Why are there still so many huge employment law settlements?

15 Sep

Companies that comply with employment law regulations can avoid financial damages.

Employment lawsuit settlements can result in heavy financial penalties. Payments run the gamut between tens of thousands of dollars to upwards of $100 million. Each organization should realize effective human resources planning involves providing staff with access to employment law training. In doing so, businesses can avoid financially damaging lawsuits that can have a lasting impact on a company's viability.

The biggest payouts tend to grab the biggest headlines, especially when they involve household-name corporations. Still, there have been more than 10 employment law settlement lawsuits brought against various companies since August 28, 2014, raising a number of questions.

Haven't employers learned the rules yet?
For instance, the U.S. Equal Employment Opportunity Commission recently brought a lawsuit against a Popeye's Chicken franchise owner in Texas, JD Supra explained. The franchisee of the fried chicken chain consented to pay $25,000 for allegedly discriminating against an applicant on the basis of a disability. In this case, the job seeker was HIV-positive and explained his condition during an interview, after which he was told he couldn't be hired due to his medical situation. JD Supra explained the Food and Drug Administration doesn't list HIV as a restricted condition under its Food Code.

In another case, the EEOC brought a lawsuit against four farms in Hawaii owned by the California-based company Global Horizons on the grounds that they discriminated against 500 Thai workers. Retaliation charges were also raised. The $2.4-million settlement came about as result of several violations, including delayed payment for work performed, lack of food and water, and unsuitable living conditions.

Is lack of training to blame or lack of followup on the training?
Considering the heavy cost of violating labor laws, it would seem that most companies would go out of their way to ensure their staff, especially those in charge of hiring or dismissal, understand the rules. In the Popeye's Chicken case, for instance, EEOC trial attorney Joel Clark explained the Americans with Disabilities Act aims to prevent employers from making hasty decisions, especially when considering an applicant for a position. When companies unknowingly violate the law, the penalties are generally less harsh than those that actively ignore the rules, which is likely a contributing factor for why Global Horizons was forced to pay millions of dollars in fines.

In response to the ADA violation, Popeye's initiated training for all employees in a managerial position, including supervisors and human resources staff. Materials provided by the EEOC seek to give workers a deeper understanding of what's expected of them when they hire workers. Similarly, farm labor contractors at the Global Horizons facilities will have to communicate compliance policies to all staff, while corporate trainers will be responsible for educating on Title VII procedures.

From these cases, the problem seems to be a lack of preparation on the part of employers in providing their managers in charge of hiring and employee policies with requisite training. The Society of Human Resources Management also explained federal training isn't mandatory for all employers across the board, and some states have unique requirements that business owners need to understand. Most companies are required to post notices in public spaces that clearly state federal workplace policies, but it then becomes the employees' responsibility to understand their rights. At the same time, there are certain jobs in the public sector related to safety that demand Occupational Safety & Health Administration training. However, the rules aren't entirely uniform, leaving some employers at risk of violating them.

What's the trend now?
An infographic developed by the human resources news site HR.BLR.com explores the various priorities that businesses are focusing on to ensure their managerial staff are informed of compliance standards. The No. 1 topic is sexual harassment training, while discrimination education is second on employers' lists. The focus on these points aligns with many of the trends in EEOC lawsuits, which heavily reflect discrimination and harassment issues in the workplace.

Another way employers can prepare leaders to handle employment law regulations is through EEOC annual executive leadership conferences. While employees must pay for admittance to these meetings, they specifically address the requirements most companies have in keeping their senior-level staff up to date with compliance standards before a lawsuit occurs. The EEOC also provides free training sessions on a limited basis.

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