Avoiding Collisions With Employees

Shop owners often point out the tremendous liabilities they face repairing a vehicle that will soon be back

out on the highway, perhaps loaded up with a family, traveling at 65 mph.

Unfortunately, these business owners can face just as much liability without repairing a single vehicle-just by hiring, firing, employing or managing one or more employees. Failure to understand and comply with myriad Federal and State employment laws can be just as risky as putting an unsafe vehicle back on the road; both can lead to fines or lawsuits that cripple an otherwise thriving business.

Legal postings

It may sound trivial, but failure to post several mandatory notices about employees' rights can result in fines of up to $7,500. These postings must be placed where employees can readily see them, such as in the shop's lunchroom.

Although the exact postings required can vary based on the type and size of the business, the one most commonly required explain to employees is the Fair Labor Standards Act, which includes minimum wage requirements, as well as "Job Safety and Health Protection," which includes rights protected under the Occupational Safety and Health Act. Also check out the Occupational Health and Safety Administration's (OSHA's) Web site, www.osha.gov, for details on procedures and requirements.

Job descriptions

To avoid discrimination, hiring decisions should be based on how well an applicant's skills and abilities meets those skills and abilities that are required for the job. That's why having a job description prepared before you begin hiring can help avoid problems. A good job description includes the duties and responsibilities in specific terms so that both you and the job applicant understand the 'what and how' of the position.

Remember that the Americans with Disabilities Act (ADA) prohibits discrimination against qualified individuals with disabilities who, with or without reasonable accommodation, can perform the essential functions of the job. A complete and accurate job description will describe these essential functions-those duties that are fundamental to the job. But in order to use a job description as a defense to an ADA claim, the job description has to exist before interviewing applicants or advertising for a position.

Employee handbook

Many legal problems with employees can be avoided through a well-written policy handbook. Julie Bolt, a business attorney with the Portland, Ore. law firm of Martin Bischoff, Templeton, Langslet & Hoffman, has one tip for those writing or reviewing their businesses' employee policy handbook: Never say "never" or "always."

"Leave yourself some leeway in your policies," Bolt advises. "Protect your rights by writing the manual so it says, 'This is normally the course of action we will take, but we reserve the right to deviate from this course of action.' Write it so you have an out, so that you reserve the right to change the policies."

Bolt cited an example of a business owner whose policy manual stated that any employee who was late for work three times would be fired. An employee who had been with the company less than three months and whose job performance left something to be desired was fired after her third late day. She successfully sued the company by showing that a male employee had not been fired after his third late day. The owner hadn't fired the male employee because he was a hard-working employee who had been with the company many years, but because the policy hadn't been written to give the owner the flexibility to fire or not to fire after the third late day, the company lost. Here are some of Bolt's other recommendations about employee policy manuals:

• Keep the manual simple and easy to understand. Include examples. Don't just say, "All employees get the following holidays off." That would mean all employees, even temporary and part-time employees, would get those days off. Also, is it clear whether employees get the holidays off with or without pay?
• Have each employee sign a form that says he or she has received a copy of the manual and agree to abide by the company policies.
• Make sure your manual forbids any "oral contracts" between any owners, supervisors or employees. It should also state that any past oral contracts are not binding. Bolt cited an example of a million-dollar lawsuit won by an employee who was laid off after being told by a well-meaning supervisor that despite impending layoffs at the company, he wouldn't be laid off "as long as there was still production coming through the door."

Candidate interviews

If done poorly, interviews of potential new employees can be a lawsuit waiting to happen. Here are some tips for doing it right:

• Standardize your interview questions so that each applicant is asked the same set of questions.
• Keep understandable notes about the interview. Your notes should include only comments about the applicants' qualifications, strengths and weaknesses-no comments that are discriminatory or could be viewed as discriminatory.
• Don't ask (on your job application form or in your interviews) about the applicant's age, marital status, height or weight, national origin, religion, military record, disabilities or arrest record (you can ask about felony convictions, but not arrests). Avoid "small talk" because it can often lead to this type of improper personal information being disclosed by the applicant.
• Make sure everyone participating in the interview process-including managers or other employees-understands and follows the laws governing the hiring process.

Employment references

For many shop owners, the fear of lawsuits keeps them from telling other employers much when they are called about a former employee. Yet these same shop owners are anxious to have as much information as possible about potential employees when it's their turn to hire. Bolt said business owners could avoid this dilemma by understanding what they can-and should-provide during employment reference checks. State laws vary in how they protect employers from claims of defamation, which charges that a former employer gave out false or derogatory information, resulting in damage to the former employee's reputation. But in general Bolt recommends the following:

• Always tell the truth. The truth is a complete defense to any claim of defamation. "So if an employee is stealing from you, and you can document that and substantiate that and you've got the witnesses, you can tell a potential employer that because it's true, even though it may be damaging to that former employee's reputation," Bolt says. But, she cautioned, make sure you have the documentation to back up what you say. Don't exaggerate, and don't draw conclusions, from an employee's behavior. If someone was often late for work, say that person was repeatedly late for work; don't say you think he or she has a drug problem because of the frequent tardiness.
• Only give out information to someone with a business need to know-such as another business that is considering hiring your former employee. You are not protected from defamation claims if you bad-mouth a former employee at a party or industry event. Make sure you know who you're talking to. Ask for a request in writing, or call them back to confirm they are who they say they are.
• Only give out information that is job-related. Ask about the job for which the former employee has applied and only comment on his or her ability to perform those types of duties. Do not give out information that you can't ask about in a job interview (such as race, age and marital status).

Harassment

Although federal laws regarding racial discrimination and sexual harassment apply to businesses with 15 or more employees, many states have extended similar protections to workers at all businesses. In any case, employers should take complaints about any such behavior very seriously.

A shop's written policy should describe that prohibited harassment may include comments, slurs, jokes, innuendoes, cartoons or pranks. The policy should outline that harassment includes physical harassment, unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct that is gender-based and could be offensive, that interferes with an individual's job performance, or that "contributes to a work environment that is intimidating, hostile or offensive." Any retaliation against an employee because he or she makes a complaint of harassment should also be prohibited.

Worker safety

Most business owners want to provide a safe work environment for their employees-if for no other reason than they understand that workplace accidents and injuries can bring costly medical bills, lawsuits or regulatory fines. Your state's worker safety agency or your workers' compensation carrier may offer free workplace inspections to help you find and correct any safety violations-with guarantees that you will not be fined for any violations provided they are corrected within a set period of time.

Exit strategies

Before you decide to fire an employee, make sure you have made some written notes or other documentation of the reasons why the employee is being fired. Being terminated should never be a surprise to an employee. If it is, you haven't done your job. Make sure he or she is aware that job performance problems are putting his or her job at risk. Keep detailed notes about your discussions with the employee regarding his or her performance, making it clear what the consequences will be if performance problems continue. Juries in employment disputes will want to see that you gave the employee a fair opportunity to improve.

At times it may feel that you might need a law degree to make sense of the various employment laws. But Bolt and other attorneys suggest that a regular review of these basics will keep you out of most trouble, and help you understand the aspects of managing employees that you need to address most carefully.