Lawsuit Proof Investigations

One of the best Lawsuit Prevention Strategies that I advocate to my clients is how to anticipate the myriad of ways a plaintiff’s lawyer will undermine the investigation that you, the employer (or in many cases the human resource investigator or in-house counsel), conducted. Why does this prevent lawsuits? Because (1) a Lawsuit Proof Investigation may deter a plaintiff’s lawyer from even taking a case. It demonstrates that the employer acted reasonably and will limit or mitigate the damages that an employee can collect (i.e. it’s not worth the plaintiff lawyer's time or money, if he (or she) takes the case on contingency, and (2) it shows the employee considering litigation against your company what a “fair” result might be if he or she decides to pursue litigation. That is, if the employee has “made their case” to the investigator and believes that the investigator is fair and neutral, then the conclusion that the investigator makes, even if it is not the employee’s desired result, will be the likely conclusion that a judge or jury will make after hearing all of the same facts. At this point, the employee will hopefully realize that a lawsuit will be expensive, time consuming and possibly, pointless.

The six ways that a plaintiff’s lawyer can undermine or “attack” an investigation are:

o The “Neutrality” Attack
o The “Time” Attack
o The “Fair & Thorough” Attack
o The “Taint Free” Attack
o The “Retaliation” Attack
o The “Burden to Remedy” Attack

The details of these attacks are the subject of a program which I will be presenting to the attendees of PIHRA District 15 on August 17, 2010, 11:30am-1:30pm. If you are interested in learning more about them in an entertaining format, please register and attend: http://www.pihra15.org. Nonmembers are permitted to attend as well.

To demonstrate my gratitude to PIHRA in supporting Katz Consulting & Associates’ mission to proactively prevent lawsuits, I am also including downloadable Sample Documents that are helpful in conducting investigations of sexual harassment.
Sample Sexual Harassment Complaint Form*
Sample Investigation Questions for the Accused*
Sample Investigation Suspension with Pay for Accused*
Sample Investigation Conclusion and Recommendations*
*The samples are not intended to be "ready for use" by readers. In addition, they are not to be construed as legal advice. Rather, these forms are intended as samples and should be adapted to your particular company's needs. Although this work is copyrighted, you may freely use the content in creating or changing your own forms. I strongly encourage you to consult with a labor/employment attorney or contact me prior to using these forms within your company to ensure compliance.

An Occasion For Reeducation from the Lebromination

Lawsuit Prevention Strategies Employers Can Gain From Dan Gilbert’s Reaction

Most employers do not lose employees in the public and spectacular way that Dan Gilbert’s Cleveland Cavalier’s lost Lebron James to the Miami Heat on July 8, 2010. Yet, almost all business owners and CEOs can relate to the potential damaging effect that a key employee’s abrupt exodus can reek on future business profits and worth. That is why it is critical that business owners and managers learn from the mistakes that Gilbert made in writing an Open Letter to Fans on the Cavalier’s website in immediate reaction to James’ decision. The Open Letter not only created potential for legal ramification and lawsuits, but was a blistering example of poor leadership in the wake of an employment crisis.

Nevertheless, using it as an example of how employers/managers should not react when an employee announces his/her departure, the following Lawsuit Prevention Strategies emerge:

Lesson #1: Amend Before You Send
Obviously, for many managers and employers, business is not always “just business” and can become very personal. Gilbert, who felt he had a personal relationship, an expectation of loyalty and an alliance with Lebron James, expected James to respond in kind with a decision to re-sign with the Cavaliers. Feeling deeply wronged, Gilbert’s Open Letter was a reactionary, scathing rebuke of Lebron James departure. He said,

“This shocking act of disloyalty from our home grown "chosen one" sends the exact opposite lesson of what we would want our children to learn… this heartless and callous action can only serve as the antidote to the so-called "curse" on Cleveland, Ohio. The self-declared former "King" will be taking the "curse" with him down south…and will unfortunately own this dreaded spell and bad karma.”

Ouch! Making a common mistake that managers make in anger that often creates litigation, Gilbert posted his comments on the web without first getting advice about the legal ramifications of this publication. Had he consulted an employment lawyer or even the Cavalier’s counsel (presumably he did not), he would have been advised to amend his comments and informed that brutal and personal criticisms about one’s former employee can leave an employer and company open to devastating liability. Suppose, for example, the Miami Heat decide to drop James, fearing that they signed a “problem” employee. Although unlikely, this is a scenario that does occur frequently in today’s corporate America. In this case, Lebron James (or the former employee) can sue Gilbert (his past employer) for interference with future contract, defamation and intentional infliction of emotional distress. Perhaps a Cavalier fan will feel justified or empowered by Gilbert’s stating,

“Some people think they should go to heaven but NOT have to die to get there.”

