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Date: November 2007
Prepared by:
Marc L. Silverman, Esq.
Hans F. Kaeser, Esq.
Schiff Hardin LLP
623 Fifth Avenue
New York, NY 10022
Tel.: +1 (212) 753-3000
Fax: +1 (212) 753-5044
E-Mail: msilverman@schiffhardin.com
One of the most daunting and difficult challenges for any foreign-owned company doing business in the United States is navigating the complex and confusing web of statutes and regulations that control virtually every aspect of the relationship between employers and employees in the United States. Foreign-owned companies must comply with a matrix of federal, state and local laws that govern applicants, current employees and even departed employees. This article will cover in summary fashion and attempt to give an overview of the most significant federal labor and employment laws that govern the workplace. In addition, we will provide suggestions to foreign companies doing or intending to do business in the United States on how to minimize the risk that they will run afoul of labor and employment laws and avoid litigation, which has become all to common in the workplace.

Managing the workplace in the United States requires great care and familiarity with the multitude of complex federal, state and local regulations. Lawsuits by employees against employers are taking up more of the federal and state courts’ docket than at any time before. Foreign-owned companies have increasingly become targets for employment-related lawsuits because of their unfamiliarity with United States labor and employment laws
Applicable Law (Federal law)
  • Title VII of the Civil Rights Act of 1964 (“Title VII”)
  • Pregnancy Discrimination Act of 1978
  • Religious Discrimination Provisions
  • The Fair Labor Standards Act of 1938 (“FLSA”)
  • Equal Pay Act of 1963 (“EPA”)
  • Age Discrimination in Employment Act of 1967 (“ADEA”)
  • The Civil Rights Act of 1866 (“Section 1981”)
  • Americans With Disabilities Act of 1990 (“ADA”)
  • Uniformed Services Employment and Reemployment Rights Act (“USSERA”)
  • The Jury System Improvement Act
  • The United States Bankruptcy Code
  • The Consumer Credit Protection Act
  • The Employee Retirement Income Security Act of 1974 (“ERISA”)
  • The Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”)
  • The Family and Medical Leave Act of 1993 (“FMLA”)
  • The Employee Polygraph Protection Act (“EPPA”)
  • The Fair Credit Reporting Act
  • The Occupational Safety and Health Act (“OSHA”)
  • The National Labor Relations Act (“NLRA”)
  • The Worker Adjustment & Retraining Notification Act (“WARN”)
  • The Omnibus Control and Safe Streets Act
    Detailed Information
    1.  Nature of the employment relationship
    The relationship between an employer and employee is a contractual one and is similar to other contractual relationships in terms of formation. Thus, an employment contract may be written or oral, and express or implied. In the absence of a written contract, the employment relationship is usually considered “at-will” in that either party may terminate the relationship for any lawful reason at any time, with or without cause or notice. However, employers should be aware that many courts have found an implied employment contract based on the parties’ conduct at terms different than “at-will”. Implied contracts with such terms may arise from oral representations, employee handbooks, manuals, or specific actions or performance that suggest an employee-employer relationship beyond “at will” employment.

    Whether an employer should offer an employee a written employment agreement that includes a specified term of employment depends on many circumstances. Some employers reject the notion of such employment agreements. Others believe that such a written employment agreement can benefit them especially when it comes to retaining a valued employee. Some written agreements called “at will agreements” do not specify a time period for which the employee is committed to the employer.

