EmPloymENT PRaCTICEs loss PREvENTIoN …

1 chubb Group of Insurance Companies | document is advisory in nature. It is offered as a resource to be used together with your professional insurance and legal advisors in developing a loss control program. This guide is necessarily general in content and intended to serve as an overview of the risks and legal exposures discussed herein. It should not be relied upon as legal advice or a definitive statement of law in any jurisdiction. For such advice, an applicant, insured, or other reader should consult their own legal counsel. No liability is assumed by reason of the information this document promotional purposes, chubb refers to the member insurers of the chubb Group of Insurance Companies underwriting 14-01-0061 (Rev. 1/14) Printed on recycled paperEmPloymENT PRaCTICEs loss PREvENTIoN GuIdElINEs A Practical Guide from ChubbEMPLOYMENT PRaCTICEs LIABILITY loss PREvENTIoN A Practical Guide from ChubbPrepared by Seyfarth Shaw LLPfor the chubb Group of Insurance CompaniesThis booklet addresses a broad range of topics about acts of workplace violence and threats of violence directed toward people associated with your organization.

2 It is advisory in nature and offered as a resource to use in conjunction with specialized training and consultation conducted by qualified experts and tailored to the particular needs of your organization. No liability is assumed by reason of the information in this : The views expressed in this handbook are those of Seyfarth Shaw LLP and may or may not reflect the views of any members of the chubb Group of Insurance ..7 OVERVIEW: FEDERAL LAWS THAT GOVERN THE EmPloymENT RELATIONSHIP ..8 Title VII of the Civil Rights Act of 1964 ..8 Section 1981 of the Civil Rights Act of 1866 ..9 Age Discrimination in EmPloymENT Act (ADEA) ..10 Equal Pay Act (EPA) ..11 Executive Order 11246 (Affirmative Action Plans and the Office of Federal Contract Compliance Programs [OFCCP] ..12 The Americans with Disabilities Act (ADA), Americans with Disabilities Act Amendments Act (ADAAA) and the Rehabilitation Act of 1973 ..13 Lilly Ledbetter Fair Pay Act of 2009 (LLFPA).)

3 16 The Family and Medical Leave Act (FMLA) ..16 Uniformed Services EmPloymENT and Reemployment Rights Act of 1994 (USERRA) and the Vietnam Era Veterans Readjustment Assistance Act of 1974 ..17 Labor Laws and Union Representation ..18 Wage and Hour Laws ..19 Employee Benefit Laws ..20 Genetic Information Nondiscrimination Act (GINA) ..21 Other Federal Laws ..22 STATE STATUTES AND LOCAL ORDINANCES REGULATING EmPloymENT ..23 STATE COMMON LAW EmPloymENT CLAIMS ..242 Wrongful Discharge or Discharge in Violation of Public Policy ..24 Breach of Contract ..25 Tort Claims ..26 Promissory Interference with Contract ..26 Invasion of Privacy ..26 Assault and Battery ..27 False Imprisonment ..27 Negligence Claims ..28 Intentional Infliction of Emotional Distress .. and Misrepresentation ..30 RECRUITING AND HIRING EMPLOYEES ..31 Before You Begin the Hiring Process ..31 EmPloymENT Applications ..33 Job Interviews ..36 Investigating Candidates for EmPloymENT : References, Credit and Background Checks.

4 40 Hiring an Applicant ..43 Immigration Considerations ..44 EMPLOYEE AND APPLICANT TESTING ..46 Medical Testing (ADA Limitations) ..46 Drug and Alcohol Testing ..47 Psychological and Personality Tests ..483 Lie Detector or Polygraph Tests ..49 HIV Testing ..50 Performance and Aptitude Tests ..51 Fingerprinting ..51 Genetic Testing ..51 THE PROHIBITION OF WORKPLACE HARASSMENT ..53 Rules for Claims of Sexual Harrassment ..54 Conduct Prohibited ..55 Protected Groups ..56 Employer Liability ..56 The Importance of an Appropriate, Well-Publicized Policy Against Harassment ..56 Responding to Reports of Harassment ..59 Additional Considerations ..62 Claims by the Accused Harasser ..62 Off-Premises Harassment ..62 Liability for Harassment by Nonemployees ..62 Customer Discrimination and Equal Access Claims ..63 PERSONNEL POLICIES AND EMPLOYEE Tips ..64 Disclaim Any Promise of Job Security ..64 Avoid Making Contractual Obligations.

5 65 Use Clear and Concise Language ..65 Specifically Allow for Flexibility and Modification ..654 Good Policies to Include in an Employee Handbook ..66 Policies That Give Rise to Claims ..67 EMPLOYEE EVALUATIONS ..70 General Guidelines ..70 Instructions for ..72 Job-Related Appraisals ..72 Objective and Independent Review ..73 Meaningful Evaluations ..74 Employee Acknowledgement ..74 Limited Access to Evaluations ..75 Record Keeping ..75 Forced Rankings ..75 DISCIPLINE AND CORRECTIVE ACTION ..76 General Considerations ..76 Discipline Should Be Documented ..78 Workplace Investigations ..79 TERMINATING THE EmPloymENT RELATIONSHIP ..80 The Basics ..80 Establish Termination Procedures ..80 Making the Termination Decision ..81 Communicating the Termination Decision ..82 Responding to Post-Termination Issues ..83 Severance Agreements ..855 Pros and Cons of Severance and Release Agreements ..85 Legal Requirements.

