MAY 2016 – Top ten things employers do to get sued (series)

Employers’ most important tool of operation to keep them out of Labor Board Hearings and courtrooms is information. For the next several months a series of “must know” facts about employment issues will be published in the chamber newsletter. The information was provided CalChamber HR Specialists.

Things employers DO to get sued

Terminate any employee who takes a leave of absence, whatever the reason. It is too much trouble to administer leaves of absence and who knows if the employee will return.

Employees have legal protection when they are away from work for various reasons, including workers’ compensation, disability, pregnancy, family and medical leave, military leave, jury duty and many more. The laws also provide protection form retaliation for taking the leave – the employer cannot wait and terminate the employee once the he/she returns to work. If you terminate an employee while the employee is on a protected leave, or soon after the employee returns to work, you will have to prove that the termination was for a legitimate non-discriminatory business reason, unrelated to the protected leave.

Use non-compete agreements to protect confidential information such as business secrets, customer lists and pricing information and prevent employees from working for the competition.

Non-compete agreements are prohibited in California, with only a few exceptions. There are ways to protect trade secrets – such as customer lists and pricing information.

Prohibiting an employee from working for someone else is limited because it infringes on the employees ability to work and earn a living. You cannot force employees to stay with you, nor may you prevent them from earning a living if they choose to leave your company.

Implement a “use it or lose it” vacation policy and avoid paying out all the money at termination.

A “use it or lose it” vacation policy is not permitted in California, If the employee has accrued vacation, it is form of wages and cannot go away. You may place a reasonable cap on the accrual of vacation, which stops when a certain level of accrual has been reached. But you cannot take away what the employee has already accrued.

All accrued and unused vacation must be paid out at termination at the current rate of salary. There is no limit on how far back in time the employee can make a claim for unused vacation.

To limit your liability your best option is to implement a reasonable cap on vacation accrual. “Reasonable” is open to interpretation, but it is usual one and one half to two times the annual accrual. For example, an employer’s policy provides for up to two weeks of accrual each year. The employer implements a policy that caps the accrual at four weeks. If an employee has four weeks (20 days) accrued and unused, the accrual stops until such time as the employee takes vacation and falls below the cap.