    In general, employers in the United States offer written employment agreements that include a specified term of employment to high level managers and executives or “key” employees whose services they wish to retain. These employers seek to “lock in” valuable employees for a specific terms. Such an agreement usually states that the employer may terminate the agreement for “cause” or, in some cases, the employee may terminate it only for “good reason”. The term, “cause” and “good reason” are generally defined very narrowly so that the employer and the employee may not easily escape their obligations except in the event the other party breaches the contract. Employment agreements may also allow the parties to agree on restrictive covenants, confidentiality agreements and non-solicitation agreements in exchange for enhanced salary, severance pay, fringe benefits or extended health insurance or pension plans. The enforceability of these kinds of restrictions varies depending on what state law governs the contract of employment. On the other hand, written employment agreements may limit the ability of the employer to vary or change the terms of employment in the event the employer’s business changes or declines. Changes during the term of the contract must be renegotiated and require the consent of both parties. In addition, an employee may not be “forced” to work even if he/she has a written contract and the employer may be left only with a breach of contract claim for damages or an action to restrain the employee from going to work for a competitor.
    2.  Interviewing and hiring process
    Federal and state anti-discrimination laws require employers to conduct the applicant screening process in a non-discriminatory manner. These laws, guidelines and regulations govern what an employer can and cannot do during the hiring process including the application, interviewing, testing and selection phases.
    In addition to federal law, which precludes employers from making pre-employment inquiries into the applicant’s race, gender, age, religion and national origin, several states have imposed additional restrictions on the types of questions that an employer may ask on an employment application or during an interview. These restrictions are generally known as “Pre-Employment Inquiry Guidelines” and specify acceptable and unacceptable inquiries under that state’s laws. Examples of impermissible inquiries during the application and hiring process include:
  • Sex, race or ethnicity, date of birth, or any other information that would indicate age (e.g., year applicant graduated high school). Questions regarding gender and race must be based on a bona fide occupational requirement. There are few bona fide occupational qualifications based on gender, and there are no recognized ones based on race. Thus, as a general rule, the company should ask about race or gender only if it is required to do so for affirmative action obligations. The inquiry should be placed on the bottom of the application under a perforated line or posed on a separate sheet entitled “Invitation to Self Identify”;
  • Maiden name. However, it is permissible to ask if the applicant has ever used another name, and if so, what names should be used to check the applicant’s background;
  • Marital status or the number and/or ages of children;
  • National origin, ancestry, nationality, or native language;
  • Birthplace or whether the applicant is a United States citizen. However, the Company may ask whether the applicant is legally authorized to work in the United States;
  • Non-essential inquiries into participation in clubs, societies, or organizations. These may reveal religion, sexual orientation, or membership in a minority group;
  • Prior workers’ compensation history;
  • Whether the applicant has ever been arrested. Although questions concerning criminal convictions are generally permitted, a statement that such convictions will not automatically bar employment should accompany them. The employer should consider the nature of the conviction, date, rehabilitation, and relationship to the job sought. Emergency contact information should not require that the contact be a relative.
    During the interview do not:
  • make inflated promises to prospective employees.
  • make predictions about how well the business will do in the future.
  • speculate on how much money the employee can earn as opposed to how much the company is willing to pay him/her.
  • make any statement that qualifies the employees “at will” status such as “you will only be terminated for cause or for poor performance.”
  • make any statement that implies the company’s ability to downsize if business conditions warrant it such as “this company never lays off employees”
  • give the applicant a job description of the position for which he/or she is being hired that is exaggerated or inaccurate.
    Employers in the United States employ various types of tests to screen applicants for positions. These tests include skill tests, psychological tests, personality tests, honesty tests and medical and drug tests. Employers must be careful before administering such tests to make sure they are permitted under federal, state and local law. It is imperative that, when testing for basic skills, the test must measure a skill that is necessary for the performance of a job. Psychological, aptitude and other forms of personality tests must be scientifically validated and the employer must take care not to invade the applicant’s privacy. The Americans With Disabilities Act (“ADA”) protects employees with, among other things, physical and mental impairments. Tests that screen out employees with such impairments are unlawful and must be avoided.

    Under the ADA, employers must refrain from asking about an applicant’s medical history and applicants should not be asked to undergo any medical examination until after the employer has made a bona fide job offer. The offer can be made conditional upon the applicant passing a valid medical examination. Drug testing is even more problematic. State laws vary widely in their application of drug testing and no drug test should be administered until it is deemed to be permissible under state law.

