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Posted by on August 9, 2012 in Business Management, Business Start Up Advice [ 0 Comments ]

ana shields of jackson lewisRunning a small business can be both rewarding and infuriating – and in no area is this more true than managing employees.

While you’ll no doubt hire plenty of honest, hard-working people who understand your vision and help your company grow, you’ll also run into sticky situations from time to time.

Whether it’s someone who posts disparaging comments about you or your business on Facebook or an employee who claims they were discriminated against in the hiring process, it’s critical to have working knowledge of various workplace laws and to consult with an attorney who specializes in employment law whenever you have a question.

Recently, we checked in with Ana Shields, a partner in the Long Island law offices of Jackson Lewis LLP, who specializes in employment law. Shields has advised clients on state and federal laws involving everything from  age discrimination to medical leave.

She said the most important time to consult with an attorney who specializes in employment law is before your employee contacts a lawyer regarding workplace concerns.

“Litigation avoidance is critical. Even where you cannot prevent an employee from filing suit, you can take steps to make litigation more defensible,” she said.

We asked Shields several more questions regarding what business owners and managers should know about employment law. Here’s what she had to say:

What’s the most common legal problem business owners come to you about?

Defending management in employment-related lawsuits (the fastest growing area of civil litigation), and related employment discrimination charges.

What’s the best advice you can give to a business owner when it comes to hiring?

When making hiring decisions, employers should, at a minimum, consider two issues:

1. Avoid any unnecessary testing of applicants. Testing is a hot button issue for the EEOC and, although no discrimination may be intended, the tests themselves may have a discriminatory impact on certain protected populations, which can expose you to systemic discrimination claims.

2. Do your homework. If an applicant claims to have a college degree, ask for a copy of the diploma. If an applicant claims to have worked at a particular company, call the company for a reference. We see misrepresentations — or, at a minimum, puffing — on many applications and resumes encountered in litigation.

What are the biggest mistakes business owners make when it comes firing?

Firing for poor performance or other reasons without adequate documentation. In New York, unless there is an employment contract to the contrary, employees are considered “at will.” This means they can be fired for any reason or no reason, so long the reason is not an unlawful one, e.g. discrimination based on race, sex or another protected category. When there is a lack of documentation, an employee’s allegations that the discharge was discriminatory is more likely to become a question for a jury, rather than something that can be resolved before trial. Moreover, the documentation should demonstrate that the performance deficiencies were communicated to the employee and the employee failed to address them.

Why should managers do performance reviews and how frequently should they be done?

Regular performance reviews should be completed for at least two reasons, to: (1) provide feedback to the employee; and (2) document performance problems. Employees who are doing well should be told they are doing well. Employees who are not meeting expectations need to understand how they are falling short and that improvements need to be made. The annual performance review should not come as a surprise to employees. It should confirm feedback that has been provided throughout the year. Managers need to have honest conversations with employees who are not performing before things get out of hand. It is difficult to defend a decision to discharge for poor performance when the last three performance reviews indicate the employee is meeting expectations.

As for the frequency of reviews, this depends on the size of the employer. Mid-year and annual performance reviews typically are recommended.

What sort of training should managers receive regarding employment law? What are the most important things they should know if they don’t receive any training?

Employers should regularly provide anti-harassment training to managers and keep a record of managers who attended. Make sure that those who are absent are trained when they return. Not only will training improve relations in the workplace but, depending on the claim, it may provide employers with an affirmative defense to allegations of harassment in that it demonstrates the employer took steps to avoid harassment.

Quite apart from training, managers need to be aware of perceptions they may create by their actions. They need to ensure that employees regard them as fair and even-handed. Too many disparate treatment claims are the result of perceived favoritism that can be avoided.

Why should business owners have an employee handbook? What main topics should it cover?

To communicate expectations to employees. It should, at a minimum, address anti-harassment policies, reporting procedures, leave policies and electronic communications policies, including social media policies. These have to be carefully drafted. There is no one handbook that works for everyone, so beware of purchasing handbooks from vendors who make such promises.

What’s one thing you wish all managers or business owners talked to you about before they take action?

Classification of employees as exempt or non-exempt from the minimum wage and overtime requirements of the FLSA (Fair Labor Standards Act) or state law, or even claiming they are not employees at all. Too often, employers must defend costly class claims in cases where, for example, an “exempt” designation is questionable and the issue could have been avoided before suit was filed.

Learn more about how to avoid lawsuits, curb the high cost of employee turnover, and more at

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