Human Resource Personal Liability

This presentation focuses on human resource personal liability, highlighting the behaviors and legal frameworks that can create potential liability in employment settings.

It explains various laws, including the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and other related regulations like the PUMP Act and COBRA, which impose personal liability on individuals in the workplace.

The presentation outlines best practices to manage and avoid personal liability while discussing specific behaviors that can lead to legal consequences for HR professionals.

Highlights

• Understanding personal liability under federal and state laws is essential for HR professionals.
• Key laws affecting personal liability include FLSA, FMLA, and ERISA.
• Certain behaviors, such as defamation and negligent hiring, can create liability.
• Best practices for avoiding personal liability include clear policies and proper training.
• Management can be held accountable for criminal acts committed by employees under their supervision.
• Documentation and awareness are critical tools for minimizing risks of liability.
• Reacting appropriately to litigation and preserving evidence are crucial if facing a lawsuit.

Key Insights

• Individual employees, especially those in supervisory roles, can be personally liable for improper employment practices.
• Negligent hiring, retention, and supervision can expose organizations and their leaders to significant legal risks.
• Clear policies and effective training programs are instrumental in preventing liability.

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Human Resource / Personal Liability

Understanding which behaviors create potential liability in an employment setting

Learning Objectives

• You will be able to define how personal liability could attach under certain state and federal laws.
• You will be able to describe best practices to avoid personal liability.
• You will be able to discuss which behavior creates potential liability in an employment setting.
• You will be able to explain to your staff how to avoid personal liability.

Federal Laws That Impose Personal Liability

• Fair Labor Standards Act
• Pump Act
• Family and Medical Leave Act
• Employee Retirement Income Security Act
• Consolidated Omnibus Budget Reconciliation Act
• Immigration Reform and Control Act
• Uniformed Services Employment and Reemployment Rights Act
• §1981
• Business Crimes

State Laws That Impose Personal Liability

• Negligent hiring, retention, supervision
• Defamation
• Interference with contract
• Invasion of privacy
• Infliction of emotional distress
• False imprisonment
• Assault
• Battery

Fair Labor Standards Act (FLSA )

The four main components covered by the FLSA are:

• Payment of a minimum wage
• Overtime pay for working 40+ hours in a week
• Recordkeeping by the employer on employees: accurate information identifying the worker and the hours worked and the wages earned
• Child labor standards and restrictions

The PUMP Act

The PUMP Act covers:

• employers engaged in interstate commerce
• at least two employees and
• doing at least $500,000 per year in business.
  • If compliance “would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business,” the PUMP Act exempts employers with fewer than 50 employees. Also exempted are certain jobs, such as flight attendants and pilots.
• Employers are required to provide nursing mothers
  • reasonable break time
  • use of a private space other than a bathroom
  • shielded from view
  • free from intrusion from coworkers and the public.
• Pumping time counts as time worked
• Remedies
  • Employment
  • Reinstatement
  • Promotion
  • lost wages
  • liquidated or compensatory damages, and
  • punitive damages

FLSA Personal Liability

• The individual’s ownership interest
• Degree of control over the corporation’s financial affairs and compensation practices
• Role in causing the corporation to compensate (or not to compensate) employees in accordance with the FLSA

Family and Medical Leave Act (FMLA)

Components of the family medical leave act

• 50 or more employees
• Employee worked more than part-time for at least a year
• The birth of a child and to care for the child after birth
• The placement of a child with the employee for adoption or foster care
• To care for the spouse, child, or parent of the employee who has a serious health condition

FMLA Personal Liability

• Any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer
• Must be acting in relation to an employee
• Supervisory government employees may qualify as “employers”
• Must have sufficient responsibility or stature within the company

Employee Retirement Income Security Act (ERISA)

• ERISA protects the interests of participants and beneficiaries in private-sector employee benefit plans
• Governmental plans and church plans generally are not subject to the law
• ERISA supersedes state laws relating to employee benefit plans except for certain matters such as state insurance, banking and securities laws, and divorce property settlement orders by state courts

ERISA Personal Liability

• Officers and directors who are individuals acting directly or indirectly in the interest of a corporate employer can be personally liable for underpayments in relation to an employee benefit plan
• Fiduciary duties of loyalty and prudence
• Employment decisions based on use of welfare plan benefits

Consolidated Omnibus Budget Reconciliation Act (COBRA)

• COBRA allows certain individuals who experience a “qualifyingevent” to continue coverage under a group health plan
• A qualifying event is an event that causes a covered employee or family member to lose coverage under the plan
• Hours of employment are reduced, or
• Employment ends

COBRA Personal Liability

• COBRA was merely an amendment to ERISA
• “Employer” is defined in ERISA
• ERISA’s definition applies to COBRA

