Businesses are only as good as their people, but recruiting employees and letting them go are both fraught with legal pitfalls. Here's how you can help your clients and your own firm avoid HR missteps.
I love being a management side labor and employment attorney," says Leonard W. Sachs, a lawyer in the Peoria office of Howard & Howard. "It's sex, drugs, body piercings, and tattoos. I have partners who get all excited about bankruptcy workouts. I circulate e-mails like one I received from a client yesterday: 'We have a flatulence problem with an employee in our Springfield office.'"
But it isn't just the entertainment value of the subject matter that makes the work exciting. HR is where the action is. The essential functions of hiring and firing are loaded with legal pitfalls for any manager, and the process is at the heart of every business. Businesses - including law firms - are only as good as their people.
To help lawyers who handle HR tasks, whether managers themselves or counselors for employers, Sachs and his partner, Tracy C. Litzinger, presented "Hiring For Keeps and Eight Rules for Good Dismissal" at the ISBA's most recent annual Solo And Small Firm Conference, held in Springfield in October 2010 (see sidebar). This article is based on their presentation.
Employment at will…sort of
Though the general rule is that employment is at will, legislatures and courts have created many exceptions.
Federal laws that employers must understand and comply with include Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (ADEA), the Americans with Disabilities Act (ADA), the Uniformed Service Employment and Re-Employment Rights Act of 1994, the Vietnam Veterans Readjustment Act, the Employee Polygraph Protection Act of 1988, the Immigration Reform and Control Act of 1986 (IRCA), the Family and Medical Leave Act of 1993, Executive Order 11246 (applicable to most federal government contractors), and the Civil Rights Acts of 1866 (Section 1981) and 1871 (Section 1983).
Surprisingly, even non-union employers must take care to comply with certain provisions of the National Labor Relations Act of 1935. State employment laws include the Illinois Human Rights Act of 1980 and the Illinois Right to Privacy in the Workplace Act.
Employers must also refrain from violating certain clearly mandated public policies when they discharge employees lest causes of action for retaliation arise. And, though Litzinger and Sachs agree it's a good idea for employers to have personnel manuals, employers risk creating contractual rights for their employees when they do so, thereby destroying the at-will employment status.
Hiring for keeps
Having represented employers large and small since she joined her firm in 2000, Litzinger said her partners asked her to become responsible for managing its staff members in 2009. "That has given me a unique perspective and understanding of the challenges that occur in the hiring process."
The importance of job descriptions. Before even advertising for applicants for an open position, an accurate job description is essential. Noting the number of people out of work and seeking employment, Litzinger says, "The amount of time spent in screening job applicants will be prohibitive without a good job description. By drafting an effective job description, you will be able to better segregate applicants who are worthy of a follow-up telephone interview, those who get an automatic thanks-but-no-thanks letter, and those who you're going to shortlist for an in-person interview."
The first step in drafting a job description is to profile the position's responsibilities, Litzinger says. What are the four to eight most important functions that the person in this position must do? Be as specific and as concrete as you can to narrow down your applicant pool, she advises.
For example, though "selling" seems like an obvious responsibility for a salesperson, that term may be overly broad and abstract. "Most sales positions involve a wide range of responsibilities," she says, "each of which requires specific skills, work habits, and knowledge." Salespersons typically must meet with customers, follow up on matters, make estimates, interact with other staff members, and report their results, she points out, all of which are essential functions for their position and, therefore, should be included in their formal job description.
A similar analysis applies to the oft-seen job requirement "effective communication skills," she says. "To the extent that I can craft that general behavioral ability into something more specific, it helps me narrow down the groups of people who may be qualified to actually perform the job."
Because not all functions are equally important, Litzinger suggests using a pie chart to prioritize them. That will help the employer to identify the specific qualifications and attributes applicants must have and, later in the hiring process, to focus interview questions on the most important areas, she says. "Establishing responsibilities lies at the heart of effective interviewing and hiring."
Litzinger says a good job description will have three essential elements: qualifications, meaning education or number of years work experience; technical skill requirements, meaning what the applicant must know and skills the applicant must have; and behavioral requirements, meaning the applicant's work habits. Think of the technical skill requirements as showing whether the candidate can perform the job and the behavioral requirements as indicating whether he or she will perform, she suggests.
