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Here’s How to Avoid Legal Pitfalls

Some of HRE's Most Powerful Employment Attorneys offer their thoughts on how HR leaders can help keep their organizations out of trouble.
By: | June 11, 2019 • 15 min read

If you think we live in interesting times right now, just wait.

The coming months will feature tons of media coverage of the upcoming presidential election, amid a divisive political landscape. Political discussions and arguments in the workplace are practically guaranteed—along with all the accompanying rancor and potential complaints.

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But that’s not all. The spotlight that the #MeToo movement has shone on sexual harassment in the workplace has hardly faded. HR leaders should anticipate ongoing awareness of the issue, and should not waver in their efforts to stamp out this behavior. On a related note, more attention than ever is being directed to the wage gap between men and women. A number of states and cities have passed equal-pay laws, and more are considering them. Organizations with multi-state operations are increasingly faced with a patchwork of laws to deal with.

For this year’s Most Powerful Employment Attorneys special feature, we spoke to a number of attorneys on the list to get their thoughts on the legal issues HR leaders should be paying the most attention to. The better prepared we are for what lies ahead, the better positioned we’ll be to help our organizations thrive.

A Divided Workplace

In the unlikely event you haven’t been paying attention, U.S. politics on the national level has come to resemble constant warfare. This has, inevitably, bled into the workplace. A survey by Randstad U.S. late last year found that 55% of employees have witnessed heated political discussions at work, with nearly 40% having engaged in such discourse themselves. In addition, 72% said such discussions have caused them stress, and 44% said they’ve impacted their productivity.

Should the solution simply be an outright ban on political discussions at work? Elise Bloom, co-chair of Proskauer’s labor and employment department and a member of this year’s list, says that, while such a ban may be too heavy-handed, efforts to discourage such discussions are probably in an employer’s best interests.

“Make it clear that work time is for work activities, and ask people to refrain from having discussions about politics during work hours,” she says. “I think it’s important to re-focus people on the fact that when you’re at work, you’re there to get your job done.”

However, list member Jonathan Segal, partner at Duane Morris and managing principal of its Duane Morris Institute, says banning or discouraging political talk simply isn’t realistic.

“People are going to talk about politics, and I think a rule that has no chance of being enforced undermines an employer’s credibility,” he says.

Segal and Bloom agree that the heated political climate brings risks for employers. The national debate over immigration, terrorism, the Mueller report and its aftermath, and a host of other issues can lead to workplace conflict that erodes camaraderie and gives rise to complaints.

Concurrent with that, there’s been a rise in hate crimes against Jews, Muslims and other groups nationwide (as well as around the world). Offhand comments in the office about certain ethnic or religious groups (sometimes arising from political discussions) can spark complaints about a hostile work environment, says Segal.

By the same token, hostile comments about demographic groups that do not have a history of disenfranchisement—older white males, for example—can lead to similar problems, he adds.

“Comments such as, ‘We really don’t need to elect another old white male as president’ can give rise to complaints of a hostile workplace environment if they’re not properly addressed by the employer when brought to their attention,” says Segal.

The ideal approach, he says, is for HR to put “guardrails” in place that remind employees of the need to be civil and respectful of each other, regardless of the topic at hand.

“Rather than waiting until there’s a problem, it’s best to head off the issue upfront by holding a meeting in which you acknowledge that, while people may discuss politics at work, everyone needs to be civil and respectful,” says Segal.

Another piece of advice? Try to exercise balance when complaints are brought directly to HR, he says. “It’s important to be seen as apolitical and not appear to be targeting one side or another.” This includes reminding employees that derogatory remarks about any group, regardless of whether they’ve been historically disenfranchised or not, are unacceptable.

The Legacy of #MeToo

Although HR leaders may feel they’ve been inundated with information about preventing sexual harassment, they shouldn’t assume that all employees have gotten the message, says Bloom. They should continue to review and evaluate their complaint-resolution processes and ensure their mechanisms for reporting complaints are working.

“There’s been a knee-jerk reaction of putting in place reporting hotlines and an ombudsman, but how do you do those things in a way that accomplishes your goals?” she says.

