Phillip B. Russell March 12, 2013
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1 Title Goes Here Phillip B. Russell 5 th Annual SHRM Jacksonville Conference & Expo Renaissance Resort at World Golf Village Jacksonville, FL March 11-12, 2013 Speaker HR Florida s Counsel Member HR Tampa, SHRA, BBSHRM, SHRM National Employment lawyer with extensive litigation experience Spear fishing and adventure races Agenda HR s Role, Responsibilities, and Risks HR as the bad actor HR as the plaintiff Top 5 Mistakes by HR Professionals Work Careers HR Gone Wild! 1
2 Who Are We Worried About? Why This Topic!?!?!!? HR professionals featured in cases Cat s paw theory of liability HR as plaintiffs Confusion on roles / loyalties HR s Role - As Viewed by HR Top 3 Critical HR Functions 1. Staffing, employment, and recruitment 2. Training and development 3. Employee benefits 10.Legal compliance 19% Small (1-99) 11% Med ( ) 7% Large (500+) HR s Evolving Role in Organizations and Its Impact on Business Strategy (SHRM, 2008) HR Gone Wild! 2
3 HR s Role Now Compliance Officer Clearinghouse of information for decisions Ensure consistency of decisions Contribute to decisions Meow, meow, meow. Compliance Tip for Consistency Infractions Files HR as Compliance Officer Policy / employee handbook development and implementation Training Supervisors and Managers Develop a supervisor / manager handbook and training program Develop and champion an open door culture with no impediments for employees to raise any concerns or issues HR Gone Wild! 3
4 HR as Compliance Officer Develop and manage internal investigation procedure Must be able to triage employee issues and concerns for proper handling Know when to bring in the legal team (internally or externally) Understand your role as advocate for the company HR s Role as Whistleblower!?! What can an HR professional do with information suggesting a legal violation by the company? A. Nothing B. Blow the whistle externally C. Handle internally D. Join in the fun! HR s Internal Handling of Issues with Legal Compliance Does HR have a confidentiality obligation to the company? Does HR have an ethical obligation to the company? Does HR have a professional obligation to the company (loyalty?) Does HR have any obligation at all to affected employees in the company? HR Gone Wild! 4
5 HR s Responsibilities Hiring Compensation and Payroll Benefits Discipline Performance Termination Others? Legal compliance permeates ALL Case - HR Director as Employee Advocate?? HR Director s Statements told law firm employee she was terminated because she was pregnant advised her to contact lawyer said the firm did this to another employee Manowski v. SmithAmundsen, LLC (7 th Cir. 2011) Employee sued PDA and FMLA claims Trial Court Excluded statements as hearsay because HR Director was not the decision-maker Appeals Court reversed and allowed the statements because the HR Director had duties related to the decision-making process with emphasis on legal compliance duties Reversed SJ for employer; case pending Manowski v. SmithAmundsen, LLC (7 th Cir. 2011) HR Gone Wild! 5
6 Shows HR s duty is to the employer Appeals Court allowed HR Director s statements as admissions, showing it considered HR Director to be speaking on behalf of the Employer NOT the employee! Manowski v. SmithAmundsen, LLC (7 th Cir. 2011) Case HR Director s Statements as Admissions HR Director s race-biased statements to plaintiff Joke about OJ case N-word usage Plaintiff terminated for not being a good fit for new management HR Director was NOT decisionmaker, but he provided input on the decision Chattman v. Toho Texas America (6 th Cir. 2012) Court: HR Director s statements were direct evidence of discrimination Used cat s paw liability because HR Director clearly intended to cause the plaintiff s termination Also found evidence of pretext Chattman v. Toho Texas America (6 th Cir. 2012) HR Gone Wild! 6
7 HR s Risks Say or Don t Say Do or Don t Do Know or Don t Know How would you answer these deposition questions? Do you have your PHR or SPHR? Why not? Explain your role when it comes to complying with employment laws. When is the last time you read the employee handbook? When is the last time you reviewed or updated the employee handbook? How often do you conduct training for your supervisors and managers in workplace legal issues? Have you attended any HR continuing education classes or seminars? Did you attend HR Florida last year? Why do you report to the CFO? Is HR just a matter of cost-containment for your company? HR Gone Wild! 7