If they harm James or his family, he can sue Gilbert personally for the foreseeable damages incurred.

Lesson #2: Minimize the Damage, Don’t Compound It
No one wants to lose a key employee and the worst way to do so is without notice or a plan for succession, but when that does happen, as it does in business, management must act in a way that minimizes the damage done. In the case of Gilbert’s Open Letter, not only did he compound the damage done by receiving a fine for $100,000 from Commissioner David Stern, but he also undermined the future of the Cavaliers’ ability to attract free agents that could succeed James in talent and experience. Will free agents desire to work for Gilbert in light of his unprofessionalism and vitriol? If so, it will be with Rod Tidwell-esque familiarity - “Show Me the Money.” That is, Gilbert will be paying a premium for his demonstrated unattractiveness as an employer. Consequently, his actions have cost the Cavalier’s even more than the loss of James, alone.

Lesson #3: Show Leadership in Crisis
Finally, Dan Gilbert may go down in history as the biggest example of poor sportsmanship that there ever was. Soon after James announced his decision to leave the Cavaliers, Gilbert changed the price of the Lebron James Fathead poster (pictured above) to $17.41. Fathead is a company owned by Gilbert and the new price is a reference to the birth year of Benedict Arnold, a U.S. general who defected to the British side during the American Revolutionary War and whose name has become synonymous with “traitor.” Rather than finding innovative ways to lament the past, Gilbert should be using the days after James’ announcement to reinvigorate his remaining employees, talent and fans for the future. In the wake of a key employee’s departure, remaining employees look to management for reasons to stay, reasons to reinvent and reasons to remain optimistic. Managers and owners must use the crisis as a leadership opportunity to remind those “left behind” that the “company” is not defined by one employee and that the remaining employees extra efforts to sustain the entity throughout uncertainty are appreciated and recognized.

Can you think of other example of good/bad leadership in the wake of a key employee’s departure? Let me know.

Brother, Can You Spare a Dime?

Strategies Managers Can Implement To Avoid Personal Liability

When I was in college, I worked as a waitress at a local restaurant. I loved working as a waitress because the harder, faster, smarter I worked, the more tips I made. It was instant financial remuneration in direct relationship to the effort I put forth. As is often the case, my hard work and diligence was noted by the restaurant owner and I was offered a job as “manager.” At 19, I knew already, that despite the promotion and title, I would actually make less money as a manager than I did as a server. I also knew there would be more “responsibility” and “liability” with that title, though at 19, I doubt I understood the magnitude of those terms. “Did managers get paid ‘enough’ considering the risks?” I wondered.

Then again, that was only a “job” for me. It wasn’t my “career.” For most people in management, their management role is their career and they take it very seriously. Moving up and forward in a company is significant and compensation is not the only factor workers evaluate when considering a move into management. Certainly, there are many managers who feel that they do not get paid “enough,” especially considering the difficulties inherent in managing people. But, in my opinion, no manager gets paid “enough” for the risk of personal liability. Personal liability is the financial punishment that a court imposes on a manager, personally, for intentional acts which are deemed outside the scope of the employer-company’s policies and which cause harm to that manager’s subordinate.

Personal liability is intended to hit the manager in his or her own pocket. And it hits hard. In Roby v. McKesson, No. S149752 (Nov. 30, 2009), a California Supreme Court case, the jury during the trial court phase punished Roby’s manager personally with a liability of $500,000 in compensatory damages and $3,000.00 in punitive damages for her harassment of Roby. Roby’s manager ostracized her and called her disgusting for her body odor and arm scabs. The jury was ensuring that the person who caused the most harm to the victim paid for it personally. Presumably, $500,000 was much more than Roby’s manager made in a year.

