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INCONSISTENT ENFORCEMENT OF HR POLICIES WILL CONSISTENTLY
CAUSE EMPLOYEE LAWSUITS
“ No Good Deed Goes Unpunished”
Ralph Waldo Emerson once wrote that, “A foolish consistency
is the hobgoblin of little minds.” He meant to convey
that each situation is different, and consistency for its own
sake is a false idol. True enough. But if Emerson ever had
the responsibility for administering HR policies, he might
have injected a qualifier or two into his famous maxim.
The Problem
In our November 2003 What
Do You Think? segment,
we asked for our readers’ input on a case that had
just been argued before the United States Supreme Court, Raytheon
versus Hernandez.
We received a firestorm of comments on the case, some of which
we published in our January
2004 issue. The case is a good
example of the problems inherent in HR inconsistency. Here’s
a quick refresher.
Hernandez had tested positive for cocaine, and was terminated
in accordance with Raytheon’s established policies. More
than two years later, however, Hernandez successfully completed
rehabilitation, and applied for reinstatement. Raytheon refused,
and Hernandez sued.
The stigma that attaches to a prior drug user can be a disability
under the ADA, and employers cannot refuse to hire an employee
on the basis of such prior drug use. Hernandez contended that
this had to be the reason why Raytheon refused to rehire him
-- he had been a good employee, he was over his addiction,
and there was no other reasonable explanation for Raytheon’s
position. Raytheon’s rationale, however, was simply this:
our policy, albeit unwritten, is not to rehire employees who
break the rules, period, and we have no obligation to treat
Hernandez any differently than any other rule breaker, disability
or no disability.
A lower court took Hernandez’ side, and the Supreme Court
then agreed to hear the case. With uncharacteristic speed,
the Supreme Court has now issued a ruling. While not yet finally
deciding the case, the Supreme Court has sent a not-so-subtle
message to the business community.
The Supreme Court ruled that a “blanket” no-rehire
policy applicable to any employee who violates a workplace
rule is a “quintessentially legitimate, nondiscriminatory
reason for refusing to rehire an employee.” That’s
a pretty significant ruling by itself, but it’s not our
present focus.
What’s important right now is this: the Supreme Court
said that on the record before it, there was not enough proof
to determine if, in fact, Raytheon refused to re-hire Hernandez
because of its “no re-hire” rule, as Raytheon
claimed, or because of some illegitimate reason, as Hernandez
claimed.
Consequently, a trial would have to be conducted on that
issue: if Raytheon could prove that it refused to rehire
Hernandez
because of its no-rehire policy, it wins; if Hernandez could
prove that Raytheon discriminated against former drug users,
he wins.
Let’s fast forward to the upcoming trial. How will
Hernandez prove his case? The Raytheon officials will, no
doubt, stridently
claim that they made their decision based only on the no-rehire
policy. How will Hernandez prove otherwise?
The answer lies in another old maxim: actions speak louder
than words. Hernandez will look to see how consistent (foolishly
consistent, as Emerson might see it) Raytheon has been in applying
the “no rehire” rule. If, indeed, Hernandez can
show that rather than the “no re-hire” rule being
a “blanket” policy, it is really a policy that
Raytheon applies inconsistently, Hernandez will have a very
powerful argument: “Raytheon only applies the “no
re-hire” rule when it wants to,” Hernandez will
contend, “and in this case it wanted to because I
was a former drug user.”
In other words, inconsistent HR enforcement will be, as so
frequently happens to employers, Raytheon’s soft underbelly
during the trial. One more famous maxim: Claire Booth Luce
cynically observed that, “No good deed goes unpunished.” If
Raytheon made a past exception to the “no hire” rule
for some favored employee or because of some perceived “extenuating
circumstance,” it will have drastically diluted the strength
of its defense against Hernandez’ claim.
