I make a lot of employment decisions in the average day, and I’m just not sure of all the laws that cover each type of action. My question is, if I’m acting in good faith, in what circumstances could I be held personally liable for my actions? Thanks for your help.
— Rose Ann, HR Specialist in San Jose
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This question concerns every HR manager. We turned it over to Allison West.
Let me say at the outset, you can be sued by anyone for anything. Whether the plaintiff will prevail is an entirely different matter! Your question highlights a disturbing trend in recent court decisions—supervisors, business owners, other decision-makers, and HR practitioners are being held personally liable for their actions under several employment laws. The good news, if any, is that most plaintiffs are primarily interested in the “deep pocket,” which more often than not is the employer. However, an employee who feels “wronged” may want to include all decision-makers in the lawsuit.
Unfortunately, good faith often has nothing to do with whether you can or cannot be held personally liable for your actions. But as an aside, your good faith can be a factor, depending on the claim, in reducing liability. For example, when conducting a harassment investigation, your good faith (as well as your employer’s) will come into play when asserting the defense of an adequate investigation. Overall, fairness and good faith practices are a critical part of an employer’s defense and should always be used when making employment decisions.
Under which federal and state laws might you be held liable? The following discussion will provide you with guidance.
Individual Liability Under Federal Employment Laws
A number of federal laws have been interpreted to hold HR decision-makers personally responsible. The laws include the Fair Labor Standards Act, the Equal Pay Act, the Family and Medical Leave Act, the Consolidated Omnibus Budget Reconciliation Act, the Employee Retirement Income Security Act, the Occupational Health and Safety Act, the Immigration Reform and Control Act, and the Uniformed Services Employment and Reemployment Rights Act.
What does this really mean? Every time you make a decision involving wage and hour, leaves of absence, benefit plan issues, safety, and I-9 forms, or affecting someone out on military leave, you may be personally at risk. Many of these laws also provide penalties ranging from administrative fines up to imprisonment.
Additionally, managers and supervisors of federal, state, or local government entities may be personally liable for antidiscrimination claims under Section 1983 of the Civil Rights Act of 1871 (which allows individuals to sue government officials for deprivation of constitutional rights). Typically, HR practitioners, managers and public officials have authority to administer or modify a public employer’s policies which, in turn, may make them personally liable for those decisions if they have a discriminatory effect on an employee.
Unlike California law, under the federal antibias law (Title VII) the principal defendant is the “employer,” defined as any person engaged in an industry affecting commerce and having 15 or more employees.” Courts have consistently held that employees cannot be held individually liable under Title VII. Additionally, courts tend not to impose individual liability under the Americans with Disabilities Act and the Age Discrimination in Employment Act based on how the statutes define “employer” (which is similar to the Title VII definition).
Individual Liability Under California Law
Turning to California law, under the Fair Employment and Housing Act (FEHA), the definition of employer is quite broad. Under California Code of Regulations Section 7286.5, “any person or individual acting as an agent of an employer, directly or indirectly, is also an employer.” This means that HR practitioners, managers, supervisors as well as employers may be held liable for harassment and most likely retaliation. However, California courts have determined that, in most circumstances, individuals may not be sued under FEHA for discrimination.
California law also provides individual liability under its wage and hour laws. Penalties are imposed regardless of whether the violation was willful, which means your “good faith” will not be taken into account. Although this seems scary, more often than not the Division of Labor Standards Enforcement reserves penalties for employers, although corporate officers or managers may be liable in appropriate instances.
Many state courts have found individuals such as managers, supervisors, and HR practitioners liable for tort claims (wrongful acts) such as defamation, intentional infliction of emotional distress, assault, battery, invasion of privacy, negligence, fraud, and misrepresentation. These claims often arise from hiring, discipline, and termination decisions.
What can you do to minimize your exposure?
- Know the requirements of the law before you act.
- Be sure that the laws’ requirements are reflected in policies and procedures to make compliance more “automatic.”
- Be fair and consistent.
- Be thorough.
- Document your actions.
- Seek an experienced employment attorney’s guidance when you are unsure about how to proceed.
Allison West is principal of Employment Practices Specialists, an employment law training and consulting firm in Pacifica.