That is why it is more important now than ever, especially in California, where personal liability exists for harassment, that managers know how to proactively prevent the circumstances that give rise to most lawsuits from their employees. Managers are not just responsible for helping the company avoid lawsuits; they now need to protect themselves too. The critical Proactive Lawsuit Prevention Strategies that managers must learn to avoid personal liability are:

1) A manager must learn how to document discipline and show progressive discipline when the employee he or she manages exhibits performance problems or behavioral misconduct. This critical strategy will insulate the manager from a claim that they acted to harass the employee showing that discipline or termination was well thought out, objectively justified and “not personal or harassing.” That is, when an employee is performing below standards, he or she is given a documented verbal counseling first, then a written counseling, then a last chance warning (or suspension with pay), etc. on a progressive scale, getting harsher as the disciplinary actions grow more frequent. The true purpose of progressive discipline is to give the employee many opportunities to improve performance. To protect against personal liability, managers should work in teams or with human resources/in-house counsel to ensure that their documented disciplinary actions are objective (not personal) and are based on measurable criteria. An objective review by the manager’s teammate or HR will ensure that the reasoning behind disciplinary action is not based on stereotype of discriminatory reasons. This team approach or peer review also protects the manager from personal liability because it guards against the perception that one manager singled out one employee with malice to harass.

2) A manager must learn how to use technology and not to get “used” by it. That is, in this day and age, many new cases are arising from the misuse of technology by managers. That is, new employment cases are citing inappropriate emails, the use of intranet and internet, social media, texting as the “smoking gun” evidence which proves a manager’s unprofessional, stereotypical or harassing intent. Managers must be trained, specifically, on the use of email. First, they must understand that email and other technological means of communication are discoverable and can be used as evidence in a lawsuit. They must learn, specifically, that all technological communication must have a professional, not conversational tone. There should be a clear understanding about when it is inappropriate to use email. For example, there are very few circumstances when it is justified to discipline or terminate an employee by email. This is a conversation, though difficult, that must be done in person. Responding to “flaming emails” or emails sent in anger from subordinates or coworkers should be well thought out and peer reviewed before sent. “Flaming emails” are bait for managers. Often a response when necessary to a “flaming email” should first be reviewed by counsel before sent. Managers should know not to have personal or sexual conversations on company owned devices. Finally, managers should understand that all technology leaves a blueprint. That, once it is written, even if it is deleted at a later time, it can be retrieved and used as plaintiff’s exhibit A, to show the manager had a malevolent intent against the plaintiff employee. Once this is proven, it is hard to avoid personal liability.

3) A manager should learn the critical importance of giving accurate performance appraisals. Performance appraisals are accurate reflections of an employee’s performance. The content of an annual performance appraisal should not be a surprise to the employee because the manager has addressed the performance issues on an ongoing basis with the employee as the performance events occur. Many employee lawsuits come out of an employee’s anger or a sense that he or she was terminated or disciplined unfairly. That is, they didn’t see it coming or they had no chance to improve. Sometimes, the employee has been told that he or she was performing satisfactorily or was even given raises. Accurate performance appraisals prevent employees from reaching the level of “disgruntled” or angry enough to hire a plaintiff’s attorney or assign blame to their manager.

4) A manager needs to know when to stop talking about a former employee. Many managers think that once an employee has left a company that the truth can come out. That is, once the employee is terminated, the manager begins to tell the story as to why that employee “had to go.” Managers must understand that it is usually after the employee has left a company that the employee contemplates a lawsuit. A manager’s unkind words, post-termination references that injure the employees ability to get work, and allegations of misconduct can give rise to claims against the manager for defamation, tortuous interference with future contract and intentional infliction of emotional distress claims, all of which can be made against the company but also against the manager, personally, with unlimited punitive damages.

5) A manager must find alternative and healthy ways to handle stress or anger. As in the case of Roby v. McKesson, courts award personal liability against managers who are purposefully hurtful and unkind to the employees they supervise. The best way to avoid personal liability as a manager is to treat employees consistently, avoiding any inference of favoritism and to find a constructive way to deal with stress in the workplace. Any display of anger or targeting frustration on employees is “asking for it.” Last, any name calling or personal attacks, especially in front of coworkers will be seen as intentional and harassing. As a manager, whether you act out anger in public against your own employees or you witness another manager doing the same, it is your responsibility to help solve this problematic behavior before it manifests into litigation.

Many managers, when faced with accusations of harassment or intentional tortuous acts are shocked and surprised that an employee targeted them in a lawsuit. Implementing the aforementioned proactive lawsuit prevention strategies will help protect managers from these allegations and the stress inherent in defending their workplace conduct.