We see this all the time: managers and executives make exceptions
to the rules, trying to do a good deed, usually motivated by
sympathy for the employee or concern for the company. In plain
violation of workplace rules, they either fail to fire, or
quickly rehire, selected employees because “she’s
been a good employee for many years” or “I’m
on a deadline and need him” or “she’s got
a family and I just couldn’t do it.” Later, when
the same rules are applied to another employee and no exception
is made, a loophole big enough to accommodate all nine Supreme
Court justices quickly opens. In those cases, the employee
will argue that the rules are not really rules at all, but
are only pretexts that the company uses to get rid of disfavored
employees. If the employees who were the recipients of the
past “good deeds” are white, or under 40, or not
subject to some disability, and the employees to whom the rules
were applied without exception are minorities, or older, or,
perhaps, former drug users … you get the point.
And what about inconsistencies with regard to the same employee?
For example, the employee is repeatedly late and the manager
overlooks it. No documentation, no discussion, he simply overlooks
it. Months pass and the manager has now reached the point where
he is beyond fed up and he disciplines the employee in accordance
with the Company’s well written, well publicized attendance
policy. The employee alleges that the manager only started
caring about his arrival time after he advised the manager
in passing that he was suffering from cancer. The inevitable
claim quickly follows.
The Solution: Five Ways To Minimize The Risks
The solution is not necessarily to be uniformly unsympathetic,
or a slave to rules even when their application does not
make sense. You can be foolishly consistent, even in this
context. Here’s how to minimize the risks.
1. Develop Written Policies
That Specifically Apply to the Situations You Will Most
Frequently Confront
Often, managers, executives and HR personnel have to make
exceptions to the rules because the rules themselves are
too general, or don’t make sense, or don’t contemplate
the kinds of situations that arise in the specific workplace.
Form book policies and procedure can be very dangerous.
Anticipate the sorts of circumstances in which exceptions
to a general policy would be considered, and incorporate
those circumstances into the policy. To the extent
feasible, make the situations that were formerly exceptions
into predictable
rules. Then, when the exceptional situation arises, you won’t
be charged with departing from the rules in order to favor
one employee and disfavor another.
A suggestion coupled with a caution: to facilitate this process,
consider establishing different policies for different groups/categories
of employees; but consult counsel to make sure that the differentiation
raises no legal risks. For instance, it will be much easier
to design and consistently enforce policies that are specifically
tailored to exempt versus non-exempt employees, or lower
level employees versus managers, or clerical personnel versus
production personnel. But the process of categorizing employees
can sometimes lead to legal issues, so make sure counsel
screens what you have done before you implement it. (Shameless
plug #1: we provide this service to a wide variety of companies.)
2. Avoid Obligatory Language, and Allow
for Controlled Discretion
Avoid obligatory terminology in
your policies and procedures,
such as “always,” “only,“ “must” or “permanent.” Instead,
rely on terms such as “generally, ” typically,“ usually,” etc.
Acknowledge the fact that some situations will not be covered
by the policy language, and provide the company with the
right to change or update policies, and with the further
right to apply them within the best interests of the company.
Building in the right to exercise such discretion, however,
could lead to a claim of inconsistent and discriminatory
enforcement. To minimize that risk, make sure the right to
exercise discretion – the right to be inconsistent – is
carefully controlled in a defined way. Supervisors must
be required to follow a procedure before an exception or
departure
is implemented – for instance, consult with and obtain
written approval from Human Resources, or the Legal Department,
or a designated member of senior management.
In fact, we (and the United States Supreme Court, for that
matter) strongly recommend that supervisors be regularly
trained in the mandatory and discretionary interpretation
and application of all HR policies -- as the primary point
of contact between employees and the company, supervisor
conduct is the primary point of defense in the prevention
of employee claims. (Shameless plug #2: consider CCG’s
new e-learning programs, and our in-person training sessions
for managers, executives and HR administrators.)
Of equal importance: keep a written
record of the exceptions that are made and the circumstances
that led to them. When
the charge is made that you only made exceptions for Caucasians
or males or persons under 40, you need to be able to show
that your discretion was driven by circumstance, not discriminatory
intent.
