These hiring guidelines can help protect your business against the “growth industry” of employment-related litigation.
Today, every business faces not only the traditional challenges of competition and rapidly changing technology, but a relatively new category of potential adversary — workers hitting them with employment-related claims. Not-for-profit corporations, public entities, and private businesses alike are experiencing an explosion of litigation alleging:
- Discrimination
- Sexual Harassment
- Wrongful discharge
- Wage and hour disputes
- Negligent hiring, retention, and supervision
- Failure to provide benefits
- Violations of federal and state leave-of-absence laws
Whether companies win or lose such suits, they’ll divert time, money, and energy from growing sales and earnings.
In one Southern California lawsuit, an openly gay grocery store night manager claimed he was wrongfully terminated because of upper management’s discriminatory anti-gay practices. The store denied the allegations and said the manager was fired because he violated the store’s zero-tolerance policy on sexual harassment. He was suspended after a stock clerk accused him of trying to fondle him; other employees provided signed statements accusing the manager of conduct ranging from mild sexual innuendo to fondling and propositioning employees.
Even if the store wins the suit, it will have lost hundreds of thousands of dollars on lawyers’ fees and its public image will suffer. If it loses the suit, the verdict could be in the millions.
Only 5% of the workforce is responsible for 95% of employment-related litigation. Most of those 5% have victim mentalities. They believe that they’re entitled to a job and salary regardless of their performance; they blame others for their shortcomings; or they refuse to accept responsibility for their actions or inactions, according to Tony Burnham, executive vice president of Employment Council for Abbott Resource Group Inc.
“This is happening all across the nation. Companies are experiencing an explosion of employment-related claims based on sexual harassment and discrimination, wrongful termination and a host of other human resources issues,” says Beth Schroeder, an employment law attorney and co-author of The EPL Book: The Practical Guide to Employment Practices Liability and Insurance.
Sound employment practices are no longer a guarantee against employment practices liability. You need to keep up with ever-changing employment laws, Shroeder says.
So how can you avoid hiring a victim? According to Burnham, thousands of successful public and private corporations of all types and sizes have benefited from these “best practices” for hiring:
ALTERNATIVE HIRING PROCEDURES
With today’s low unemployment rate, newspaper ads generally don’t attract the best applicants. Consider alternative recruiting sources, such as trade and vocational schools, community colleges, and local universities for recent graduates who are highly motivated and willing to learn. Also look into these options:
- Employees with excellent performance records often have friends and relatives with similar traits.
- Laid-off workers are often experienced, hard working, and grateful for a new opportunity.
- A staffing firm that screens candidates can be a valuable source for temporary or permanent workers.
- Cities and local communities may be potential recruiting sources through their workforce and economic development efforts.
- The Internet has become an increasingly valuable resource for recruiting skilled workers.
DETAILED EMPLOYMENT APPLICATIONS
One of the most important hiring tools is a careful review of the applicant's background. It's important to use an application with detailed questions. Also, be sure to:
- Require candidates to answer all questions completely. An applicant who leaves blanks usually has information they don't want to disclose.
- Ask an applicant why they wrote 'see resume' on the employment background section of the application. Were they trying to avoid answering any of the questions or just offering supplemental information?
- Pay close attention to the applicant's reasons for leaving a job. Applicants who claim they left because of 'poor management' or that they 'disagreed with company policy' are particularly suspect for having a victim mentality.
- Carefully scrutinize candidates with unexplained gaps in their employment history, criminal records, and other questionable items on their application.
- The employment application should include a statement about at-will employment as a defense against potential employee contract claims.
- Have employees sign an agreement that any disputes concerning hiring, termination or wages be resolved through binding arbitration before a retired Superior Court Judge.
REVIEW OF CANDIDATES’ QUALIFICATIONS:
Besides the standard job interview, employers should consider the following ways of checking a candidate's qualifications:
- Drug Tests: Many problem employees have drug or alcohol problems.
- Credit Check: A credit report will reveal if the applicant has listed all previous employers. The new Fair Credit Reporting Act (FCRA) amendments require employers to get permission from applicants before obtaining their credit reports. The notice and authorization must be on a separate document, consisting solely of the FCRA language.
- Background Checks: Many applicants fail to disclose past employment or misrepresent the reason for their termination. Amendments to the FCRA apply if the background check involves using an outside agency to collect information.
CONCLUSION
Even with smart hiring practices, employers are still getting drawn into employment disputes and litigation. It’s crucial to try to resolve a claim or dispute as quickly as possible. If there’s no alternative to litigation, it’s essential to get an attorney with experience in the specific employment dispute involved.
Many insurers offer Employment Practices Liability (EPL) insurance, which provides indemnity protection. Most EPL policies also include a duty of the insurer to defend the insured. This is a valuable feature: Most insurers use law firms that have expertise in employment litigation. EPL insurers are likely to offer the most favorable rates to clients who implement best practices hiring policies.