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Three Legal Trends Will Affect You

October 1, 1996
Related Topics: Miscellaneous Legal Issues, Mergers and Acquisitions, Workers' Compensation, Featured Article, Compensation
Forewarned is forearmed, they say—and this is never more applicable than in the employment law arena. Ever feel like those legal entanglements just hit you out of no-where? They shouldn't. Keep a watchful eye on the workplace-law horizon, and you may avoid a painful legal collision. Bernard Sobelsohn, name partner at Allen, Rhodes & Sobelsohn in Los Angeles, identifies three major trends heading your way.

Is there any trend that might take precedence over others?
I think the major trend facing the HR field today is a [difficulty with compliance to] multiple statutes both at the state and federal level, as well as judicially created law, that impact the work environment. Frequently, the federal and state statutes conflict with each other. Sometimes the state statutes are stricter than the federal statutes; sometimes not. So you really have to go through a whole list of potential pitfalls in analyzing every situation, because you can't just pigeonhole. You can't say "I'm just dealing with this one problem," because in solving that problem, you can create two or three others.

What's an example of a situation triggering several different statutes?
An individual has a back injury and is off work and has surgery. The employee will have a workers' comp claim. If the individual is off work several months, he or she will have rights under both state and federal family leave act statutes in terms of continuation of fringe benefits while off work—the right to sick leave, the right to health insurance, right to pension continuation. When the employee comes back to work, he or she will have potential rights to modified work under the ADA. He or she may also have rights to rehabilitation, retraining or alternative or modified work under state statutes. That's very typical.

What's another situation employers may overlook?
You may have someone who has claimed industrial heart attack and the issue may be whether the heart attack is industrial in nature —whether it's a valid workers' comp claim. This also happens in various types of stress cases, in psychiatric disability and ulcer cases, in which reportedly the stress of work has given rise to illnesses that may give rise to a workers' comp claim. Someone will litigate the workers' comp claim and try to establish that the disability is not industrial. But that doesn't mean the person doesn't have rights under the ADA or family leave act when he or she is off work, even if it's a nonindustrial problem. So you may win the workers' compensation case, but still have to make available modified or alternative work for [the person] under the ADA.

What should HR do to fight this problem?
Make sure your people are educated. There are numerous courses out there. Make sure they attend the seminars on employment law so they're at least aware of the multiplicity of rights a worker may have—so when they analyze potential problem areas, they're doing so with knowledge of where they can make mistakes and how to avoid making them.

Any other comments on this issue?
[The problem] is accelerating. Five or 10 years ago, the problem wasn't as severe. These days it gets worse every time someone passes a new statute.

What's the second trend?
The impact of mergers. When you have a merger, the merger of both corporate cultures is difficult enough, but you also have the merger of different corporations' legal rights for employees. Most of these companies have personnel manuals or union contracts if they're unionized. These will have different policies on sick leave, on pension rights, on disability rights and on coverages. I know one supermarket chain that has absorbed about six other chains in the last 10 years, and now has myriad union contracts covering union workers. Some permit six months off on a disability claim, some 12 and some 18. When you have one company now, and you have different rights under different personnel manuals and different union contracts for similar workers who are now working for one corporation, you give rise to potential employment-discrimination claims by treating people differently because of where they originally worked.

What should employers do in this situation?
You need to, as soon as possible, integrate all these policies, employment manuals and union contracts into the new company. Try to make them uniform so there's one union contract for the whole company or one personnel manual that covers the whole company, so that no one can say somebody gets six months off if he or she gets hurt and someone else gets 12 months and someone else gets 18. Or someone gets six holidays and someone else gets nine. If you don't integrate manuals and personnel policies, you give rise to all kinds of legal conflicts as opposed to cultur al conflicts.

And the final trend?
There has been a trend to limit certain types of workers' compensation claims over the years because of concerns about fraud. In California and Oregon, there have been statutes passed that basically state, for example, in psychiatric cases that if more than 50% of the psychiatric disability isn't caused by the workplace, then it's not covered by workers' comp.

What's the problem there?
For years employers have been happy with that exclusive remedy in [workers' comp claims]. But by taking cases out of workers' comp, there's the potential of these cases winding up in the liability arena. The Oregon Supreme court came down with a decision that said if you're defending a workers' comp case and win —prove the predominant cause wasn't industrial and therefore isn't covered by workers' comp—then there's no exclusive remedy. The employee then has the right to sue for a liability claim.

How should employers address this?
You have to remember that the knife cuts both ways. If you're trying to restrict the right to collect under workers' comp for certain types of claims and say they're not industrial, the flip side is the court is going to say there's no exclusive remedy. So if the employee can show negligence or anything that can give rise to a liability claim, he or she has a right to go into state or federal courts and sue for damages. That can be a lot more expensive to defend and a lot more expensive if you lose. So as employers are getting these statutes modified in various states, they have to be cognizant that it won't eliminate the claim—it will merely change the form.

Personnel Journal, October 1996, Vol. 75, No. 10, pp. 101-103.

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