    For many years, employers relied upon polygraph or “lie detector” tests to sort out undesirable applicants. However, the Employee Polygraph Protection Act (“EPPA”) passed by Congress in 1988, greatly limited the use of polygraphs in the workplace and limits its use to a few types of businesses.

    It is extremely important that an employer conduct a background check for most applicants. This is so for several reasons, including avoidance of negligent hiring claims and identifying misrepresentations on applications and/or resumes. Accordingly, the employer should require all applicants to sign a release and consent form allowing the employer to conduct a background check. This gives the employer permission to check the applicant’s background and authorizes all former employers and other entities to disclose the information to the employer. The employer should document all information gathered as part of the background check, as well as any unsuccessful attempts to gather information. Generally, if the employee refuses to consent to a reasonable request for information, the employer may legally refuse to hire the employee on that basis. Inquiries into applicants’ criminal background and credit are subject to a host of federal and state requirements.

    With respect to criminal background checks, federal law prohibits any inquiries that adversely impact minorities. State laws generally impose more stringent requirements. For example, almost all states prohibit inquiries into an applicant’s arrest record in the absence of special circumstances. Several states prohibit inquiries into misdemeanor convictions. Some states even prohibit inquiries into felony convictions unless they occurred within a certain period of time prior to the application for employment. Moreover, on a practical level, the company should also consider the nature of its industry and the type of vacant position it intends to fill. States vary in terms of whether an employer may refuse to hire an employee because of a criminal conviction. Some states have “ex-offender” laws that make it permissible for an employer to consider a criminal conviction only if the crime for which the ex-offender was convicted is relevant to the job applied for.

    Credit checks are traditionally conducted whenever the applicant will be trusted to handle large sums of money or exercise financial discretion. The Fair Credit Reporting Act of 1971 (“FCRA”) regulates the use of consumer credit reports as a part of background checks. The FCRA sets forth several disclosures that an employer must make when conducting a credit check, including, but not limited to, advising the applicant that: an investigative consumer credit report will be conducted, and it may include information on his/her character, reputation, personal characteristics, or mode of living.

    Under federal law and under some state statutes, student’s educational records are strictly confidential. Information including transcripts, financial information and the like may not be available to an employer without the student’s consent. Some schools limit disclosure of such information only to the student.

    Under federal law, employers are prohibited from discriminating against applicants because they have sought protection under the bankruptcy laws.

    Driving records of applicants are generally available from the states motor vehicle department for a fee.

    The military may disclose member’s or former member’s name, rank, service number, awards, and duty status. However, most other information about the member is protected and may be disclosed under limited circumstances and with the member’s consent.
    3.  Employee handbook and/or written employment policies
    Even if you have a relatively small complement of employees, it is important to create an employee handbook that clearly spells out the policies that are in force in the workplace. The handbook normally provides the employee with a brief history of the employer, its philosophy and a welcome to new employees. Certain employment policies are mandated by state and federal law. However many other policies are traditionally adopted by the majority of employers, including attendance, computer and Internet usage, rules of employee conduct and safety. Employers should codify these rules in an employee handbook. The handbook should serve as a reference guide for employment information and employment policies.

    The most critical element of an employee handbook is the employment “at-will” provision. The handbook should state in several places, including the opening paragraphs and the acknowledgement form, that employment with the company is “at-will” and may be terminated by either party at any time, with or without cause or notice.

    The company should take great care in drafting an employee handbook, and counsel should review it prior to implementation. This is because certain provisions, if not carefully drafted, may inadvertently create enforceable contractual rights in favor of the employee. For example, a policy regarding progressive discipline may create an implied contract that the company must follow certain procedures before discharging an employee.
    4.  Wages, Hours and Overtime
    There are two primary federal statutes that govern employee wages and hours. First, the Fair Labor Standards Act (“FLSA”) governs minimum wage, overtime, equal pay, recordkeeping and child labor standards for workers covered by the Act. The Act applies to all business “enterprises.” “Enterprise” is generally defined under the Act as an employer who has: (1) two or more employees engaged in commerce or in the production of goods for commerce or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person, and (2) a gross annual volume of sales of $500,000 or more. Covered individuals are employees who: (1) work in an enterprise; or (2) individually are engaged in producing or handling goods for interstate commerce. Second, the Equal Pay Act (“EPA”) provisions of the FLSA require an employer to pay male and female employees the same wages if they are performing work that is substantially similar in skill, effort, responsibilities, and working conditions.

