1

CUNA Mutual Group Proprietary

Reproduction, Adaptation or Distribution Prohibited

© 2014 CUNA Mutual Group, All Rights Reserved.

Hiring, Firing and Everything in Between

Iowa Credit Union League Convention

September 17, 2015

2

JACK D. WILLIAMS, Esq. Senior Consultant, Risk Management

CUNA Mutual Group

jack.williams@cunamutual.com

(608) 665-8528

This presentation was created by the CUNA Mutual Group based on our experience in the credit union and insurance market. It is intended to be used only as a guide, not as legal advice. You should contact your credit union's legal counsel for legal advice. Any examples provided have been simplified to give you an overview of the importance of selecting appropriate coverage limits, insuring-to-value and implementing loss prevention techniques. No coverage is provided by this presentation/ publication, nor does it replace any provisions of any insurance policy or bond. Coverage may vary or may not be available in some states. Please read the actual policy for specific coverage, terms, conditions, and exclusions. For general information, please contact your company Sales Executive. Insurance products offered to credit unions, including the Bond, are underwritten by CUMIS Insurance Society, Inc., a member of CUNA Mutual Group.

2

3

Employment Lifecycle

Pre-hiring Process

Hiring Decision

Active

Employment

Decision to Terminate

Termination Process

Voluntary

Separation

4

Employment Claims

Only one way to win:

Avoid a claim

1. Easy to file (and hard to get dismissed)

2. Employee’s claims presumed to be valid

3. Plaintiff can recover attorneys’ fees (and you have to defend your credit union)

3

5

The Hiring Process

6

Job descriptions

Purpose

• Provide clear job expectations

• Give managers guidelines to hire, promote and supervise employees

• Support hiring, disciplinary, promotion, compensation and termination decisions

• Assist in legal compliance (FLSA, ADA, FMLA) and defense of claims (discrimination, wrongful termination, unemployment)

Best practices

• Consider job description process

• Update current job descriptions

• Consult an employment attorney for assistance or review of your job descriptions

What should be included?

4

7

Background Checks

8

Fair Credit Reporting Act

Use caution if you use a credit report in

your hiring practices.

FCRA Requirements:

1. Disclosure must stand alone

2. Summary of Rights must be

provided at specific time in process

3. Comply with adverse action

procedures

5

9

Fair Credit Reporting Act

Best practices:

1. Review Disclosure form and

Summary of Rights notice

2. Confirm your adverse action

procedures

3. Establish written policies and

procedures

4. Confirm forms are signed prior to

ordering background checks

10

Employment Issues

6

11

Employment Handbooks

• Disclaimer: handbook is a guide, not a contract

• Mission

• Employee definitions

• At-Will Statement

• Anti-discrimination and harassment (all protected classes; dress codes)

• Defined work week (meal, rest breaks included)

• Discipline

• Internet and Electronic Device Communications and Usage

• Leave and other benefits

• Overtime

• Social Media

• Acknowledgment of Receipt

Minimum policies to have

• Bullying

– Prefer boundaries, respect, civility

– California has “abusive conduct”

• Bring Your Own Device (BYOD)

• Social Media

• Lactation

Policies driving questions

12

Social Media

Risk mitigation tips

Establish written policies and procedures

Protect your credit union

Address professional and personal use

Train your employees

Ensure compliance with NLRB

Consult your employment attorney for review

Important note!

• Legal to search public social media pages of applicants

• Do not search or try to search private pages

• Do not ask for passwords

• Discipline carefully

7

13

Performance Reviews

Purpose

• Performance Review

• Set realistic goals

• Performance Improvement Plan

Important! Properly document the review and any discussions - these reviews are valuable evidence in any termination or disciplinary action

Risk mitigation tips

• Train managers regarding proper review

• Evaluate:

• Specifically

• Honestly

• For the entire year

• Follow up with goals and plan

• Document consistently

14

Litigation trends

• Wage and Hour

• Family Medical Leave Act (FMLA)

• Whistleblowers

• Discrimination / Harassment

– Pregnancy

– Sexual Orientation / Gender Identity

The impact:

