Avoiding Lawsuits

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Avoiding Lawsuits

The two most common sources of worker lawsuits are wrongful termination and discrimination.

Before addressing preventive measures specific to each category, there are a few general cautions that are worth a pound of cure:

  • Hire smart. Trust your intuition. Remember that, beyond an employee's skills, workplace chemistry is the bedrock of good morale .

  • Learn how to interview. Learn about what you can and can't say when trying to learn about a prospective employee. With all of the laws to follow regarding interview, getting information about a prospective employee has been likened to drinking a glass of water with your hands behind your back.

  • Check references. First, actually make the calls. You'd be shocked, simply shocked , at how many Mr. Hydes get hired because management was too harassed to call the references. Second, listen carefully : many ex- employers are wary of the retribution a negative reference can bring, so, as with stock analysts, you have to listen between the lineslack of enthusiasm can be an indicator that there's something the reference would like to say but won't.

  • Conduct standard periodic performance reviews and keep written records.

  • Consider instituting a probation period for new hires, even if they are at-will employees . A probation period with reviews after 1, 2, and 3 months communicates to new hires that their status with the company is still undetermined.

  • Get it in writing: Every worker should sign:

  • An Employment/Independent Contractor Agreement

  • Reviews

  • Complaints

Discrimination

Note regarding state regulations. Some expand the federal acts to all businesses regardless of number of employees. States vary on who is considered a protected class, for example, some states protect homosexuals from discrimination on the basis of sexual orientation, but others do not.

In a harassment /discrimination litigation, an employer wants to be able to prove it exercised its best efforts to prevent any poor behavior by employees. The following efforts will bolster an employer's argument that it did all it could to prevent the situation:

  1. Policy guide. Every employer should give new employees a policy guide outlining prohibited actions and clearly stating where to report any violations, the procedures that the employees must follow, that such reports shall be free from retribution (anti-retaliation clause), and so on. The employee should sign an acknowledgment that he has received, read, and understood the document. See sidebar: "Employee Handbook."

  2. Training. Management and employees should receive sensitivity training. Lower level management is particularly important in preventing harassment, as they see the employees on a day-to-day basis and are likely to be the first to notice any problems. Moreover, an employee is most likely to make his or her first complaint to an immediate supervisor. Management should receive training in:

  • The nuts and bolts of harassment and discrimination law

  • Company procedures for handling complaints and potentially volatile situations

  • How to recognize potential harassment/discrimination situations before they receive a complaint

  1. Open communication lines. The best prevention for sexual harassment or any kind of discrimination litigation is a short line between the offended party and upper management. Publicly designate a "go-to" person for any complaints, and clearly communicate that consultations with the go-to will be confidential.

  2. Reinforcement. Many employers elect to have periodic (annual or bi-annual) "training" lunches where a lecturer educates employees about what constitutes harassment and discrimination, and what to do should such a situation arise in their workplace.

  3. Documentation. An employer then wants to be able to prove that it took all available steps to address and remedy the problem.

  • Follow the steps outlined in the corporate harassment policy.

  • All complaint communication must be documented

  • After addressing a complaint, the company will want to receive some signed documentation from the complainant that the measures taken by the company were effective and satisfactory. This will reduce the likelihood of a subsequent lawsuit alleging insufficient measures.

How to Fire Someone Politely and Effectively

Do not fear the axe. A wise man once said: "It's not the people you fire who make your life miserable; it's the ones you don't." Nothing is worse for morale than lack of consequences for those employees who make everyone else's job harder. It is wise to keep careful documentation of poor performance for two reasons: (i) in case of a wrongful termination suit, you need to be able to prove that the employee's performance was the cause of termination; and (ii) to minimize your unemployment insurance tax rates. Employees terminated for poor performance generally do not receive unemployment benefits, but those who are laid off do. In most states, a company will pay into a state's unemployment insurance fund through a tax on payroll, and the state will require higher tax rates from companies whose employees have drawn unemployment benefits. Minimize the number of employees receiving unemployment benefits and you'll minimize your unemployment insurance payments.

Conduct performance reviews every 6 to 12 months, have the employee sign them, and keep them in a personnel file. Any complaints against the employee must be documented, signed by the employee to prove that the issue was brought to the employee's attention, and kept in the personnel file.