In determining the necessary position qualifications, Litzinger suggests that employers ask themselves three questions:
· What training must the applicant have? A college degree? Two years' work experience in a similar position?
· What must the applicant know to fulfill the job's responsibilities? How to use certain software and hardware? A basic understanding of Illinois probate law?
· What must the applicant be? Punctual, courteous, and well organized? Someone who can listen and respond to unhappy clients with patience and courtesy?
To answer these questions successfully, Litzinger says, a good technique is to think of past employees who turned in stellar performances in the position. What did they have or do that substandard employees in the same position lacked or failed to do? The employer might also ask others what requirements they would like to see in people in that position.
Job postings - the perils of casting a wide net. Employers who post job openings on their own websites or on other sites such as Monster.com or CareerBuilder, or who allow employees to circulate job openings on their Facebook pages or Twitter accounts, may benefit from casting their employment net further and wider to attract the best qualified applicants for employment, Litzinger says. However, they must take care to comply with recordkeeping requirements that are part of laws such as the ADEA, ADA, and Title VII, all of which require employers to retain employment applications for one year.
"If you're a small firm, filling one position every three years, that's not such a burden. But if your client has 400 job openings on average each year and has to maintain 1,600 applications for each one, your client has a data storage problem."
Employers may unwittingly compound that problem by authorizing or encouraging employees to invite their friends and followers to apply by posting openings on their personal accounts. Responses to those employees may arguably fall into the category of records that the employer must then maintain under applicable statutes, Litzinger says.
But there's a problem, she says. "The employer has no reliable mechanism to assure it receives accurate records of any persons who responded to the poster. Good luck trying to get your employees to timely print out the responses to their Facebook page [job listing] and allow you access to that material."
Toward embracing the power and the benefits of the Internet and social media while still complying with statutory recordkeeping requirements, Litzinger advises employers to have and communicate to their employees a strict and appropriate social media policy. "One of the easiest ways is to allow your employees to provide a link to your website on which the application can be filled out."
The employer should tell its employees that if they wish to publish notices of job openings, they must publish a brief employer-drafted statement with a link that directs all inquiries to the employer's website. "Then, you're tracking the information, and your employee is not responsible for that requirement."
Immediately upon filling positions, employers should take care to shut down the job postings, Litzinger says. "You have to have an open listing for the recordkeeping requirement to trigger." So, she says, employers who list their jobs on external sites should be sure to understand and follow those sites' procedures for taking those listings down. "Otherwise, you can have straggling resumes for two, four, six, eight months [after the position is filled] that you have to maintain under the ADEA [and other statutory] regulations."
Be careful what you ask. What about pre-employment screening, both on application forms and in interviews? Litzinger says all questions should focus either on the applicant's past performance, which will provide an employer with a good idea of the kind of performance the applicant is likely to turn in, or on at least one of the requirements listed for the job.
"Hypothetical questions or questions that address the applicant's personal lifestyle or habits will only provide the employer with information that is either unreliable or irrelevant to the position." Though she agrees that conversation and follow-up questions that result from an interviewer's initial choice of topic are not only inevitable but are key to successful interviewing, she cautions that interviewers should always make sure that new topics relate directly to the requirements of the job. "If every question in your interview is not about the job or the individual's qualifications for the job, you're doing it wrong."
A good rule of thumb, Litzinger says, is that if you would not ask a question when speaking to someone in person or over the phone, the subject should not appear on the application. Even seemingly innocuous inquiries, such as "OMG, you went to my high school - what year did you graduate?" can lead to applicants disclosing information that they are in protected classifications, which can lead to claims for discriminatory failure to hire. (For more, see Litzinger's sidebar on page 133.)
Firing: everyone's least favorite job
Tell the bitter truth. Even the best hiring process can recruit employees who must ultimately be let go. Recognizing that disciplining and firing employees is the least favorite task for most managers, Leonard Sachs says a cardinal principle should be "Always tell the truth."
Most managers who have decided to fire an employee instinctively want to soften the blow, Sachs says. "No one likes to say 'you're a lousy employee, or a liar, or a cheat, or a thief, or you haven't shown up for work.'" So, he says, managers have a tendency not to tell the complete truth when they're making termination decisions or communicating them to the affected employees.
