Follow these tips to ensure an efficient, cost-effective working relationship with your outside legal counsel.
HR professionals know that employees are quick to cry "foul" whenever business necessity calls for unpopular company action. They also know that plaintiffs' attorneys are increasingly creative in devising strategies that support these employees' claims.
Fortunately, most HR professionals have a reliable employment law attorney in their own corner--someone who can help make sense of confusing situations and devise practical strategies and solutions.
But like any professional relationship, there is always room for improvement. How can HR professionals ensure that they maintain an efficient and effective working partnership with their legal lifeguards? Here are some suggestions from practicing employment law attorneys.
Early Coordination Is Key
Employment lawyers agree that the single most important step HR can take when working with legal counsel--and the one they too often miss--is simply asking questions soon enough.
"I'm more proud of the lawsuits I've helped prevent than the cases I win in court," says Peter Petesch, partner with the law firm Ford & Harrison in Washington, D.C. "The toughest call I get is the one where HR says, 'I just fired so-and-so--did I do the right thing?'"
Many factors lie behind HR's delay in seeking counsel. "HR may feel pressure from their senior management to keep down legal fees because there's no visible product that results from an expense in this area," says Doug Towns, employment attorney at Jones, Day, Reavis & Pogue in Atlanta. "But it's really a matter of where you want to spend the money--at the front to avoid the lawsuit, or at the end during litigation?" says Towns.
By not engaging counsel at the outset of a situation, some companies are essentially playing Russian roulette.
"You may miss nine out of 10 bullets, but the one you catch will be expensive," says Towns.
Petesch believes "It's far more economical to have a 15-minute conversation over an issue versus having to appear in a lawsuit." Of course, he's had cases where clients called early, got his advice, followed it and got sued anyway. "Nothing stops a person from suing," he notes, "but in these cases, the employer was in a very good position to win."
Don't Assume Expertise
Sometimes HR professionals fail to call their attorneys quickly enough because they rely too heavily on their own familiarity with employment law. Though this knowledge can be very helpful, it may not be enough to help them make the correct decision.
"Professionals in HR are well versed in what the law provides, but aren't necessarily cognizant of all its intricacies," says Arlene Switzer Steinfield, partner with Thompson & Knight LLP in Dallas. "We are closer to day-to-day court decisions and the nuances of interpretation."
For example, companies may open the door to lawsuits by focusing only on what the law allows--not what is legally wise, says Bob Prorok, partner with ReedSmith LLP in Pittsburgh.
"During a reduction in force, for instance," Prorok notes, "you are permitted under law to choose nondiscriminatory reasons to let an employee go. But what if that happens to he the oldest person there, or someone in another protected class? A legal analysis can provide input as to whether you want to do it."
Employment law attorneys, says Prorok, "have a perspective about what can happen down the road" that HR professionals may not share.
For example, even a well-intended comment can cause problems if taken out of context, says Steinfield. "If an employee complains of sexual harassment and HR says something like 'We're glad you came to us because we don't want you going outside,' that can be misconstrued by the employee to mean 'HR is trying to keep me from going to the EEOC Equal Employment Opportunity Commission],'" Steinfield explains.
Know the Law
While HR staff can't--and shouldn't try to--be legal experts, they should try to gain a good understanding of how the legal process works and how their own actions can affect litigation, say employment lawyers.
An important part of prevention is staying current on developments in the human resources field and in the legal arena, says Paul Salvatore, partner in the labor and employment law department of Proskauer Rose LLP in New York. "The most effective HR executives are the ones who understand enough about the law and the legal process to make the right decisions for their companies about how to handle employee litigation," he says.
Salvatore, who also is a member of the Society for Human Resource Management's Employee and Labor Relations Committee, urges HR to take advantage of free seminars given by law firms. Other attorneys add that firms often give HR professionals access to legal reference material and other useful resources.
What areas of employment law should HR professionals focus on? For a brief rundown, see "What's on the Horizon?" on page 130.
Don't Add or Subtract Information
Towns says it's important for HR professionals to refrain from filtering information for outside counsel. "If you call for help with a sexual harassment complaint," he says, "don't leave out that the alleged wrongdoer has had two or three complaints prior to this one. That changes our analysis and remedial action."
The same holds true for filtering or adding to information when dealing with employees.
"When I'm interviewing witnesses, I like to have HR or internal personnel there because it can be reassuring to the witness," says Steinfield. "But it's extremely important for me to hear what the witness does or doesn't know. In a well-meaning effort to assist, HR sometimes jumps in and 'helps' by translating questions or helping with an answer, like 'Oh, Sally, what you mean is ... .' And the witness gets a signal that 'This is what the company wants me to say.'"
