WPA in the News

Why Training Dollars Should Remain in HR Recession Budgets

September 11, 2009
Employment Relations Today: Questions — and Answers Column
By Lynn Lieber, Esq.

Employers worldwide are engaging in an unprecedented period of budget cuts and belt-tightening measures in an effort to ride out the bumpy economy. One of the first line items in HR's budget to get cut is often training, which can be perceived by high-level executives as “discretionary” and “a good thing to do” but nonessential to their organizations in these challenging financial times. In reality, workforce training has never been more important, and it provides a stronger-than-ever return on investment.

Former employees are filing harassment and discrimination claims in record numbers due to layoffs and terminations; supervisors are untrained in how to manage their workforces through the unprecedented economic downturn. Government agencies such as the Department of Labor have increased staff and enforcement efforts. Employers are being scrutinized for ethical violations like never before. For all these reasons, HR professionals should protect their training budgets. Moreover, it is important that training dollars are used to implement only high-quality, legally compliant training solutions that educate their workforces, change employee and supervisor behavior, and reduce liability to their organizations. The quality of a training program is more important than ever because training programs are now more likely to be brought under legal scrutiny.

WHAT TYPES OF WORKFORCE TRAINING ARE CRITICAL IN A RECESSION?

The four most essential training programs for most workforces are those created around unlawful harassment and discrimination prevention, workplace violence prevention, wage and hour law, and the organization’s code of conduct. Of course, depending on the industry or type of organization, other training might be mandated or advisable.

WHY DOES TRAINING TO PREVENT DISCRIMINATION AND HARASSMENT REMAIN A PRIORITY?

Employment discrimination and harassment claims soared 15 percent to an unprecedented 95,402 during 2008 and are surging again in 2009, according to the Equal Employment Opportunity Commission (EEOC).

Age discrimination claims increased over other types of discrimination claims, rising 29 percent, followed by retaliation claims, which increased by 23 percent. “The EEOC has not seen an increase of this magnitude in charges filed in many years,” said the commission’s Acting Chairman Stuart J. Ishimaru, who further stated, “It is clear that employment discrimination remains a persistent problem.” The EEOC’s numbers represent only the tip of the iceberg – they do not include harassment and discrimination charges filed with state enforcement agencies, in state courts, or those related to conflicts that settle before the charges are formally filed.

As hundreds of thousands of employees are laid off from their jobs, shock, confusion, and anger can abound. Employees might question why they were laid off when others were not or why they did not receive more notice of their termination. Many employees might perceive the reasons stem from one of the protected categories – age, race, gender, national origin, etc. Other employees who remain can view filing a harassment or discrimination claim as “job security” – falsely believing that filing such a claim makes it impossible for an employer to terminate their employment. All these reasons make it critical to provide training to prevent unlawful harassment and discrimination.

Employees should be trained in what is not unlawful harassment or discrimination as well as what could constitute unlawful behavior. Employees should know the options they have in reporting claims, and supervisors should be trained on how to identify and accept a complaint of potential unlawful behavior. Supervisors should also be clearly instructed in what constitutes unlawful retaliation perpetrated by either management and other employees.

Many courts have held that regular (generally, annual) harassment-prevention training allows an employer to establish an “affirmative defense” to avoid liability in cases where the allegedly aggrieved employee has not suffered any tangible job detriment, such as a demotion or termination. Additionally, numerous courts have held that employers that do not train in harassment prevention, or do so only sporadically, can be subject to punitive damages for negligence. Conversely, if an employer can demonstrate it made “good-faith efforts” to comply with the harassment and discrimination laws by training employees, punitive damages can more likely be avoided.

WHY IS VIOLENCE PREVENTION A PRIORITY DURING AN ECONOMIC DOWNTURN?

Workplace violence is occurring with alarming frequency; homicide is the second-leading cause of fatal occupational injury in the United States, according the Bureau of Labor’s most recently revised report. Many employees and former employees are feeling desperate – over layoffs, terminations, foreclosure on their homes, and their plummeting (or nonexistent) retirement accounts. For many employees, the workplace has become anxiety-laden, with constant fear of the next round of layoffs, terminations, or furloughs.

All these circumstances make training employees and supervisors in workplace violence prevention more crucial than ever. In nearly every case of extreme workplace violence, there were many early warning signs that were ignored because employees and supervisors were not trained in recognizing them and taking appropriate action. Supervisors should be trained in how to manage employees who show “inappropriate workplace aggression” –– conduct that will continue to escalate unless appropriate disciplinary action is taken. Training should also teach employees how to deescalate aggressive behavior and immediate steps to take in case of an incident of violence.

Not only can proper training of employees and supervisors prevent an incident of horrible tragedy from occurring, but also it can be used as a legal defense should an incident occur. Employers who show they have acted prudently to protect their employees by conducting training will likely avoid multimillion-dollar jury awards finding that the employer was negligent or an assessment of punitive damages.