    The FLSA generally requires that all covered employees must be paid at least the federal minimum wage. That wage is currently $5.15 for each hour the employee actually works or is required to be available for work, including time spent traveling as part of the employee’s duties.

    Employers should be aware that the FLSA does not preempt state law. Instead, it establishes only the minimum wage and overtime standards. Thus, states are free to enact higher minimum wage standards. In cases where an employee is subject to both federal and state minimum wage laws, the employee is entitled to the higher of the two wages.

    The FLSA requires that employers pay all covered employees overtime for all hours worked in excess of forty (40) hours in any one week. Overtime pay must equal at least 1 1/2 times the employee’s “regular rate of pay” (i.e., generally all compensation except discretionary bonuses).

    Employees must be paid for overtime even if the time worked is not authorized. Accordingly, the Company should warn all employees in advance that working unauthorized overtime will lead to discipline, as opposed to nonpayment.

    The FLSA exempts certain employees from the foregoing minimum wage and overtime provisions. There are three principal exemptions to the FLSA. These exemptions are for executive, administrative and professional employees (collectively known as the “white collar exemptions”). The Department of Labor has issued a (recently revised) test for determining who falls under the exemptions for overtime that are very detailed and should be reviewed before classifying an employee as “exempt”.

    “Hours worked” are all hours an employee is engaged to work, engaged to wait, or actually at work, whether or not authorized. A legal day’s work is defined as eight hours. If the employee works more than 40 hours a week, additional compensation must comply with the overtime requirements set forth above.

    State law governs the frequency and the manner of payment employee. In general, these state laws do not apply to employees employed in a bona fide executive, administrative or professional capacity (whose duties track the FLSA white collar definitions set forth above).

