Your dollars at risk: Protect yourself from personal liability

December 13, 2011
in Employment Law

HR pros spend a lot of their time ensuring that their companies comply with the law so they don’t wind up in court and lose big bucks to a jury verdict. But more and more, they find themselves defending not their employers’ bottom lines, but their own bank accounts.

The law increasingly holds managers personally liable for conduct “in the scope of employment” that violates Title VII, the Age Discrimination in Employment Act, the ADA, the FMLA, the Fair Labor Standards Act and more. And since HR professionals almost always act on behalf of their employers’ interests, they’re uniquely at risk of being personally sued.

How big is the risk? Try six figures—or more.

“It can cost as much as $150,000 just to get a case dismissed,” according to Colorado attorney and employment practices consultant Denise Kaye.

Anyone who commits an act that gives rise to an employment complaint or who is even tangentially involved can find himself or herself at risk of losing personal assets.

That’s the bad news. The worse news: The conduct doesn’t have to be intentional.

Kaye offers these tips on how to avoid personal liability:

  • Know the law. Federal and state anti-discrimination laws often specifically cite the circumstances in which individuals can be held personally liable for violations. Your legal counsel can alert you as to what to worry about.
  • Educate decision-makers. Part of your HR role is making sure top brass know the law, too.
  • Follow the law—not just your marching orders. Sure, you’re a loyal employee, but you must ensure compliance with the law, even if top management wants you to cut corners. Remember, it’s potentially your money at risk.
  • Review and compare organizational policies and procedures. Make sure they align with what the law requires.
  • Implement organizational policies and procedures consistently. Nothing turns a disgruntled employee into a litigious one faster than the perception that he or she has been dealt with inequitably. Nothing makes a jury more likely to slap HR professionals with ruinous damage awards either.
  • Do not act in anger or retaliate. “When we see managers and HR people get in trouble with personal liability is when they let their frustration with an employee get the better of their business judgment,” says Kaye.

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