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The Fourth Wave of Y2K

September 1, 1999
Related Topics: Technology and the Law, Featured Article, Technology
The fourth wave will be manifested in a hindered ability to defend traditional claims by employees for unemployment compensation, workers' compensation benefits, illegal workplace discrimination, etc., due to an inability to access records and statistical evidence. The first aspect of the defense is to design solutions to systems identified as defective.

Once the systems upon which HR is dependent are identified, and the problem with each defined, solutions must be designed. It may be best to pursue solutions along parallel tracks: one "high-tech," the other "low-tech."

As for the "high-tech" solution, it's tempting, but not useful, to rely on the representations of vendors and software suppliers that systems are "Y2K compliant." "Y2K compliant" isn't a term with a generally accepted definition. Each vendor and/or supplier defines the term differently, with varying consequences.

There are several basic problems to consider. First, the vendors' statements of compliance may be of little practical value, even if they rise to the level of a warranty.

Congress enacted and the President signed legislation that encourages the "free exchange of information about Y2K problems." In reality, however, it is a liability shield for vendors.

In order to recover money damages for misrepresentation in a vendor's Year 2000 statement (and to recover for damages resulting from that misrepresentation) a customer must establish by clear and convincing evidence that the statement was (a) made with actual knowledge of its falsity, and (b) made with intent to deceive or mislead or with reckless disregard for its falsity. (These are extremely difficult burdens of proof.)

The Act does not provide protection for breach of contract claims nor does it apply to any document or disclosure filed with the Securities and Exchange Commission nor banking regulators. All that has been achieved is favorable litigation status, not a working system. In other words, a promise is merely something upon which a claim for money damages might be premised in a Court of Law. It does not ensure that the systems will actually work as designed.

Second, there is no way of actually determining that a system that is Y2K compliant will actually work until "the morning after." The goal, after all, is to be functional on January 1, 2000, not litigious. Third, even if you have succeeded in ensuring that your own systems may work well, little is achieved if those with whom you must interface (or the provider of electric power) is not equally well prepared.

In some circumstances, existing systems will either be incapable of becoming compliant or will not be accepted as such by the HR professional. Again, there should be two strategies running in parallel, "high-tech" and "low-tech."

The only reasonable high-tech "fix" will be to install new systems, or to upgrade existing software. Naturally, the benefits come with the associated risks of transferring data and the substantial effort and disruption, which inevitably accompanies retraining system users. New systems inevitably place a new strain on even the most adaptable HR staffs. Additional planning and downtime usually follow.

The low-tech solutions present different challenges. Few contemporary businesses stock supplies sufficient to write the payroll manually, stuff and address the envelopes, and apply a stamp. The morning after may not be the best time to shop for anything.

Therefore, it's equally important to have also prepared a low-tech strategy. Prepare a hard copy of virtually everything. Restore the capacity to function with primitive systems such as handwritten paychecks and telephone chains to communicate with employees in their home. Update the mailing list with your employees' home addresses (in hard copy). American business thrived for 200 years without the personal computer; perhaps it can survive for 30 additional days after the millennium!

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.

Recent Articles by Lee Stephen MacPhee, Esq.

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