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Take Practical Steps to Avoid Lawsuits in California

By Joanne Deschenaux  6/24/2014
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ORLANDO, FLA.—Litigation in the Golden State of California "is a cottage industry,” Jennifer Brown Shaw, an attorney with Shaw Valenza in Sacramento, Calif., told an audience of 2014 Society for Human Resource Management Annual Conference & Exposition attendees June 23, 2014, at a concurrent session called “How to Stay Out of the HR Hot Seat: 10 Ways to Get Your Company Sued in California.”

Most businesses in California will be sued for alleged employment law violations sooner or later. But there are many preventive measures HR can take to limit their companies’ exposure to time-consuming litigation and high damages awards, Shaw told the audience, noting 10 major areas of concern. Here are her suggestions:

Follow best practices for hiring. Comply with all state and municipal laws regarding background checks. Although there is no statewide “ban-the-box” law, many cities and counties have their own ordinances. Even in the absence of a law, “in most industries, if you are already doing background checks, you don’t need the criminal conviction question on your application,” Shaw said.

In addition, conduct a job analysis before trying to fill a position so that everyone is “on the same page” as to what skills the company is looking for.

Keep your policies and procedures up-to-date. The laws in California change every year, Shaw noted. That means you should review your handbooks once a year. “A critical part of your job as an HR professional is to make sure your policies are up-to-date and reflect what you actually do,” she said, noting that “when a company is audited by the state department of labor, the first thing the auditors do is look at the policies in your handbook.”

Train your leaders to be leaders. Most of us are not born leaders, Shaw noted. She recommended that employers conduct management training for all people managers.

Give explanations for terminations. Don’t use at-will status as the reason. In the absence of an explanation, an employee may assume that there was an illegal reason for the termination (discrimination or retaliation, for example) and sue.

Be careful about wage and hour compliance. Make sure your employees are properly classified as exempt or nonexempt. Pay close attention to meal and rest break issues, which have triggered many lawsuits in recent years.

Ensure EEO compliance. Training on sexual harassment prevention and other equal employment opportunity (EEO) requirements is mandated by statute every other year in California.

Follow NLRB guidance on social media usage. The National Labor Relations Board (NLRB) takes the position that even nonunion employers must allow their employees to use social media “to engage in concerted activity” with regard to workplace conditions.

Address technology issues. Establish and publicize clear policies regarding the use (and misuse) of technology—both that owned by the company and employees’ own devices.

Effectively manage leaves of absence and reasonable accommodations. Disability discrimination is now the most common basis for EEO lawsuits, Shaw said. A policy capping leave at a set amount of time is per se illegal, she noted. After all leave required by statute (Family and Medical Leave Act and leave required under state laws) is exhausted, employers should view leave requests as a reasonable accommodation issue and engage in interactive dialogue with the employee.

Properly identify independent contractors. There are costly penalties for treating employees as independent contractors.

Joanne Deschenaux, J.D., is SHRM's senior legal editor.

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