Are you doing what it takes to avoid costly litigation? Featured

4:49pm EDT October 5, 2011
Are you doing what it takes to avoid costly litigation?

If you are worried about how technology issues are impacting your business, how management issues are demanding more time and how federal regulations are often a challenge to understand, you are not alone.

Setting aside bottom line concerns, these three areas are among the top legal challenges that companies are facing today. But don’t despair. The best advice is ? get legal advice, and do it sooner rather than later.

“The biggest pitfall to avoid is not involving your lawyers until there is a problem,” says Steve Zack, former president of the American Bar Association. “Legal counsel is much more cost-effective if it used preventively rather than as the crisis begins to brew.

“Any issue where your lawyer has not been a partner in your decision-making process is going to become costly,” he says. “Lawyers are there to look over the horizon with you and help you weigh your options. You’ll make more fully informed and better decisions that will save you time, money and legal headaches.”

Here are some tips to find solutions to some of today’s common problems.

Avoid the legal pitfalls of technology

Issues with technology, be it over social media, privacy or data security, are among the top concerns of companies. Many employees today are from what might be called the “TMI Generation” because they reveal too much information ? and information leaks could lead to problems.

“They don’t have a good sense of the walls that should exist between a public personality and their private life,” Zack says. “So they could wind up tweeting information on Twitter about an account or an internal project.”

Too much information can also affect the hiring process. One of the tools employers have started using to screen job candidate applications is to search Facebook and MySpace pages to eliminate the people that might not be desirable to represent their company.

“The problem with using social media is that it gives the person making the hiring decision information that in many ways that person should not have while making that decision,” says Rick Bales, professor at Northern Kentucky University Chase College of Law. “So, for example, you go on to Facebook and get somebody’s birth date, you now know how old they are.”

To avoid a possible age discrimination suit, you should have a low-level staff member do the screening.

“You should have one person who is not a decision-maker do those social media screenings who will report only that part of the information to the person actually going to make the hiring decision,” Bales says.

To protect the company, rules and policies drawn up by your attorneys for use of the Internet and social media should be included in employee manuals.

“It’s important that companies set clear standards and then train and retrain employees on those issues,” Zack says.

Issues that should be considered in the policy will vary because of the nature of the business, how it is operated and what kind of electronic devices are provided to employees. Most concerns are over limiting what can be said through social media about a company and that any social media policy will have to pass muster under the National Labor Relations Act ? employee use of company computers during work time is subject to being reviewed at any time for security and other purposes.

Data security is another technological concern. With a number of companies using cloud computing, where data is stored over the Internet at remote sites, how secure that data is and who can access it are major issues.

“It’s crucial that companies protect their customer data from hackers,” Zack says. “There could be serious liability issues otherwise.”

A data security breach can be devastating for a company, and you need to have steps in place internally in the event that something does happen. Just the case of losing a laptop computer with company information on it can cause major problems.

The cloud computing concept opens new chapters on areas of law that are evolving. If the wrong people get access to your data, do you have a claim against the Internet provider who is managing the data? What about an employee who leaves the company and has the ability to hack your site?

You should consider both the upside and the downside of social media, privacy and data security concerns with your legal counsel.

“Good legal counsel will make the journey easier,” Zack says.

Take training seriously

When it comes to management issues, there is no shortage of pitfalls to be concerned about. Probably the most historical involves promoting a high-performing worker into a management job and failing to give that person the training to be a supervisor.

“This is a perpetual problem from hundreds of years ago ? the training of low-level supervisors,” Bales says

There is a huge difference in the skills that it takes to go from a front-line production worker or sales associate to managing people.

“The skills are not necessarily transferable, and the new managers are often not well-trained,” he says. “They don't know the slightest thing about sexual harassment law or the meaning of nondiscrimination. They haven’t had any training with working with people or dealing with workplace conflicts. They don’t necessarily know how to motivate people.”

The proper approach involves training the person and monitoring the results.

“Start at the bottom and make sure that somebody promoted from the line or the sales force or whatever into a supervisory position for the first time has adequate training and is supervised closely enough so the folks at the top can figure out what challenges that person has and what kind of training that person might need,” he says.

