Agreements, Forms and Checklists for Risk Managers: A Companion to Legal Risk Management for In-House Counsel and Managers - Softcover

Hopkins, Bryan E.

Softcover

ISBN 10: 1490703411 ISBN 13: 9781490703411

Publisher: TraffordSG, 2014

Synopsis

In today's business environment, companies either properly manage the complex world of legal and corporate risk or suffer the consequences. The wrong decision can kill a company-but how can those responsible for risk management keep on top of company needs? In this guide, author Bryan E. Hopkins discusses the numerous areas of legal and corporate risk that managers and their company counsels face. Hopkins provides agreements, forms and checklists needed to implement a sound legal risk management program and mitigate, shift and prevent legal and corporate risk through careful management. Managers and practitioners will also find practical and detailed information on how to identify legal risk and use legal and corporate risk management contracts and checklists. Written by an international lawyer and corporate counsel with decades of experience in risk management, Agreements, Forms and Checklists for Risk Managers seeks to help you deal with processes and procedures needed to protect any organization in today's complex and hostile business environment.

About this title

About the Author

Bryan E. Hopkins is an international lawyer and professor of law in the Graduate School of Business, Sejong University, Seoul, Korea. He was general counsel of Samsung Electronics America, Inc., and assistant general counsel of Kumho Petrochemical. He managed litigation and counseled multinational corporations on legal risk and exposure.

Excerpt. © Reprinted by permission. All rights reserved.

Agreements, Forms and Checklists for Risk Managers

A Companion to Legal Risk Management for In-House Counsel and Managers

By Bryan E. Hopkins

Trafford Publishing

Copyright © 2014 Bryan E. Hopkins
All rights reserved.

ISBN: 978-1-4907-0341-1

Contents

Preface, xiii, 
1. Conducting a Legal Risk Assessment, 1, 
2. General Product Liability Considerations, 13, 
3. Product Design Risks, Labels and Warnings, 41, 
4. Contract Management, 53, 
5. Credit Risk Management, 93, 
6. Compliance, 133, 
7. Records Retention, 257, 
8. IT Issues, 275, 
9. Crisis Management, 287, 
10. Corporate Structure Issues, 293, 
11. Outside Legal Fees & Tools for Reducing, 297, 
12. Litigation, 319, 
13. Arbitration, 327, 
14. Outsourcing, 339, 
Index, 405, 

CHAPTER 1

Conducting a Legal Risk Assessment

1.1 LRM Investigation

Conducting a Legal Risk Management investigation is of major importance to a company. Many companies have not conducted a proper LRM investigation of its departments to determine what legal risks need to be identified and minimized. It is recommended that initial LRM investigations be conducted in departments that have major dealings with the public or are heavily regulated, as these departments or divisions will have more legal exposure than most.

Human Resources (HR) is a prime example of a department within a company that not only comes into contact with the public, but that in many countries has to deal with many employment laws and regulations. A sample HR audit follows.

1.2 Sample Employment Policies and Processes Audit

I. Audit Objectives

The primary objectives of the audit can be stated as follows:

1. To review current Employment Policies and identify policies that require modification;

2. To gather data that will enable XXX to identify and evaluate the problems and/or issues that appear to be of present concern to the employees;

3. To identify those facts that will aid XXX in determining its relative strengths and weaknesses in maintaining an environment that inhibits litigious activity;

4. To collect sufficient information so that XXX can clearly define any problems that may exist and be in a better position to develop the relevant, feasible, pro-active countermeasures that will help XXX achieve and maintain the level of employee commitment, loyalty, enthusiasm, and general morale that is needed to maintain a productive and efficient work environment;

II. Audit Objectives

During ____________, Risk Management shall employment policies in place at XXX, the current processes in place shall review and conduct numerous private, confidential interviews of employees in supervisory positions (managers, senior managers and vice presidents). The purpose of these confidential interviews is to learn facts and obtain impressions and perceptions of the issues that currently exist at the various locations. The interviewees will be asked a series of open-ended questions intended to allow discussion of any issue or concern which the individual chose to address. The open-ended technique is designed to ensure that the interviewees will feel comfortable and be more willing to discuss the issues of greatest concern to them.

During the interviews, many topics with the interviewees, including their views on the extent of wages, fringe benefits, communication, and working conditions shall be discussed.