3. Measure Your Policies Against the “Best Employee” Test
Look at each of your policies in the following light: if
your best employee violated the policy, would you be willing
to impose the mandated consequences, or would you more likely
find a way to make an exception? If the answer is more the
latter than the former, you will run the risk of developing
a track record of inconsistency respecting that policy, and
that inconsistency will lay the groundwork for future trouble.
Re-evaluate the policy in question, and revise it until you
can honestly conclude that you would be willing to enforce
it as written, no matter who the violator might be.
4. Standardize Performance Documentation
Procedures
Whether it’s the annual review or a one-time policy
infraction, failing to document the course of action taken
can be deadly. It is a stamped invitation to the land of “He
said”/ She said” – a place employers need
to avoid. See the January
2004 issue of Avoiding Lawsuits for an in-depth discussion of this issue.
5. Make Changes Where Change Makes Sense
Incorporate a periodic review procedure to ferret out past
practices that are out-of-date, no longer make sense,
or were simply mistakes, and to add policies that might
help
address problems you had not previously anticipated.
(Shameless plug #3: CCG provides this service for its
clients.)
Eliminating the inconsistent policy enforcement that leads
to employee claims is, at its core, a two part process:
structure the policies so that the need to make exceptions
is minimized;
and develop a training methodology and business structure
to control and document the exceptions that should be
made. As always, let
us know if we can help.
WHAT DO YOU THINK?
This month’s What Do You Think? brings good news for
older workers.
Last month, in a 6 to 3 decision, the Supreme Court ruled
that the Age Discrimination in Employment Act (ADEA) does permit reverse discrimination in favor of older employees:
in other words, it is legal for employers to discriminate
in favor of employees who are over 40. Although reverse discrimination
suits have been upheld in the areas of race and gender discrimination,
the Court ruled that the rationale was not applicable to
the ADEA. (Cautionary note: Some states may prohibit reverse
age discrimination under their own human relations acts.)
Click here to give us your point of view – should employers
be permitted to discriminate against younger employees, even
if they are more qualified, based solely on their age?
Next month we will share your input (but we will never
disclose your name, e-mail address or other identifying
data without
your permission).
ANALYSIS AND REVIEW:
WHAT DO YOU THINK? – February 2004
Our February 2004 What Do You Think? raised this issue:
Do you feel that your Company’s training programs effectively
prepare managers to properly handle employment law issues?
If so, why? If not, why not?
Some of your comments:
“
My Company provides very little training and much of it is
incredibly boring and outdated.”
“
We are required to attend mandatory training every year on
sexual harassment. It seems like we should be learning about
more topics.”
“
The training we receive is OK but I would love to receive
a lot more. I am a fairly new supervisor and I can use all
the help I can get.”
“
Our company is going through a downsizing and the Training
Department was the first to go.”
“
Training on employment law issues and areas of compliance
are very important in my company as we are a government contractor
with strict regulations to follow.”
“
Only certain levels of management are eligible to go to training.
The sad thing is most of them don’t go.”
Analysis:
There is a consistent thread that runs through
your comments: although companies appear to be
trying
to train employees,
they are not succeeding. This is problematic,
for a variety or reasons. For instance:
•
The Supreme Court has effectively required that companies
train their managers to avoid employment law mistakes. Companies
that fail to do so will risk huge damage awards, including
punitive damages.
•
Seven figure employment law verdicts are becoming commonplace,
and the direct and indirect costs of defending against employment
claims are monumental. There is no denying the link between
effective HR practices and return on investment.
•
As if the prospect for corporate liabilities were not sufficiently
worrisome, there is a real risk of personal liability for
officers and directors who fail to stem the tide of employment
liabilities.
CCG trains employees at all levels, from
entry level to the corporate boardroom,
on the best
ways to prevent
the
distractions,
the legal fees and the potential damages
caused by employment practices lawsuits.
We do it
in person, and we do it
through state of the art e-learning programs
that allow individuals
to obtain training on their own time, at
their own
pace. It’s not boring; it does not waste time; and it produces
long term changes in the behaviors that lead to lawsuits.
Helping companies realize the financial
benefit that effective, affordable and
engaging training
can reap
is at the heart
of CCG’s mission. Let
us know if we can help.
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