Seven Legal Survival Tips for the Office Holiday Party – Asset Protection

This week marks the traditional start of the holiday party season for many businesses and most readers will attend multiple holiday parties and perhaps even host one or more. Attending a few of these events myself I’m always surprised to see employers with exemplary employee interaction throw all caution to the wind at this time of year, often with unpleasant results. While I certainly don’t want to scare you out of having a party and sharing the holiday spirit with your valued employees, we must address the way people really behave at these events and what it means for your practice.

As discussed in previous columns, employee liability is a major issue that we are always trying to be proactive about. Most employment liability centers around a lack of clear rules and procedures and perhaps most importantly, a set of well enforced behavioral expectations that they support. Below are some simple tips and issues to consider when planning your party. 

Invite your “guests” — don’t require their attendance.
Make it clear that the party is an optional perk, not a required work activity that is linked to their job requirements. If they are required to attend it raises your liability.

Lead by example.
“The boss” or some kind of hall monitor being present goes a long way. Be friendly and collegial but control your drinking, get people to eat, and make sure someone is clearly in charge and visible as the host. Many of our clients have been involved in lawsuits related to the conduct of their partners while everyone was making sure the guests were behaving. The rules apply to everyone, especially you and all management.

Set the tone with a dress code.
Make sure your colleagues and employees understand that this is a business event, not a nightclub atmosphere. Encourage appropriate dress for the event and set guidelines if you know some attending may dress in a manner that is inappropriate or overly suggestive. Communicate it clearly and in advance so your guests are not surprised or embarrassed.

Feed them first.
Put some food in your guests, before the drinks are really flowing if possible. This will keep them busy, slow their drinking and help ensure they don’t drink until they are full.

Control and limit the booze.
It’s not realistic to expect that many offices will abstain from serving alchohol completely, but this is the number one source of problems at most parties. Remember that you are responsible for just about everything that happens during and even after the party, including liability for those who may injure themselves or others (even people not in attendance) as a result of excessive drinking or as their lawyer will put it, “being over served.” You can do this by limiting service hours at the bar, providing drink tickets for a specific reasonable number of drinks, or by having the drinks passed and served at intervals.

Consider the venue and limit access if it’s at the office.
During the day everyone knows where they are allowed to be and what is and is not appropriate, the lines get blurred after a few cocktails. Consider hosting your party off-site. It’s often more fun and helps transfer liability on some issues to the “professional” hosts at a restaurant or other venue. Make sure the venue itself does not create additional liabilities or an environment that may promote inappropriate contact or behavior or excessive consumption; cross the “Home of the Barber Shop Shot Chair and Mechanical Bull” bar off your list. If logistics don’t allow that, limit access to the office and request that the computers not be used. The last thing you want to happen is to have four employees gather in a cubicle watching Internet porn (true story). Make sure that items that are sensitive, controlled, or dangerous are off limits and inaccessible. Remember that you may have strangers in your office like caterers or delivery people and that no one will be watching them.

Have a good time.
Have some genuine fun and make sure others are doing the same. We often see that “boring” parties create the most issues as people drink, fight, argue and gossip to keep themselves busy. On the other hand a well-organized party with a flow that keeps people talking, eating, moving, and interacting reduces the opportunity for much bad behavior.

Asset Protection for Your Medical Practice or Business , Learning To Fire the Right Way

By Ike Devji, J.D.

Imagine that after two decades in business with 100 plus employees and not a single EEOC or employment complaint your business is facing a class action lawsuit by disgruntled former employees discharged for cause. Imagine that these employees call every other employee they can reach and try to get them to join the lawsuit against you. Imagine that many of these employees are currently unemployed or underemployed due to economic conditions and are happy to have a new business, yours. Now wake up, it’s 2011 and all of this is real.

Over the last 45 days I have helped three different clients with issues similar to this fact pattern. In every single case the toxic employee that brought suit and/or encouraged others to do so was employed until the time of the suit, fabricated serious and offensive complaints at discharge or in anticipation of discharge. They also shared one other characteristic, in every single case they had been toxic or had been performing poorly for some extended period of time and should have been fired long ago but were not because of fear of conflict or because the manager of practice owner was trying to “be nice”.

