Being Prepared In Lean Times

This brief checklist can guide human resource professionals through the basics of compliance issues -- to protect their organizations from costly lawsuits.

Saturday, May 16, 2009
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Like all departments, human resources is being asked to do more with far less. The C-suites expect human resources to keep the company out of legal battles with employees and former employees -- but to do it with half the staff and very little money for training.

So in these lean times, what should every human resource leader do to protect the company and reduce legal fees? Use the following checklist as a gauge of your preparedness.

1. Are all of your employees properly classified as either exempt or non-exempt for wage-hour purposes?

2. Are all employees being properly paid for all hours worked?

3. Is your handbook up to date and do your practices comply with the requirements set forth in the handbook?

4. Do you have a signed copy of the company's policy prohibiting harassment and discrimination in all employees' personnel files? Have all employees acknowledged, in writing, that they will follow the policy and report any inappropriate or discriminatory conduct to Human Resources immediately? Is that acknowledgement current (within the last 12 months) and in their personnel file?

5. Do your managers know how to identify union activity and how to react if they see it? Is your company prepared for the possible passage of the Employee Free Choice Act?

6. If called upon to reduce the number of employees, do you have a strategy for selection that is nondiscriminatory and best protects the company from Equal Employment Opportunity Commission charges and lawsuits (particularly age- and sex-discrimination claims)?

7. Do you have legally enforceable restrictive covenant and noncompete agreements in place so you can stop former employees from unfairly competing against your company and stealing your employees, your customers or your trade secrets?

8. Do your employment applications and policies contain a waiver of employee's right to a jury trial and preclude employees from participating in a class-action suit against your company?  

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If you answered "yes" to all of the above questions, then you have at least covered the legal minefields.

If you answered "no" to any of the questions, you may want to consider spending some time and resources so you can change your answer to "yes."

It will be time and money well spent because lawyers representing employees (and former employees) are ready, willing and able to strike when they are least expected and least welcome.

Being well prepared is even more important in lean economic times.

Chad A. Shultz and Sarah Pierce Wimberly are partners with Ford & Harrison LLP, a national labor and employment law firm with almost 200 lawyers in 18 offices. They have a broad employment practice that includes advising employers on litigation-avoidance strategies. Chad and Sarah have recently authored a management-training book that they hope will further assist companies in avoiding lawsuits that can be prevented and better defending those that cannot. Chad can be reached at or 404-888-3874, and Sarah can be reached at or 404-888-3842.

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