- In a survey conducted by the Society for Human Resource Management (SHRM), 53 percent of companies have been named as defendants in employment-related lawsuits—90 percent of which were brought by former employees. Such claims typically allege discrimination based on sex, disability, age, race or religion; wrongful termination; invasion of privacy; or wrongful demotion or failure to promote.
- The cost of such a lawsuit can be upward of $50,000 in litigation fees, with the average jury award exceeding $250,000.
- According to the Equal Employment Opportunity Commission (EEOC), 91 percent of all discrimination claims are resolved through consent decrees, settlements and court-ordered payments—all unfavorable to most employers and certainly expensive.
Today’s litigious workplace climate puts further stress on businesses that are also facing shareholder lawsuits citing the lack of effective corporate governance, as well as mounting regulations and skyrocketing insurance prices. And companies in all industries are downsizing, belt-tightening and, even worse, shutting their doors.
These difficult times are already effecting a change in the corporate paradigm. As we trek deeper into the knowledge/information age, old business models are becoming obsolete, creating barriers to learning and performance improvement. It’s no surprise to learning officers and training managers that as sweeping changes are being made by business executives, learning and training agendas are finally coming to the forefront as practical strategies to address problems like liability risk and corporate compliance.
The speed at which business and technology has developed over the past decade is a major contributor to the recent skid. As organizations have run leaner, policies, processes and procedures put in place to ensure that corporate values are upheld have been set aside in favor of bottom-line profitability. Consequently, the right information may not be reaching the right people at the right time. And both training and human resources departments drown in administrative paperwork and record-keeping nightmares as they attempt to stay in compliance with ever-changing federal, state and local regulations.
A Balancing Act: Employment Practices Compliance and Learning
Learning officers and training managers, however, can take heart. Renewed attention to employment practices compliance has given rise to systems that, when successfully implemented, can reduce corporate vulnerability to lawsuits. Employment practices compliance systems (EPCS) are leading the way for corporations to integrate the information and tracking needs of training, human resources, risk management and legal departments. This same system can be used to comply with new and existing corporate governance regulations, such as the Sarbanes-Oxley Act. By demonstrating a strong commitment to corporate values and good business practices that benefit their shareholders and employees, companies will foster a more positive corporate culture, thereby reducing the frequency of lawsuits, as well as the severity of jury awards.
As a learning officer or training manager, it is your charge to establish and execute training programs that align with federal, state and local regulations, as well as unique corporate policies. The EPCS is an interactive, online tool that gives training professionals an effective method of increasing the level of workforce compliance—aimed at 100 percent—that not only helps employee stability, but also can successfully refute legal challenges through systematic documentation.
Reaping the Benefits
As the trend toward e-learning moves upward, EPCS is its natural companion. The dream of giving employees responsibility for accomplishing their own learning can be realized. Employees know what they have learned and what they have yet to learn, giving supervisors a platform for goal setting and evaluation. The EPCS delivers training and testing, so employees actually understand the information they review, rather than just signing off on it. Finally, both HR and training can fully monitor and document compliance, proving the company’s commitment to fair and consistent treatment of every employee.
Moreover, a functioning EPCS demonstrates a “standard of care” in terms of informing and educating employees about company policies and procedures, such as workplace discrimination, corporate guidelines, sexual harassment, hiring and firing regulations and so on. When not properly addressed, these issues are the very things that can increase a company’s vulnerability to a lawsuit. When an EPCS is in place, employees have peace of mind knowing that typical areas of concern, such as harassment and discriminatory topics, are universally being addressed throughout the organization—making the EPCS the first line of defense against frivolous lawsuits.
With an EPCS, training’s responsibilities for conducting skills, policy and compliance training for all departments and varying job functions can become more streamlined and centralized. The learning officer gains a structured system to integrate, segment and customize the overwhelming web of regulations and corporate policies, including specific federal, state and local employment laws that affect individual workplaces. At the same time, an EPCS can collectively help human resources (HR), training and administration departments identify gaps in learning and align programs with compliance needs.
Furthermore, integration of an EPCS enhances training’s charge to justify return on investment. The investment made in establishing an EPCS will be returned through improved productivity. For example, resources previously devoted to administration of training documentation can be reallocated to other tasks—and a favorable work environment.
Overall Enterprise Improvements
In the end, the entire workplace is improved. Not only does an EPCS enhance learning, but also corporate trainers can improve their credibility and value to the organization. By recommending implementation of an EPCS, learning officers and training managers take charge of their own destiny while adding benefits for the entire enterprise. These benefits include an enhanced platform for inter-departmental collaboration, the potential for reductions in insurance costs, increased worker morale and productivity and consistent corporate governance and regulatory compliance to reinvigorate shareholder confidence.
Most importantly, because all employees are receiving the compliance learning they need and associated documentation is clear, the enterprise achieves a reduced risk of employee lawsuits, fewer claims, smaller judgments and less time devoted to compiling and administering claims when they do occur. And corporate learning officers and training managers get the satisfaction of knowing they had a hand in the proactive development of system improvements that contribute to overall business success.
Ken Thrasher is the CEO of Complí. Prior to joining Complí, Thrasher served 18 years in executive positions with Fred Meyer Stores including CFO and executive vice president with oversight of human resources. In 1999, he was promoted to the position of president and CEO after the company merged with The Kroger Company, the nation’s largest grocery store chain. Currently, Ken serves on the boards of numerous Oregon-based organizations, including Albertina Kerr Centers, the Oregon Mentoring Initiative and the Portland Art Museum. He was also appointed by Governor John Kitzhaber as chairperson of the Quality Education Commission for Oregon in 2001. For more information about Compli, visit www.compli.com.