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20 Most Common Employer Mistakes That Could Cost Your Hospital

John Commins, for HealthLeaders Media, September 11, 2009

Employment discrimination lawsuits have doubled in the last 10 years, thanks in large part to provisions of the 1991 Civil Rights Act that give juries a say in financial settlements. Among the headlines: Publix supermarkets got slapped with an $82.5 million class-action sex discrimination settlement and Coca Cola paid nearly $192.5 million in 2000 to settle a class action.

In other words, juries are ready and eager to shower aggrieved former-employees-turned-plaintiffs with millions of dollars in settlement dollars at your business's expense.

"Plaintiffs don't win a huge percentage of lawsuits, but that percentage goes up a lot if there is a jury trial. After 1991, when jury trials came into play, the percentage of plaintiffs' wins increased and the dollar amounts increased," says Michael D. Malfitano, an attorney with Constangy, Brooks & Smith, LLP (CBS).

"Most jurors are working people with family members who may have had problems with employers at some point," Malfitano says. "So, there is a natural empathy with the working person who is the plaintiff."

Malfitano says that because of their relatively small size and close working relationships, physician practices are less likely to find themselves in an employment suit than larger healthcare entities, such as hospitals and nursing homes.

So what can you do to reduce your potential liability? Malfitano and fellow CBS attorney Cherie L. Silberman have identified the 20 most common mistakes that can come back to bite employers when a jury sets its teeth. Take a look, and give your workplace an honest appraisal and see how many snafus you recognize.

Pre-employment mistakes
Let's start with what Malfitano and Silberman call "pre-employment mistakes," the errors committed during the recruiting and hiring process.

1. Failure to conduct an adequate background check on potential employees. Did you conduct a criminal background check? Did you contact the references? Did you ask about previous convictions, but not arrests? Did you check his or her driver's license?

2. Inconsistent recruiting and hiring practices. Are you thorough in the hiring process with some employees but not with others? "When employers don't apply policies consistently, it looks to a juror like they may be discriminating," Silberman says.

3. Inappropriate interview questions and comments. This is a real minefield. Although you want to be thorough in your hiring process, you also have to be careful about what questions you ask. For example, you can ask about criminal convictions, but not arrests. You cannot ask about the status of military discharge, and questions about education have to be thoroughly screened. Avoid questions related to religious or social issues, as well as those related to physical or mental health. "Where employers get in trouble is where it may not seem so harmful, say in casual chatter. If someone says they're moving into town and you ask if it's so they can be closer to their husband. The intent doesn't matter," Silberman says.

Mistakes during employment
Then there is a category of mistakes that are made during employment.

4. Failure to properly pay non-exempt employees for breaks, lunch, and overtime training. "This is a ripe area for litigation right now," Silberman says.

5. Inappropriately classifying hourly employees as salaried employees to avoid overtime and other compensation. Just because you slap an "assistant to the assistant manager" title on somebody's name tag doesn't make him or her exempt from overtime and other benefits. Juries salivate over this issue. Malfitano recommends that physician practices undertake annual or biannual audits to ensure they haven't improperly classified employees as exempt. "In medical practice, that is not an unusual situation. We have seen receptionists answering the phone classified as exempt and not getting overtime. There is no way a receptionist would be exempt," he says.

6. Failure to implement, disseminate, and follow personnel policies. What are your harassment and discrimination policies? What are your corrective action and disciplinary policies? You might have the most progressive and comprehensive personnel policies in the business, but they're useless if you don't follow them.

7. Failure to train employees. Do your employees understand the finer points of the Americans with Disabilities Act? Do they understand that harassment is not limited to sex, but can include religion, age, race, ethnicity, disability, and marital status? This training should apply to all supervisors and managers, as well as HR.

8. Failure to document promptly and accurately. Prepare every document regarding warnings, complaints, and disciplinary action as if it is being introduced at trial and you are the jury. Be objective. Get the facts, not the conclusions. The document should include the date it was created, the name and signature of the author, the name and signatures of the witnesses, when applicable, and the stated purpose of the document.

9. Failure to appropriately evaluate employee performance. Make sure your assessment of your employees is accurate. Don't fudge over the problem areas because it's difficult to refute a former employee's complaint of being wrongfully denied a promotion after a soft-hearted supervisor gave a glowing, but undeserved, appraisal. "If they make a decision adverse to that employee later on because of poor performance, but there is no documentation to support that that could look like discrimination," Silberman says.

10. Failure to adequately discipline employees. Remember, the purpose of the discipline, beyond covering your own liabilities, is to help the employee improve. Juries really dislike it when they believe that employees are blindsided with punitive actions.

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