While term employees can only be terminated for the reasons and on the conditions enumerated in their individual contracts (see the Anatomy of an Employment Agreement section), at-will employees can be terminated at any time for any reason.

An ex-employee may claim exception to this rule by arguing that he was wrongfully discharged for any of the following three reasons:

  1. Employee and employer had an implied contract . Even without a written contract, courts have ruled that an implied contract to fire only for cause exists where employer behavior created a reasonable expectation in the employee. Factors leading to the existence of an implied contract include: a long term of employment; the employer stated that it would not terminate at employee's level without cause; the employee was assured that employment would continue with good performance; the employee had received raises, promotions, and other signs of employer approval; the employee had been told that he had performed well and had never been criticized or warned .

  2. Employer violated the implied covenant of good faith and fair dealing . This hallowed covenant has been deemed by courts to exist in the background of almost every contract, essentially giving courts a reason to prevent one party from utterly exploiting another. Hence, employers should beware firing an at will employee the day before he receives the royalty bonus unless the employer can firmly establish that the employee is being terminated for good cause.

  3. Employee was terminated for a reason violating public policy. Most employers' moral compasses will help them avoid this trap, but some examples of invalid reasons to terminate an at-will employee include: refusing to assist employer to break laws or engage in deceptive practices; whistle -blowing; and filing a worker's comp claim.

NOTE

CAUTION

When a high-level executive is terminated, or anyone receives a severance package, be sure to get something in writing acknowledging the position of the parties as well as a release of employer liability.You don't want to pay a gen erous severance package and then be sued three months later for wrongful termination.

Organization Charts

Man may be born free, but he elects the comfort of society's chains. I have found this a helpful principlethat structure is a preferred evilin organizing young, creative companies."Flat" organizations (so-called because there is little or no hierarchy) were the vogue result of a realization that the collaborative approach often creates happier employees and faster development times. However, such structures are more chaos-prone for the simple reason that no one knows where to take a problem for the authority to solve it. On the other hand, a structure with too many layers can bog down processes and alienate knowledge (usually held by the workers) from decision-making.The goal is to give fertile minds the room to roam, contribute, and problem-solve while providing a support skeleton that is informed and able to listen for and identify trouble, intervening quickly where needed.

Creating an organization chart becomes even more important when your organization has more than one project in motion at a time.There are three main philosophies of organizing your personnel:

  1. Pure Project: In a pure project organization, people are grouped into teams by project, instead of function.A programmer reports to the project lead, and not to a Technical Director or other functional head.Advantages:Total focus on a project, strong team identity, minimized red tape, maximized flexibility. Disadvantages: Competition between teams can get out of hand; specialized knowledge can fail to get transferred to the institution (example: team 2 doesn't understand team 1's technology and tools); renegade managers can turn the company into fiefdoms; resource allocation can be inefficient (example: art staff lying fallow while waiting for next project).

  2. Functional: Personnel report to a functional head, so programmers would report to a Technical Director. Duties for new projects would be added to and divided among function groups (like the technical department) by the function head, who would also serve as the project manager for a given func-tion.Advantages: Stability, cohesion, common pool of knowledge within a department, coherent career paths. Disadvantages: Competition for resources, communication not as fluid among project contributors, not quite the same goal fervor.

  3. Matrix.The matrix format combines the project and function forms by having personnel report to more than one supervisor. Employees are organized on a permanent basis into functional groups and report to function heads, but "seconded" (dedicated) to project teams for a given project for whatever duration is required (which may not be the entire life of the project). One way to imagine the matrix is to see the functional group as the employee's family, and the project team as its peer group . Employees spend more time with their peers, but their primary identification is as a member of the family, and it is to the head of that family that they go with any problems. Benefits: project emphasis, strong access to all of company resources, institutionalization of technology and knowledge, continuity after projects end. Disadvantages: Disputes can arise between functional heads and project managers over resources and authority, with employees caught in the middle; major problems can arise when a project gets shut down.


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Game Development Business and Legal Guide
Game Development Business and Legal Guide (Premier Press Game Development)
ISBN: 1592000428
EAN: 2147483647
Year: 2003
Pages: 63

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