HR Management & Compliance

12 Biggest HR Risks in a Down Economy

By Patricia M. Trainor, J.D.
BLR Legal Editor

In this down economy, HR faces serious risks from employees who are worried about money and the possible loss of their jobs. HR managers must be proactive to protect their companies from harm, asserts attorney Allison West.

With a good dose of humor in her keynote address, West discussed the top 12 areas of risk for HR in an economic downturn. West made her presentation at BLR’s 2009 National Employment Law Update, held recently in Las Vegas. West is principal of Employment Practices Specialists, LLC, in Pacifica, California.

1. The Pilfering Privilege

The risk of employees accessing company documents and trade secrets is high because employees have access to much of the company’s data through their computers. West alerted employers to the Computer Fraud and Abuse Act, a federal law that protects employers in such circumstances.

West recommends that employers insert the following statement into their computer use policies: “When an employee’s interest is adverse to the company’s, the employee is not authorized to use company computers.”

West also suggests that employers have a system of secondary oversight in place to ensure that their IT departments, which hold the “keys to the kingdom,” are not misusing their computer access.

2. Txtul hrsmnt — not lol

(Translated: Textual Harassment — not laughing out loud)

West discussed several recent cases where an employee’s inappropriate texting led to harassment claims. She concedes that it is unrealistic to have zero tolerance for personal use of a computer or texting device, but she stresses the importance of having a texting policy in place. The policy should prohibit any inappropriate texting and any texting that violates any of the company’s policies.

3. $how Me the Money!

In West’s view, there is no bigger risk than wage and hour claims because of the possibility of a class action. For example, if an employee claims that she has not been given a required lunch break, everyone in her department who also did not get a lunch break can join the action.

In particular, West cautions against “voluntary overtime.” When the economy is down, employees who are worried about avoiding being laid off may volunteer to put in extra time to show their dedication and value to the company. However, under the law, all overtime must be paid, and managers should be aware that voluntary overtime is not okay.

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4. Unionization

West believes that in a down economy, companies are vulnerable to unionization. Many employees are working longer hours for less pay, and a union may convince them that it can make their working conditions better. In this environment, West warns, don’t assume that your workforce would not vote for union representation.

She recommends that employers think of ways to show employees that they care about them and that they listen to their concerns. She also recommends consulting with local labor counsel to learn ways to be proactive in preventing unionization.

5. Will You Still Love Me When I’m 64?

West notes that claims under the Age Discrimination in Employment Act (ADEA) are on the rise. She recommends making sure that any severance agreements comply with the Older Workers Benefits Protection Act (OWBPA). She also strongly advises against a “one size fits all” severance agreement, noting that each severance agreement must be drafted with the individual employee in mind.

In age discrimination claims, anecdotal evidence of age-related jokes and comments is often used as evidence against the employer. West urged HR not to engage in such comments and to train managers that they are not acceptable.

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6. Welcome to the New ADA

West sees the biggest risk in job descriptions. Job descriptions should accurately reflect the essential functions of the job. Managers sometimes put their own “wish list” of job functions into job descriptions, but it is important not to let that happen, West says.

West also encourages employers not to fear the interactive process in finding an appropriate accommodation for a disabled employee. Discussing an employee’s needs usually results in an accommodation acceptable to both the employee and the employer, she says.

In tomorrow’s Advisor, we’ll get the next six of West’s HR risks in a down economy, and we’ll take a look at a unique solution for offering the training that can reduce the risks to a manageable level.