No one ever accused me of hating a cliché. With March Madness upon us, a good sports reference seemed timely – “the best defense is a good offense.” Putting aside our brackets for a moment, this adage is equally applicable to employers seeking to avoid expensive, time-consuming litigation.

The first line of defense in an employment lawsuit or an investigation by a federal agency, including an investigation by the Department of Labor, Equal Employment Opportunity Commission, and Tennessee Human Rights Commission, is a demonstration by the employer that it has developed effective workplace anti-discrimination and anti-harassment policies. Such policies must include, at a minimum, warnings against unlawful behavior, as well as provisions outlining grievance and investigation procedures. These equal employment opportunity policies should not only exist, but more importantly, must be “effective.”  In other words, employers should practice what they preach. Additional cliché intended.

Although clear policies prohibiting workplace behavior are a necessity, I highly recommend that employers engage in the ultimate offensive tactic – a comprehensive equal employment opportunity compliance audit. A compliance audit is a self-review of an employer’s business, which evaluates the employer’s policies, procedures, and practices to determine if the workplace is in compliance with state and federal laws and regulations pertaining to equal opportunity employment. For instance, do the employer’s policies and practices tend to be discriminatory or, in fact, discriminate against applicants and/or employees in violation of equal employment opportunity laws and/or regulations. i.e., laws on age, race, national origin, sex, religion, or disability status? In comparison, a review tailored to wage and hour concerns will identify whether the employer is in compliance with the requirements of the Fair Labor Standards Act as it pertains to the classification and compensation of its employees.

So, how does this offensive strategy work? For me, a compliance review is a three-step process:

(1) review and evaluate the employer’s written policies and documents pertaining to employment decisions, including recruitment and hiring, benefit programs, handling of employee life events, employee evaluation, compensation, promotions, disciplinary action, demotions, and termination;

(2) examine the business’s daily operations using questionnaires, an interview process, and statistical indicators within the workforce, to determine if the employer’s supervisors are practicing what they preach – in other words, are supervisory personnel properly implementing the employer’s policies and procedures and do non-supervisory staff understand their rights under these policies and/or believe these policies are being enforced?; and

(3) identify areas of legal vulnerability and offer conclusions, including concrete recommendations for bringing the business into compliance with federal and state law and regulations. This final step involves re-training employees, supervisors and non-supervisors on the requirements of a compliant workplace, as well as the ramifications for failing to abide by the employer’s policies.

In sum, employers exit a properly conducted compliance audit with specific recommendations to achieve maximum legal and regulatory compliance, as well as unambiguous suggestions for remedial action. Significantly, a compliance audit is a powerful tool to reduce damages in litigation and fines from federal agencies, demonstrating the employer's good faith efforts to comply with state and federal law and regulations governing employment decisions and/or compensation.

To ensure successful minimization of legal and/or regulatory risk, compliance audits should be conducted with the assistance of outside counsel, ensuring that the review, conclusions, and subsequent recommendations are covered by attorney-client privilege and the work-product doctrine, i.e., are confidential. If you have questions on how to obtain such an audit for your business, please contact our office.