Human Resource Functions Critical To Any Business Operation
A human resource individual can be described as a person who “professionally” oversees the organization’s human resource management functions. This includes a wide spectrum of managing the entire employee-employer relationship, including outside forces that interact, and employment laws applicable to the workplace.
Employees are a businesses’ “most valuable asset!” Whether you have just one employee or many, the success of any business operation lies with its employees. Attracting and retaining employees is critical to any businesses’ operational success. Unfortunately, many business owners unwisely leave human resource functions to individuals who are not qualified in the area (e.g. receptionist, office manager, accounting, etc.), because the individual lacks the proper education, experience, or otherwise, which leaves the business operation vulnerable to employee litigation, increased turnover, and unhappy employees. Business operators should use a qualified individual to manage key internal human resource functions. There are three (3) key areas of human resource management which can be summed up into the following categories:
- Employee Recruitment and Retention: includes by way of example, but not limitation creating organizational roles, interviewing, job descriptions, selection and placement, assessments, and background screening
- Employee Retention and Engagement: includes by way of example, but not limitation on boarding of new employees, training and development, compensation and benefits, career and/or succession planning, performance management, and employee related issues
- HR Policies, Procedures, and Law Compliance: includes by way of example, but not limitation, HR strategy, HR tools, HR policies (e.g. employee manuals and forms), compliance with local, state, or federal employment laws, HR training, education, and certifications.
According to the US Department of Labor, the number of suits filed in federal courts concerning employment grievances has grown over 400 percent in the last two decades. In addition, the Equal Employment Opportunity commission has received on average 90,000 discrimination complaints from across the country per year. The expansion of federal and state discrimination laws over the last couple of decades, coupled with recent National Labor Relations Board rulings, have dramatically increased employee rights in the workplace in the United States. As a result, administrative regulatory compliance in the workplace has imposed significant costs on employers. According to a study done by CNA, a large national insurance carrier, almost 75% of all litigation against corporations today involve employment disputes and, of those, over 40% of the claims filed against private employers involve employers between 15 and 100 employees. CNA’s study also indicated that nearly 25% of all litigation in federal courts involves employment disputes, and an even higher percentage in state courts, with the average defense costs (not settlements to employees or verdicts) being $100,000 per claim. Per US Labor statistics, for every dollar given to employees to resolve the dispute, an equal dollar is spent on attorneys. According to the EEOC, the most frequent type of claims involve sexual harassment, race, disability, sex and retaliation. In addition, state and federal wage and hour claims at both an administrative and judicial level has been on a significant rise.
Although not all encompassing, there are certain things employers can do to minimize and/or protect themselves against potential employment law exposures.
- Have legal counsel review corporate employment policies and procedures on a yearly basis.
- Have legal counsel develop an employee manual and related forms which provide written guidance on workplace policies, procedures and rules and provide statutory notices to employees on employment related rights.
- Have legal counsel review all corporate layoffs and/or terminations before they happen.
- Create internal corporate dispute resolutions systems/policies (e.g. open door policies and grievance procedures).
- Using outside mediators during employment disputes.
- Draft and implementing a binding employment arbitration agreement which avoids the court process.
- Utilization of Severance Agreements during permanent layoffs and/or discharges.
- Purchasing of Employment Practices Liability Insurance (“EPLI”) coverage through an insurance agent.
Restrictive Covenant Agreements-“Buyer Beware!”
Restrictive Covenant Agreements
Restrictive covenant agreements are a useful tool for any business wanting to protect their interests and assets with current and past employees. These types of agreements commonly involve matters concerning trade secrets, non-disclosure, non-solicitation, confidentiality, and non-competition clauses. Some of these types of agreements are stand alone or are a part of an employment contract or severance package. So long as reasonable, Michigan law allows for non-compete agreements in employment (See Michigan Antitrust Reform Act, MCL 445.774a). In general, restrictive covenant agreements attempt to restrict employees who are currently employed and after a separation of employment from doing something or not doing something that they otherwise may have had a legal right to do. The most common practice of employers is to provide a restrictive covenant agreement at the time of the offer of employment or hire, but, under current Michigan case law, employers can require employees to sign a restrictive covenant agreement after the employee has already been hired. Far too often, employees are too eager to take an offer of employment and/or want to continue their employment with a business and, unfortunately, employees do not spend enough time reviewing these restrictive covenant agreements, and, it’s not until they separate their employment with a business do they realize the quagmire they might be in, especially in cases involving non-competes. Before signing any of these types of agreements, individuals should seek legal counsel for advice. .
Federal Trademarks: Protecting Your Business Name, Logo, Products or Services
A trademark is a brand name. A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services. Although federal registration of a mark is not mandatory, it has several advantages, including notice to the public of the registrant’s claim of ownership of the mark, legal presumption of ownership nationwide, and exclusive right to use the mark on or in connection with the goods/services listed in the registration. Federally registered trademarks are national in scope, regardless of the actual geographic use made by the mark.
Advantages To Having a Federally Registered Trademark
Additional substantive benefits received through federal registration include, but are not limited to:
- The ability to recover profits, damages and costs for infringement, including the possibility of receiving treble damages in certain circumstances;
- The ability to recover attorneys’ fees in infringement actions;
- The right to use the ® symbol in connection with the mark, which may deter potential infringers;
- Federal registration also makes it easier to prove an allegation of trademark infringement by providing prima facie evidence of trademark ownership and use.
The law firm of Seth T. Seidell provides federal trademark legal services at reasonable and affordable fixed rates.
Mistakes made by Employers that a Plaintiff’s Lawyer Loves to See
There are certain mistakes made by employers that a plaintiff’s lawyer loves to discover. Below is a short list of common errors made by employers in the workplace that are avoidable.
- Failure to conduct an adequate background check
- Inconsistent recruiting and hiring practices
- Inappropriate interview questions
Mistakes During Employment
- Failure to pay and identify exempt vs. non-exempt employees
- Failure to implement, disseminate, and follow personnel policies or procedures
- Failure to train employees
- Failure to provide job descriptions
- Failure to document promptly and accurately discipline or performance issues
- Failure to provide employee performance reviews
- Failure to provide employees notice under state or federal law when the law requires
- Not conducting exit interviews
- Not making timely payments of all wages due the employee
- Inappropriate internal and external comments
- Failure to provide post-termination required notices under state or federal law