8 Do you think your executive team respects HR at your company? How many EEOC charges and lawsuits have you been involved in during your career? How about with the Company? Does your reporting or complaint procedure have credibility with employees? How do you know? Have you ever had an executive ask you to do something you consider to be illegal at your company? How did you handle that? Do you feel like you must protect your company at all costs? Have you conducted any internal audits of your workplace policies and practices? Have you had any outside HR consultants or lawyers conduct any audits of your workplace policies and practices? Case - Tripped Up HR Director I have reviewed the documentation that you have provided. There is a lot of substance here and I am fine with proceeding. There is a lot of room for him to trip up after this warning considering all the areas where he is below expectation and the magnitude of improvements needed. I recommend that you consider how strict you are going to be on this (i.e., zero tolerance the next time he does not provide a timely report) and communicate accordingly so that he knows this is a true warning and that his job is truly on the line. Later scrub the performance review. Phillips v. StellarOne Bank (W.D. Va. 7/16/12) HR Gone Wild! 8
9 Court denied summary judgment because s undermined the bank s allegedly legitimate performance expectations and its proffered performance-based reasons for terminating him. Age and FMLA claims will go to trial Q&A with Your CEO Q (CEO) - Can I issue a policy that no women should be hired for this position? A - How about waiting until next week? The legal defense funds are a little low now. When HR Sues! HR Gone Wild! 9
10 Case - HR Compliance Director Believes she was personally discriminated against on the basis of pay, other reasons Used her HR authority to access confidential information Other employees pay Lawsuits and legal issues involving others Externally disclosed the information to her attorney Company terminated her employment for violating a strict confidentiality policy Former employee becomes the charging party / plaintiff Case - HR Compliance Director Can the company win? What are her legal claims? Discrimination can she use the stolen information? Retaliation did she engage in protected activity? Is there an HR Duty of Loyalty? Another one! HR Director claims harassment by the president Does not report to the CEO for 2 yrs During investigation, other employees report HR Director also engaged in inappropriate activity CEO now concerned that HR Director cannot do her job because she failed to report CEO removes her from HR and puts her back into other administrative role Retaliation? HR Gone Wild! 10
11 And HR knows how to sue! Amtrak s HR Director filed suit for pay discrimination During 8 years at Amtrak, she managed EEOC charges then she filed one! She attempted to handle internally, but management was unresponsive Consent Decree $170k+ in back pay, damages and fees Increase in base salary of $16k HR Director Wins Retaliation Case HR Director sued for discrimination re: promotion During discovery, revealed she had taken confidential documents to support her case Company fired her during case, citing confidentiality agreement Added retaliation claim; jury = $10.6 million Appellate court threw out verdict send case back for new trial NJ Supreme Court HR Director engaged in protected activity and did not violate the confidentiality agreement Quinlan v. Curtiss-Wright Corp. (S.Ct. NJ 2012) Advantages to HR Plaintiff Knows former settlements Privy to confidential information Sensitive information about executives or company owners Aware of severance arrangements Appear credible to jury because of position They know whether the company fights or tries to settle and when HR Gone Wild! 11
12 HR Mistakes At Work and in Your Career HR Mistakes At Work 1. Over-advocating for employees 2. Wearing rose colored glasses for the employer 3. Making careless statements deemed to be admissions 4. Being unprepared for litigation 5. Getting too friendly or social with employees 5 HR Mistakes Your Career 1. Not keeping up with critical developments in workplace law 2. Too narrowly defining your role in the organization 3. Losing your credibility 4. Failing to understand general business concepts 5. Having an undefined purpose / career trajectory HR Gone Wild! 12
13 Stay informed and keep in touch! Newsletters Events E-Alerts Use Sign-In Sheet! Special Announcements Updates Commentary Speaking Engagements Tell me how we met! HR Gone Wild! 13
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