    Employers should be aware that state law severely restricts employers from making deductions from employee wages. For example, in New York, an employer may not take any deductions from an employee’s wages unless authorized in writing by the employee and the deduction is for the benefit of the employee, (i.e., payments for insurance premiums, pension health, welfare benefits, contributions to charitable organizations, payments for United States bonds, or union dues). Some states require employers to provide employees with periodic meal and rest period.
    5.  Employee Benefits
    The Employee Retirement Income Security Act of 1974 (“ERISA”) governs employee pension, health, and welfare benefit plans and applies to all private employers engaged in interstate commerce. ERISA sets forth various provisions governing: participation; vesting; minimum funding standards; and fiduciary, reporting, and disclosure requirements for employers, plan administrators, trustees, and fiduciaries. ERISA’s reporting and disclosure requirements require plan administrators to provide employees with, inter alia, summaries of their benefit plans, updates regarding major changes, and copies of reports on the financing of certain plans. ERISA also sets forth various anti-retaliation provisions. The Internal Revenue Service and the Department of Labor are responsible for enforcing the vesting, participation, and funding requirements under ERISA.
    The Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) requires employers with more than 20 employees to offer employees and their eligible dependents a temporary extension of health coverage at group rates in certain cases where such coverage would otherwise end. Circumstances that warrant such an extension include situations where the employee is laid off, retires, resigns, loses group health insurance as a result of changing from full-time to part-time status, or is discharged for any reason other than gross misconduct. The continued coverage must be identical to that provide to current employees and to similar beneficiaries.
    Moreover, the employee’s spouse and dependents are also entitled to continued coverage following the employee’s death, a divorce or legal separation, or a dependent’s loss of coverage as a result of no longer being classified as an eligible dependent under the terms of a specific plan. COBRA obligates employers to inform all employees and their spouses and dependents of their right to avail themselves of continued coverage. The Family and Medical Leave Act of 1993 (“FMLA”) requires employers with 50 or more employees to provide covered employees with up to 12 weeks unpaid, job-protected leave in any 12-month period for the following reasons:
  • the birth of a son or daughter, and the care for the newborn child;
  • the placement with the employee of a child for adoption or foster care, and the care for the newly placed child;
  • the care for an immediate family member (i.e., spouse, child, or parent) with a “serious health condition”; or
  • for an employee’s own “serious health condition.”
    The FMLA applies to all employees who have been employed by the employer at least 12 months and have at least 1250 hours of service in the 12-month period preceding the leave. A covered employer has several responsibilities under the FMLA, including, but not limited to: maintaining the employee’s group health insurance coverage, except in limited circumstances, restoring the employee to his or her original job or to an “equivalent” position (i.e. one that has equivalent pay, benefits, and working conditions, including privileges, prerequisites, and status), providing prompt written notice to the employee that leave is being taken under the FMLA and posting requirements. Employers should be aware that the FMLA does not preempt state and local laws that provide greater leave rights. Further, it is not intended to discourage employers from offering more generous leave policies.
    6.  Notice Posting Requirements for employers
    Federal law requires employers to post notices explaining many of the federal laws that govern employees in the employer-employee relationship in the workplace. These notices must be posted in a conspicuous location in the workplace where notices to applicants and employees are customarily posted. Almost all states and some municipalities also require the posting of certain notices. More significant posting requirements are the following:
  • Employers must post notices describing the federal laws prohibiting job discrimination based upon race, color, sex, national origin, religion, age, disability and request for family or medical leave. EEO posters may be obtained from the local office of the United States Equal Employment Opportunity Commission. (“EEOC”)
  • The Occupational Health and Safety Act (“OSHA) governs workplace safety. Employers must post notices explaining the employer’s obligations and protections afforded employees under OSHA. These posters may be obtained from the local Department of Labor office.
  • The Employee Polygraph Protection Act prohibits polygraphing of employees except in very limited circumstances. Employers must post the prescribed notice outlining the prohibitions and limitations of polygraphing. These posters, too, may be obtained by contacting the local Department of Labor office.
  • The Fair Labor Standards Act, (“FLSA”) prescribes the minimum wage and overtime requirements under Federal Wage and Hour law. Every private, federal, state and local government employer of employees subject to the FLSA Act must post the required posters.
  • Uniformed Services Employment and Reemployment Rights Act (“USERRA”) veterans must be provided notice of their rights, benefits and obligations under USERRA. Since March 10, 2005, notices must be posted in all workplaces.
    States and municipalities also have various notice posting requirements. Some of the more common requirements related to: Smoking in the workplace, Child labor, Unemployment Insurance, Workers' compensation, State wage and hour laws, Notification to employees of various employment policies and employer benefits..
    7.  Anti- Discrimination and Anti-Harassment and Policies
    Although there are many statutory prohibitions against different forms of discrimination, VII of the Civil Rights Act of 1964 deserves special mention and discussion. Private employers with 15 or more employees, state governments and their political subdivisions and agencies, the federal government, employment agencies, labor organizations, and joint labor-management committees are covered by this Act.

    Title VII prohibits employers from discriminating against applicants and employees on the basis of race or color, religion, sex, pregnancy, childbirth or national origin. It also prohibits employers from retaliating against an applicant or employee who asserts his or her rights under the law. For example, an employer cannot fire someone for complaining about race discrimination.

    Title VII’s prohibition against discrimination applies to all terms, conditions and privileges of employment, including: hiring, firing, compensation, benefits, job assignments, shift assignments, promotions and discipline.

    Harassment includes, but is not limited to, making derogatory comments, telling jokes, offensive or inappropriate touching or other physical contact, or otherwise creating an uncomfortable environment on account of someone’s age, national origin, religion, color, race, disability, gender or some other protected classification.