Significant time and expense

to defend difficult claims

8

15

• The greatest risk for all employers

• Regulators, trial bar, and media focus on “wage theft”

• What credit unions need to know:

– Misclassification of non-exempt as exempt

– Misclassification of employees as contractors

To do

Review record keeping system, training program, job descriptions and responsibilities

Audit your practices to ensure compliance “This is how we’ve always done it” is no good

Consult your attorney

Wage and Hour

16

Family Medical Leave Act (FMLA)

Allows eligible employees of covered employees to take unpaid, job protected leave for specified family and medical reasons

Litigation trends

» Interference

» Retaliation

Risk mitigation tips

Establish written policies and procedures

Train employees and managers

Think and act proactively

Conduct thorough investigation

Consult employment attorney

Where FMLA leave ends… ADA begins?

9

17

Whistleblower protections

Provides information he / she reasonably believes evidences a violation of law, rule or regulation

Protects against workplace retaliation:

• Firing

• Demoting

• Disciplining

• Denying overtime or promotion

• Intimidation / harassment

Risk mitigation tips

• Establish written whistleblower policies and protections

• Strong internal corporate reporting system

• Train and educate all employees

• “Secrecy statements”

• Ensure compliance with laws/regulations

• Respond to complaints

Federal and state laws protect whistleblowers from retaliation.

Retaliation remains the number one EEOC filed charge.

Retaliation claims survive, even if underlying complaint has no basis.

18

Discrimination & Harassment

Federal, state, or municipal laws prohibit discrimination & harassment

• Americans with Disabilities Act

• Title VII of the Civil Rights Act

• Age Discrimination in Employment Act

• State: Wisconsin Fair Employment Act

• City: Equal Opportunity Ordinance

Protected classes Sex; Race; National Origins, etc.

Best practices

• Up-to-date policy that bans harassment, discrimination and retaliation

• Two reporting mechanisms

• Annual training of all employees, managers and BOD

• Proper investigation techniques

New protected classes resulting from court decisions…

10

19

What do credit unions need to know?

Pregnancy Discrimination

• Ensure light-duty policies apply to employees with on-the-job injuries apply to pregnant employees too

• Don’t have to create light-duty program – pregnancy doesn’t get a preference

• Engage in interactive procedures to determine appropriate reasonable accommodations

• State laws can require much more of employers

20

Investigating complaints

Proper investigations

Investigate all complaints promptly

Select impartial, trained investigator(s)

Conduct interviews and review evidence

Act discreetly (Can you ensure confidentiality?)

Prevent retaliation

Document investigation

Who, what, where, conclusions, credibility, reasons for discipline

Take appropriate disciplinary action if warranted

11

21

Discipline

Progressive Discipline

Increasingly severe discipline if an employee fails to correct a problem after being given a reasonable opportunity to do so

• Document problem and discipline

• Assess problem and address behavior

• Discuss consequences for failing to comply

Counseling / Oral Warning

Written Warning

Suspension without Pay

Termination

Don’t be afraid

to skip ahead!

22

Discipline

Best practices

Proper policies and procedures

Train managers regarding proper discipline

Document discipline consistently, specifically & factually

Discipline consistently

Consult with employment attorney

Do your employees sign warnings?

12

23

Separation & Termination

24

Voluntary Separation

1. “I quit!”

2. No show, no call

3. Happy (or at least not unhappy) departure

Prepare for transition:

• Attempt to keep employee?

• Written update of work

• Exit interview / exit conversation

13

25

Involuntary Terminations

26

Involuntary Termination

Goal: Avoid claims (and provide best defense)

Proper termination:

1. Starts with job description and responsibilities

2. Use progressive discipline

3. Choose your words (and your reason) carefully

4. Document (non-discriminatory) reasoning

5. Two witnesses

All this will help protect your credit union

14

27

Separation/Termination

Risk Management Tips:

1. Discuss decision to terminate with HR or

your attorney

2. Plan return of credit union property

3. Confirm any legal obligations

4. Prepare final paycheck including unused

sick, vacation if required by policy or

law.

5. Provide reference?

6. Severance agreements?

7. Consult your employment attorney

28

Questions?

jack.williams@cunamutual.com

608-665-8528

15

29