| 10 May 2010
What issues do you need to consider when hiring or firing an employee?
Business owners need good employees, but there are a number of considerations that need to be taken into account in how you manage them, especially when trouble arises or they need to be let go. Jennifer Treadway Morris walks you through the legal considerations surrounding such issues.
Employment Law Overview
December 8, 2009
By: Jennifer Treadway Morris, Esq.
In my business law practice, many clients request guidance on relevant employment laws to minimize employer liabilities. As you know, Louisiana is an at-will employment state. This means that an employer is free to fire an employee and an employee is free to leave employment without providing any reason. However, there are some terminations that can create liability for an employer where claims of violations of federal or Louisiana employment laws are made. Some are obvious pitfalls but others are less obvious, e.g. the drug using employee. An employer suspicious of an employee using illegal drugs or alcohol while at work seems to be glaringly obvious misconduct that an employer should be able to use to dismiss an employee without incurring any potential legal liability. However, there are still safeguards an employer must have in place in order to be able to successfully defend the action even in this situation. In this article, I outline some major employment laws and then provide some safeguard suggestions to incorporate in your company policy. As with any potential legal issue, you should always review your specific scenario with your business law attorney before considering yourself protected.
Employment law covers all rights and obligations in the employer/employee relationship which includes interactions between employers and their current employees, employers and job applicants, employers and former employees, as well as relationships between employees. The gambit of employment law involves legal issues such as discrimination, wrongful termination, wages and taxation, and safe workplace. Title VII of the Civil Rights Act of 1964 provides the framework for all discrimination and harassment litigation and was the springboard for other laws designed to protect employees from negative employment consequences based on something other than job performance. Generally, an employer can insure compliance with these laws by documenting that every decision was made on a purely performance based ground.
Title VII of the Civil Rights Act prohibits discrimination based on race, color, national origin, religion, or gender and applies only to employers with 15 or more employees. Likewise, the Americans with Disabilities Act applies to employers with fifteen or more employees. Under the Americans with Disabilities Act, an employer shall not discriminate against a qualified individual on the basis of disability in regard to employment decisions.
The Americans with Disabilities Act was recently amended in September 2008 to emphasize that a broad view of the definition of handicap or disability should be used to protect any individual with a disability or an individual who is regarded as disabled regardless of whether he actually has a physical or mental impairment and whether the impairment limits or is perceived to limit a major life activity. The Fair Labor Standards Act requires employers to comply with minimum-wage and overtime rules. This statute applies to a company with gross yearly revenue totals which exceed $500,000. Mis-classification of employees to attempt to prevent paying overtime can cause problems for the employer. Recently, the Department of Labor allotted significant funds to investigate mis-classified employees and overtime wage violations in an attempt to protect employees. Further, an employer must be aware of any state specific requirements as well.
The other important federal laws are the Family Medical Leave Act which only applies to employers with 50 or more employees within 75-miles of a single location. The Uniformed Services Employment and Re-employment Rights Act applies to all employers. This act prohibits employers from taking negative job action against an employee because he is a member of the armed forces or reserves. It requires employers to reinstate employees who take time off to serve. The Consolidated Omnibus Reconciliation Act of 1985 (COBRA) applies to employers with 20 or more employees and requires the employer to offer employees the right to a continuation of their health coverage only if they had a group health plan as a benefit. The Employee Retirement Income Security Act (ERISA) has detailed requirements for employers who offer employees a “welfare benefit plan” or retirement plan. A welfare benefit plan includes providing health insurance. Generally, employers can avoid any ERISA violations by having a third-party provider handling their retirement plan and other benefits.
On the drug testing scenario illustrated above, the main concern is a claim by the employee of an invasion of privacy or a claim of defamation. All of the cases and statutes dealing with rights to privacy of employees address the competing interests at play. The court will balance the employer’s need to protect its clients, customers and other employees as well as insure its work is being done properly with the employee’s right to privacy. An employer can avoid problems by insuring that inquiries relate to the job.
The safest course of conduct an employer can take is to ask an applicant or employee in writing for a written consent to a drug test. As long as the request is reasonable, courts generally uphold the employer’s request. As a practical matter, an employee who believes he will fail the test, will refuse to consent to the drug test. Failing to consent to a reasonable request for a drug test which leads to termination of an employee has been upheld to be valid grounds for termination. Anderson v. Dept. of Public Safety & Corrections, 2007-1603(La. App. 1 Cir. 3/26/08), 985 So.2d 160.
In Louisiana, drug-testing of individuals in residence in Louisiana and of samples collected in this state shall be performed in according with the Mandatory Guidelines for Federal Workplace Drug Testing Programs, as used by the National Institute on Drug Abuse Guidelines and published in the Federal Register (“NIDA Guideline”). See 53 Fed. Reg. 11970 (1988). See also 59 Fed. Reg. 29908 (1994) and 62 Fed. Reg. 5118 (1998) for the amendments and revisions. These provisions are similar to the National Guidelines and most likely to most states. Check with your local laws to be sure.
Louisiana’s law also contains provisions relating to the rights of the employee as well as responsibilities of the employer. If all of the procedures are followed, then there can be no cause of action for defamation of character, damage to reputation, or privacy against the employer as long as they have an “established program of drug or alcohol testing in accordance with this chapter.” Failing to follow the procedure, however, does not make the employer liable in Louisiana for wrongful termination of an at-will employee. Sanchez v. Georgia Gulf Corporation, 2002-0904 (La. App. 1 Cir. 11/12/03), 860 So.2d 277.
