why training dollars should remain in hr's recession budgets

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Why Training Dollars Should Remain in HR’sRecession Budgets

Lynn D. Lieber

Questions—and Answers

Employers worldwide are engaging in an unprecedented period ofbudget cuts and belt-tightening measures in an effort to ride outthe bumpy economy. One of the first line items in HR’s budget toget cut is often training, which can be perceived by high-levelexecutives as “discretionary” and “a good thing to do” butnonessential to their organizations in these challenging financialtimes. In reality, workforce training has never been more impor-tant, and it provides a stronger-than-ever return on investment.

Former employees are filing harassment and discrimination claimsin record numbers due to layoffs and terminations; supervisors areuntrained in how to manage their workforces through the unprece-dented economic downturn. Government agencies such as theDepartment of Labor have increased staff and enforcement efforts.Employers are being scrutinized for ethical violations like neverbefore. For all these reasons, HR professionals should protect theirtraining budgets. Moreover, it is important that training dollars areused to implement only high-quality, legally compliant training solu-tions that educate their workforces, change employee and supervisorbehavior, and reduce liability to their organizations. The quality of atraining program is more important than ever because training pro-grams 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 workforcesare those created around unlawful harassment and discrimination

©2009 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/ert.20266

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prevention, workplace violence prevention, wage-and-hour law, and the orga-nization’s code of conduct. Of course, depending on the industry or type oforganization, other training might be mandated or advisable.

WHY DOES TRAINING TO PREVENT DISCRIMINATION AND HARASSMENTREMAIN A PRIORITY?

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

Age discrimination claims increased over other types of discriminationclaims, rising 29 percent,1 followed by retaliation claims, which increased by 23 percent. “The EEOC has not seen an increase of this magnitude incharges filed in many years,” said the commission’s Acting Chairman StuartJ. Ishimaru at a hearing held on July 15, 2009.2 The chairman furtheracknowledged, “It is clear that employment discrimination remains a persis-tent problem.” The EEOC’s numbers represent only the tip of the iceberg—they do not include harassment and discrimination charges filed with stateenforcement agencies, in state courts, or those related to conflicts that settlebefore 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 whythey were laid off when others were not or why they did not receive morenotice of their termination. Many employees might perceive the reasonsstem from one of the protected categories—age, race, gender, national origin,and the like. Other employees that remain can view filing a harassment ordiscrimination claim as “job security”—falsely believing that filing such aclaim makes it impossible for an employer to terminate their employment.All these reasons make it critical to provide training to prevent unlawfulharassment and discrimination.

Employees should be trained in what is not unlawful harassment or discrim-ination as well as what could constitute unlawful behavior. Employees shouldknow the options they have in reporting claims, and supervisors should betrained on how to identify and accept a complaint of potential unlawfulbehavior. Supervisors should also be clearly instructed in what constitutesunlawful retaliation perpetrated by either management or 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 notsuffered any tangible job detriment, such as a demotion or termination.Additionally, numerous courts have held that employers that do not train inharassment prevention, or do so only sporadically, can be subject to punitive

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damages for negligence. Conversely, if an employer can demonstrate it made“good-faith efforts” to comply with the harassment and discrimination lawsby 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 thesecond-leading cause of fatal occupational injury in the United States, accord-ing to the Bureau of Labor’s most recently revised report. Many employeesand former employees are feeling desperate—over layoffs, terminations, fore-closure on their homes, and their plummeting (or nonexistent) retirementaccounts. 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 inworkplace violence prevention more crucial than ever. In nearly every caseof extreme workplace violence, there were many early warning signs thatwere ignored because employees and supervisors were not trained in recog-nizing them and taking appropriate action. Supervisors should be trained inhow 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 de-escalateaggressive behavior, as well as immediate steps to take in case of an incidentof violence.

Not only can proper training of employees and supervisors prevent anincident of horrible tragedy from occurring, but it also can be used as alegal defense should an incident occur. Employers who show they haveacted prudently to protect their employees by conducting training will likelyavoid multimillion-dollar jury awards finding that the employer was negli-gent 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 theslashing of work hours and overtime, which can lead to unwitting violationsof wage-and-hour laws. At the same time, the U.S. Department of Labor hasstepped up efforts to ensure compliance with wage-and-hour laws and hasalready begun hiring 150 investigators and plans to add 100 more.