The downside is that there are many potential problems, for example, discrimination suits, claims of bullying and group dynamics issues.

“The person needs to be an effective manager ? very often union campaigns grow out of employees being upset with a manager or supervisor who doesn’t know how to manage,” Bales says.

Sometimes not keeping your house in good order causes headaches that could have been prevented with some foresight.

Take, for instance, employers who have the idea they should document what happens with their workers. Having records of incidents and situations may not offer the security desired.

“Employers still do a terrible job of that, by and large,” says Josh Fershee, associate professor at the University of North Dakota School of Law. “Giving someone a difficult time in one department and moving them to another department, sometimes even with a promotion or a perceived promotion, and then they get to the point where they want to terminate the employee and everything in the records indicates no problems.”

What typically goes hand in-hand with that is not having some clearly stated policies. If that is an at-will employee, he or she can be terminated at any time for cause.

“But employers periodically will make promises that as long as you do a good job or as long as sales are good, you have a job here,” Fershee says. “Well, that can change that status to some degree and those relationships are certainly something to watch out for.”

Play it safe with the feds

The number of federal regulations keeps rising over the years, and along with it comes concern of not just complying with them ? but what do they mean?

One area where misunderstanding the law is creating problems involves compliance with the Americans with Disabilities Act.

“Discrimination is something that they have to take a real amount of care to avoid and obviously comply with the civil rights laws at all levels,” says Carol Miaskoff, assistant legal counsel for the Equal Employment Opportunity Commission.

“But the positive is that the employer is able to benefit from the talents and the contributions of people with disabilities as opposed to just losing that.”

Reasonable accommodation enables employers to make some low-cost modifications that enable an injured or disabled person to stay on the job ? as opposed to being out of work.

“That seems to me to be a win-win situation for employers,” says Chris Kuczynski, assistant legal counsel for the EEOC.

Difficulties may arise over the sense of what is an accommodation for the worker.

“They need to make a reasonable accommodation, but what is reasonable?” Fershee says.  “Some instances where businesses get into trouble is that they really try to avoid hiring somebody, whether they know it consciously or not, who comes in with a potential disability, because they don't want to have to accommodate it.”

Doing so may actually create a problem that wouldn’t have existed had they had just moved forward the way they should have. For example, if they think it is going to be too hard to accommodate someone in a wheelchair, some companies don't want to tell the person that's why so they just skip the application even though the person is fully qualified otherwise.

“In fact, the law generally says if you can't accommodate, you don't have to,” Fershee says. “Reasonable accommodation is a fairly low standard most of the time.”

You need to go to an expert in the ADA area and ask what you need to do.

“Oftentimes, the answer is something that works for everybody,” he says. “Or there's something that doesn't work for everybody, but it can insulate them from liability because they've done what they are supposed to: ‘We looked into how much it's going to accommodate and we can't.’ That is often a legitimate defense.”

While virtually unheard of as a term before the 1970s, sexual harassment is a concern in the workplace. Sexual harassment policies are in place at nearly all major companies, schools, universities and the military.

“It’s always a problem in the workplace for two reasons: No. 1, the perception of the person who was on the receiving end of the harassment is always different from the person who was on the giving end of the harassment. No. 2, the legal difference between banter/flirting and sexual harassment is kind of blurry,” Bales says.

The giver may perceive that it was not harassment at all. He or she may perceive it as an expression of sexual interest or as good-natured flirting or as banter while the person on the receiving end may view it very differently and take it much more personally.

“Even a trained attorney or an HR manager may not know at first glance if this is crossing the line or not,” Bales says.

An employee who has a workplace problem needs to have somewhere to go so that the employer gets notice early on and can correct the problem before it rises to the level of legal harassment.

“If this is the first time that the employer has received notice of it and the employer takes prompt action, the employer's not going to get sued or if he does get sued, he’s going to win,” he says. “If a company is big enough and can afford an ombudsman, I think those are terrific. But if not, use someone who is functioning as an HR person.”

How to reach: American Bar Association, www.americanbar.org; Salmon P. Chase College of Law, Northern Kentucky University, chaselaw.nku.edu; School of Law, University of North Dakota, law.und.edu; U.S. Equal Employment Opportunity Commission, www.eeoc.gov