So-called “one-and-done” online sexual-harassment training may not be enough, says Bloom. The best approach, she says, is live, in-person training that gives employees the opportunity to ask questions, accompanied by an on-site presentation from company leaders about why the training is important.

“That’s where organizations have seen the greatest success and the biggest change,” she says. “Having leaders present reminds everyone that the issue is being taken seriously.”

HR needs to evaluate the organizational culture to ensure sexual harassment isn’t being tolerated, while ensuring that managers up and down the org chart are treating employees fairly, understand the rules and know what to do when a complaint is brought to their attention, says Segal.

“#MeToo will continue to be a big issue for organizations,” he says. “The days of people suffering in silence are over.”

HR leaders should also evaluate whether work events may allow for too much alcohol consumption, how complaints related to incivility are resolved and what, if any, restrictions apply to dating among co-workers (or attempts to date co-workers).

Respect at all levels of an organization is vital, says Segal.

“It’s important to understand that #MeToo does not just refer to sexual harassment,” he says. There’ve been upticks in other categories of harassment as well, including incidents motivated by race, disability and ethnicity, he says.

One of the biggest perils organizations face these days is a “false sense of security” within the C-suite that the harassment issue has been adequately addressed, says Segal.

“HR leaders may feel over-saturated with news about #MeToo, but this behavior remains a very big issue in the workplace,” he says.

Unequal Pay and Other Matters

Pay inequity, and legislative efforts to remedy it, should continue to be on HR’s radar, says Bloom.

“One of the things that keeps HR leaders up at night is ‘How do we go about approaching pay structure and evaluating whether or not we have an issue?’ ” she says.

In some cases, organizations have elected to go with transparency, making it easy for all employees to determine who’s paid what and to see how their pay stacks up against that of their peers, says Bloom.

Although new federal laws mandating equal pay are unlikely in the near future, given the current political stalemate, states such as Washington, Oregon, Maryland and New Jersey (along with cities such as Philadelphia and Cincinnati) have introduced fairly robust pay-equity laws, which include bans on soliciting salary history from candidates, says Segal. (However, at least two states—Wisconsin and Michigan—have gone in the opposite direction, barring towns and cities within those respective states from implementing salary-history bans on employers.)

“There are laws brewing in a variety of states—including red and purple states, not just blue ones,” he adds.

Regardless of which jurisdiction their organization is in, HR should audit their pay practices and anticipate questions from employees about pay equity, says Segal, who notes there has been an uptick in pay-equity suits.

“If employees find out they’re making less than their colleagues for no legitimate reason, it increases the likelihood of such suits and results in lower employee engagement,” he says.

Marijuana legalization will continue to be a vexing issue, particularly for employers with multi-state operations.

“Some states have protections for medical marijuana, while other states, such as California, don’t,” says Segal. In California, for example, the state supreme court recently ruled, in Ross v. RagingWire Telecommunications Inc., that the state’s marijuana-legalization statute did not give the drug the same status as legal prescription drugs.

The legal fights over whether federal laws banning marijuana preempt state law will continue to rage, he says. In the meantime, a growing number of organizations have decided to stop testing for marijuana.

“It’s a hassle—what does the company do when someone tests positive for marijuana?” says Segal. Some employers allow a positive result to be relabeled as negative if a job candidate or employee can show a valid medical-marijuana prescription. However, organizations that must comply with federal regulations relating to marijuana—such as transportation companies—do not have that option, he says.

More companies are moving away from marijuana testing except when mandated by federal law, Segal says, a trend he expects to continue.

Labor Relations: Whither the NLRB?

For M.J. Asensio, a partner at BakerHostetler and a member of this year’s Most Powerful list under the labor category, one of the most compelling issues in that area will be what happens with the National Labor Relations Board. Two major issues for the business community are the so-called “quickie-election rules” issued under the Obama administration and the Browning-Ferris joint-employer ruling, also issued by the Obama-era NLRB.

Many in the business community think “the quickie-election rules are unfair because employers are given less time to communicate with employees about union-related issues,” he says.

