Ten Employment Errors Managers Make That Invite Lawsuits

In my practice, I am often frustrated by lawsuits that could have been avoided. Managers take improper actions and make mistakes that they do not know they are making. The company loses money and becomes embroiled in preventable lawsuits because the managers did not know the applicable employment laws. HR generally knows that it needs to partner with management to help keep the company compliant . . . but getting management to work reciprocally can be a challenge. Following are ten mistakes managers make that entangle companies in lawsuits and lost profits that could be easily avoided if only the managers knew what to do:

1) Firing Someone Without Consulting HR: When managers fire an employee without coordinating with HR, they often unnecessarily embroil the company in discrimination litigation because they are outright engaging in discrimination (see number 2) or because they didn’t take appropriate performance management actions necessary (see number 3).

2) Firing the Pregnant Lady or the Man with Cancer (without consulting HR): All managers see is an individual who is absent a lot and not doing his or her job—instead of a discrimination lawsuit waiting to happen. If there are true performance issues, they can be addressed. However, HR (or outside employment counsel) needs to be involved in such decisions.

3) Not Keeping Proper Performance-Management Documentation nor Properly Performance-Managing Employees: Managers fail to document their employees’ performance issues, and go so far as to give "satisfactory" reviews, when performance is far from OK. Sometimes, they never tell the employee there are performance issues. When things come to a head and the employee is fired, not only is the employee surprised, but he or she is sure the termination must have been for a discriminatory reason because, after all, their performance must have been fine, right? After all, they got satisfactory reviews and performance bonuses year after year.

4) Providing Time Off In Excess Of (or contrary to) Company Policy, and Not Advising HR: When managers provide employees with paid time off in excess of company policy, they often "play favorites," which can lead to discrimination claims. They also could potentially be hiding disability or performance issues that HR needs to know about, violating wage and hour laws, and setting bad examples that company policy is not to be followed as written.

5) Abusing/Altering Company Overtime Policies: Companies can require overtime work, and must pay employees if overtime is owed. Managers sometimes "encourage" non-exempt employees to work through lunch or stay "a little" late—but tell the employees to mark their time sheets with their "normal" hours and refuse to compensate the employee for the overtime owed. This can cause huge headaches for companies.

6) Brushing Off Employee Complaints: Managers are often the first ones to receive complaints of harassment, bullying or other improper activities in the workplace. When managers brush off the complaints and don’t take them seriously, they not only are probably violating company policy but are laying the groundwork for lawsuits if the situation is not properly addressed.

7) Overlooking Minor Thefts: The petty cash is off and supplies are missing, but the manager chalks it up to the price of doing business and neglects to take any actions to get to the bottom of the thefts.

8) Failing to Follow Confidentiality Protocols: Company confidential information (customer lists, new product plans, formulas, marketing strategies etc.) need to be treated as confidential by the company, or courts will not likely enforce company confidentiality agreements when employees take and use this information for personal gain. Managers need to enforce and follow company confidentiality protocols to limit access to and protect this vital information, or legal action by the company for misappropriation of trade secrets may be unsuccessful.

9) Hiring Employees Without Going Through HR: Have you ever received a note from a manager: "I hired Sally Jones; she started last Monday. Please make sure she’s on payroll,"? Of course, the usual new-hire paperwork was not completed. Perhaps a background check was not done. If your company requires employees to sign non-competion/non-solicitation agreements on hire, and continued employment is not consideration for those agreements, the agreement may not be enforceable when that employee signs it a week into his or her hire.

10) Looking At An Employee’s Personal Email or FaceBook Page: The manager heard that the employee (we’ll call him Jasper) had started a rant about the company on his FaceBook page, and so gets another employee who is "friends" with Jasper to let you see what is being said. The manager then acts precipitously (see number 1), and the company is suddenly facing a lawsuit alleging that the manager violated the National Labor Relations Act (which, yes, applies to non-unionized workplaces in this situation) by firing the employee in retaliation for engaging in concerted protected activity.

Bottom line, as a holiday gift to your company in the new year, invest in manager training so your mangers know what to do, and how to do it, and do not inadvertently embroil your company in very avoidable lawsuits.