Employers – Are you Sitting on a Ticking Time Bomb?

You have found the perfect employee.  She is dependable, detailed and very organized.  He is attentive, resourceful and takes good notes.  You think to yourself how lucky you are to find such good help and feel safe knowing that your business is in good hands.  You have such a great working relationship that you think nothing could ever go wrong.

And, then, BOOM! The bomb goes off.  The very things that made your employee “perfect” are now the things that are being used against you.  That employee’s attention to detail, organization, and great note-taking meant she/he kept every single document: time cards, pay stubs, memos, emails, etc. from the day she/he began working for you until the day either she/he left or you finally had to let her/him go.  The employee is now what we call “disgruntled” and is looking for anything to make you pay.  And remember his/her resourcefulness?  Well, she/he just found a lawyer to take his/her case.

Your now former employee meets with his/her attorney.  She/He brings a binder of all the documents described above.  After reviewing the documents, the attorney agrees to take the case.  Next thing you know you get a demand letter for $200,000.  You are accused of not paying overtime, not allowing your employee to take uninterrupted meal and/or rest breaks, and for wrongful termination.  The period of time covered goes back four years.  If even one claim is determined to be true, you have to pay his/her attorneys’ fees and penalties (in addition to YOUR attorneys’ fees).  Your insurance does not cover this and you must pay all of this out of YOUR pocket.

The solution?  Diffuse the bomb before it explodes.  How?  A written “Acknowledgment” form coupled with regular, consistent employee reviews (quarterly, semi-annually, or annually).  An Acknowledgement is a form that the employee signs at their review whereby they acknowledge they have been compensated for all time worked, they agree on the number of accrued hours they have earned for vacation and sick time, and they acknowledge they have no open claims against the employer for harassment, discrimination or retaliation, or if they do, those claims are being investigated and the employee is being kept updated as to those investigations. In legal terms, this acts as an “estoppel” preventing the employee from later claiming something different. Quarterly reviews are recommended because a good recent acknowledgment form signed by the employee turns what could have been a lit stick of dynamite in a plaintiff’s lawyer’s hands into a useless dud.  Plaintiff’s lawyers hate seeing a signed employee acknowledgment form, and will most likely not take the employee’s case, let alone file suit against you.

Additionally, regular, consistent employee reviews give you the opportunity to address any potential problems raised by the employee, as well as assess the continued “fit” of the employee with your company.  If the employee is unwilling to sign the acknowledgment form, this should raise a red flag that trouble is on the horizon.  You should contact your employment law attorney immediately to discuss your options.

Both the acknowledgment form and employee reviews should cover specific items to ensure the bomb is never lit and your business is protected.  Do not try to diffuse the bomb yourself, but leave it to the professionals who have the proper experience, skills and “tools” to do so in a way that will leave you intact.

BPE Law Group is an experienced “bomb squad” when it comes to your business’ needs.  If you have employees and are interested in how BPE Law Group can help you with your employment-related matters, call us at (916) 966-2260 or email Elizabeth Arias at earias@bpelaw.com.

We hope that you will find this Article helpful in your real estate activities.  Please feel free to forward this to others that you think may benefit from this information.

This article is not intended to be legal advice, and should not be taken as legal advice.  Every case requires review of specific facts and history, and a formal agreement for service.