The increasingly complex legal system compels more and more employers to hire management attorneys to assist them in their dealings with employees. But is an attorney needed in every situation?
Employers are not required to have legal representation in all labor and employment disputes. It is up to employers to decide whether to hire legal counsel to represent their interests. While the obvious advantage of representing themselves is saving money, there are situations where this can be "penny wise and pound foolish." The task is to identify situations where it would be prudent and/or cost effective to hire a management attorney.
Situations Where Hiring an Attorney is a Necessity
Employers should hire attorneys to represent them in all court proceedings. Judges are bound by rules of procedure and cannot give parties a "break" simply because they are representing themselves. Consequently, employers involved in litigation, injunctive proceedings, or motions to compel disclosure of company records and information should hire legal counsel.
Many employers also believe it is necessary to hire a management attorney whenever the "opposition" is represented by legal counsel. This is not a sign of weakness, it is a sign of prudence.
Furthermore, there are non-adversarial areas of employment law which have become so complex that lack of legal input often results in problems later on. For example, the drafting of benefit plans and programs (particularly tax qualified plans such as pension, profit sharing, and deferred compensation plans) requires the expertise of benefit attorneys. The drafting of settlement and/or severance agreements (particularly those in which the employee releases his/her rights to all claims) are also heavily regulated so that legal review before signing is highly advisable.
Situations Where Hiring an Attorney is Optional
The vast majority of these situations involve administrative hearings and investigations before government agencies. Some of these agency proceedings (such as hearings before the National Labor Relations Board and the Hawaii Civil Rights Commission) are as complicated as civil trials so that legal representation is advisable. Arbitrations--whether they are court-annexed, collectively bargained, or individually negotiated--can also be difficult to handle when complicated legal issues are involved.
Employers should ask themselves:
1. Has the employee filed a lawsuit or indicated he intends to file? If the answer is yes, the employee (and his/her attorney) may be using the agency proceeding as an opportunity for "free discovery."
2. Has the employee retained a lawyer? This is generally another indication that the agency proceeding is being used for "free discovery." In arbitrations, it generally indicates the employee is serious about pursuing his/her legal rights.
3. Does the employee have a history of filing charges, grievances and/or complaints? If so, the employer may be dealing with a "professional" litigant. He/she will generally be more experienced at asserting claims (or setting an employer up for a claim).
4. Has the employee filed or indicated he/she intends to file multiple claims with different agencies? It is becoming increasingly more common for employees to allege violations of multiple statutes (e.g. ADA/WC/FMLA, harassment/criminal assault, Title VII/FLSA claims). The interplay between the laws can be complicated.
5. Is the employee covered by a collective bargaining agreement? If so, the employee may be entitled to pursue a "complaint" through the grievance/arbitration process and through administrative agency processes at the same time.
6. Is the employee claiming there is a "pattern or practice" of discrimination? These are generally more difficult cases to defend because the employer must defend its "record" and not any particular incident with a single employee. Moreover, the agency may resort to statistical analyses of the employer's practices which can be more complicated to handle.
7. Has the employer been accused of other violations recently? If so, the agency may on its own initiate a "pattern and practice" investigation.
8. Does the case involve complex issues of law or fact? If so, the employer may need legal assistance to provide a persuasive case to the agency or arbitrator, with legal citations for the arguments made. Administrative proceedings include worker's compensation appeals, sexual harassment, disability discrimination, arrest and court record discrimination, and government contract disputes over wage determinations.
9. Are the potential damages large? Clearly, the larger the potential damages, the less risks an employer may want to take in representing itself.
Situations Where Use of an Attorney Can Be Limited
There are times when it is more cost-effective for an employer to take the "first crack" at a problem. Employers should generally do the initial drafts of personnel policies or collective bargaining agreement proposals to give counsel a general idea of what is wanted. Employers can also shoulder the bulk of collective bargaining negotiations or the processing of grievances through the initial steps of a collectively bargained grievance procedure--saving their attorneys for difficult situations during negotiations or the actual arbitration of the grievance. Employers should also try to handle most of their internal investigations into discrimination and/or harassment complaints. This is because the rules on professional conduct for attorneys, as well as the rules governing attorney-client privilege, have changed so that attorneys who conduct in-house investigations on behalf of their clients can sometimes be called as witnesses in subsequent litigation.
Consider Using Consultants When Appropriate
Labor and employment law is such a "hot" area that dozens of consulting firms and membership organizations have been created to fill an ever-increasing demand from employers for help. Employers can find consultants to help with equal employment opportunity; compensation planning and design; benefits design and administration; risk management; safety & health; recruitment; and human resource management.
Industry groups, business leagues, employer groups, and other similar organizations often make an effort to provide their members with information on labor and employment issues of particular interest to their specific industry or membership.
Employers should also note that many federal and state government agencies provide information on their respective laws and regulations, as well as tips on how to comply, for free or at a minimal cost. The Equal Employment Opportunity Commission, U.S. Department of Labor, Hawaii Department of Labor and Industrial Relations, and the Hawaii Civil Rights Commission all have literature which can help employers find out about the basics. Most of the agencies will also answer questions over the telephone about compliance issues. A few of the agencies (notably the Hawaii Occupational Safety & Health division) will even do free, non-investigative inspections to assist employers who want to voluntarily get into compliance.
Employers should keep in mind, however, that following the advice of consultants, membership organizations and government agencies will not necessarily shield you from legal problems. At best, consultants ease the administrative burden imposed upon employers by an increasingly complex system of labor and employment laws. Their assistance does not constitute legal advice.