In an issue of Corporate Counsel an article entitled It’s a Systemic World Out There discusses the EEOC’s pursuing large “systemic” cases. For example, in fiscal year 2011 they conducted 580 systemic investigations, filed 84 systemic lawsuits, and settled 35 systemic cases for total $9.6 million. Although your company might not be large enough to be on the EEOC’s radar screen, I can tell you that attorneys are also suing small to midsized companies on a class basis. An employee walks into a lawyer’s office because they didn’t receive their final paycheck, and before you know it they’re filing a class-action lawsuit against your company for missed overtime and meal periods. The article provided a few golden nuggets of advice:
- When responding to an EEOC inquiry, don’t use the phrase “pursuant to our consistently applied policy.” This only invites a broader request for information.
- Do not submit more information than is necessary.
- Conduct your own statistical analysis before submitting data.
- Do preventative analysis looking for adverse impacts in the hiring, promotion, or termination practices.
- Validate pre-employment tests.
- Conduct preventative compensation analysis periodically.
- Cover all internal analysis with attorney-client privilege. This might be impossible in smaller organizations, but you can certainly retain outside counsel to instruct you on how to conduct such analysis and report back to them.
- Listen to your employees. As I have always recommended, you should survey your employees, including use of the Employee Compliance Survey that can be found in HR That Works.
- Invigorate that underutilized internal complaint system. Again, go one step further and ask if there’s a problem –don’t wait for them to tell you there is one.
- Stay current with legal trends. This is one reason why HR That Works membership is so valuable.
- Walk the talk. Are you sensitive to the potential for your practices to cause adverse impacts? Frankly in my experience I can tell you that some business owners could care less about whether a practice causes an adverse impact. All they care about is getting the best employees they can, damn the EEOC. Of course, few companies appreciate a risk until they’re hit with it.
Finally, the article points out how large corporations can gather the data requested by the EEOC easily because they have such large HRIS systems. However, most companies with less than 500 employees don’t have this data readily available, and t collecting it can be an over-burdensome process. This is one reason to make sure that you hire an attorney any time you receive a communication from the EEOC or another regulatory agency.
Read more
Three out of five firms that suffer a major disaster go out of business or are sold. Preparing your business to survive a disastrous event involves a multi-step process: assessment, planning, implementation, testing, and documentation.
- Assessment: Brainstorm and list all potential losses. Then rate them on a 1-10 scale, with 10 being the most disastrous and 1 having the least impact on the business.
- Planning: Formulate a comprehensive, detailed action plan, using both in-house and outside sources. The plan should include both steps to prevent the loss and remedies to take if the loss occurs. Be as specific as possible.
- Implementation: Act on the plan. Determine what steps you must take to now insure a positive outcome if disaster strikes; Who will be accountable for taking these steps when and to whom will they report?
- Testing: For example, if you’re planning to deal with a computer crash, data recovery is essential. Test back-up media regularly to ensure that they will be available when needed. All too many businesses lose data due to malware or mechanical breakdown only to find that their backup is either corrupted or unavailable when needed.
- Documentation: Put the details of the plan (who, what, when, and where) in writing. Keep one copy in the office, another on the computer, a third off premises – and make sure that every manager knows these locations. Finally, review and update the plan every six months.
Although nothing is foolproof, implementing these five steps can go far to prevent a disastrous loss, or at least, mitigate its impact.
To learn more about developing a disaster plan for your business, feel free to give us a call at any time.
Read more
Most people who commit fraud at work are not career criminals – and are often trusted staff with no criminal history. According to criminologist Donald Cressey, there are three factors (the “Fraud Triangle”) that lead an ordinary person to fraud: opportunity, pressure, and rationalization.
Take this example: a bartender who splashes a little more scotch into his friends’ drinks when they come into the bar is succumbing to opportunity; his peers’ expectations that he’ll do this create pressure; while telling himself that “everybody does this – and we’re too stingy on our pours, anyway” provides a rationalization.
How can you use this three-legged tool to detect and deter fraud?
You can’t do much with about rationalizing fraudulent misbehavior because everyone does it without announcing their decision in advance.
You can’t learn whether employees might be under financial pressure to commit fraud without investigating their personal finances – which is impractical and illegal. However, you might be able to minimize work-based pressures they face (for example, forbidding managers from ordering them to hit their goals at all costs).
