Let’s face it, calling in legal counsel costs money that HR would rather not spend, particularly in these belt-tightening times. But is the risk too great not to call for legal help?  Jim Thelen helped attendees at the SHRM annual conference with the thought process in deciding when HR doesn’t need to call their employment lawyer and when they should.

The determination of when you need to involve legal counsel involves a two-part matrix: know yourself and know enough about the issues.  Knowing yourself is not limited to you personally, but knowing your company, your in-house legal office, your HR office, what you collectively know, and, most importantly, what you don’t know.

Know yourself. Know your HR office and staff, their abilities and limitations. Does anyone have a law degree or prior legal experience with the legal issue du jour? Does your HR office have protocols, policies, or procedures for handling certain legal compliance situations? If not, you may want to consider creating some. If your company has an in-house legal office, get to know the attorneys; HR and in-house legal, not being profits centers, face the same organizational challenges and suspicions.

How is outside legal counsel handled? What is everyone’s role? Are there protocols for contacting outside counsel? Who pays the bill for outside counsel? Get to know outside counsel; they can provide better and more efficient advice if they know you and your company better.

Become familiar with Employment Practices Liability Insurance. If your company carries it, know the agent, carrier representative, or your company’s insurance contact person. Know the general parameters and coverage of the policy; what practices/issues are covered, does it pay for legal representation, what is the deductible, when must you provide notice of a possible claim, and who selects legal counsel? Large EPLI providers have approved counsel lists. Be aware of this because it can create disorganization if you must change counsel once the carrier becomes involved in a matter.

Know the issues. Knowledge of the issues involves both issue content and context. Context is unrelated to the substantive issue and comes down to whether or not you are on reasonable notice that a legal dispute might be brewing. Is an outside attorney contacting you on behalf of one of your employees? Is an employee questioning whether her legal rights have been violated?

Knowing the context of an issue should affect your consideration of the content of the issue. If another attorney is coming after you, you really can’t avoid legal input on some level. And, if you’re on notice that a lawsuit is coming, you should involve legal counsel sooner rather than later even if you have issue expertise.

Here’s some typical content issues, which get progressively more difficult.

HR receives a request to review Pat Smith’s personnel file. Look at the context of the request. Did it come from an attorney, an employee, or a former employee? If it came from an attorney, you may be looking at a lawsuit in the making and want to involve counsel. But that’s not necessarily so. What do you know about the employee and the supervisor? Do you know why the employee asked? If not, it’s harder to know if a legal issue is coming or if it is a generic request. What kind of an employee is (was) Pat? Are there union or collective bargaining agreement issues?

Some states have laws relating to personnel files; know your state’s law. Also, having a policy eliminates the need for calling a lawyer every time you get a request. It will save you money if you write the policy and have a lawyer review it rather than if you ask a lawyer to write it for you.

HR receives a subpoena for employment records. Generally speaking, you don’t need a lawyer to respond to a subpoena requesting employment records. Do you know why the records have been subpoenaed? You may know that the employee is involved in a divorce or other litigation that has nothing to do with your company. Depending on circumstances, ask for a release—if medical records are involved, absolutely get a release.

Subpoenas generally come from a lawyer, but are treated as a court order with which you must comply. Most attorneys don’t want to take you to court to enforce a subpoena, understand your desire for a release, and can help you obtain it. Make the call yourself and ask for a release regarding the subpoenaed records.

Garnishment, claims for unemployment benefits, etc. These legal issues are driven by procedures and forms embodied in state and local rules and laws. Counsel can be utilized, but these issues can be handled without counsel if you understand the process and requirements. Evaluate the complexity of the claim or issues. Keep in mind minimum wage requirements when dealing with garnishments.

General employment law compliance issues. This would involve things like Family and Medical Leave Act administration, Americans with Disabilities Act (Amendments Act) accommodation, wage and hour (e.g., Fair Labor Standards Act, state wage laws), labor relations issues, union avoidance, union organizational drives, contract negotiations and administration, and grievance administration and arbitration.

These types of issues are primarily driven by your staff’s experience and expertise. What do you as a company know, and what is it that you don’t know? Have similar issues arisen in the past? How were they handled? Is there a company policy? What do you know about why the issue is arising? How big a deal is it? Is the employee likely to sue?

Specific employee relations issues. Here we’re looking at generic harassment—supervisor-subordinate and peer-peer, other employee complaints that do not involve discrimination or harassment, performance review issues, work rules administration, and discipline not involving separation or money.

These issues take you back to understanding your company and your staff because context is very important. Knowing the company’s employee relations history is most important. Is the supervisor involved a problem? Is the employee a chronic complainer? Has the employee threatened a lawsuit?

Safety/OSHA issues. These usually involve a simple fact situation that is injury specific. How serious is the injury? If it is a slight injury, is it recordable or reportable? More serious injuries implicate other considerations, including related workers’ compensation issues. Workers’ compensation carriers have a protocol for selecting an attorney. Workplace violence incidents may lead to litigation. Because of the possibility of an after-the-fact civil claim outside of the workers’ compensation claim, you want to obtain a global settlement.

Adverse employment decisions. These are the kinds of decisions that lead employees to consider a lawsuit: think failure to hire, demotion or promotion denial, and discipline of consequence—disciplinary transfer, loss of pay, termination. Adverse employment decisions are particularly troublesome now because it is so much harder these days for an employee to get another job, pushing them more in the direction of litigation.

Three quarters of the decision on how to handle these situations is based on the context matrix. How does the employee perceive the situation? Does the employee feel like he or she got the short end of the stick? Or was there a clear violation of a company rule and the employee admits it?

Discrimination, harassment, whistleblower complaints. The thing to keep in mind with these is that discrimination and harassment are conclusions, not what happened. An employee using these words has already half concluded to sue, so deal with these situations as if you were going to court over them.

Try to get into the individual’s mind.  Keep your eyes open and evaluate all of the circumstances. Where is the complaint coming from—an employee or an ex-employee? Is it accompanied by a threat of litigation? Is an attorney involved yet? Who should investigate? HR, legal or an external consultant?

Government investigations and audits. Government investigations and audits come from several agencies: the Department of Labor, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration; the Office of Federal Contract Compliance Program, and Immigration and Customs Enforcement. With these, you need to go over the expertise matrix.

You don’t necessarily need an attorney to handle these, but you must know if you have this expertise. If you don’t have the expertise, get counsel. But if you do have the expertise, don’t be afraid to argue with an auditor. For example, a wage and hour auditor will know the rules and regulations, but may not know the details of how a regulation applies to your specific company. They are willing to listen to your explanation.

Communication from an attorney on behalf of employees. Go over the context of the claim, investigate and understand how and why the dispute arose. Nevertheless, you have no choice but to seek advice of counsel on how to proceed. Preserve records. Decide who should respond. While legal counsel should be a part of this decision, legal counsel is not necessarily in the best position to respond as that may just inflame the situation.

Receipt of a lawsuit. It is possible to get a lawsuit that you didn’t see coming. Call counsel immediately as there is a short time in which to file an answer. If you miss that window and default, you loose without having had a chance to fight. Preserve documents. Determine who needs to know: operations management, legal, IT, insurance/risk manager. There is no downside to contacting your EPLI carrier.

Source: “When Not to Call Employment Counsel” presented by Jim Thelen at the SHRM 2010 Annual Conference and Exposition, San Diego, Calif., June 29, 2010.