Uniformed Services Employment and Reemployment Rights Act (USERRA)

• “Any person whose absence from a position of employment is necessitated by reason of service in the uniformed services is entitled to the reemployment rights and benefits of USERRA.”
• Prohibits an employer from denying employment benefits to a member of the armed services because of his military obligation
• Violation occurs if the employee’s military status is a motivating factor in the employer’s actions

USERRA Personal Liability

• The language of USERRA and accompanying regulations arguably support a broader interpretation of the term “employer”
• “Employer” has been interpreted to include those individual employees who have authority to hire and fire, such that personal liability may attach under USERRA
• Official decisionmaker is liable even without discriminatory animus but is influenced by previous company action that is the product of a like animus in someone else

42 U.S. Code § 1981 – Equal Rights Under the Law

• All persons within the jurisdiction of the United States shall have the same right to make and enforce contracts as is enjoyed by white citizens

• Outlaws discrimination with respect to the enjoyment of benefits, privileges, terms, and conditions of a contractual relationship, such as employment

• Is applicable to a plaintiff complaining of discrimination during an employment period of probation

§ 1981 Personal Liability

• To impose individual liability under § 1981, a plaintiff must demonstrate some affirmative link to causally connect the actor with the discriminatory action
• Personal liability predicated on the actor’s personal involvement.
• Personal involvement includes gross negligence in the supervision of subordinates who committed the wrongful acts
• Personal involvement includes failure to take action upon receiving information that constitutional violations are occurring

Business Crimes

• Management of the company whose employees actually commit criminal acts can be held liable if they authorized the conduct, knew about the conduct but did nothing, or failed to act reasonably in their supervisory capacity
• An employee can be found guilty of a business crime if he by virtue of his position had authority and responsibility to deal with the situation

Negligent Hiring, Retention, Supervision

• Existence of an employment relationship
• Employee’s incompetence
• Employer’s actual or constructive knowledge of such incompetence
• Employee’s act or omission causing plaintiff’s injuries

Defamation

• Intentional false statement of fact to a third person outside the workplace
• Per se defamation: 1) criminal conduct; 2) a loathsome disease; 3) misconduct in a person’s trade, profession, office, or occupation; or 4) or sexual misconduct” to the plaintiff
• Workers’ compensation may not be exclusive remedy

Interference With Contract

The requisite elements of tortious interference with contract claim are:

• The existence of a valid and enforceable contract between plaintiff and another;
• Defendant’s awareness of the contractual relationship;
• Defendant’s intentional and unjustified inducement of a breach of the contract;
• A subsequent breach by the other caused by defendant’s wrongful conduct; and
• Damages

Personal Liability Interference With Contract

• When officers or directors act in their official capacity as agents of the corporation, they act not as individuals so they are not acting as a third party, but rather as a party to the contract and cannot be personally liable
• When directors or officers act outside the scope of their official capacity, they no longer act as agents of the corporation and therefore act as a third party
• Directors and officers who act outside the scope of their official duties, therefore, can be held personally liable for tortious interference with a contract

Invasion of Privacy

• Invasion is a public disclosure of facts regarding the plaintiff;
• the disclosed facts were not already in the public domain;
• the facts once disclosed were of a type highly offensive to a reasonable person; and
• the defendant acted unreasonably or recklessly as to whether there was a legitimate public interest in the disclosed facts.
• may not be covered by workers’ compensation

Infliction of Emotional Distress

• Conduct that is extreme and outrageous;
• The defendant intended to cause, or knew that there was a high probability of, the severe emotional distress; and
• The defendant’s conduct in fact caused the severe emotional distress
• Extreme and outrageous conduct can occur when an employer abuses its power over an employee or coerces her to engage in illegal conduct

False Imprisonment, Assault, Battery

• Confining a person in an area against their will
• Personal attack is assault – physical contact is battery
• Personal liability attaches when the injuries caused by the intentional conduct of third parties [including co-workers] for reasons personal to the actor and not directed against the person as an employee or because of his employment
• The third party or fellow employee’s act must have been motivated by his animosity against the injured employee

Avoiding Liability

• Policies, practices, and procedures
• Training
• Personal behavior
• Awareness
• Prudence
• Common sense
• Documentation
• Insurance

What to Do if You Are Personally Sued

• Responding to litigation hold letters
• Work product and attorney-client privileges
• Discovery
• Finding out
• Impeachment
• Preserving testimony
• Deposition
• Question‐and‐answer session
• Dealing with opposing counsel
• Never volunteer information
• Stay calm

Deposition

Summary

Article Name

Human Resource Personal Liability

Description

This presentation focuses on human resource personal liability, highlighting the behaviors and legal frameworks that can create potential liability in employment settings.

Author

Alan C. Olson

Publisher Name

Alan C. Olson & Associates

Publisher Logo