"The problem is that if you're ultimately challenged and you want to raise all of those legitimate, nondiscriminatory, nonretaliatory reasons, the fact that you've shifted your explanation in that process is itself evidence of pretext, of unlawful discrimination or retaliation." As in other areas of life, Sachs counsels, honesty is the best policy.
Though fairness is an underlying principle of employment law, Sachs says, "It's OK to discriminate. You discriminate every day. Eggs or sausage. It's only bad when it's because of sex, race, national origin," or the other statutorily prohibited factors.
Put it in writing. In particular, Sachs says, it's fine to discriminate among employees on the basis of performance, rewarding and promoting "The Mother Of All Employees" for coming in early, staying late, blowing all production goals out of the water, and teaching a yoga class for other employees on her lunch hour, while disciplining and firing "Sluggo," who comes in late, leaves early, and plays on Facebook when he ought to be working. "But you'd better have a paper trail that establishes that The Mother Of All Employees is The Mother Of All Employees and Sluggo is a slug."
Though no law requires employers to make records of employee matters such as disciplinary actions, "written documentation is the best defense to challenged terminations and discipline." Managers may leave the company and be unavailable for testifying. But if they've made written records explaining their actions, including even verbal warnings, they've preserved that information for the company's later use.
The rules of evidence recognize that contemporaneous written records are more likely to be accurate than people's memories, and decisions that are supported by documentation are far easier to defend. It's also easier for employers to be certain that they're responding appropriately and in keeping with their policies and practices when they can refer to documentation of prior incidents.
When a manager has decided to fire an employee, Sachs says, "always have someone else review the documentation." Does that documentation follow the employer's policy and practice? Did the employee get warning? Did the employer communicate what would happen if the employee failed to meet expectations? Is that documented? Will the ultimate decisionmaker make a good witness?
"To the extent you can insulate senior management, such as the CEO and your other main players, from that person, do it. You never want to have your CEO on the witness stand. You never want that person distracted from advancing [the company's] bottom line." (See sidebar on page 132 for other tips on avoiding liability for employee discharge.)
It's a business decision. Though it may seem counterintuitive to many lawyers and human resource professionals, Sachs also says "I advise all my business clients that there is no right and wrong in HR. In the general run of business cases, it comes down to making a business decision."
Often there are no clear answers, he says, notwithstanding voluminous statutes and regulations. On being asked for advice, "The first question I always ask the client is 'What do you want to do?'" Resist any urge or plea to answer that question for your clients, Sachs says. "We give them all the information they need to make the decision. It's a business decision, and it's the client's call, not yours."
That's not to say that lawyers should discourage their clients from consulting them, Sachs adds. "By encouraging your involvement as counsel in the decisionmaking process, you're saving them money. Every dollar you're not spending defending a baseless discrimination suit, or answering interrogatories, or being prepped for a dep, or giving testimony or losing stomach lining worrying about it, is money that goes to the bottom line."
It's beneficial, then, Sachs says, to get your clients into the mindset that HR is a profit center, not a black hole of expense. "If they have to spend $150 to make the phone call to you to get advice, you need to convince them so that they understand that that's money very, very well spent."
To view and listen to Sachs's and Litzinger's complete presentation and download their materials, take advantage of ISBA's FastCLE capability by visiting http://isba.fastcle.com and scroll down to the 2010 Solo and Small Firm Conference link. With just a couple of mouseclicks, you can not only gain valuable tips that will help you in managing employees in your own office or in advising your employer clients but also get an hour of approved CLE credit.
Employment lawyer Leonard Sachs offers the following tips.
Avoid interview questions if they aren't designed to elicit answers that reveal an individual's qualifications or ability to perform the job. Definitely don't ask questions related to an applicant's age, race, national origin, sex, sexual orientation, marital status, disability, religion, union affiliation, or workers' compensation filings.
Some managers mistakenly believe they have to ask about an applicant's national origin to comply with the Immigration Reform and Control Act. They're wrong - don't ask about national origin. Obtain work eligibility information after you extend an offer.
Here's a brief summary of protected classifications and traps to help interviewers avoid discriminatory hiring claims.
Race and color
- Tracy Litzinger