Fault lined “No-Faults” May Create Liability for Attendance Conscious Employers

If you have the pleasure of working in manufacturing, construction and other industries where unplanned absences have an immediate and direct impact on production and the bottom line, you are probably familiar with a “no-fault” attendance point policy. This is a policy where there are no excused or unexcused absences. All absences (except those that are specifically excluded by company policy, state or federal laws) count against an employee. That is, “No one wants to hear about whose fault it is that you can’t be at work today.” Employee absences are tracked based on the number of occurrences of absence or tardy, often via a point system. For example, an absence that is called in ahead of time will cause the employee to get 1 point. A tardy will cause an employee a 1/2 point. An absence without a call in is a “no-show” and that may cause an employee to get 2 points. Progressive discipline is provided when employees reach or exceed specific points. For example, disciplinary actions could be taken if an employee earned the relevant points within a 12-month period. If an employee has 7 points within a 12 month period, he or she receives a verbal warning. After 9 points, he or she receives a written warning and so on until the employee reaches the maximum allowable points, causing termination.

Although rigid, these attendance policies are favored by production centered industries because they allow companies to maintain staffing needs and quickly warn employees who have excessive attendance or lateness that directly undermines productivity. Because the attendance is usually administered by a computerized system or software, it also helps insulate production supervisors from being accused of “targeting” these employees for discriminatory reasons. Once an employee reaches the maximum allowable points, he or she has been sufficiently disciplined for his or her absences and warned of imminent termination. Thereby, undermining any post termination claim of discrimination or wrongful termination.

Since they are not exactly pro-employee, these no fault attendance policies are often criticized for their rigidity, for discouraging employees from staying home when they are “fluey” but not wanting or needing to go to the doctor (as was the case when the H1N1 virus began its outbreak), for being unfair to women who are often the parent to stay home to care for the unpredictable needs of small children or the elderly (the criticism Wal-Mart came under recently for instituting a point attendance policy) and for not allowing leeway for unplanned emergencies, such as car accidents, among other reasons.

Notwithstanding these criticisms, when applied consistently, fairly and objectively, the “no-fault” attendance point system is generally upheld by courts when challenged. The problems or “fault-lines” emerge when individual managers, human resource personnel or sometimes even company counsel mistakenly do not properly identify the tardiness or absence as within statutorily protected leaves. That is, an employee receives points when their absence should not have counted as an “occurrence” and they are disciplined or terminated while protected under the Family and Medical Leave Act (FMLA), the California Family Rights Act (CFRA), the Americans with Disabilities Act (ADA) or California’s Fair Employment in Housing Act (FEHA).

For example, in Roby v. McKesson Corp., No. S149752 (Nov. 30, 2009) the California Supreme Court reviewed a case that involved the McKesson Corporation’s wrong decision to deny one of its employees FMLA and terminated her when she reached the maximum points under the Company’s no fault attendance policy. In this case, Charlene J. Roby was a 25 year employee of McKesson Corporation, a distributor of pharmaceuticals and health care products. At the end of her employment, Ms. Roby was a customer service liaison at McKesson Corp. In 1997, Ms. Roby began experiencing panic attacks. This restricted her ability to perform her job as she would have heart palpitations, shortness of breath, dizziness, trembling and excessive sweating. She began a medication for the panic attacks, but one side effect of the medication was unusual body odor. Her panic disorder also caused her to nervously dig her fingernails into her skin and this caused scabs and sores. Her supervisor, knew about her panic disorder, her body odor and skin condition. Her supervisor called Ms. Roby “disgusting” because of the scabs and odor, she refused to acknowledge her greetings, turned away when Ms. Roby asked her questions, ignored her in meetings and called Ms. Roby’s job a “no-brainer.” Ms. Roby’s condition caused excessive absences. Although she requested FMLA, she was denied it by the company. In 2000, she was terminated based on these excessive absences pursuant to the recently instituted no fault attendance policy.

After her termination, Ms. Roby was “devastated,” depleted her savings and became suicidal. Ms. Roby sued McKesson Corp. and her supervisor personally for harassment and discrimination based on her disability. The jury sympathized with Ms. Roby and gave her a very generous verdict: $1.3 million in lost earnings, between $500,000 and $2 million for emotional distress, including $500,000 against the supervisor as an individual and $15 million in punitive damages. The Supreme Court reduced this amount to $1,900,000.

Although McKesson Corp.’s no fault attendance policy was designed to protect the company and its supervisors from claims such as Ms. Roby’s, when implemented with complete disregard for Ms. Roby’s ongoing medical issue, compounded with her supervisor’s personal attacks, it in fact created the opposite effect: both company and personal liability.

