Risk Management in the New Year: Assessing The Preventative Health of Your Employment Policies and Practices

by Jennifer Parda and Mark Busto

In the recent economic downturn, employment litigation has swelled and union organizing is on the rise. In the face of such risks and challenges, you can effectively manage your own destiny through well crafted and consistently applied employment policies and practices. As this year comes to a close and a new one approaches, now is the time for a thorough checkup and healthy dose of preventative medicine. The following are key focus areas for review that may prove invaluable in reducing the risk of lawsuits and avoiding employee morale problems that can lead to successful union organization. Remember, “one ounce of prevention is worth a pound of cure!”

Update your employment handbook and policies. When drafted carefully and updated regularly, an employment handbook can provide several advantages to employers. Handbooks help to explain employers’ policies, procedures, and philosophies and are useful tools for communicating employer expectations. When consistently followed by management, handbooks can foster uniformity in policy interpretation, administration, and enforcement. As a result, handbooks can provide invaluable defenses in litigation. Handbooks often communicate an employer’s legal obligations under ever-changing federal, state and local law. Therefore, they should periodically be updated to reflect the most recent legal standards and related best practices. Employers should also have evidence that employees received the most recent version of the handbook and understand that the handbook is just that: a summary of employment policies and procedures, as opposed to a binding contract or a promise of specific treatment in specific circumstances. This important step may provide a solid defense to any potential breach of contract claim.

Regularly train employees in EEO and discrimination/harassment prevention. Discriminatory practices lead to employee unrest and dissatisfaction with the attendant risks of litigation and union organizing. Consequently, employers should implement well-drafted EEO and anti-discrimination and harassment policies and ensure that all employees are well versed in the policies’ purposes, requirements and complaint procedures. Managers and supervisors should receive regular training specific to their responsibility for oversight of the policies and role in the identified complaint procedures. Responsive action should be designed to ensure that any complaint is systematically and promptly responded to, investigated and appropriately addressed with the end goal of eliminating the complained-of behavior.

Give regular fair appraisals and reviews. Supervisors should provide employees with performance feedback immediately, whenever it is necessary. In addition, regular, periodic performance reviews are useful to provide employees with an assessment of their job performance and to establish clear expectations. If handled right, such reviews reinforce good performance, improve unsatisfactory performance and foster positive and effective employee/supervisor relations. In assessing performance, supervisors should be honest and respectful, while affording the employee a meaningful opportunity to respond and provide input. Employees who are heard, respected and treated fairly are much more likely to look favorably upon their employer and much less likely to take action adverse to it—whether by seeking court action or union representation.

Follow a protocol for every termination. Not surprisingly, the majority of employment-related complaints and lawsuits stem from termination decisions. Proper termination procedures not only reduce litigation risks but also positively impact general employee morale. Termination protocols should include, among other things: proper documentation and notice of performance issues; appropriate application of progressive discipline; an investigation that is fair and objective; substantial evidence that the employee violated company rules or repeatedly failed to meet performance expectations; and consistent and non-discriminatory treatment. Employers should also assess the risk of each termination decision and determine whether the specific facts warrant limiting potential liability through an employee’s release of potential claims in exchange for a severance payment to which the employee is not otherwise entitled.

Manage employees’ leaves of absence and disabilities. Laws granting employees protected leaves of absence have multiplied exponentially in recent years. Employees increasingly are claiming that employers denied them protected leaves or failed to reasonably accommodate their disabilities. Human resources personnel must keep current with the changing leave landscape and manage each situation as required by law and regulation. In addition, performance management issues must be addressed separately from leave of absence issues to protect against claims of retaliation. This is an area of great risk, so don’t be afraid to ask for help when you are unsure of the substantive law or an effective strategy.


This Employment Law Note is written to inform our clients and friends of developments in labor and employment relations law. It is not intended nor should it be used as a substitute for specific legal advice or opinions since legal counsel may be given only in response to inquiries regarding particular factual situations. For more information on this subject, please call Sebris Busto James at (425) 454-4233.