What should an Employer do in the Labor Law minefield?

Posted By on April 12, 2009

     If you are an employer then every day it seems like there is a new warning on what you should and should not do to avoid running afoul of the myriad labor laws which regulate the way that you do business.  It seems like every time that you turn around there is a new law or a new interpretation of an old law which makes it more and more difficult for you to run your business without incurring liability for the way that you run it.  You think that you are treating your employees fairly and as a business person you realize your employees are the life’s blood of your business.  These employees can make or break you even outside of their making labor law violation claims against you so you have an incentive to maintain a good relationship with them.  In these economic times you need to have some flexibility in the way that you do business and handle your workforce in order to survive.  Each way that you turn it appears that the government is attempting to hamstring you and interfere with the way that you run your business and handle your employees.  Common sense often seems to be thrown out of the window and it appears that whatever you do it may violate someones rights or cause you some form of exposure to liability.  The deeper your understanding becomes the more you realize that your understanding of how to handle your workforce is imperfect.  If you are a large size employer with your own Human Relations department you have an edge over the smaller employers who do not have this benefit.  You often cannot afford to spend the time , as a small business owner, to bring and keep yourself up to speed in your intimate knowledge of the labor laws and as an informed business owner you realize that you also cannot afford to not do so.  I think all of us in this field recognize that things are not going to get simpler in the near future with the legislative and executive branch taking an active role in the entry of new labor legislation and their evidenced willingness to impose new constructions and actual modifications of even those labor laws which have judicial interpretation and a history of application already in place.

     As an employer you are simply going to have to realize that while common sense and fair dealing with your employees is extremely important it is not the sole answer to labor related questions.  The time of using an evenhanded approach with all employees and then adding an additional level of review when you are dealing with an employee in a protected class is simply not enough.  If you are fortunate enough to have an in-house general counsel then in the past that attorney would advise you, almost as an aside, regarding labor questions.  While it is better to have an attorney, even one not specifically skilled in labor and employment law, review your employment related actions as things currently exist that itself can be a recipe for disaster.  It is simply unsafe to rely upon the advice of attorneys who are trained to handle your contract and other business related matters unless they have  specialized training in the field of labor and employment.  Your labor and employment law advisor needs to have the time and focus to keep themselves updated in this regularly changing area on almost a daily basis so that you are not simply obtaining the black letter interpretation of the law today but also you must be able to make an informed projection as to where the law will be tomorrow.  It is going to be difficult to spend assets which are greatly needed elsewhere in growing and maintaining your business in the sales and manufacturing end by reallocating these funds to areas which do not in themselves produce.  However, those expenses which in themselves do not generate income are not something which is new.  For years you have used outside tax preparers and accountants to assist you in areas outside of your practical ability to perform and knowledge.  It is my opinion that the expenses which you incur in the proactive avoidance of employment difficulties is money much better spent than just reacting to a problem which has already occurred.

     Unless you are fortunate enough to have an attorney on your general counsel staff who has the specialized training in labor and employment law you are going to need to arrange for the services of an attorney whose focus is in that field.  You really need to have a relationship with an employment attorney where you can, at a minimum, pick up a phone and call them with your employment related questions as they arise and without substantial delay.  Little is accomplished where you have positioned yourself to make a very lucrative business deal and then lose the profit, or your business itself, due to a labor related suit by a disgruntled employee.  As a business owner you should realize first the need and then make the decision of how to fill it.  Your workforce may be substantial enough and your problems with them of such volume that you may wish to hire an in-house attorney who has the special knowledge in the field of labor and employment to advise you accurately in order to avoid the many pitfalls.  In many instances the employer will not have the size or a volume of problems in this area which is significant enough to warrant the hiring of an attorney specialist to work in-house to simply service this area.  Then you will have a couple of choices to make.  One would be to attempt to hire an attorney who has the capability to act as your general counsel in those matters which are business related including labor and employment.  This will be a challenging position to fill and you must accept that this attorney will be spending a substantial amount of time each day in order to maintain their knowledge of this area of law as well as those other areas where you are seeking assistance.  Another choice would be to put a labor and employment attorney into an outside general counsel position where you recognize that your work will only take up a portion of the attorney’s time.  In so doing you can leave the attorney free to seek out other business relationships to fill up their workweek.  In that vein you may wish to put the labor attorney on a monthly retainer or choose to pay them by the hour worked.    There is  give and take in whatever the method that you choose to incorporate a labor attorney into your business process.  Where you hire a labor attorney in-house then you will gain the opportunity to step across the hall and immediately ask your question which will limit the inherent delay in the business decision process.  Again, you may wish to pay for services as they are provided on an hourly basis.   The downside to this type of arrangement is the natural inclination to avoid making the call or setting the office meeting and incurring the expense in many instances where you do not realize the potential exposure which may be incurred due to your action or inaction.  As I stated above, another possible means of dealing with outside general counsel would be to pay them on a monthly retainer basis where you have a large number of quickly answered questions which require their expertise but your requests do not close down their practice for large portions of the labor attorney’s day.  Where an arrangement is made for a set fee each month the labor attorney has an incentive to average out the services provided and will recognize the benefit of a steady source of income whether they act or not.  The employer is much more likely to use the attorney’s services and avoid problems at the outset where the attorney’s retainer must be paid whether they are used or not.  This steady payment of monthly retainer has seemed to me to provide the most value for the employer and attorney alike.  Of course, if the average use of the attorney becomes substantially higher on a regular basis then he will seek to renegotiate the retainer amount.  There may be other ways to structure attorney’s fees which are limited only by the imagination of the parties.

     What ever your decision I would suggest to you a decision should be made before the problem arises.  An employer needs access to current and accurate information regarding these labor and employment situations and actions in order to make the correct decision.  The cost associated with the defense of these matters not to mention any costs involved in an adverse finding is hard to determine so that they may be taken into account in any business plan.  A business plan which incorporates the proactive use of the attorney’s services is something which can be planned.  Avoiding the problem is always the best choice since the costs associated with defending these matters can be tremendous as not only do damages, your own attorney’s fees and court costs come into play but you also may have exposure for the Plaintiff’s attorney fees, punitive damages and other costs depending upon the source of the dispute.

    The time is past where an employer can simply treat his employees fairly and expect to have few, if any, labor problems with them.  Cookie cutter approaches are of questionable value where these matters are each driven individually by the specific facts of the case.  A proactive approach to labor and employment matters, which incorporates an ongoing plan of action and a quick response to individual complaints, would seem to me to make the most long term business sense.   Mistakes will undoubtably happen and you must be in the best position to limit damages in their wake and delay in taking action or making a decision can be the difference between just correcting the error at a minimum cost and facing a full-blown legal action.  The Internet is available to almost everyone and Employees are, for the most part, extremely well educated in their rights.  Your business is too important to base its continued existence upon a roll of the dice.

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2 Responses to “What should an Employer do in the Labor Law minefield?”

  1. […] An Employer must have access to the advice of an Attorney who is well trained in the field of Labor and Employment Law or risk severe repurcussions. … It is simply unsafe to rely upon the advice of Attorneys who are trained to handle your contract and other Business related matters unless they have specialized training in the field of labor and employment. Your labor and employment Law advisor needs to have the time and focus to keep themselves updated in this regularly … What should an Employer do in the Labor Law minefield? | Ohio … […]

  2. You actually make it seem so easy with your presentation but I find this topic to be really something that I think I would never understand. It seems too complicated and very broad for me. I’m looking forward for your next post, I’ll try to get the hang of it!

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