Proactive Lawsuit Prevention Strategies for No-Fault Attendance Policies
1) Train Your Managers.
All managers and human resources must be trained that employees with known or suspected disabilities and medical conditions may be protected by state and federal laws. They must be trained on the nuances between FMLA and CFRA, between ADA and FEHA. This may mean that the employee needs a special accommodation, time off, allowance for tardiness or is an exception from the attendance policy point system all together. This training should cover what a supervisor can ask for in terms of medical documentation and personal information. Moreover, all supervisors and managers must never make personal attacks, comments or criticism with respect to an employee’s disability or condition, verbally or in writing.

2) Institute Pro-Employee Benefits
A company with a no fault attendance policy can compensate for the rigidity of this policy by rewarding employees for perfect attendance, recognizing exemplary employees in company newsletters or intranet, by providing paid time off, paid sick leave, paid vacation benefits or rolling holidays. All of these would kick in before the points began to be counted against the employee.

3) Apply the Policy Fairly
Managers and human resource personnel must understand that the policy cannot be used to terminate disfavored or “problem” employees and ignored when the employee is someone they would like to keep. In Carmona v. Southwest Airlines, 5th Cir., No. 08-51175 (April 22, 2010), the 5th Circuit recognized that Southwest Airlines allowed some of its flight attendants to maintain employment even after reaching the maximum points under Southwest’s no fault attendance policy. Therefore, the Company’s decision to terminate one flight attendant, Carmona, for reaching maximum points was a “pretext” for his manager’s true discriminatory intent against Carmona’s for being disabled, which violated the ADA.

California’s 4th Dispenses “Wild Justice”

On December 10, 2009, in Haberman v. Cengage Learning, 180 Cal.App.4th 365 (2009) the California Court of Appeals for the 4th Circuit affirmed the trial court’s summary judgment in favor of the employer on the employee’s claim that she was sexually harassed and retaliated against. The ruling in this case reminds me of a famous quote:

“Revenge is a kind of wild justice, which the more man's nature runs to, the more ought law to weed it out.” (Francis Bacon Sr.)

In this case, the Court of Appeals did not ignore the peculiar timing of the allegations made by Cengage Learning’s employee and ruled in favor of the employer, weeding out the “revenge” lawsuit at the summary judgment phase. The facts of this case reveal it as a “revenge” lawsuit.

Cengage Learning, a textbook publishing company, employed Alicia Haberman as a sales representative from 2004 through 2008. During her employment at Cengage Learning, Haberman underperformed, consistently failing to meet her annual sales goals. For years, this underperformance went virtually ignored, but in 2007, when Cengage Learning hired on a new district sales manager, Rick Reed, he began to hold Haberman accountable to her projected sales goals. Reed gave Haberman verbal and written notice of his expectation of her improvement. He created an action plan for her improvement as it pertained to her “gap to goal.” He discussed his concerns over Haberman’s failure to improve with the President, Vice-President and national sales manager of Cengage Learning. He gave Haberman a final chance to demonstrate improvement. On September 10, 2007, Reed told Haberman that if she did not show improvement she would be placed on a Performance Improvement Plan (PIP). Finally, on October 10, 2007, Reed placed Haberman on a PIP. Presumably, failing to meet the PIP would be grounds for dismissal.

A few days later, Haberman conveniently remembered that she had been sexually harassed for the past three years by the company’s national sales manager, Eric Bredenberg. On October 12, 2007, she made a complaint with Cengage Learning’s Human Resources department stating that she had “enough” and was being harassed. In November, she took a medical leave of absence and never returned to work. (Her employment was terminated effective August 31, 2008.)

In November 2007, Haberman filed a complaint in state court against Cengage Learning, Rick Reed and Eric Bredenberg alleging sexual harassment, retaliation, breach of contract and intentional infliction of emotional distress. The trial court granted the defendant’s motion of summary judgment. On appeal, the Court of Appeals reviewed the trial court’s decision and considered all the evidence set forth.

In her complaint, Haberman alleged she had been sexually harassed by Bredenberg in 2005 with comments he had made. These comments included “Wow. You look so pretty.” A school administrator was “pretty hot for being an older woman.” A comment that a supervisor’s father, named Richard, was called by his son of the same name, “Big Dick.” A comment that she was “drop dead gorgeous.” When driving his car behind her in a parking garage, a comment on the phone that he was “coming up right behind her and that it felt pretty good.” A comment that a text book author had “the hots” for her. A comment that his grief counselor advised him to wait before entering into another relationship and “did she know someone who just wanted to have sex?” In addition, these conversations were not one-sided. Court papers showed Haberman also sent emails and made comments to Bredenberg, such as, “Thank you Eric! You are too good!” “I think the picture of the week should have been a muscle pose of you!!!” In addition, Haberman alleged that another sales person who failed to meet sales goals was not placed on a PIP; therefore, her discipline was a mere pretext for harassment.