I’m all for charitable giving, but I must be clear on this point; your HR practices are not the place for you to be “charitable” and can cost you and all your other employees your livelihoods. Part of the hesitation we see is based on the fact that most people don’t know how to fire and discipline in a safe and effective way, below is a simple outline we use to help you get a handle on a real “process” just like you have for most other operations in your practice.

Start early, even in the interview process and make all employees aware that you have a specific discipline process and high standards. Encourage them to communicate on any issues related to the workplace and their performance. Be clear about your expectations and requirements and how they will be enforced. Use a written job description that outlines their responsibilities and your performance expectations and then be ready to back it up.

THE FOUR STEP GUIDANCE AND DISCIPLINE PLAN:

VERBAL – Given instructions, corrective feedback and outline your expectations for behavior or performance that is below par or creates conflict with other employees or patients immediately.

WRITTEN – Upon the SECOND incidence of any undesired behavior or shortfall of the performance the position clearly required and which was clearly outlined in the initial interview and written job description (see how it is repeated, re-enforced and most importantly, DOCUMENTED?) provide specific written record of the issue, save it in their file and provide them notice by giving them a copy.

HAVE AN AFFIRMATIVE AGREMENT – As a last salvage attempt and to preserve a record, use an affirmative agreement that specifies the behavior you need to correct and have the employee agree to specific, immediate changes in their behavior and performance to conform to their job description and previous corrections. Use a written  form that they have seen before and that should be in their handbook.

FIRE THEM– If after the three above attempts don’t produce the desired results, you’ve done your part and it’s time to discharge the employee; again it is vital to have a process. Get keys, passwords, building entry keys and other security related issues covered and consider changing key locks and alarm codes. Have a witness if possible and follow a specific discharge process including an exit interview. Record the exit interview if possible so that the interaction is documented. If possible provide the employee with a final check they are due or any severance you may offer as a courtesy at the time of discharge, it takes some of the anger they feel away even if they know that being fired was their own fault. Finally, provide them an opportunity to provide feedback, either during the interview or in writing on a form you can provide; give them a chance to speak their mind and vent anger that might result in a lawsuit.

As always and as covered in my previous articles, get both EPLI (employment practices liability insurance) and a real, customized employment manual from a top employment law resource, not a free form of the internet or an outdated one you copied from another practice and get legal advice from an experienced employment law attorney sooner rather than later if you feel you have an employee that threatens your practice.

For more information, see our index under employmentlaw and visit http://lawsuitfreeworkplace.net/members/ my thanks to Douglass Lodmell and Paul Edwards for their guidance on these issues. This article originally appeared at www.physicianspractice.com, the nation’s leading practice manage,ment resource and appears here with permission.

Two Types of Liability Insurance Your Practice Needs (and likely lacks)

To address two common exposures that are often overlooked and important in protecting your business against a potential lawsuit;  employment practices liability and cyber liability, I turned to insurance expert Aaron Stauss at Gilbert Insurance  for some details on how you can be protected.

If you have employees, a website, or your business works with or stores personal, medical, financial or other valuable data, then your business has exposures that most likely are not covered in your general liability policy.

Employment Practices Liability

As the number and severity of employee practices claims rise, business with employees should have in place an employment practices liability (EPLI) policy to protect the business against costly litigation and / or damages.

An EPLI policy will provide coverage / defense cost from a potential lawsuit brought forth by an employee for…
• Discrimination (racial, religious, gender, age)
• Sexual Harassment
• Wrongful Termination
• Failure to Promote
• Retaliation
• Employee Related Libel, Slander, Defamation
• Mental Anguish, Emotional Distress
• Invasion of Privacy

According to the Equal Employment Opportunity Commission (EEOC), the average number of EPLI cases filed per year is 80,000 cases. A recent study finds the average payout on an employee-related claim is approximately $180,000. We could list hundreds of example of employee lawsuits, but to get the idea all you need to do is go to the EEOC’s website and browse through the hundreds of cases in the Newsroom.