Some thought the Trump administration would overturn the rule, but the NRLB has yet to issue a ruling on the matter, although it has solicited public comment, says Asensio.

“It is notable that [NLRB General Counsel Peter Robb] sent out a memo during the comment period basically stating that he was in favor of modifying, not jettisoning, the quickie-election rule,” he says. “It will be interesting to see whether the board issues a rule or what, if any, activity it takes.”

As for the Browning-Ferris ruling, which found that employers may be jointly liable for temporary workers under certain circumstances, it’s seen by many employers as burdensome and overly complicating, says Asensio.

“Under Browning-Ferris, you, as an employer, could find yourself subject to liabilities that you probably never anticipated,” he says.

In 2017, the NLRB issued its Hy-Brand ruling, which overturned Browning-Ferris in favor of the pre-Obama standard for determining joint-employer status. However, NLRB Inspector General David Berry later determined board member William Emanuel had a conflict of interest, thus rendering Hy-Brand null. What will be interesting to see, says Asensio, is the final form of a proposed rule on joint-employer status, which the NLRB is expected to issue later this year.

It’s been a turbulent time for the NLRB, he says, with former chairman and member Mark Gaston Pearce withdrawing from consideration earlier this year after President Trump unexpectedly nominated the Obama-era member for another term. This leaves the board with a vacancy, while another member’s term expires this year.

“Everyone will be carefully watching to see who the president nominates for the board,” says Asensio.

Employee Benefits: Four Issues

Ian Morrison, co-chair of Seyfarth Shaw’s ERISA and employee benefits litigation practice group and a member of this year’s list, says four issues warrant HR leaders’ attention when it comes to employee benefits.

First, there’s been an “explosion of claims” asserting a right to what ERISA [the Employee Retirement Income Security Act] lawyers call “equitable remedies” for situations in which a benefit is not otherwise due under an employer’s plan, he says. “These usually stem from some failure to communicate or follow processes in the benefits area that lead someone to think they have coverage when they actually don’t,” says Morrison.

As an example, an employee might contact a call center to get pre-authorization for a medical procedure that isn’t approved under the plan. However, if the call-center rep provides authorization for a service that’s later denied, the employee can bring an equitable-remedy claim against the employer, says Morrison.

“They can say, ‘I asked for guidance, you didn’t tell me this wasn’t covered, you should have told me and now you’re on the hook,’ ” he says.

The second issue involves the fees and expenses associated with defined-contribution plans, says Morrison.

“Almost every other week, we hear about class-action lawsuits being filed over excessive fees and expenses being paid to service providers,” he says.

For plan sponsors, the best defense is to have a good process in place for regularly examining what the plan is being charged and whether those charges are reasonable, and to document that such oversight is taking place, says Morrison. “People should know this by now, but we continue to see these lawsuits,” he says.

Issue No. 3 involves mortality tables and defined-benefit plans, says Morrison.

“There have been a bunch of cases filed at the end of last year and earlier this year claiming that recipients are being underpaid,” he says.

The claims essentially rest on the fact that, because people are living longer these days, companies should use 1971 mortality tables because they may otherwise be underestimating life expectancy, says Morrison.

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“There’s no law that says you can’t use those mortality tables, and the claims here are the first time we’ve seen this being asserted,” he says.

Finally, there’s the issue of “cross-plan offsetting,” Morrison says. In a typical scenario, he says, a health plan’s third-party administrator concludes it overpaid an out-of-network provider for services provided to a plan member, and reduces the amount it pays to the same provider for a different member to recoup the balance. Providers have, not surprisingly, cried foul.

“The courts have punted on whether [cross-plan offsetting] is allowed under ERISA,” says Morrison. “I expect the issue will continue to be litigated.”

See this year’s Most Powerful Employment Attorneys list (which includes top 100 attorneys, specialists in specific areas, up-and-comers and this year’s inductees to the Most Powerful Employment Attorneys Hall of Fame).

Andrew R. McIlvaine is senior editor at Human Resource Executive®. A Penn State graduate, Andy also spent two years in the U.S. Army prior to attending college and attained the rank of sergeant while serving in the Army Reserves. He can be reached at [email protected]

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