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 an employer fails to manage its employees well in the wake of disaster and meets the employee needs in addition to the employer 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 serious legal liability.
Although an employer can never be fully prepared for a natural disaster, 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:
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, an employer can devise preventive steps that can maximize the chances that a business will be able to recover from a disaster.
For every casualty event, there will be disruptions in 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 worksite for a considerable period of time, or the lack of necessary electrical or other utilities may make it futile to attempt to restart operations until service is restored. According to the Congressional Budget Office, even ignoring short term disruptions, Hurricanes Katrina and Rita alone wiped out between 280,000 and 400,000 jobs. In 2017, CNBC reported that the average hurricane since the 1980's takes about 50,000 jobs off the market. In the event of bioterrorism, or a disabling cyberattack, there may be no way for employees to use the facility or access the information necessary for them to do any meaningful work. According to a 2018 report by Kaspersky Lab and B2B International, some job losses occurred in 31% of the cases in which a data breach occurred
Immediately after a disaster strikes, a company must let its employees know whether they should report to work. Employers should recognize that even this important initial step 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 level, the Worker Adjustment and Retraining Notification Act (WARN Act) 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. 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 protecting 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 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. As a consequence of these earlier cases, employers should ask themselves as part of their disaster preparation whether the business could meet the reduced notice standard if it no longer had access to its employment records in either hard copy or electronic form.
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 employer 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 employer to sanctions by the National Labor Relations Board (NLRB), including being ordered to reopen a plant under certain circumstances.
Disasters rarely affect an employer 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. Indeed, they may need the money more than ever. Paying accrued wages when due is not only a contractual obligation of the employer, but many states have wage payment laws that make it a criminal violation for an employer to fail to pay wages when due and grant employees liquidated damages, statutory penalties, or attorneys' fees if employees are not paid as required. Moreover, the majority of these laws extend beyond the corporate employer to the individual officers of the corporation who have the authority to pay the wages. While coping with the other aspects of a disaster, the last thing 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. See Chapter 10: Wages and hours.
If a worksite is closed because of weather, the employer may still be obligated to pay exempt salaried employees their full salary for the week in which the disaster occurred if those employees performed any work during that week. The Department of Labor considers an absence caused by transportation difficulties experienced during a weather emergency to be an absence for personal reasons if the employer is open for business. When this happens the employer may dock the employee pay for any full day that the employee fails to report for work, or the employer may require use of allowed leave time for this purpose. Salaried exempt employees may not be docked pay for absences of less than a full day. For hourly and other non-exempt employees, there is no statutory obligation to pay for hours not worked; however such an obligation may be found in many union contracts.
During disasters employees are often called upon to care for other family members. If those family members need care due to a serious health condition, the employee may be entitled to leave under the FMLA. Likewise, parents who, as a result of disaster, are required to care for children in the first year following birth or adoption may be entitled to invoke leave rights under the FMLA. See Chapter 17: Family and medical leave.
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. For example, 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. 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 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 also 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. If a workplace hazard is predictable, such as chemical release, the employer will need to plan for it and train personnel how to respond to the situation when it occurs. 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. (See Chapter 13: Disabilities and reasonable accommodation.) However, that information is essential if an employer is to implement an effective plan for evacuating employees who suffer disabilities in the case of an emergency or disaster in the workplace.
The EEOC has issued guidance on the following 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 nonmedical personnel who oversee evacuations qualify as first aid and safety personnel. However, employers should be cautioned that these individuals are entitled to only that portion of an individual’s medical information necessary to carry out a first aid or evacuation plan.
If workplace deaths are involved, 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 and Hazard Investigation Board, or a host of other agencies. When a 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 can both impose enormous fines and refer matters for criminal prosecution. See Chapter 33: Safety and health.
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 an employer’s premises. As a result of that access, 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 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 and whether those jobs will be secure. In that situation, they are particularly vulnerable to overtures from the 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. See Chapter 13: Disabilities and reasonable accommodation.
An issue employers often overlook is that their employment records can be quite vulnerable to disasters. Consider compliance with the Immigration Reform and Control Act, which requires employers to create and maintain I-9 forms. It is not only the employer’s records that are subject to loss, but employees may have difficulty for a period of time being able to establish their right to work in the United States. The lack of such records may impair the ability of an employer to hire people whose skills are essential to helping the company rebuild after a disaster. After hurricane Katrina in 2005, the U.S. Department of Homeland Security announced that it would not prosecute employees for approximately 50 days for not having proper documentation; but in the absence of such a large-scale disaster, employers cannot count on such relief in the future.
Employee medical and exposure records are particularly at risk, especially because of the long time period that OSHA regulations require they be preserved. Employers would do well to review the recordkeeping requirements described in Appendix A: Recordkeeping requirements to evaluate how vulnerable their records are in the event of a disaster.
There are many steps than can be taken 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 one critical stakeholder group – the employees. Among the items that should be considered in advance of a crisis:
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Appendix A: Recordkeeping requirements
Appendix B: Posting Requirements