Respond Quickly
Being involved in too many other projects may sometimes prevent HR from devoting full attention to a legal situation. While such distractions are an understandable part of the work world, a lack of focus on the problem at hand won't help your company's legal defense, says Anne Covey, management employment attorney at Covey & Associates P.C. in Pennington, N.J., and author of The Workplace Law Advisor (Perseus, 2000).
"When you have an active piece of litigation and a client hasn't given you all the facts, hasn't accumulated all the facts or doesn't work with you on deadlines, that just makes the attorney's job harder or delays necessary action," says Covey.
She believes that delayed responses from employers and HR professionals can cause litigation to drag on needlessly. "Sometimes clients are angry because they believe the litigation is frivolous, and therefore put the situation on a backburner," she explains. But by being proactive, employers "can either settle the case in the early stage if the facts are not in the organization's favor or have the case dismissed because it is baseless."
Salvatore agrees. "Many cases could be settled for a lot less, if you had settled up front," he says. "It can be very hard to prove that you didn't discriminate."
Covey adds that a lack of action also can anger the courts, which tend to think "If you're not interested, we'll make you interested."
Steinfield finds it frustrating when HR's response to her initial investigation isn't what she hopes for. "My gut may say that a certain type of document exists, but HR says that nothing's there," Steinfield explains. "But what HR needed to do was go back to a supervisor from three years ago and ask 'Do you have anything?'"
She stresses that it is important to avoid overlooking significant documents and information. "Failing to produce such information if requested or required to be disclosed in discovery can have disastrous consequences, such as the exclusion of critical evidence at trial," says Steinfield. "That exclusion can impair the defense."
This has nothing to do with an unwillingness to help on the part of FIR, says Steinfield, but probably reflects the fact that some HR professionals are unfamiliar with how painstaking the investigation and discovery processes can be.
But HR professionals who are watching their legal costs have a vested interest in becoming knowledgeable about and involved with the discovery process. Employment attorneys point out that investigation and discovery can be lengthy and painstaking, and the more help HR gives in this area, the fewer hours an outside legal staff spends on legwork.
"If my legal assistants have to run down information in 15 departments, that can get expensive," says Steinfield.
(For more on the discovery process, see "HR Provides Critical Assistance" on page 127.)
Training
Of course, the greatest cost savings come from the lawsuit that never happened, say attorneys. Because of this, HR's greatest contribution toward cost control will lie in prevention--often through training. Covey explains that in employment litigation, managers often "buy the lawsuit" simply because they don't know their obligations.
For example, Prorok remembers how one manager filled out the appraisal form for an employee who later filed an age discrimination claim. "One item on the appraisal form was a 'promotion' question mark. The appraiser had filled this item out with 'No, so-and-so is 56,"' says Prorok.
On the other end of the spectrum, managers who are not adequately trained may fail to properly discipline poor performers, which can create legal problems. "Many supervisors are afraid to discipline because employees scream harassment," says Covey.
What can result is watered-down discipline, or no discipline. "This is where an employee receives a memo that says 'If you engage in this behavior, you will be fired,'" says Covey. "The problem is that there are six memos like this one in the employee's personnel file. A court may conclude that the employee never knew when, if ever, he would be fired."
Consistent, high-quality training for managers can pay big dividends--but Covey cautions HR against providing that training directly. "It's clear by federal and most state law that you must provide training to supervisors and other employees about workplace sexual harassment, for instance," she says. "But because top management may think that the training is a luxury, HR steps in and does the training--and they may now unwittingly become a party to the lawsuit.
"A plaintiff's attorney will ask pointed questions pertaining to the HR trainer, such as: 'What was the training?' 'What's your background and what are your qualifications?'" continues Covey. "They try to show a defect in the training, which is the equivalent of no training, and thus a violation of the U.S. Supreme Court mandate of Faragher and Ellereth."
HR should be sitting in during the training sessions, Covey says, listening to the managers and supervisors to understand their problem areas and to provide them with specific direction and advice. "Then, make sure that you keep providing the training as new managers and supervisors are hired or promoted."
Management Support
But training alone isn't enough. HR professionals also must be available to provide counsel and support to managers as they grapple with human resource issues.
Ann Kiernan, an attorney for Santa Cruz, Calif.-based Fair Measures Corporation who also has a private practice in New Brunswick, N.J., says most HR problems are created by "individual managers flying solo."
"When I provide training for HR and managers," says Kiernan, "I frequently hear managers say 'We can't get hold of HR-we're in different time zones' or 'I wish I could call HR and talk to someone instead of voice mail."' Even though her more difficult clients are generally too small to have HR departments, an HR department that's stretched too thin also can leave managers lacking advice, she says.
