How to Avoid Labor Litigation

Document everything, and find a good labor attorney.

August 31, 2012

Here’s the email we all dread:

From: HR
To: Joe CEO
Subject: Can I see you for a minute?

We all know what this particular subject line means—two hours in a closed-door meeting, a hefty attorney bill, and a distinct distraction that probably will go on for weeks. All because of the fear of being sued.

It’s more common than one would think. Legal actions have exploded in recent years in both private and class-action lawsuits, according to Seyfarth Shaw’s sixth annual Workplace Class Action Litigation Report. This leads to three questions for credit unions:

1. In what areas should credit unions be particularly careful?
2. How can we mitigate our risks?
3. When will we have nonsuing robotic workers?

My take (note: I am not an attorney, never will be an attorney, and even avoided watching “Perry Mason” out of fear I could be sued because of it):

Displaced workers file a lot of lawsuits. This seems to be the “duh” point. For some odd and unexplained reason, laid-off employees have the combination of anger and time off. Their primary argument is “You did it because of my [fill in the blank].” It could be age, gender, religion, or whatever.

Suggestion: You won’t be able to avoid many of these, but you can defend yourself. Document why you do things, how you do things, and why your actions are even-handed.

Working off the clock isn’t cool. Our employment manuals specify that working off the clock is prohibited. Verboten. Will never happen. Then it does. Something simple—staying a few minutes late to handle that last member. Showing up to a community event on the weekend to promote our brand. Then it hits: a request for tons of overtime dating back to when the major technology was called “Betamax.”

Suggestion: Notice when folks work outside of their normal times, and double check to make sure they report work hours appropriately.

► Exempt? Are you sure? I’ve often seen managers treat trusted employees as exempt under the Fair Labor Standards Act. Don’t do it unless they match a very specific set of criteria. Most employees aren’t exempt and are entitled to breaks, overtime, and other benefits.

Suggestion: Review every exempt position to make sure it meets all the criteria. And remember this phrase: “When in doubt, fill it out”—a timecard, that is.

Worthless paper. Earlier in my career, I worked at an old manufacturing company. Employees were forced to sign a noncompete agreement every year. After a key salesperson quit and went to a competitor, management soon learned their “ace in the hole” was more of “four aces for the other guy.” Quicker than Lindsay Lohan can crash a car, the salesperson had a court vacate the noncompete agreement, and we ended up paying a tidy sum.

Suggestion: Find a good labor attorney and ask if your noncompete policies are overreaching. If they are, stop.

Social media is socially trouble. Remember the headlines about the National Labor Relations Board coming down hard on a company that had fired an employee for writing derogatory remarks on her Facebook page? In the final agreement, the employer acknowledged the employee had a right, under protected speech, to write about wages, working conditions, and other factors.

Suggestion: Write the following phrase on a piece of paper 100 times: “I don’t control the Internet. I am not Bill Gates.”

Just for the fun of it, to answer question No. 3 from earlier in this column: Microsoft plans to release “Staffer 3.0” in 2015.

Too bad it will be one year after “Attorney 1.0” is released by Apple.

JAMES COLLINS is president/CEO at O Bee CU, Tumwater, Wash. Contact him at 360-943-0740.