Hiring, Firing and Everything in Between Iowa Credit Union League Convention September 17, 2015 CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited 2014 CUNA Mutual Group, All Rights Reserved. JACK D. WILLIAMS, Esq. Senior Consultant, Risk Management CUNA Mutual Group jack.williams@cunamutual.com (608) 665-8528 This presentation was created by the CUNA Mutual Group based on our experience in the credit union and insurance market. It is intended to be used only as a guide, not as legal advice. You should contact your credit union's legal counsel for legal advice. Any examples provided have been simplified to give you an overview of the importance of selecting appropriate coverage limits, insuring-to-value and implementing loss prevention techniques. No coverage is provided by this presentation/ publication, nor does it replace any provisions of any insurance policy or bond. Coverage may vary or may not be available in some states. Please read the actual policy for specific coverage, terms, conditions, and exclusions. For general information, please contact your company Sales Executive. Insurance products offered to credit unions, including the Bond, are underwritten by CUMIS Insurance Society, Inc., a member of CUNA Mutual Group. 2 1
Employment Lifecycle Termination Process Pre-hiring Process Decision to Terminate Voluntary Separation Hiring Decision Active Employment 3 Employment Claims Only one way to win: Avoid a claim 1. Easy to file (and hard to get dismissed) 2. Employee s claims presumed to be valid 3. Plaintiff can recover attorneys fees (and you have to defend your credit union) 4 2
The Hiring Process 5 Job descriptions Purpose Provide clear job expectations Give managers guidelines to hire, promote and supervise employees Support hiring, disciplinary, promotion, compensation and termination decisions Assist in legal compliance (FLSA, ADA, FMLA) and defense of claims (discrimination, wrongful termination, unemployment) What should be included? Best practices Consider job description process Update current job descriptions Consult an employment attorney for assistance or review of your job descriptions 6 3
Background Checks 7 Fair Credit Reporting Act Use caution if you use a credit report in your hiring practices. FCRA Requirements: 1. Disclosure must stand alone 2. Summary of Rights must be provided at specific time in process 3. Comply with adverse action procedures 8 4
Fair Credit Reporting Act Best practices: 1. Review Disclosure form and Summary of Rights notice 2. Confirm your adverse action procedures 3. Establish written policies and procedures 4. Confirm forms are signed prior to ordering background checks 9 Employment Issues 10 5
Employment Handbooks Minimum policies to have Disclaimer: handbook is a guide, not a contract Mission Employee definitions At-Will Statement Anti-discrimination and harassment (all protected classes; dress codes) Defined work week (meal, rest breaks included) Discipline Internet and Electronic Device Communications and Usage Leave and other benefits Overtime Social Media Acknowledgment of Receipt Policies driving questions Bullying Prefer boundaries, respect, civility California has abusive conduct Bring Your Own Device (BYOD) Social Media Lactation 11 Social Media Risk mitigation tips Establish written policies and procedures Protect your credit union Address professional and personal use Train your employees Ensure compliance with NLRB Consult your employment attorney for review Important note! Legal to search public social media pages of applicants Do not search or try to search private pages Do not ask for passwords Discipline carefully 12 6
Performance Reviews Purpose Performance Review Set realistic goals Performance Improvement Plan Important! Properly document the review and any discussions - these reviews are valuable evidence in any termination or disciplinary action Risk mitigation tips Train managers regarding proper review Evaluate: Specifically Honestly For the entire year Follow up with goals and plan Document consistently 13 Litigation trends Wage and Hour Family Medical Leave Act (FMLA) Whistleblowers Discrimination / Harassment Pregnancy Sexual Orientation / Gender Identity The impact: Significant time and expense to defend difficult claims 14 7
Wage and Hour The greatest risk for all employers Regulators, trial bar, and media focus on wage theft What credit unions need to know: Misclassification of non-exempt as exempt Misclassification of employees as contractors To do Review record keeping system, training program, job descriptions and responsibilities Audit your practices to ensure compliance This is how we ve always done it is no good Consult your attorney 15 Family Medical Leave Act (FMLA) Allows eligible employees of covered employees to take unpaid, job protected leave for specified family and medical reasons Litigation trends» Interference» Retaliation Risk mitigation tips Establish written policies and procedures Train employees and managers Think and act proactively Conduct thorough investigation Consult employment attorney Where FMLA leave ends ADA begins? 16 8
Whistleblower protections Provides information he / she reasonably believes evidences a violation of law, rule or regulation Protects against workplace retaliation: Firing Demoting Disciplining Denying overtime or promotion Intimidation / harassment Risk mitigation tips Establish written whistleblower policies and protections Strong internal corporate reporting system Train and educate all employees Secrecy statements Ensure compliance with laws/regulations Respond to complaints Federal and state laws protect whistleblowers from retaliation. Retaliation remains the number one EEOC filed charge. Retaliation claims survive, even if underlying complaint has no basis. 17 Discrimination & Harassment Federal, state, or municipal laws prohibit discrimination & harassment Americans with Disabilities Act Title VII of the Civil Rights Act Age Discrimination in Employment Act State: Wisconsin Fair Employment Act City: Equal Opportunity Ordinance Protected classes Sex; Race; National Origins, etc. Best practices Up-to-date policy that bans harassment, discrimination and retaliation Two reporting mechanisms Annual training of all employees, managers and BOD Proper investigation techniques New protected classes resulting from court decisions 18 9
What do credit unions need to know? Pregnancy Discrimination Ensure light-duty policies apply to employees with on-the-job injuries apply to pregnant employees too Don t have to create light-duty program pregnancy doesn t get a preference Engage in interactive procedures to determine appropriate reasonable accommodations State laws can require much more of employers 19 Investigating complaints Proper investigations Investigate all complaints promptly Select impartial, trained investigator(s) Conduct interviews and review evidence Act discreetly (Can you ensure confidentiality?) Prevent retaliation Document investigation Who, what, where, conclusions, credibility, reasons for discipline Take appropriate disciplinary action if warranted 20 10
Discipline Progressive Discipline Increasingly severe discipline if an employee fails to correct a problem after being given a reasonable opportunity to do so Document problem and discipline Assess problem and address behavior Discuss consequences for failing to comply Don t be afraid to skip ahead! Counseling / Oral Warning Written Warning Termination Suspension without Pay 21 Discipline Best practices Proper policies and procedures Train managers regarding proper discipline Document discipline consistently, specifically & factually Discipline consistently Consult with employment attorney Do your employees sign warnings? 22 11
Separation & Termination 23 Voluntary Separation 1. I quit! 2. No show, no call 3. Happy (or at least not unhappy) departure Prepare for transition: Attempt to keep employee? Written update of work Exit interview / exit conversation 24 12
Involuntary Terminations 25 Involuntary Termination Goal: Avoid claims (and provide best defense) Proper termination: 1. Starts with job description and responsibilities 2. Use progressive discipline 3. Choose your words (and your reason) carefully 4. Document (non-discriminatory) reasoning 5. Two witnesses All this will help protect your credit union 26 13
Separation/Termination Risk Management Tips: 1. Discuss decision to terminate with HR or your attorney 2. Plan return of credit union property 3. Confirm any legal obligations 4. Prepare final paycheck including unused sick, vacation if required by policy or law. 5. Provide reference? 6. Severance agreements? 7. Consult your employment attorney 27 Questions? jack.williams@cunamutual.com 608-665-8528 28 14
29 15