The human resources department of a mid-sized corporation believes it has a handle on all the quirks and intricacies of employment law. It posts employee information on its bulletin boards, has employees read and sign employee handbooks, provides introductory orientation. It covers its bases, or so it believes, until the lawsuit materializes.
It could have to do with termination issues, employee compensation and benefit packages, the work environment, promotion opportunities or discrimination. The California Legislature keeps busy updating and changing the law. The challenge is in the detail, and recognizing the detail can keep even the most vigilant businesses spinning.
According to attorney Janice Brown, the most effective way to deal with litigation is to avoid it. This means having a clear idea of situations that could turn into lawsuits and defusing them before they happen. Yet knowledge and prevention, Brown said, can prove complex, confusing and often formidable in the day-to-day conduct of business.
"Businesses need to remain proactive and smart," Brown said. "But often they need help. "A company policy and procedures audit checklist can be a valuable first step or refresher resource in making sure a business is legally on track."
Brown, a 23-year respected litigator who founded Brown Law Group in 2003, noted that some of the items on a checklist would include assuring that the employee handbook has been updated to reflect current law.
"The last thing a business needs, large or small, is an employee basing his or her actions, or a company making its decision, on dated information." She further emphasized that a business needs to understand the value of signed arbitration and at-will employment agreements. "The goal is prevention through knowledge and appropriate action," said Brown.
"Education is so critical to the daily operation of business," she added, "from formal e-mail policy to how to conduct a legal interview."
Brown said that in the corporate world, legal issues arise over the most basic of concepts. Is the business in the proper corporate form, is there an operating agreement or partnership agreement in place? Are employees offered equity or cash based incentive compensation? If so, does the company have the proper arrangements in place? "Sometimes a company grows so fast," she said, "or becomes so focused on doing business, that it struggles to maintain the kind of internal business practices that keep it clear of litigation." Issues involving tax planning, finance, corporate, proper state and county filings, and going through the red tape of doing business in other states and countries can quickly overwhelm corporate officers and staff.
Karina Juarez of Brown Law Group, who recently was selected to participate in one of the nation's top leadership academies through the American Bar Association's Tort Trial & Insurance Practice Selection (TIPS), reiterated that the goal of a business attorney, regardless of the area of law, should be prevention first. "A business should have a legal advocate that keeps the business current on state and federal law," she said. "The role of a business attorney is not only to inform businesses of legal developments in the corporate arena, but to also openly discuss wrongful termination, race and gender discrimination and sexual harassment and to work with businesses to create processes to ensure the proper handlings of these issues. Consideration must be given to all factors to which a business has exposure."
Brown noted that TIPS is one of the ABA's largest and most active sections with 36,000 members nationwide, and is comprised of 34 general committees that focus on substantive and procedural matters in all areas of law. This prestigious academy is known as the source of knowledge and leadership on trial practice and critical issues of justice that involve tort and insurance law.
Juarez will participate in a series of conferences led by national leaders, attorneys and elected officials. This year's TIPS academy conferences include: Ethics, Justice & Values; Leadership in Practice; and Leadership in Public Service.
"Karina's expertise in transactional law empowers the firm to expand the scope of services we deliver to our clients," Brown said. "Karina's TIPS selection recognizes her tremendous leadership potential in the field of law."
Ellman is founder and principal of Beck Ellman Heald.