Usually, California trial courts do not grant summary judgment in harassment cases because any questions of fact should be decided by a jury after hearing the evidence rather than a judge based on his/her reading of the paperwork. However, in this case, the Court of Appeal carefully evaluated the evidence and concluded that the trial court correctly decided the motion and affirmed the court’s summary judgment. The Court found that although Haberman alleged harassment from 2004 through 2007 that the comments were sporadic, isolated, occasional and trivial falling short of meeting the “severe and pervasive” standard for a hostile work environment case. Second, the court rejected her allegation of retaliation since the alleged retaliatory conduct – the decision to put her on the PIP - actually predated her complaint to human resources and therefore could not have been in retaliation for her complaint. The Court similarly disposed of the breach of contract claim and intentional infliction of emotional distress claim.

What Proactive Lawsuit Prevention Strategies Did Cengage Learning Implement That Saved It from a Costly Lawsuit?

Cengage Learning Implemented Progressive Discipline and Gave Employees Ample Opportunities for Improvement
Cengage Learning provided Haberman with clear performance standards. Therefore, her supervisor had a clear, objective, well documented reason for placing Haberman on the PIP. She had been given many opportunities to improve. She had been given many warnings about her failure to improve. These disciplinary actions were documented. She had been given many opportunities and resources for improvement. Therefore, the court did not find her placement on a PIP a pretext to mask any harassment.

Cengage Learning Had a Grievance Procedure with Various Avenues for Employees to Complain
Once Haberman decided to complain, she did not have to complain to her direct supervisors, Rick Reed or Eric Bredenberg. She knew she could complain to her human resources (HR) department. Therefore, the fact that she never complained about the alleged ongoing harassment to another manager or to HR until after her job security was undermined made the timing of her complaint seem vengeful.

Cengage Learning’s Supervisors’ Did Not Date, Sexually Proposition or Physically Touch Their Supervisees
This case could have easily survived summary judgment if the alleged harassment went only one or two steps beyond inappropriate comments. If Bredenberg had sexually propositioned Haberman or even inappropriately touched her, the Court most likely would have allowed a jury to evaluate whether the conduct was “pervasive” or a “quid pro quo” thereby costing Cengage Learning many more thousands of dollars in litigation expenses.

What Proactive Lawsuit Prevention LEADERSHIP Strategies Should Cengage Learning Have Implemented? (In other words, how can you and your company better protect yourself from “revenge” lawsuits?)

To recap from my previous blog, Proactive Lawsuit Prevention Leadership Strategies invoke the highest standards of conduct. These strategies ask employers to internalize all the externalities inherent in employee relations, even the conflicts which may not necessarily give rise to litigation under the current laws or the externalities that a business is not forced to “pay for” by order of a court. Using Haberman v. Cengage Learning as an example, the company in this case could have demonstrated leadership and better protected itself with the following actions:

Cengage Learning Should Train Their Supervisor’s On the Appropriate Use of Email and Technology
Especially in today’s high tech world, companies must educate their managers about the appropriate use of technology in the corporate environment. The casual and sometimes inappropriate “conversations” documented time and again in email communications between Bredenberg and Haberman are glaringly obvious as “unprofessional” when presented as evidence in litigation. Email communications, voicemails, PDAs and the use of social media are becoming fodder for plaintiff’s counsel in these cases. Techno-harassment is emerging in increasing frequency in the case law. Cengage Learning should have trained its managers to anticipate that email is discoverable and to only put into email communication information that a manager would feel comfortable reading out loud in front of a jury.

Cengage Learning Should Train Managers Not To Talk About Their Sex Lives
Whether the details of a person’s sex or romantic life can trigger a sexual harassment lawsuit or not, managers should not discuss the details of their own romantic or sexual escapades with their coworkers or subordinates nor should they ever ask about someone else’s. This is an area that can easily offend the person listening to these stories or make others uncomfortable. Because the intent of the accused is often irrelevant or secondary to the offense of the receiver of harassment, these stories are unsuitable and too risky in the workplace and among coworkers.