Opportunity provides the most effective leg in the triangle to curb fraud by making it more difficult. Here’s how:
- Segregate duties so that no one has sole control over accounting, reconciling, custody of assets, and approval of transactions.
- Make sure that transactions which are unusual or involve large amounts have strong managerial oversight and follow-up.
In other words, develop effective control systems so that any larcenous employee will need to be clever enough to avoid several pair of eyes while running a gauntlet of people who reconcile accounts and monitor budget.
If fraud does strike despite these precautions, make sure that you have the right insurance to protect you from loss. For more information, just give us a call.
Read more
It’s always difficult to terminate an employee – especially in this age of employment litigation and privacy concerns. Even if a worker leaves voluntarily, you need to make sure that he or she no longer has access to confidential information
The key to making sure that you’ve covered all bases of your bases is to follow a Departure Checklist:
- When an employee leaves, whether voluntarily or involuntarily, notify all staff immediately to help reduce rumors, hurt feelings, and concerns. Keep the announcement positive.
- Remove the employee from your facility soon as possible. Offering to have the person stay is nice, but might not always be helpful. If you decide to let the employee stay for the customary two weeks, assign him or her specific tasks to complete. Collect keys immediately and assign someone to work with the departing employee for the duration of their stay.
- Once the decision has been made, restrict the employee’s access to sensitive company information at once; be sure that this restriction includes any VPN or private access.
- Have the employee review all items on which he or she is working and write a synopsis of what’s needed to complete each item. Then review these items to create a specific workload transition plan, and assign them to other employees. The sooner you do this, the better.
The more you think through this process before a problem arises, the more effectively you’ll be able to deal with it. We stand ready at any time to help you develop and implement an effective plan that can go a long way to help you protect your business from this risk.
Read more
Several courts have found yet another way for someone to sue contractors.
This term refers to lawsuits against you for alleged failure to exercise proper control over your employers. For example, one of your employees might be accused of injuring others recklessly while driving a truck on company business. A “negligent supervision” suit would claim that you were negligent in hiring this worker because you either failed to discover or ignored the fact that she had a record of reckless driving.
You also have an obligation to supervise your staff. Although you can’t foresee every incident, a court will look at whether you took reasonable steps to identify and guard against potential wrongdoing by your employees: everything from unsafe behavior on the job site to sexual harassment. It’s not only about whether a worker actually committed an offence – it’s about what you did to prevent it.
To head off liability for negligent supervision, we’d recommend that you:
- Set and enforce clear guidelines for interviewing and hiring employees.
- Provide training in conflict resolution and communication. Supervisors need to know when to report certain behaviors and which behaviors to look for, such as verbal abuse, failing to cooperate with supervisors or co-workers .and making inappropriate comments.
- Conduct regular performance evaluations to address specific behavior or job performance changes.
- Provide multiple avenues to receive allegations of misbehavior, and have unbiased managers investigate complaints so that no conflicts of interest exist. Investigate every incidents promptly and take decisive action.
We stand ready to review your company’s exposure to negligent supervision claims – and how your Liability insurance coverage can help protect you. Just give us a call.
Read more
Across the nation, utility lines, tunnels, and structures run under our feet, Each year, excavators strike approximately 700,000 of these underground lines, often triggering potentially fatal accident (from steam, gas, propane, or electricity). A single strike might easily cost a contractor hundreds of thousands, or millions, if the accident leads to an interruption of service that shuts down a factory, hospital, telecommunication lines– even a missile silo.
In most cases, insurance will not cover these losses. To deal with this threat, the Common Ground Alliance coordinates 811 –Call before You Dig, a nationwide phone and online system that contractors can use to notify local utilities so they can “mark out” their facilities before excavation of anything from to a sewer to a subway. These markouts are required under state law.
When you use the call 811.com system, bear in mind that:
- It doesn’t matter where you are – downtown, in the middle of a suburban street, or building a private home.
- Call even if you’re confident that you know where something is buried (for example, if you installed the line); many contractors dig up lines that have just put in.
- Instead of marking the area with wooden stakes – which are all too easy to drive through gas lines – use white paint or “feathers;” even the most shallow excavation can be hazardous.
Remember, failing to contact 811.com before every excavation violates the law – and leaves you wide open to huge liability losses. Don’t take a chance your odds of losing in the Underground Damage Casino!
To learn more, just get in touch with the Construction Insurance Specialists at our agency.
Read more
