Can your business afford costly legal mistakes?

 The 5 most dangerous legal mistakes managers or supervisors make:  

If you own or manage a business, you carry many responsibilities on your shoulders. However, one small simple misstep by a supervisor or manager could cost your company hundreds, thousands or even millions of dollars. So what are the biggest legal risks you must be aware of? Here are my suggested top 5: 

1.  The “Hiring Process”: Mistakes in this area often start right at the beginning, with the hiring manager using discriminatory words dropped in your online ads. Too many employers still use terms like "recent college grad” in their advertisements. This is particularly true when managers, rather than HR, write those ads. Also, make sure everyone involved in interviewing process knows not to ask about the applicant's personal characteristics, such as age, race, gender, pregnancy or disability status. Asking such questions is essentially asking for a discrimination lawsuit. Keep every question based around job related issues.  Ask yourself — "How good would this person be at performing the job?” 

2. Wage and hour issues: Pay-related lawsuits in the United States have tripled in the past decade. An entire industry of lawyers who solely go after employers for overtime and other pay-related cases has sprung up. Technology has sparked many of these lawsuits. People can perform work now from anywhere at any time. You may be stuck with a big bill for this "off the clock” work unless you set some clear ground rules. When employees work unapproved overtime hours, you do have to pay them, but you can discipline them in some other way. Another big wage issue: Wrongly classifying certain employees as exempt from the Fair Labor Standards Act, and thus, ineligible for overtime pay. You cannot just arbitrarily decide someone is a salaried, exempt employee. If they do not fit under certain exemption criteria, they are due overtime pay for work over 40 hours a week.

 3. Training and performance: Supervisors who have not been trained properly are more likely to trigger HR troubles. They may say racist or sexist things, or discriminate in some way. Nevertheless, because they are in a supervisory position, the entire company is on the hook. When it comes to performance reviews, companies get into the most trouble by having evaluations that are inconsistent or overly positive. Supervisors have a tendency to inflate employee ratings. However, what happens when that employee who was fired for poor performance digs out his A+ review? He will suspect discrimination … and a court will, too. So keep evaluations consistent and grounded in reality. 

4. I-9 form mistakes: Make sure you complete an I-9 for each new employee within three days of their arrival. Do not ask new hires for any particular identity documents—let them choose one from the I-9 list. Keep those I-9s on file for at least three years after the employee's hire date or one year after his termination, whichever comes later.

5.  Terrible terminations: An undocumented firing or messy and complicated firings are one of the biggest causes of employee lawsuits. To protect yourself legally, follow these tips for that last meeting: 

• Bring another supervisor to act as witness. 

• Write a memo right after the meeting summarizing what was said on both sides.

 • Avoid surprises. Employees should never be completely surprised by a termination as long as their managers have been giving them regular feedback. (preferably in writing) 

 • Don’t be too kind. You may feel compassion for the person, but your overly kind comments about a person being fired for substandard work could have them suspecting a different reason.

 • Finally, do not discuss the reasons for terminations with other employees. A simple "Jim won't be working here any longer” will suffice. 

Managers are your first line of defense to minimize exposure to lawsuits and government fines. Yet they often receive little to no training on the legal aspects of their jobs. 

 Hire an expert to teach your managers the basics of Labor Law! or email


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Internal Investigations


The Importance of Protecting the Attorney-Client Privilege

The attorney-client privilege is an essential tool when conducting internal corporate investigations involving serious issues (Harassment, Sexual Harassment, Bullying and other serious violations that may result in a litigation).  The attorney-client privilege should be used in every serious internal investigation.

At the beginning of any internal investigation, Human Resources should involve Legal Counsel if  the matter under investigation is likely to result in litigation, then the privilege should be preserved. Legal Counsel or and outside consultant hired by legal counsel should conduct the entire investigation. On the other hand, if the investigation is only for an internal purpose, or a minor disciplinary action, then the privilege may be less important to protect.

If the privilege is going to be applied, then the investigator should make it clear, at the inception, with documented guidance from the company’s Legal Counsel that the specific investigation is being conducted under a claim of privilege. At every step, legal counsel and investigators have to state before any interview that the investigation is being conducted under the privilege, and that it is the company’s privilege, so that waiver or any claim belongs to the company not to any individual. The company should document carefully the legal basis for the investigation, the specific assertion of the privilege, and provide basic guidance on how the privilege should be preserved.

If outside legal counsel conducts the investigation under its privilege and retains any consultants or experts who will assist in the investigation, outside counsel should, in writing, directly retain the consultants or experts. Consultants should make sure that the information supplied to outside counsel is provided with clear documentation and notations that such information is being provided for purposes of providing legal advice and counsel to the client company.

Confidential and privileged communications should be directed to counsel and not to high-level executives or managers in the company. Executives, managers and employees should not communicate among themselves about privileged matters – it should be directed specifically to the counsel handling the matter. All communications and copies of documents or email messages (whether hard copy or electronic) should be marked with (attorney-client privilege markings “Protected by Attorney-Client Privileged” or “Prepared for Counsel and Protected by Attorney-Client Privilege.”)