Cengage Learning Should Train Managers to Always Treat Like Cases Alike
Although Cengage Learning was able to demonstrate that Haberman’s placement on a PIP was appropriate and that the other employee who was not placed on a PIP only missed sales goals for two years, (rather than the three years that Haberman missed) this was a near miss for Cengage Learning. The Company should ensure that performance standards and discipline are consistent and objective, rather than based on the subjective opinions or decisions of individual supervisors. If Cengage Learning had objective performance standards that it applied consistently, than Haberman would have been disciplined about her underperformance in the years prior to Reed’s hire. His suddenly holding her accountable would not have triggered her backlash lawsuit or incurred the “revenge” allegations. Treating like cases alike also increases the likelihood that a claim of discrimination or harassment is defeated.

Can you identify any other strategies that a company in this situation can implement to protect it from a “revenge” lawsuit?

Significant Impressions from the Last Row of the LACBA Symposium

Old habits die hard I guess. I have always preferred the last row. Despite the fact that I teach seminars for a living and always appreciate the wide-eyed, enthusiastic attention of the people who sit in the front row of my own programs, I always seem to want to sit in the very last row when I am attending someone else’s program. Saving the self-analysis for a later date, yesterday, I spent the entire day in the last row of various employment law Symposium sessions given by the Labor & Employment Group of the Los Angeles County Bar Association. Some of the significant impressions that I made include:

1) Plaintiffs’ lawyers had more to be pleased about last year than defense counsel.
After listening to the first panel discuss the recent developments in statutory and case law from the year 2009 and early 2010, most of those cases had holdings that expanded employee’s rights to the dismay of employers. A typical repartee between the panelists, Gina Browne, Esq. (plaintiffs’ counsel) and Tracey Kennedy, Esq. (defense counsel) was “I love this case,” - “I hate this case,” respectively, as they discussed each holding. For example, when discussing A.M v. Albertsons, LLC 178 Cal. App. 4th 455 (2009) Browne cheered the court’s finding - that an employer’s failure to accommodate an employee’s disability on a single occasion did not preclude a case under the Americans with Disabilities Act and the California Fair Employment and Housing Act - while Kennedy look dismayed. Clearly, the fact that an employer, 9 times out of 10, accommodated an employee’s special needs did not impress the California Court of Appeal when the single refusal to allow an employee to go to the bathroom as a part of her reasonable accommodation led to an award of$200,000 dollars. This happy/sad banter set the tone for this rest of the case law discussions.

2) Employee privacy challenges are still a tremendous threat to employers as the impact of technology and social media have provided a new, somewhat legally, untested dimension to the issue. All employment lawyers’ eyes and ears are on what the California Supreme Court will do when it hears Quon v. Arch Wireless Operating Co. on April 19, 2010. Although all the panelists agreed that employers need “policies” to protect their client/employers from liability, the issue of how specific and what to include in the policies seemed to be less clear. The concern was over whether a “kitchen sink” policy will sufficiently protect the company in this day and age and whether it is even practical in 2010 when the expectation of privacy over personal/ professional devices, such as iphones or flash drives is so unclear. The panelists also discouraged the use of social media websites for recruiting purposes in light of the potential for claims against the employer made by rejected applicants. As discussed in my previous blog, Elvis Has Left the Building, this is an attitude that I do not necessarily agree with, as I think it is outdated and not "proactive".

3) Competition among “neutrals” is stiff.
The program designed for attorneys who mediate, arbitrate or act as neutral investigators was packed. Most likely, this is a commentary on the recessionary economy. Certainly, some attorneys are looking for new ways to augment their income by becoming “neutrals.” I was personally grateful for the time the panelists devoted to ineffective marketing strategies. That saved me a bundle on advertising costs alone. It also made me grateful for the investment made in my website and blog as one panelist, Apalla Chopra, Esq. specifically stated that she “likes a good website.”

4) The program was thorough and it is impossible in one day to cover every topic (and please everyone).
Nevertheless, items that I was surprised that the program did not include were 1) a discussion of future legal trends in the practice of labor and employment law, such as the increase in wage and hour class action filings, 2) a discussion of the recent Healthcare Reform Act and how it will impact employer’s responsibilities towards employees, 3) an honest discussion of the impact that the recession has had on labor and employment law on the whole and 4) time for questions. Of course, I was not able to attend all the sessions, so perhaps these topics were covered in portions of the Symposium I did not get to see..from the last row.

Did you also attend? What were your impressions?