WHY IS TRAINING TO PREVENT WAGE-AND-HOUR VIOLATIONS A PRIORITY?

Current economic conditions have resulted in drastic cost cutting and the slashing of work hours and overtime, which can lead to unwitting violations of wage-and-hour laws. At the same time, the U.S. Department of Labor has stepped up efforts to ensure compliance with wage-and-hour laws and has already begun hiring 150 investigators and plans to add 100 more.

Wage-and-hour violations most frequently occur simply because either employees do not have accurate information on how to properly record hours or supervisors lack training in wage-payment practices.

As with other types of training described above, training employees and supervisors in this area can help not only to prevent violations, but also to establish a legal defense — in this case, by demonstrating “good- faith” compliance with the Fair Labor Standards Act. Employers who have instituted a wage-and-hour training program and have instructed employees and supervisors in proper wage-and-hour recordkeeping and payment practices can avoid the liquidated damages that can arise from a willful violation of the law. Employee class-action wage-and-hour lawsuits are a substantial threat to U.S. employers, and wage-and-hour training for employees and supervisors can minimize the risk of such suits – potentially saving an employer millions of dollars in violations and liquidated damages.

WHAT DOES ETHICS HAVE TO DO WITH IT?

As ethics violations in nearly every business sector, as well as in government, continue to make news headlines, organizations are facing unprecedented scrutiny of their ethical practices and procedures. Most organizations have a code of conduct that covers such topics as conflict of interest, financial integrity, appropriate recordkeeping practices, confidential information, etc. In many organizations, employees are given a copy of the code of conduct when they begin employment, but the code is largely forgotten afterwards. However, the Sarbanes-Oxley Act of 2002 strongly encourages training on an organization’s code of conduct and requires education about reporting systems. Although the Sarbanes-Oxley Act technically applies only to publicly traded companies, the Federal Sentencing Guidelines of 2004, which mandates training on ethics and legal compliance, applies to all organizations, whether publicly or privately held, and of whatever nature. Additionally, the 2007 and 2008 amendments to the Federal Acquisition Regulations now affirmatively require most government contractors to provide ethics and legal compliance training.

Code-of-conduct training is most useful if it is tailored to the organization’s specific industry and the unique ethical situations employees may face doing their jobs. Such training has the added benefit of being useful as a defense should an ethics lapse occur – demonstrating to an enforcement agency that your organization took ethics training seriously enough to customize the training to your organization’s specific workforce. Such “good-faith efforts” might make regulators less likely to assess fines or penalties.

WHAT ARE THE LEGAL PITFALLS OF IMPROPER TRAINING?

Both in-person trainers and Web-based training vendors can create substantial liability for employers if the training program that is offered has defects in the content, method, and delivery of the training. Courts, administrative agencies, and opposing counsel frequently scrutinize training that employers use to avoid or limit liability.

Training Should Be Consistent Across the Organization

One of the downsides of in-person training is that employees in different training sessions receive different training content. Questions and answers are different in each session. Additionally, if an employer later needs to recreate exactly what content was presented to the employee, it must rely on the trainer to save a copy of the presentation slides or notes. Even then, the session cannot be fully recaptured.

Testing Employee Knowledge and Retention

Some in-person trainers and Web-based training programs test employees at the outset of the program to determine employees' baseline knowledge and at the end of the session or course to determine how well they have learned the material. An employee’s performance on these tests could be fuel for a plaintiff’s attorney in a later lawsuit. For example, if an employee scores poorly on an unlawful harassment test and is later accused of harassment, the plaintiff’s attorney will use the poor test scores as “Exhibit A” to show that the employer should have conducted remedial training for that employee.

Rather than gather test scores, the employer should conduct training in a manner in which it will be able to show that the employee spent a sufficient amount of time in the training, had to interact with the materials, and agreed to abide by the employer’s policies.

Training Can Have a Disparate Impact

Federal and state law explicitly prohibits training programs that, while neutral on their face, have the result or effect of adversely affecting individuals in a protected class. For example, having all office employees participate in a training program on ethics or the company's code of conduct and exempting field employees might have a disparate impact on the field employees if they are in protected classifications based on their national origin, ancestry, or race. Another example of an unintended but adverse effect arises from training materials in English that have the effect of discriminating against employees who are non-English speaking or who are culturally diverse. The “hidden” requirement is that training materials be linguistically accessible.

Employees are often confused by the role of an outside consultant or attorney that their employer brings in to conduct training. Employees feel they can ask the trainer questions about situations occurring in the workplace and that the trainer will give them advice or draw legal conclusions. Imagine the potential liability if an employee tells the trainer – in front of dozens of witnesses – that her supervisor frequently uses the “N word” and refuses to stop! In-person training sessions with employees can turn into “gripe sessions” where employees vent their frustrations with their supervisors or their employer. Human resources professionals need to be careful in selecting in-person trainers who can appropriately handle questions from the audience and direct the session.

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