Beware management push-back on HR decisions

December 21, 2011
in Employment Law

As an HR professional, you may come across employment practices that you think violate the law. What you do with that concern and how you express it may make the difference between engaging in protected activity or not—and by extension, whether you can sue for retaliation if upper management punishes you.

Recent case: Peggy Hayes worked for Crescent Real Estate Equities as vice president of HR. She told the managing directors that she believed bonuses that the company called discretionary were actually nondiscretionary payments. She added that hourly employees were not being paid appropriately because of the erroneous classification. The directors told her: “Drop it.”

Hayes didn’t. Instead, when she prepared the budget for the coming year and presented it to the directors, she listed a higher amount for labor costs and explained the reason was hourly employees had been under­­paid under the Fair Labor Stand­­ards Act (FLSA) due to the nondiscretionary bonuses. The directors told her they weren’t going to change the practice and again warned her to stop raising the issue.

Shortly after, Hayes was terminated. She sued, alleging retaliation for engaging in protected activity.

Crescent said Hayes had no stand­­ing to sue because she was merely doing her job when she warned them. Therefore, it said, she wasn’t engaging in protected activity.

The court disagreed. Since she had not dropped the matter, she stepped outside her usual role and had engaged in protected activity. It ordered a trial. (Hayes v. Crescent Real Estate Equities, No. 11-2201, SD TX, 2011)

Final note: HR can be awkward sometimes, and HR professionals must often bear bad news. If man­­agement pushes back against your recommendations, remind them that they (and you) may be personally liable for FLSA and FMLA violations.

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