Proactive Lawsuit Prevention LEADERSHIP Strategies

The focus of my business is about teaching other businesses how to prevent lawsuits. Much of my time is spent teaching awareness raising seminars, law based topics and CYA skills (that stands for Cover Your …you can figure it out on your own.) That is, I often train employees, management, human resources and even in-house counsel how to implement policies and procedures so that when an employee has an internal complaint, the company is primed to diffuse the lawsuit-bomb in order to avert a disgruntled employee from suing. These are what I have termed Proactive Lawsuit Prevention Strategies.

For example, sexual harassment lawsuits are prevented when an employer has a strong policy which prohibits harassment, when employees are trained to take complaints to receptive managers, when human resources is prepared to investigate it, and when the company responsibly acts to remedy the harm done. These are examples of Proactive Lawsuit Prevention Strategies and spreading this dogma is the mission of my business.

Yet, in reading a recent Harvard Business Review article, “The Big Idea: Leadership in the Age of Transparency” (April 2010) by Christopher Meyer and Julia Kirby, it occurred to me that I needed to be invoking an even more proactive “leadership” characteristic into my own curriculum. In their article, Meyer and Kirby make the case that “the true measure of corporate responsibility – and the key to a business’s playing a proper role in society – is the willing, constant internalization of externalities.” In my area of expertise, the “externality” is the extremely, remote, potential litigation. More than CYA tactics which prevent actual lawsuits, companies need to be looking at internalizing all the externalities inherent in employee relations, even the conflicts which may not necessarily give rise to litigation under the current laws or the externalities that a business is not forced to “pay for” by order of a court.

For example, although federal and state laws (Title VII and the Fair Employment & Housing Act (FEHA) in California) protect certain categories from unlawful harassment, i.e. sex, race, religion, etc., companies seeking to stand out as having leadership strategies would also respond to harassment based on “unprotected" categories. That is, when human resources receives a complaint from an employee that she is being “harassed” based on her weight or she complains about a singular “blond joke,” whether she can actually meet the legal criteria for a valid claim with the EEOC or Department of Fair Employment & Housing (in California) should be irrelevant. A leading company takes ownership of all complaints made by employees and seeks to provide a workplace free of any conduct that interferes with an employee’s ability to work optimally.

Why? According to Meyer and Kirby, the rationale goes beyond, “it’s the right thing to do.” Their article puts forth that our corporate society has become literally transparent. So that hiding a wrong is no longer an option. For example, the campaign by Phillip Morris in the 1980s to conceal evidence which linked smoking to lung cancer could not occur in today’s society of social media, whistle blower protections and instant messaging. According to the authors, “the worst of all worlds is to be made responsible, and still not be considered responsible.”

I agree with this premise that transparency demands higher accountability and recent case law supports it as well. In the case of Pietrylo v. Hillside Restaurant Group, disgruntled employees began a Myspace page which maligned their managers’ inappropriate behaviors. Although the company sought to force the employees to remove the page, the damage to the company’s reputation had been done. In a recent investigation I was asked to conduct, after interviewing the company’s employees, I learned that some employees, in reaction to the corporate officers’ secretive conduct, reactively began an anonymous blog which purposely leaked confidential company information to all employees. The availability of social media, the access to technology and the flattening of companies corporate structures encourages transparency. The company’s leadership role is to accept this and to act accountable to transparency’s offspring - heightened corporate responsibility to all externalities.

In the legal realm, that means protecting employees from conduct which has yet to be protected fully under the law, but which is still detrimental. For example, many companies employ an equal-opportunity bully. That is a person, who does not discriminate, but bullies all underlings similarly. Often under these circumstances, an employee may not be able to maintain a claim of unlawful harassment absent a showing of discriminatory behavior. (Although recent EEOC actions suggest that the agency and courts are beginning to recognize this behavior as actionable. See E.E.O.C. v. National Education Association (male supervisor’s temper tantrum had a disparate impact on female employees even when he treated male employees similarly.) A company that protects its employees from “bullying” by disciplining the bully is demonstrating its leadership by refusing to allow its employees to be mistreated, whether it can be “forced” to or not by a court of law or agency.

Similarly, employees who “haze” new employees must also be disciplined whether the law prohibits the specific hazing behavior or not. This is another example where a company can maintain a leadership policy which prohibits any hazing activities whether or not an employee can maintain a cause of action or not. (Some courts recognize hazing employees as actionable when the elements of sexual harassment or assault exist. The U.S. Supreme Court set this precedent in Oncale v. Sundowner Offshore Services.

What are other Proactive Lawsuit Prevention Leadership Strategies or other examples that you can think of? What legal externalities should your company internalize and act to remedy?