Disasters can take many forms. When a disaster strikes an employer’s 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 decide whether and how to move forward. A company’s employees are a critical component of any recovery plan. If an employer fails to manage them well and to meet their needs, other recovery efforts may be futile. Even if an employer decides 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 legal liability.
Sound disaster planning requires that HR departments provide adequate attention to both the preventive and remedial aspects of any disaster prevention and recovery plan. The goals are:
This chapter will provide an overview of some of the fundamental issues that need to be addressed in a post-emergency incident response.
For every casualty event, there will be disruptions to the ability of employees to conduct their normal work activities. The employees 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, the employees may be unable to access the worksite 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 to 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. That may be difficult to do, and federal, state and local efforts to protect employees from surprise plant shutdowns may complicate your task. At the federal level, the Worker Adjustment and Retraining Notification Act (known as WARN) requires covered employers to provide 60 days advance notice of a plant closing or mass layoff. See Chapter 25: Plant closings and mass layoffs. 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. In addition to notifying employees, employers must also notify state or local officials of a temporary shutdown. 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 husbanding corporate resources may be critical, having a 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 employers have assumed that they do 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 if the employer cannot access the addresses of its employees? In the case of a natural disaster during which employment records have been destroyed, employers can post notices at the worksite or post a notice in a newspaper.
WARN is not the only source of an employer’s obligation to notify employees of permanent and temporary shutdowns. State and local laws in many jurisdictions, including Massachusetts, have different or additional 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. See Chapter 25: Plant closings and mass layoffs for more information.
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 (NLRB), including being ordered to reopen a plant under certain circumstances.
Disasters rarely affect a company without affecting its employees. Human resources must be prepared to respond by meeting the employees’ immediate needs.
When a disaster strikes, employees still must be paid. Paying accrued wages when due is not only a contractual obligation of the employer; many states have wage payment laws which make it a criminal violation for an employer to fail to pay wages when due and grant employees liquidated damages, statutory penalties or attorney’s fees. Moreover, the majority of these laws extend beyond the corporate employer to the officers of the corporation who have the authority to pay the wages. While coping with the other aspects of a disaster, the last thing that a CEO needs is to be arrested on a criminal law wage payment violation based on the complaint of employees who are upset about not being paid. Non-exempt employees, however, are paid only for hours worked. See Chapter 10: Wages and hours. In order to avoid employee confusion, companies should have a policy detailing whether employees will be required or permitted to use accrued vacation or holiday time during the periods surrounding a disaster.
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 11th, 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. However, it is uncommon that such disaster funds are available in less extreme situations. See Chapter 15: Benefits.
If the disaster involved particularly traumatic events, such as an incident of workplace violence or a natural disaster in which co-workers’ lives are lost, the survivors may 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 required to enable them to come to work. See Chapter 33: Safety and health.
Since passage of the Americans with Disabilities Act (ADA), employers have been prohibited from making many types of medical inquiries. Yet, such information likely will be 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:
Employers may also ask individuals to describe the type of assistance they believe they will need, such as, for example, special medication, equipment or device. 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 emergency teammates or “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, such as the type of assistance an individual needs in the event of an evacuation.
If a work-related incident results in the death of any employee or the in-patient hospitalization of three or more employees, the Occupational Safety and Health Administration (OSHA) must be called in within eight hours so that an investigation can be launched. One way to do this is by calling the OSHA toll-free central telephone number, 1-800-321-OSHA (6742). 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 a disaster strikes, a team of company representatives must be ready to meet with an OSHA area director or personnel from these other agencies, guide the inspection process and oversee responses to government requests to inspect facilities and documents and to interview employees. This is a particularly sensitive issue because not only can OSHA can not only impose enormous fines, but it can also refer matters for criminal prosecution. See Chapter 33: Safety and health.
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. One effective way to prevent this is to identify key employees and enter into binding agreements with them that prohibit them from working for the competition for a period of time after their own employment ends. These can be combined with confidentiality and non-solicitation agreements to safeguard the kind of non-balance sheet assets that-will never be covered by an insurance policy. Another way to limit staff turnover after a disaster is to communicate regularly with employees regarding the employer’s business plans after disaster response efforts are completed. For more information on this topic see Chapter 08: Restrictive covenants and trade secrets.
While it is impossible to plan for every possible disaster scenario, employers may identify the disasters most likely to befall their business, based on geographic, historical and human factors. For example, businesses near a river may face heightened flood risks, while companies that produce or store hazardous materials would have an increased probability of chemical disasters. Employers should be aware of the risks that their business faces and develop a disaster plan that addresses the scenarios that may arise. Such disaster plans should address:
There is no “one size fits all” contingency plan that all companies can implement to ensure continued functioning in the event of a disaster. In developing such a plan, companies must consider the systems most vital to business operations. For many companies, this may involve:
Personnel should be aware of the location of crucial documents (IRS forms, financial statements, client records and employee personnel records) stored both on-site and off-site so that business may resume with as few interruptions as possible. Companies may develop disaster partnership relationships with other companies to provide an alternative work location (a conference room or other empty space) should offices become unusable or to take over the servicing of clients.
There are many other steps employers can take in advance so as to be prepared 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 their employees. Among the items that employers should consider in advance of a crisis are:
In regions that are prone to certain types of natural disasters, such as hurricanes, flooding or earthquakes and the resulting disruptions to technical and electrical infrastructures, prudent employers might take steps to implement contingency plans and policies designed to minimize foreseeable disruptions to operations and ensure employee safety. However, it is impossible to plan ahead for every disaster scenario and employers and managers should be trained to handle the unexpected. For example, the 2014 outbreak of Ebola which reached American soil was, for many, an abrupt reminder that contagious diseases are a real concern in the workplace. Employers found themselves dealing with issues such as employees’ travel plans to visit family in or near affected areas of the world, an increase in employee absences or requests for leave or time off for fear of contracting a disease in the workplace or the constant buzz of nervous talk at the water cooler that can become disruptive to business operations and productivity.
Some tips on how to respond to an unforeseen situation, such as a medical epidemic of contagious disease, are listed below. The likelihood of contraction, gravity of the potential illness and proximity of the threat, as well as other surrounding circumstances should dictate the appropriate employer mobilization or response.
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Disaster planning — Massachusetts
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