Draft Your Documents
It wouldn't be a good idea to attempt this with all documents, says Towns, but HR can write the initial drafts of certain types of documents such as offer letters, disciplinary forms, policies and so on.
"This saves time and money for both sides," he says. "The attorney can just look the draft document over, mark it up and make suggestions."
Though HR-or management-may feel that standard documents don't need legal assessment, Towns emphasizes the problems that can occur just because of wording. "In some courts, a poorly worded offer letter may be construed as an express employment contract, instead of an offer for at-will employment," he says.
He remembers one "somewhat imprecise" offer letter that included various conditions, such as taking a drug test to get the job. "The employee took the drug test and failed it," says Towns. "However, he argued that 'My offer letter says I get a job if I take a drug test. I took it, and you have to give me the job."'
The company settled out of court, says Towns, "but it cost handsomely in settlement and attorney's fees."
Be a Wise Consumer
HR departments should expect good advice, availability and responsiveness from their attorneys, while outside counselors need to understand the company's culture and policies.
"In a new relationship, both HR and legal counsel should know what to expect from each other," says Stu Garbutt, partner with the law firm of Meckler Bulger & Tilson in Chicago. "HR should explain what they want the lawyer to do, and what they will do in-house. Both sides need to know: Who will be gathering what information? Who will contact witnesses? Who will find records? You don't want to trip over each other."
Most HR professionals have had the experience of giving excellent advice on an employment law matter, only to have the advice ignored until their legal counsel advised the same thing. Frustrating as that experience can be, attorneys urge HR to use them as the "voice of authority" they need when upper management just won't listen.
Garbutt also reminds HR professionals that their attorneys may be very useful in sticky situations. "Maybe a manager wants to fire somebody and you have a very bad feeling about it," says Garbutt. "Let your lawyer be the bad guy for you in discussions with management.
Attorneys know that HR walks a difficult line between legal caution and the realities of the workplace. "If HR listened only to lawyers, you'd end up with a 1,000-page manual and never fire anyone," says Towns, "and if you listened only to managers, you wouldn't even have a policy. The answer is somewhere in the middle."
Ultimately, it's HR's knowledge of the company's culture, senior management's attitude toward litigation, the problem areas within the company and their own legal savvy that will help them most in getting good value from their legal counsel.
Carla Joinson, a contributing editor to HR Magazine, is based in San Antonio. She specializes in writing about business and management issues.
HR Provides Critical Assistance
HR professionals may not always appreciate how important they are to the defense team. But Arlene Switzer Steinfield, partner with Thompson & Knight LLP in Dallas, says that HR is invaluable during the discovery process.
Discovery, she explains, is the point in the lawsuit where each party's legal team sends requests for documents and written responses to questions, and takes depositions from the parties involved and from third-party witnesses.
"HR is our fundamental liaison in fact-gathering," says Steinfield. "They know where all the pieces of paper are. They're the ones who identify the witnesses and give us an assessment of 'Here are the right people to talk to.' They can save the company a great deal of money."
Steinfield often needs information from the company that can be difficult to track down--and HR can help to obtain it. She remembers one case in which, after the plaintiff's deposition, she "had a hunch the plaintiff may have written some nasty e-mails to her supervisor. But, the company had thousands of employees--how could I find these e-mails?"
Sure enough, HR contacted IS professionals within the company to pull up old e-mails, "and found wonderful evidence for me," says Steinfield. "Even when it's a matter of asking for a personnel file, HR will know whether that equates to a formal file plus a working file somewhere. They know the company."
Doug Towns, employment attorney at Jones, Day, Reavis & Pogue in Atlanta, explains that he needs a lot of background to create a defense. Getting that background is a lot more costly if he doesn't have HR's help because "they're on the grounds, they know the skeletons and the policies and people involved."
What's on the Horizon?
It won't be any time soon that HR professionals see the end of such employment law staples as suits alleging sexual harassment or violations of the Fair Labor Standards Act, say attorneys. But other areas of employment law are taking on new importance.
"I think ergonomics will re-emerge," says Ann Kiernan, an attorney for Santa Cruz, Calif.-based Fair Measures Corporation who also has a private practice in New Brunswick, N.J. "But for now, HR should keep their eyes on the ADA [Americans with Disabilities Act]. Federal court has cut back dramatically on protection, but state law often has [broader] protection-we may see a swing back to state law."
Bob Prorok partner with ReedSmith LLP in Pittsburgh, agrees that disability discrimination is an area of concern. "Up until now," he says, "most ADA lawsuits allege the employee has a disability." Because the definition of disability has been very narrow, he says, employees had difficulty meeting the legal standard.