6 86 Summary of Common Contents of Severance and Release Agreements ..86 LAYOFFS AND REDUCTIONS IN FORCE ..88 Worker Adjustment and Retraining Notification Act (WARN) ..88 The Decision-Making Process ..88 Preparation for RIF-Related Interviews ..89 Other Considerations ..90 SINGLE-PLAINTIFF AND MULTIPARTY EmPloymENT LITIGATION, INCLUDING CLASS AND COLLECTIVE ACTIONS; THE ALTERNATIVE DISPUTE RESOLUTION OPTION; AND OTHER ISSUES ..92 Types of Claims ..92 Arbitration and Other Types of Alternative Dispute of Pre-Dispute ADR Programs ..94 Advantages of Post-Dispute ADR Programs ..95 Disadvantages of ADR ..96 The Use of Personnel Records in EmPloymENT Litigation ..97 Assume All Documents Are Available to Your Opponent ..97 The Benefits of Properly Prepared Documents ..99 Problematic Documents ..100 Document Retention ..101 CONCLUSION ..102 INFORMATION ABOUT THE AUTHORS ..1037 INTRODUCTIONE mployers face increasing legal obligations in managing their workforces.

7 The federal government and the states continually impose new EmPloymENT regulations on employers, designed to protect employees from a lengthening list of discriminatory PRaCTICEs . In addition, large, high-visibility verdicts and settlements encourage some employees who think they have been treated unfairly to sue over EmPloymENT actions. Companies face legal fees and litigation expenses, and EmPloymENT PRaCTICEs liability (EPL) suits consume managers time. In this difficult environment, employers must keep pace with changes in the law and continually adapt by ensuring that existing policies are up to date, drafting new policies when necessary, and adopting new EmPloymENT PRaCTICEs when appropriate. In such a fluid environment, avoiding EmPloymENT claims might seem impossible. It isn t. The keys are staying up-to-date on EmPloymENT law, understanding which laws apply to an organization, and instituting policies and taking other steps that can limit potential claims and make actual claims easier and less costly to defend.

8 This guide is intended to help. It offers an overview of the federal laws governing the EmPloymENT relationship, highlighting the rules and regulations governing various events in the employee-employer relationship. It includes practical suggestions for limiting EmPloymENT liability, from initial interview to termination of EmPloymENT , and it discusses common types of EmPloymENT claims and what to expect from EmPloymENT is pleased to share this information with you. If you already have a program in place to help your organization manage its EmPloymENT PRaCTICEs , we hope this guide will serve as a practical resource and supplement your organization s effort to build a strong and appropriate loss PREvENTIoN : FEDERAL LAWS THAT GOVERN THE EmPloymENT RELATIONSHIPMany laws have an impact on EmPloymENT , either directly or indirectly. To acquire knowledge of all such laws is not practical, but employers should be aware of the major statutes that govern the EmPloymENT relationship and should be aware of other general EmPloymENT principles.

9 A number of laws are extremely significant in the EmPloymENT context. All employers should be aware of these laws and the legal obligations they impose. The following summary provides an overview of these laws. Title VII of the Civil Rights Act of 1964 Title VII is one of the most common bases of EmPloymENT litigation. The statute makes it unlawful for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of EmPloymENT because of race, color, religion, sex, including sexual harassment, national origin, and pregnancy, childbirth, or related medical conditions. The Supreme Court found that Title VII protects against both sexual harassment by the opposite sex and sexual harassment by the same sex ( , male on male sexual harassment). Title VII prohibitions against workplace harassment are dealt with in greater detail on page VII applies to employers with 15 or more employees.

10 All employees, including part-time and temporary workers, are counted for purposes of determining whether an employer is covered. Title VII cases are initially processed by the Equal EmPloymENT Opportunity Commission (EEOC) or an equivalent state agency. Following the initial processing of the case, the complaining party is typically issued a notice of his or her right to sue. Individual employees or the EEOC may then file suit in federal court. A charge alleging a violation of Title VII must be filed with the EEOC within 300 days of the alleged unlawful act (180 days in some states). A federal court lawsuit must be filed within 90 days after receipt of the right-to-sue notice. Claims under Title VII are established through either direct evidence of an intent to discriminate or indirect (circumstantial) evidence. A Title VII claim may arise from an alleged unlawful difference in treatment afforded similarly situated employees based on one of the above classifications 9(known as disparate treatment) or from an EmPloymENT practice that appears nondiscriminatory but that has an adverse impact on employees in a protected class (known as disparate impact).