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


As with other types of training described earlier, training employees andsupervisors in this area can help not only to prevent violations, but also toestablish a legal defense—in this case, by demonstrating “good-faith” compli-ance with the Fair Labor Standards Act. Employers who have instituted awage-and-hour training program and have instructed employees and supervi-sors in proper wage-and-hour recordkeeping and payment practices canavoid the liquidated damages that can arise from a willful violation of thelaw. Employee class-action wage-and-hour lawsuits are a substantial threatto U.S. employers, and wage-and-hour training for employees and supervi-sors can minimize the risk of such suits—potentially saving an employer mil-lions 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 govern-ment, continue to make news headlines, organizations are facing unprece-dented scrutiny of their ethical practices and procedures. Most organizationshave a code of conduct that covers such topics as conflict of interest, finan-cial integrity, appropriate recordkeeping practices, confidential information,and so on. In many organizations, employees are given a copy of the code ofconduct when they begin employment, but the code is largely forgottenafterward. However, the Sarbanes-Oxley Act of 2002 strongly encouragestraining on an organization’s code of conduct and requires education aboutreporting systems. Although the Sarbanes-Oxley Act technically applies onlyto publicly traded companies, the Federal Sentencing Guidelines of 2004,which mandate training on ethics and legal compliance, apply to all organi-zations, whether publicly or privately held, and of whatever nature. Addition-ally, the 2007 and 2008 amendments to the Federal Acquisition Regulationsnow affirmatively require most government contractors to provide ethics andlegal compliance training.

Code-of-conduct training is most useful if it is tailored to the organiza-tion’s specific industry and the unique ethical situations employees may facedoing their jobs. Such training has the added benefit of being useful as adefense should an ethics lapse occur—demonstrating to an enforcementagency that your organization took ethics training seriously enough to cus-tomize 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 substan-tial liability for employers if the training program that is offered has defects


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in the content, method, and delivery of the training. Courts, administrativeagencies, and opposing counsel frequently scrutinize training that employersuse to avoid or limit liability.

Training Should Be Consistent Across the Organization

One of the downsides of in-person training is that employees in differenttraining sessions receive different training content. Questions and answersare different in each session. Additionally, if an employer later needs torecreate exactly what content was presented to the employee, it must relyon 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 atthe outset of the program to determine employees’ baseline knowledge andat the end of the session or course to determine how well they have learnedthe material. An employee’s performance on these tests could be fuel for aplaintiff’s attorney in a later lawsuit. For example, if an employee scorespoorly 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 showthat the employer should have conducted remedial training for thatemployee.

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

Training Can Have a Disparate Impact

Federal and state law explicitly prohibits training programs that, whileneutral on their face, have the result or effect of adversely affecting indi-viduals in a protected class. For example, having all office employees par-ticipate in a training program on ethics or the company’s code of conductand exempting field employees might have a disparate impact on the fieldemployees if they are in protected classifications based on their nationalorigin, ancestry, or race. Another example of an unintended but adverseeffect arises from training materials in English that have the effect of dis-criminating against employees who are non-English-speaking or who areculturally diverse. The “hidden” requirement is that training materials belinguistically accessible.


In-Person Training Can Be a Forum for Venting Grievances

Employees are often confused by the role of an outside consultant or attor-ney that their employer brings in to conduct training. Employees feel theycan ask the trainer questions about situations occurring in the workplaceand that the trainer will give them advice or draw legal conclusions. Imag-ine the potential liability if an employee tells the trainer—in front of dozensof witnesses—that her supervisor frequently uses the “N word” and refusesto stop! In-person training sessions with employees can turn into “gripe ses-sions” where employees vent their frustrations with their supervisors ortheir employer. Human resources professionals need to be careful in select-ing in-person trainers who can appropriately handle questions from theaudience and direct the session.

NOTES

1. See also http://www.washingtonpost.com/wp-dyn/content/article/2009/07/15/AR2009071503760.html?hpid=sec-nation.

2. See http://www.eeoc.gov/press/7-15-09.html.


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Lynn D. Lieber, Esq., is founder and CEO of Workplace Answers, a SanFrancisco–based provider of Web-based legal compliance training.Lieber is a seasoned employment law attorney and a nationally recog-nized spokeswoman on harassment and discrimination law. WorkplaceAnswers delivers Web-based training in human resources, unlawfulharassment prevention, and financial and ethics compliance. The com-pany helps client organizations build an effective affirmative defenseunder local, state, and federal employment law. She may be contacted [email protected].

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