    As defined by the EEOC, sexual harassment is unwelcome sexual advances or other verbal or physical conduct of a sexual nature.

    Employees may not always know if their behavior is offensive. It is the impact on the victim that determines whether the behavior is offensive, not the actions, intentions or belief of the actor. The question is whether the victim was in fact offended by the behavior and whether a “reasonable person” also would be offended. Several factors come into play when evaluating behavior, including how severe the behavior is and how frequently it occurred.
    8.  Pregnancy and Childbirth
    The Pregnancy Discrimination Act (“PDA”) provides that women affected by pregnancy, childbirth or related medical conditions are to be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work. The PDA requires that employers treat pregnant employees like similarly situated non-pregnant employees. An employer may not refuse to hire an applicant because of her pregnancy, or a pregnancy-related condition, so long as she can perform the major functions of the position. Nor can an employer refuse to hire an employee based upon pregnancy-related bias of its customers or employees. An employer may not treat pregnancy-related health conditions differently than it treats other health conditions. The PDA also prohibits certain conduct that could be perceived as protective of pregnant women. For example, an employer may not force a pregnant woman to take medically unnecessary leave, nor may it prohibit her from returning to work before the birth of her child, after recovery from some temporary disabling condition. Similarly, employers must not require that women wait a certain period of time after birth to return to work. The PDA also applies to men as well as women. The PDA prohibits discrimination against male employees with respect to the provision of pregnancy-related benefits.

    The Federal Family and Medical Leave Act (“FMLA”) passed in 1993 provides that eligible employees, including males and females, are entitled to up to twelve weeks of unpaid leave to care for a newborn or adopted child. FMLA leave may also be available for pregnancy-related conditions if they constitute a “serious health condition”. Employees may decide that they wish to use available accrued paid leave during their FMLA leave. Moreover, employers may require that employees use accrued paid leave during their FMLA leave. A key feature of the FMLA is that employers are required to reinstate returning employees to the same position or to an equivalent position with equivalent benefits, pay and other terms and conditions of employment when they are ready to return to work. FMLA is also significant in that it requires that employees be permitted to take “intermittent” leave when it is medically necessary either to care for a sick family member or because of the employees own serious health condition. However, it does not require that new parents be permitted to take intermittent leave. The Americans With Disabilities Act (“ADA”) also comes into play when severe, unusual, or long-term complications arise from pregnancy. Such complications could be found to be a “disability” under the ADA. Under these circumstances, an employee would be entitled to the protections of the ADA and an employer may be required to provide the employee with “reasonable accommodation”.
    9.  Labor Unions
    The relationship between employers, employees and labor unions is primarily regulated by the National Labor Relations Act (“NLRA”). The NLRA among other things, protects the right of employees to self organize; to form, join, or assist labor organizations; to bargain collectively with the employer through representatives of their choice; and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. Union organizing in the United States is regulated by the NLRA, which provides procedures for secret ballot elections supervised by the National Labor Relations Board (“NLRB”). The NLRB is a federal government agency that enforces the NLRA. The NLRA also regulates other aspects of the union-management relationship, including collective bargaining, strikes, picketing and prohibited conduct that constitutes “unfair labor practices”.