Cyber Liability Insurance

As businesses continue to rely more on technology and the internet, it also increases the potential for data security and privacy breaches. The average cost of a data breach is $204 per lost record. Question… Is your computer network protected from…
• Hacker Attack
• Human Error
• Fraud
• Virus Transmission
• Employee Sabotage
• Power Failure
• Natural Disaster
• System Malfunction

Examples of the Impossible that Actually Happened

An employee of a financial institution loses a laptop with client data. Multiple lawsuits are pending with defense costs exceeding $700,000.

Computer hackers breach your electronic system containing your patients’ medical records, and you are sued by the patients for failure to protect private information.

Don’t pay out of pocket or spend your time defending yourself against a potential lawsuit. If you feel your company has a need for either EPLI or Cyber Liability call Aaron Stauss at Gilbert Insurance Group (480) 926-9020.  To learn more about their services and team, please visit their website at www.gilbertinsurancegroup.com.

Employers Beware: The Department of Labor is Out to Get You

Employers often think they understand wage and hour laws, but the fine print is more complicated than they realize and can lead to serious legal and financial exposures.  When the new Secretary of Labor announced that “There’s a new sheriff in town,” she wasn’t kidding.  As Emloyment Law Attorney Rachel Weiss explains, employers would be wise to heed the Secretary’s warnings and get good employment law counsel to review their polices and procedures now, BEFORE the exposure exists. –  Ike

Employers Beware:  The Department of Labor is Out to Get You

 This is not a threat, it’s reality.  The DOL’s focus has shifted from helping employers comply with the Fair Labor Standards Act (FLSA) to nailing those who do not.   

This is also not a secret.  In fact, watch for public service announcements in multiple languages featuring the Secretary of Labor and celebrities urging employees to call their hotline if they believe they are being paid unfairly.  (See for yourselves at http://www.dol.gov/wecanhelp/psa.htm)   Aptly named the “We Can Help” campaign, this initiative was launched just one week after the DOL announced that it is abandoning its practice of publishing Opinion Letters, which historically have provided important guidance to employers.  Reliance on DOL Opinion Letters has also served as a defense to liability for back-wages and other damages.  Instead, broader “Administrator Interpretations” will be issued that will not address the finer points of particular policies and practices, thereby requiring litigation to determine their application to the facts of each case.  

Then there’s the “Plan/Prevent/Protect” initiative, which proposes new regulations that will require employers to audit their pay practices, document how each employee’s exempt status and pay calculations are determined as well as the reasons why certain individuals are categorized as independent contractors and not employees.  Employers would need written plans and be required to track how they are implemented.  The failure to do all of this to the DOL’s satisfaction will be deemed noncompliance and result in sanctions and/or costly litigation.  The pending Employee Misclassification Prevention Act (H.R. 5107, S. 3254) seeks to impose similar obligations. 

If you think I’m trying to scare you, you’re right.  Most employers also don’t realize that once a violation is established in an FLSA lawsuit, the burden is on the employer to prove why double damages should not be awarded, and the employer will be liable for the employee’s legal fees.  Moreover, the owner of the company, or whoever was responsible for the decisions that led to the violation, will be held personally liable along with the company, regardless of laws that limit personal liability in other contexts.  Unlike cases brought under Title VII for discrimination, there are no administrative hoops to jump through before employees can go to court.  And remember, too, that wage and hour claims are not usually covered by insurance. 

Now more than ever, employers need to develop not just a plan for compliance, but a culture of compliance.  Consider conducting an internal or external audit of your employee classifications and pay practices, and seek advice from an employment attorney.  Wage and hour laws are complex and nuanced, and the DOL clearly is not interested in educating you.  If that were the case, it would have created an employer “help desk.”  Instead, it beefed up its enforcement staff with 250 new investigators and got famous people to reach out to employees. 

Lest there be any misunderstanding, I do not mean to imply that the DOL should not be an advocate for employee rights or that employers should be able to shirk their obligations under the FLSA.  Just consider this a public service announcement for the other side.    

Rachel Weiss practices labor and employment law with the law firm of Gammage & Burnham in Phoenix.  If you have questions about wage and hour issues, you can reach her at (602) 256-4448 or rweiss@gblaw.com.