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Employment Practices Loss Prevention Guidelines Employment Practices Loss Prevention Guidelines A Practical Guide from Chubb Wrongful Discharge or Discharge in Violation Employment Practices of Public Policy 31 Liability Loss Prevention Breach of Contract 32 A Practical Guide from Chubb Tort Claims 33 Prepared by Seyfarth Shaw LLP Promissory Estoppel 33 For the Chubb Group of Insurance Companies Tortious Interference with Contract 34 Contents Invasion of Privacy 34 Introduction 7 Assault and Battery 35 Overview: Federal Laws That Govern The False Imprisonment 36 Employment Relationship 8 Negligence Claims 36 Title VII of the Civil Rights Act of 1964 8 Intentional Infiction of Emotional Distress 36 Section 1981 of the Civil Rights Act of 1866 10 Defamation 38 Age Discrimination in Employment Act (ADEA 12 Fraud and Misrepresentation 39 Equal Pay Act (EPA 13 Recruiting and Hiring Employees 41 Executive Order 11246 (Afrmative Action Plans and the Ofce of Federal Contract Compliance Before You Begin the Hiring Process 41 Programs [OFCCP] 13 Employment Applications 44 The Americans with Disabilities Act (ADA), Americans with Disabilities Act Amendments Act (ADAAA) and the Job Interviews 48 Rehabilitation Act of 1973 15 Investigating Candidates for Employment: References, Lilly Ledbetter Fair Pay Act of 2009 (LLFPA 19 Credit and 53 The Family and Medical Leave Act (FMLA 19 Background Checks Uniformed Services Employment and Reemployment Hiring an Applicant 58 Rights Act of 1994 (USERRA) and the Vietnam Era Immigration Considerations 60 Veterans’ Readjustment Assistance Act of 1974 21 Employee and Applicant Testing 62 Labor Laws and Union Representation 22 Medical Testing (ADA Limitations) 62 Wage and Hour Laws 24 Drug and Alcohol Testing 64 Employee Beneft Laws 25 Psychological and Personality Tests 66 Genetic Information Nondiscrimination Act (GINA) 26 “Lie Detector” or Polygraph Tests 67 Other Federal Laws 28 HIV Testing 68 State Statutes And Local Ordinances Regulating Employment 29 Performance and Aptitude Tests 70 State Common Law Employment Claims 30 Fingerprinting 71 Genetic Testing 72 The Prohibition of Workplace Harassment 72 Limited Access to Evaluations 99 Rules for Claims of Sexual Harrassment 73 Record Keeping 99 Conduct Prohibited 73 Forced Rankings 100 Protected Groups 74 Discipline and Corrective Action 101 Employer Liability 75 General Considerations 101 The Importance of an Appropriate, Well-Publicized Discipline Should Be Documented 104 Policy Against Harassment 75 Workplace Investigations 106 Responding to Reports of Harassment 76 Terminating the Employment Relationship 106 Additional Considerations 82 The Basics 106 Claims by the Accused Harasser 82 � Establish Termination Procedures 107 Of-Premises Harassment 8 � Making the Termination Decision 107 � Liability for Harassment by Nonemployees 83 Communicating the Termination Decision 109 � Customer Discrimination and Equal Access Claims 84 Responding to Post-Termination Issues 111 � Personnel Policies and Employee Handbooks 85 Severance Agreements 113 General Tips 85 Pros and Cons of Severance and Release Agreements 113 Disclaim Any Promise of Job Security 85 Legal Requirements 114 � Avoid Making Contractual Obligations 87 Summary of Common Contents of Severance and Release Agreements 115 � Use Clear and Concise Language 87 Layofs and Reductions In Force 117 Specifcally Allow for Flexibility and Modifcation 87 Worker Adjustment and Retraining Notification Act 117 � Good Policies to Include in an Employee Handbook 88 The Decision-Making Process 118 � Policies That Give Rise to Claims 89 Preparation for RIF-Related Interviews 119 � Employee Evaluations 92 Other Considerations 119 � General Guidelines 93 Single-Plaintif And Multiparty Employment Litigation, Instructions for Supervisors 94 Including Class And Collective Actions; The Alternative Dispute Resolution Option; And Other Issues 122 Training 95 Types of Claims 122 Job-Related Appraisals 96 Arbitration and Other Types of Alternative Objective and Independent Review 97 Dispute Resolution 124 � Meaningful Evaluations 98 Advantages of Pre-Dispute ADR Programs 125 � Employee Acknowledgement 99 Advantages of Post-Dispute ADR Programs 126 � Disadvantages of ADR 127 � The Use of Personnel Records in Employment Litigation 129 Employment Practices Liability Loss Prevention Assume All Documents Are Available to Your Opponent 129 The Benefts of Properly Prepared Documents 132 Problematic Documents 132 Document Retention 135 Conclusion 136 Introduction Information About The Authors 137 Employers face increasing legal obligations in managing their workforces. 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 difcult 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 fuid 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. This guide is intended to help. It ofers 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 litigation. Chubb 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 Note: The views expressed herein are those of the author and may or may not refect the views of any member of the Chubb Group of Insurance Companies. 7 serve as a practical resource and supplement your Title VII applies to employers with 15 or more organization’s efort to build a strong and appropriate employees. All employees, including part-time and loss prevention program. temporary workers, are counted for purposes of determining whether an employer is covered. Title VII Overview: Federal Laws That Govern cases are initially processed by the Equal Employment the Employment Relationship 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 Many laws have an impact on employment, either her right to sue. Individual employees or the EEOC may directly or indirectly. To acquire knowledge of all such then fle suit in federal court. A charge alleging a violation laws is not practical, but employers should be aware of Title VII must be fled with the EEOC within 300 days of the major statutes that govern the employment of the alleged unlawful act (180 days in some states). A relationship and should be aware of other general federal court lawsuit must be fled within 90 days after employment principles. A number of laws are extremely receipt of the right-to-sue notice. signifcant in the employment context. All employers should be aware of these laws and the legal obligations Claims under Title VII are established through either they impose. The following summary provides an direct evidence of an intent to discriminate or indirect overview of these laws. (circumstantial) evidence. A Title VII claim may arise from an alleged unlawful diference in treatment aforded similarly situated employees based on one of the above Title VII of the Civil Rights Act of 1964 classifcations (known as disparate treatment) or from an employment practice that appears nondiscriminatory Title VII is one of the most common bases of employment but that has an adverse impact on employees in a litigation. The statute makes it unlawful for an employer protected class (known as disparate impact). to “fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual Most commonly, claims under Title VII allege that an with respect to his compensation, terms, conditions, individual was treated unfavorably regarding a term or privileges of employment” because of race, color, or condition of employment because the individual religion, sex, including sexual harassment, national belonged to a protected class. In other words, these origin, and pregnancy, childbirth, or related medical claims assert that the decision maker made an conditions. The U.S. Supreme Court found that Title VII employment decision based on an individual’s race, protects against both sexual harassment by the opposite gender, or other protected classifcation. To succeed sex and sexual harassment by the same sex (e.g., male on on such a claim, the individual typically produces male sexual harassment). Title VII prohibitions against circumstantial evidence of discrimination; e.g., that he workplace harassment are dealt with in greater detail on or she belongs to a protected class, was qualifed for page 54. a position,
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