In addition, an employee who voluntarily submits to a drug test waives any claim of an invasion of privacy. Casse v. Louisiana General Services, Inc., 531 So.2d 554 (La. App. 5 Cir. 1988). Further, to prevent claims of defamation or invasion of privacy by disseminating facts concerning the employee’s drug test, an employer must get a signed authorization specifically allowing discussion with certain individuals who would need to know. Employer safeguards include maintaining confidentiality of the request for the employee to take the test as well as the results. Adams v. Kaiser Aluminum, 96-429 (La. App. 5 Cir. 11/14/96), 685 So.2d 269.
Finally, before acting, verify information first. Before conducting a search or requesting submission for a drug test, check other available sources of information to rule out other possibilities. For example, if an employee is using prescribed medication, this may explain bizarre behavior. When engaging in this discussion with the employee, be mindful of their right to privacy and that their medication and illness may be a delicate subject for them to discuss. You do not want to be accused of discriminating because they were taking prescribed medicine or because they have a certain medical condition. Thus, once an employee does indicate that he is on medications, you will have to tactfully and carefully try to determine whether the medications have any adverse effects which will impact their ability to perform their job. You can request a doctor’s note to verify the medications do not impair their ability to safely do their job.
If there is truly a prescribed medication causing odd behavior, then you will have to know whether the employee can still safely and effectively perform their job while taking this medication. Once the employee does provide a legitimate excuse for the perceived suspicion of drug use or other odd behavior, the employer will then have to determine whether the rumors are merely harassment of the individual suspected of drug use in order to protect itself from claims by the employee for disability or handicap discrimination and harassment.
In order to take advantage of available employer defenses, I recommend the company establish a company policy. Once you establish a procedure, put it in your handbook, and follow the established procedures for every complaint or suspicion. Otherwise, you will open yourself up to claims of unfair treatment. Include employee acknowledgment forms specifically stating that the employee has read and understands the company policy, specifically stating they agree to abide by the discrimination, harassment, and drug policy, and have it signed and dated by the employee and kept in their personnel file. I also suggest employers keep a reasonable suspicion log form that can be kept in the personnel file on an employee who is suspected of any company violations. Most employers do well defending claims of violation of rights when they maintain good records, act reasonably, have neutral or job-specific reasons for their actions, can back it up with documentation, and provide employees or potential employees clear guidelines as to the company policy and expectations for continued employment.
When you interview the people involved, get details such as what was said to whom, when it was done, where it was, and whether anyone else was present. Be sure to take notes of everything. Then, talk to the person being accused of discrimination, harassment or illegal drug use. Get details from them as well. Reserve judgment or your decision. Look for corroboration or contradiction from neutral sources such as schedules, time cards, other attendance records, and e-mails in order to help you determine if a party was where he or she claimed to be. Look for outside witnesses (UPS, mail carrier) that may have observed something as well. Avoid possible workplace polarization by insisting on confidentiality and practice it yourself in the investigation. Keep a journal of all investigations. Your written records will protect you later if an employee claims that you ignored a complaint or fostered an environment of discrimination.
Once you have gathered all information available, sit down and decide what you think really happened. If you conclude that some form of discrimination or harassment is occurring as opposed to someone using illegal drugs, then figure out how to discipline the wrongdoer appropriately. Termination may be warranted in some cases but lesser discipline, such as warning, counseling, or training might be in order. Once a decision is made on the appropriate action, take it quickly, document it, obtain signatures of the person reprimanded or terminated and notify the others involved that a decision was made. They do not need to know the details of the action taken.
To summarize, as an employer, you can minimize liability under many employment laws by following a few simple guidelines:
- The company should have a clear policy regarding harassment, discrimination, and drug use. All decision should be made on a neutral basis which can be documented.
- Maintain a zero tolerance for discrimination or harassment. Train all employees on what is considered harassment and discrimination and re-train all employees on promotion to supervisor and management. Document attendance at the training.
- Provide a procedure for handling individual employees suspected of violating a company policy and for handling employee complaints of harassment or discrimination.
- Maintain records in the suspect’s personnel file of all suspicions of violations in a log that includes the name of the person who witnessed it, the date and time and the description as to what they saw or heard.
- Make sure that you have enough evidence to be considered “reasonable suspicion.” Corroborate with other neutral sources.
- In a confidential setting, approach the suspected employee with a form that reminds them of the workplace policy, your right to investigate, and have the employee sign and date that form.
- Present the employee with the evidence of reasonable suspicion that whichever policy has been violated. Fill out a form that explains to the employee the extent of the reasonable suspicion, omitting names to protect others safety and privacy, and have the employee sign and date that form indicating he received an explanation of the reasonable suspicion.
- When an employee is suspected of using drugs or alcohol, have the employee sign a consent to undergo the drug test. Have someone, who is trusted in management and can keep the information confidential, bring the employee to the certified drug testing site you have under contract immediately for the drug testing. Make sure the certified drug testing facility you use understands your state’s policies and does comply with them.
- Maintain confidentiality of everything when dealing with employees and demand it of all management.
An employer must exercise caution, respect, and compassion to all of its employees. An employee who feels you are taking the problem seriously is less likely to escalate the issue to a government agency or to a court. Don’t risk polarizing your workplace, damaging morale, and lowering productivity by taking any employee concern lightly or the legitimate reason given by the suspect by reprimanding the whistleblower. You want to be sure not to retaliate against anyone or blame anyone so that all employees know that they can come to you with legitimate concerns. However, you don’t want to foster an environment of harassment or disrespectful behavior towards coworkers. Sometimes litigation can be avoided by remembering employees want to be respected and to feel that they matter to the company. Practicing consideration could save you thousands in legal fees and damage awards.
Jennifer Treadway Morris is a practicing attorney with her own firm, The Law Firm of Treadway Morris and is of counsel to Shockey & Associates, a business law firm concentrating in comprehensive legal advise to the entrepreneur and small business client. Jennifer is an integral part of the Thompson Creek Team.