Employment Practices Liability

Properly handling employment issues and related claims are key factors in reducing your entity’s employment practices liability exposure.

As simple as it may sound, there are right and wrong ways to discipline or terminate an employee. Unfortunately, increasing numbers of employment claims, court awards and settlements all seem to indicate that the wrong way may be gaining ground.

The workplace and the laws that govern it have changed in multiple ways, which has increased the number of exposures governmental employers face regarding employment practices. For instance, 20 or more years ago, governmental employers didn’t to have to worry about claims of a hostile work environment, age or disability discrimination, or whistleblower protections, let alone even know about the Public Employee Political Freedom Act. Lack of awareness of today’s laws, or choosing to ignore them, increases governmental employers’ chances of making poor employment decisions.  

There are multiple reasons why employers make poor employment decisions:

1.)      Current employment laws and court decisions are not static.

• New state and federal employment laws are being passed, and case law has expanded the interpretation of these laws and how they apply in the workplace.

• It’s challenging for human resource professionals to keep up with these changes.

• These changes aren’t always reflected in the employer’s personnel policies and practices.

2.)      There are increasing numbers of employees today who fall within one or more of the seven protected classes as outlined in Title VII of the Civil Rights Act.

• As the workforce ages, it’s possible that every employee can be placed in at least one of the seven federally protected classes.

• When employers seek to discipline or terminate an employee, they often don’t take into consideration that their actions, which may appear to be legal, might create a disparate impact on a group of legally protected employees.

 • A disparate impact occurs when an employer uses “a facially neutral employment practice that has an unjustified adverse impact on members of a protected class.”

• A facially neutral employment practice is one that does not appear to be discriminatory on its face, but rather is a practice that is discriminatory in its application or effect. 

3.)      Smaller employers lacking professional human resources staff may provide little or no training for their management staff on personnel policies and current employment laws.

• These managers do not always understand what actions are permissible under their own personnel policies, much less whether or not they are legal. 

4.)      Many employers make high-risk employment decisions without the guidance of legal counsel.

• This is perhaps the biggest mistake governmental employers make with regard to employment liability.

• Often, legal counsel is not engaged until after the poor employment decision is made, and the employee has suffered some sort of adverse employment action.

• It is difficult, if not impossible, for legal counsel to develop a defense for a poor employment decision when they are consulted after the fact.

By no means is this an exhaustive list of reasons as to why governmental entities sometimes make poor employment decisions. It does, however, provide evidence as to why it is vitally important for governmental entities to seek legal advice from their staff attorneys, or a PE Partners hotline attorney, before making high-risk employment decisions. High-risk employment decisions are those actions that may violate the civil rights of an employee or run contrary to the governmental entity’s personnel policy.

Employment liability lawsuits against governmental entities and their officials usually involve the alleged violation of an employee’s civil rights. Typically, this means that someone believes, and/or wants the court to believe, that an employer has violated an employee’s constitutional right to due process, the right to equal protection of the law, and/or the right to be free from discriminatory actions. Although these cases can be heard in state court, they are largely heard in federal court, where the awards can be much greater.

Employment-related claims continue to be a large loss leader for Public Entity Partners’ members, and we will cover this topic at our upcoming regional workshops.

To help reduce employment liability exposures, Public Entity Partners has developed an Employment Liability Checklist that is available on our online portal. The checklist provides a decision-making framework to guide public administrators on high-risk employment actions. Before making a final decision on a high-risk action, or if there is any doubt or question regarding an employment action under consideration, governmental entities should first contact their staff attorney.