    Approximately twelve percent of the work force in the United States is organized. The NLRA requires employers to bargain with unions who are authorized to represent the employer’s employees. Typically, collective bargaining agreements negotiated by employers with unions contain provisions setting forth the employees’ wages, hours, and working conditions. Generally, collective bargaining agreements attempt to limit the rights of employers to terminate employees except for “just cause”. Most collective bargaining agreements also contain provisions that regulate the union’s right to strike and establish a dispute resolution system that typically involves final and binding arbitration of all disputes under the collective bargaining agreement. Binding arbitration provisions resolving disputes are usually granted in exchange for a “no strike” commitment by the union during the term of the collective bargaining agreement. Foreign-owned companies operating in the United States are often targets for union organizing simply because foreign companies are not familiar with the NLRA and the procedures for determining union representation. Knowledgeable management labor lawyers can assist employers to remain union-free by advising employers in advance of and during union organizing drives and NLRB-conducted elections.
    Frequently Asked Questions
    What are some of the factors that an employer should consider before imposing discipline in order to avoid employment discrimination and wrongful termination lawsuits?
    Did the employer forewarn the employee orally or in writing of the possible or probable consequences of the employee’s action? Was the employer’s rule reasonably related to the orderly, efficient, and safe operation of the business and the performance that the employer might reasonably expect of the employee? Did the employer, before administering discipline to the employee, make an effort to discover whether the employee did in fact violate or disobey an employer rule or order? Was the employer’s investigation conducted fairly and objectively? At the employer’s investigation, did the employer’s adjudicator obtain substantial and compelling evidence or proof that the employee was responsible or at fault as alleged? Has the employer applied its rules, orders, policies and penalties fairly and without discrimination to all employees? Was the degree of discipline reasonably related to the seriousness of the offense and the employee’s work performance record with the employer?

    A negative response to any question on this checklist would overturn the employer’s disciplinary action or require it to be modified.

    Is it sexual harassment if a customer, client or vendor is the one engaging in the harassing behavior?
    Yes. Employees should report any such incident so that it can be investigated and corrective action can be taken.

    Do the rules against sexual harassment apply when employees are out of the office but with colleagues?
    Yes. The anti-harassment rules apply at work-related social or business events.

    Should the employer adopt a written anti-harassment policy?
    All employers should adopt written policies that set forth their policies against harassment in the workplace. For those employers who already have a policy, the policy should be reviewed and updated as necessary. There are several critical components to an effective policy. The policy should state that the employer prohibits sexual harassment in the workplace. The policy should define who is covered, where the policy applies, and what behavior is prohibited. The policy should direct persons who have been subjected to, witnessed, or otherwise have information or questions about inappropriate sexual behavior to report the behavior or their concerns. The policy should identify the persons to whom such complaints should be directed. The policy should also state that complaints will be investigated and corrective action taken. The policy should also state that complaints, investigation results and corrective action will be kept confidential consistent with the need to investigate and take corrective action. Finally, the policy should explicitly state that it prohibits retaliation against persons who complain or participate in an investigation in good faith. Persons with complaints of retaliation also should be directed to identified individuals.

    How does an employer undertake an investigation of an employee complaint?
    Generally, and if possible, it is a good idea to review the personnel file of the employee bringing the complaint, the alleged wrongdoer and any witnesses before proceeding. However, this should not delay the investigation and, if it will, you should proceed with the interviews. Remind the employee that the Company has a policy prohibiting discrimination or harassment (as applicable) in the workplace. Advise the employee that a co-worker has made a complaint that is being investigated in accordance with the policy. Inform the employee he/she may have some knowledge regarding the incidents that are being investigated. Advise the employee that the information he/she provides will be kept confidential to the extent possible. Tell the employee about the Company’s policy against retaliation. Attempt to determine if the alleged witnesses’ perceptions are consistent with or contrary to those of the complaining employee. Elicit background information (to the extent not known). Elicit general information about the nature of the work environment. Ask about any specific allegation that you are investigating and whether this person may have been a witness to or any allegations that arise from the interview. Request the witness (es) to exercise good judgment after he/she returns to work. Interview the alleged wrongdoer. It is important when interviewing the alleged wrongdoer that the individual be given the opportunity to address the specific allegations and to provide any information or the names of any people that he or she believes could corroborate his or her version of what happened. Advise the alleged wrongdoer of the follow-up he/she can expect. As appropriate, re-interview the complaining employee to address any conflicting versions of the events as described by the alleged wrongdoer or any witnesses. Gather and review any additional documents. If necessary, re-interview the witnesses who have been spoken to, as well as any new witnesses, for their responses to the alleged wrongdoer’s assertions. Prepare a detailed report summarizing your investigative findings.