Magazine article Supervisory Management

Employment Audits Reduce Chance of Litigation

Magazine article Supervisory Management

Employment Audits Reduce Chance of Litigation

Article excerpt

As employment litigation increases, and as more of these cases go to jury trials, managers have to put particular emphasis on lawsuit prevention.

One of the anti-litigation procedures that is becoming more popular nowadays is the "employment audit," in which a company reviews its procedures regarding treatment of employees, makes sure that they're fair and in compliance with the law, and figures out how to make them lawsuit-proof.

Stuart Bompey is a partner at the New York City-based law firm of Orrick, Herrington and Sutcliffe and chairman of the labor and employment law department for the company nationwide. He recommends the following broad guidelines for conducting an employment audit:

* If you haven't been doing so, conduct an audit immediately. Hereafter, conduct one at regular intervals, preferably toward the end of the fiscal year.

* Get in-house counsel or a labor relations lawyer from outside to conduct the audit in conjunction with your human resources department.

* Restrict all information obtained during the audit to counsel, the human resources department, and top management.

* Let employees know that you're conducting an audit.

* Review all personnel- and labor-related policies, practices, documents, etc. Review all employee handbooks, policy statements, orientation materials, and such documents.

* Interview all supervisory personnel to discover unwritten and unobserved policies.


* Are stated policies and practices being applied consistently?

* Are the policies both fair and legal?

* Do you have a standard, recognized method of communicating these policies?

* Who is responsible for enforcing these policies?

* Do you use employee handbooks or personnel policy manuals? If so, are they easily understood and consistently followed?

When conducting an employment audit, Bompey says, the manager should divide employment procedures and practices into four areas: hiring, retention, discipline and termination, and post-employment. Each area should be reviewed independently.


* Are employees hired at will, or pursuant to contracts? Whichever the relationship, is it set forth in all written materials related to the hiring process?

* Does the interviewer cover all relevant points, including elements of the job, description of salary and benefits, list of people who will interview the applicant, and a written summary of the interview?

* Does the interviewer know which health-related questions are off-limits?

* Does the interviewer describe the duties of the job and inquire what, if any, accommodations would be needed for the applicant to perform them?

"Hiring is where most employers make their big mistakes," Bompey points out. "You hire the wrong people, then it takes you four years to get rid of them. You have to emphasize background checks--although of course it's hard to get accurate references from previous employers these days because of the threat of lawsuits. Another hot issue with regard to hiring is compliance with the Americans With Disabilities Act, particularly with regard to mental disabilities and reasonable accommodations therefor."


* Are performance evaluations based on objective, job-related criteria?

* Does the evaluation list both the employee's strengths and weaknesses?

* How is the evaluation communicated? …

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