Disasters can take many forms. When a disaster strikes your business, regardless of whether it emanates from natural or human causes, there will always be significant human resource issues that must be addressed and often very quickly. In the aftermath of any disaster, every business must make the decision of whether and how to move forward. A company’s employees are a critical component of any recovery plan. If you fail to manage them well and meet their needs, other recovery efforts may be futile. Even if you decide that a facility or the entire business cannot reopen, it will be essential to respond to employee concerns to avoid or minimize the risk of serious legal liability. Sound disaster planning requires that human resource issues be recognized as being of first order importance and adequate attention must be given to them both in the preventive and remedial aspects of any disaster prevention and recovery plan. The goals are to:
This chapter will provide an overview of some of the fundamental issues that need to be addressed in a post-emergency incident response. From this, you can devise preventive steps that can maximize the chances your business will be able to recover.
For every casualty event, there will be disruptions of the ability of employees to conduct their normal work activities. They may not have an office or a factory to return to if there has been a fire or explosion. In the event of a natural disaster such as a flood or hurricane, they may be unable to access the work site for a considerable period of time. In the event of bioterrorism or a disabling cyber-attack, there may be no way for employees to use the facility or access the information necessary for them to do any meaningful work.
Immediately after a disaster strikes a company must let the employees know whether they should report to work. This may not be such a simple process. Moreover, federal, state and local efforts to protect employees from surprise plant shutdowns may complicate your task. At the federal or state level, the Worker Adjustment and Retraining Notification Act (WARN) and the Illinois" mini" WARN Act requires covered employers to provide 60-days’ advance notice of a plant closing or mass layoff.
Even a temporary shutdown of a plant can be covered if it results in an employment loss during any 30-day period for 50 or more employees. Besides notifying employees, companies must also notify state or local officials. Failure to give the necessary notice can leave the employer exposed to governmental fines and an obligation to continue to pay wages and benefits to the affected employees. At a time when preserving corporate resources may be critical, having WARN exposure may prevent a company from being able to reopen.
WARN does provide exceptions to the 60-day notice requirement if the plant closing or mass layoff is due to any form of natural disaster, such as a flood or earthquake or if it is caused by “business circumstances that were not reasonably foreseeable as of the time notice would have been required.” These exceptions are very narrowly construed.
Some companies have concluded that they did not have to worry about WARN at all if they fell within these exceptions. But the statute goes on to require that even when there is a justifiable reason for giving less than 60 days advance notice, the employer “shall give as much notice as is practicable and at that time shall give a brief statement of the basis for reducing the notification period.” In several reported cases, employers have been held liable for the full 60 days of wage and benefit obligations because they failed to meet this requirement. You might ask yourself whether your business could meet the reduced notice standard if it no longer had access to its employment records in either hard copy or electronic form. To whom would the notices be sent?
WARN is not the only source of an employer’s obligation in this area. State and local laws in many jurisdictions provide enhanced notice requirements and remedial provisions. In addition, collective bargaining agreements may also obligate employers to provide certain notices before the obligation to pay wages can be suspended.
In a unionized setting, the employer may not be free to respond unilaterally to all of the many concerns that must be addressed immediately after a disaster. Under some union contracts, the union is treated as having shared governance with the employer over such issues as wages, hours and other terms and conditions of employment. Depending on what the union contract says about the issue, the company may have to begin immediate negotiations with the union business representative to avoid incurring liability.
Even if the union contract allows the employer to take unilateral action in laying off employees, transferring production, relocating bargaining unit work, etc., employers are still required to negotiate in good faith with their union counterparts over the effects of these decisions on bargaining unit employees. The failure to engage in so-called “effects bargaining” may subject the company to sanctions by the National Labor Relations Board, including being ordered to reopen a plant under certain circumstances.
Disasters rarely ever affect a company without affecting their employees. Human resources must be prepared to respond by meeting the employees’ immediate needs.
When a disaster strikes, employees still must be paid. They may need the money more than ever. Paying accrued wages when due is not only a contractual obligation of the employer; Illinois has a wage payment law which provides for civil penalties, liquidated damages, costs and attorney’s fees if an employer fails to pay wages when due. While coping with the other aspects of a disaster, the last thing that a CEO needs is to be hauled into court for a wage payment violation based on the complaint of employees who are upset about not being paid.
Benefit plan administration also needs to be maintained during a disaster. Health claims, life insurance claims and disability claims need to be processed and resolved. In the aftermath of September 11, 2001, there were many families of World Trade Center employees who were unable to resolve benefit issues. Fortunately for them, emergency relief funds were able to tide many of the families over the immediate period of shock. It is far from common that such disaster funds are available in less extreme situations.
