An Employment Wellness Check for Medical Practices

gutstein_keith-kdv-150x150By Keith Gutstein

The popularity of employment-related claims asserted against employers nationwide does not appear to be slowing.  This certainly applies to medical practices as well.  While the physicians who own medical practices remain primarily focused on providing quality healthcare and navigating the always complicated area of insurance reimbursement, one significant area that typically receives less attention from the medical practice owner or administrator is compliance with applicable labor and employment laws.  The decision by the medical practice to ignore such issues and to not take the needed steps to comply with relevant laws and regulations typically spells problems for the office.  As addressed below, ignoring this topic can spell trouble for any medical practice. 

A word of caution before you read further.  It is usually at this point where the owner or chief administrator of a medical practice proclaims with certainly that they have no employment concerns because they treat their employees “like family” and that because they have “done so many things for their employees, the employee will never sue them.”  I can assure you that this same belief is shared by all business owners, from all industries. 

The irony is that business owners often convey that belief to me in the past tense just when we are discussing the proper defense to the employment litigation commenced by a former employee. Like those other industries, owners of medical practices are not immune from such claims, and should therefore take all necessary steps to protect themselves.

Whether the medical practice is small, and employs only five people, or is a large practice with multiple locations, a medical practice must consider itself a potential target of an employment related lawsuit or claim.  Unfortunately for employers, the list of potential employment law pitfalls is long.

Workplace Harassment

As with all employers, medical practices must ensure that employees are not subjected to discriminatory workplace harassment.  While most people instinctively equate workplace harassment with sexual harassment, it is not just sexual harassment that is unlawful.  Harassment of any medical practice employee due to their race, religion, national origin, disability, age or any class protected by federal, state or local statute is prohibited.  With regard to sexual harassment, though most employers realize nowadays that it is a violation of law for a supervisor to condition the employment of a subordinate upon that person’s agreement to succumb to the supervisor’s sexual advances, claims where such conduct is alleged still occur.  For example, in a recently filed case in Ohio, a former employee of Toledo Hospital commenced a lawsuit alleging that he was sexually harassed by a female colleague when she made unwanted advances to him, which he rebuffed.  The purported victim of the harassment claims he was ultimately terminated in retaliation after he complained about the harassing conduct.   If successful in his lawsuit, the terminated employee may recover money damages in the form of back pay, front and emotional distress damages.   

Workplace harassment is not limited to situations where the alleged harasser is a supervisor.  Owners and administrators of medical practices must know that they are ultimately responsible for preventing a hostile work environment.  In certain jurisdictions, not only is the employer liable for the unlawful conduct described above, but the individual harasser and/or the practice owner or administrator who allowed such conduct to occur may also be held individually liable for damages owed to the victim. 

What can the employer do to avoid such claims

In a medical office, where employees are often working closely together, side-by-side, for hours at a time, it is not uncommon for situations to arise where co-workers gain a comfort level with one another.  Though the law does not prohibit consensual relationships and voluntary workplace banter, it is when this conduct ceases to be consensual and voluntary that a claim may be born.  To decrease one’s chances of being the target of a workplace harassment claim, a medical practice should ensure that it maintains, distributes and enforces a clear policy which alerts employees of the conduct that is unacceptable, and encourages employees to report claims of harassment.  The medical practice should also enforce a policy that prohibits any form of retaliation.  It is advisable that the practice enlist the assistance of qualified employment counsel in their jurisdiction to prepare a compliant and comprehensive policy, and to make sure that the designated receivers of the complaint know what steps to take upon receipt.

Employment Discrimination

In addition to workplace harassment, it is critical that medical practices be mindful of their obligation to prevent employment discrimination.  Claims of discrimination usually arise when an employee is fired, denied a promotion, paid differently, or treated in a different manner that he/she believes was done because of his/her membership in a protected class.  It is the employer’s responsibility to ensure that any action it takes is based upon a legitimate business reason.  In response to a discrimination claim, most medical practices will deny the allegations and then proclaim that the employee was “at-will” and could therefore be fired for any reason.  While that is often true, in today’s world, a government investigator or a court analyzing whether discrimination took place, will want to hear an actual meritorious reason for the adverse action taken against the employee before vindicating the employer.  In other words, the simple retort that the employee was “at-will” will likely not carry the day for the employer.

What can the employer do to avoid such claims

In addition to maintaining the anti-discrimination policy referenced above, medical practices should prepare themselves for possible claims asserted by sophisticated employees.  To do so, an owner or administrator of a medical practice should ensure that their employees are trained to know what conduct is and is not acceptable.  While effective training may prevent the actual unlawful conduct, proof demonstrating that employees were subjected to training may also be used by the employer to show that the practice takes discrimination avoidance seriously.   

Moreover, it is critical to document the poor performance of all employees.  Gone are the days where a medical practice should ignore bad performance due to employee loyalty or fear that you might offend an employee.  In sum, when it comes to defending a practice against claims of discrimination, if the warning or counseling of the employee is not in writing or documented somewhere, the employee will argue that it did not happen.  Lastly, employers must not act dismissively when asked by an employee for an accommodation for their disability or religion.  Ignoring such requests, or denying them out of hand could result in liability both for the medical practice and the individual who aided in that decision.

Wage and Hour

Once of the most popular claims asserted against all employers today, including medical offices, is the claim that an employee was not paid properly.  Whether the allegations are brought by a former disgruntled employee, a class of existing employees, or by the United States or local departments of labor, the only way to properly defend your practice from a claim that an employee was not paid overtime or minimum wage, is to ensure steps are taken NOW so that your business is in compliance with the Fair Labor Standards Act and local labor regulations. 

In the absence of contemporaneous time records and payroll records showing that an employee was paid properly for all hours worked, including overtime, an employee’s allegations will be given significant weight, essentially shifting the burden on to the medical practice to prove the employee either did not work the hours claim, or was paid properly for all such hours.  In addition to properly maintaining records in accordance with applicable law, owners and medical practice administrators are also responsible for properly designating which employees are exempt from receiving overtime compensation.  This is usually where I am told by potential new clients that they do not pay their employee overtime when the employee is paid a weekly salary.  This belief is wrong.  In order for an employee to correctly be classified as exempt, and therefore not be entitled to overtime pay, they need to not only receive the requisite salary (the amount of which is changing effective December 1, 2016), but they must also satisfy the duties test. 

In other words, they must also perform exempt duties in order to be an exempt employee.  The failure of a medical practice to accurately track their employee’s time, correctly classify employees as exempt, and compensate non-exempt employees for overtime can lead to significant liability, not only against the practice, but for individuals responsible for these decisions.   

Conclusion

Medical practices must take steps now to adequately protect themselves.  Waiting to react only after the lawsuit or government investigation has begun is a risk that is just too costly to take.

Keith Gutstein is co-chair of the labor and employment practice at Kaufman Dolowich & Voluck where he counsels clients in all issues arising from the employer-employee relationship, including the defense of employment discrimination and sexual harassment matters, compliance with workplace regulations and employment statutes and wage and hour lawsuits. He also develops corporate policies and procedures, employee handbooks, employment applications, employment contracts, and restrictive covenants for use by employers. He may be reached at kgutstein@kdvlaw.com.

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