If the disaster involved particularly traumatic events, such as an incident of workplace violence or a natural disaster in which co-workers’ lives were lost, the survivors will need counseling services to debrief them on the incident and to begin grief counseling. Security, biohazard or other personal protective measures may need to be put into effect. It is legally essential to offer employees a safe and healthy workplace and it is necessary on a practical level that employees have the psychological comfort that it is safe for them to come to work.
Since passage of the Americans with Disabilities Act (ADA), employers have been prohibited from making many types of medical inquiries. (See Disabilities and reasonable accommodations.) Yet, such information is essential if an employer is to implement an effective plan for evacuating employees who suffer disabilities. The Equal Employment Opportunity Commission (EEOC) has issued guidance on three circumstances when it is permissible for an employer to seek medical information:
Although the ADA generally requires confidential treatment of medical information of applicants and employees, an exception permits first aid and safety personnel to have necessary information. Medical professionals, emergency coordinators, floor captains, colleagues who act as buddies, building security officers and other non-medical personnel who oversee evacuations qualify as first aid and safety personnel. These individuals are entitled to only that portion of an individual’s medical information, which is necessary to carry out a first aid or evacuation plan.
If workplace deaths are involved, the Occupational Safety and Health Administration (OSHA) (or, for public employers, the Illinois Department of Labor - OSHA) must be called in within eight hours so that an investigation can be launched. This is in addition to any investigation being conducted by local law enforcement, the Environmental Protection Agency, the Chemical Safety Board or a host of other agencies. When disaster strikes, a team of company representatives must be ready to meet with OSHA or these other agencies, guide the inspection process and oversee responding to government requests to inspect facilities and documents and to interview employees. This is a particularly sensitive issue because OSHA cannot only impose enormous fines, but it can refer matters for criminal prosecution.
It is not only the physical loss site that will need to be protected against intentional, accidental and/or weather induced changes in condition. A fire, flood, explosion or other disaster may mean that large numbers of outsiders suddenly have a legal right to enter the premises. Trade secrets or confidential proprietary information may be lost or fall into the hands of competitors. Therefore, access and information security controls need to be imposed. Centralized coordination must be used to control document production, access to witnesses and inspection of the pertinent physical evidence. Individuals who are given access to the site may need to sign releases or agreements to protect proprietary information. If not already in existence, restrictions will need to be implemented, even on law enforcement agencies, concerning duplication of confidential documents or photographing sensitive equipment or installations.
In the immediate aftermath of a disaster, employees will naturally worry whether they will have jobs to go back to or whether those jobs will be secure. They are particularly vulnerable to overtures from your competition. It will not help to rebuild the plant if all of the customers have been pirated away with the sales force. The only effective way to prevent this is to identify key employees and lock them in with binding agreements prohibiting them from working for the competition for a period of time after their own employment ends. These can be combined with confidentiality and no-solicitation agreements to safeguard the kind of non-balance sheet assets that will never be covered by an insurance policy.
There are many steps that can be taken in advance to prepare for a crisis. These actions will allow corporate executives to concentrate on other important issues, confident that they have already acted to reduce their risk of liability and satisfied the immediate needs of one critical stakeholder group: the employees. Among the items that should be considered in advance of a crisis:
About Laner Muchin
About the author
An HR audit Snapshot — Illinois
An introduction - features of the HR Library
Background checks — Illinois
Benefits — Illinois
Celebrations in the workplace — Illinois
Child labor — Illinois
Compliance thresholds — Illinois
Disabilities and reasonable accommodations — Illinois
Disaster planning — Illinois
Discipline — Illinois
Discrimination — Illinois
Diversity in the workplace — Illinois
Drugs and alcohol — Illinois
Family and medical leave — Illinois
Federal contractors and affirmative action — Illinois
Health insurance continuation coverage — Illinois
Health insurance — Illinois
Health insurance portability and privacy — Illinois
Immigration — Illinois
Independent contractors — Illinois
Military leave — Illinois
Other types of leave — Illinois
Pandemic outbreaks — Illinois
Performance evaluations — Illinois
Personnel files — Illinois
Plant closings, mass layoffs and reductions in force — Illinois
Policies and procedures manuals — Illinois
Politics in the workplace — Illinois
Privacy rights — Illinois
Protecting electronic information — Illinois
Public employers — Illinois
Recruiting and hiring — Illinois
Restrictive covenants and trade secrets — Illinois
Safety and health — Illinois
Social media — Illinois
Telecommuting — Illinois
Temporary and leased employees — Illinois
Termination — Illinois
Unemployment compensation — Illinois
Unions — Illinois
Wages and hours — Illinois
Whistleblower protections — Illinois
Workers’ compensation — Illinois
Workplace harassment — Illinois
Workplace investigations — Illinois
Workplace violence — Illinois