The audit will identify issues of concern to supervisors and/or employees as relayed to the supervisors, discuss the ramifications of each issue and consider as to how XXX might best address the issues.

III. Employment Policies and Procedures

A. Policy Review

There are a number of policies that need to be updated and revised to provide direction to the Human Resources department, supervisors and employees.

• Section 1 Employment

Recommendation:

Revise the policies to clarify the Job Posting Policy, the Employee Referral Program Policy and the Employment Termination Policy definitions and explanation.

• Section 2 Performance Management

Recommendation:

Revise the Performance Evaluation Policy to clarify the role of the managers and expand upon the need for regular feedback to employees to avoid issues that can arise with an employee who does not receive regular feedback who needs to be managed through the Corrective Action Plan

With regard to the Attendance and Punctuality Policy, we need to review this in conjunction with other policies in place to ensure consistency.

Several issues regarding policy inconsistencies are discussed in subsequent sections of this report.

• Reward and Recognition

Recommendation:

The Promotions Policy needs to be revised to allow more flexibility within the area of promotions.

• Employee Relations

Recommendation: Several policies in this section require revision.

With regard to the Sexual Harassment and Anti-Harassment Policies, these need to be revised to provide details as required by the law. A clarification of the complaint procedures and examples of sexual harassment are integral components of these policies. Moreover, references to the training requirements should also be incorporated.

With regard to the Affirmative Action Policy, this entire process needs to be reviewed and revised to ensure compliance and accurate data maintenance.

With regard to the Drug and Alcohol Policy, this policy should be revised to ensure compliance with the law. Additionally, consideration should be given to random drug testing within the company.

• Personnel Records

Recommendation:

The policies in this section are in compliance with the current state of the law in the relevant jurisdictions.

• Personnel Records

Recommendation:

With regard to the Security Inspection Policies, although these policies are compliant with the current state of the law, we need to exercise extreme caution if the need arises to implement this policy.

• Health and Safety

Recommendation:

The policies in this section are in compliance with the current state of the law.

• General Employee Information

Recommendation:

With regard to the Business Travel and Expenses Policy, this policy should be revised conform to the current Compliance Policy.

B. Employment Document Review

• Section 3 Compensation and Benefits

Recommendation: A number of policies require revision in this section.

Specifically, the Time Keeping Policy require clarification regarding who can input time changes and the issue of adjustments to non-exempt employee time reports. There must be increased awareness regarding employees who come in early and/ or work through lunch without properly swiping

With regard to the Employee Benefits Policy, this policy should be revised once the relevant plan documents have been reviewed and finalized.

With regard to the Family and Medical Leave Policy, this policy needs to be revised to give further detail and explanation to employees.

With regard to the Personal Leave Policy, this policy should be revised to clarify the terms of the personal leave and its interactions with other types of applicable leaves (e.g. FMLA, disability leave).

• Employment Application Form

This form needs to be modified to rectify some issues regarding the information that is elicited as well as proper waivers for XXX to obtain necessary information.

• Employee Evaluation Form

The Employee Evaluation Form has been recently revised. The main area of concern in this area is the lack of effort and thoroughness from the evaluating employees. Currently, we have a program in place to provide guidance to evaluating employees.

• FMLA Policies and Procedures

This is an area that requires a significant amount of attention. The current policy must be reviewed and the process must be modified to ensure timeliness, efficiency and compliance with the law.

C. Process Review

Numerous employment processes that are currently in place should be reviewed including:

• Payroll and Recordkeeping Practices

The general payroll practices should be audited to ensure compliance. For example, the requirements for final paychecks made to employees in California, if any, are quite strict and issues like overpaid commissions must be dealt with in advance of the final paychecks.

There must be increased recordkeeping in all of the locations to ensure that the records are properly retained (e.g. I-9 forms in separate files; medical leave documentation in separate files) and retained for an adequate period of time.

• Job Descriptions

The area of job descriptions is one that requires significant attention. This is an issue at all of the locations, with some locations having minimal problems and others having significant deficiencies.

• Selection/Interview Process

The Selection and Interview Process need to be improved upon to minimize exposure to failure to hire and discrimination claims. It is recommended that XXX require mandatory interview training for any individual who participates in the interview process. There needs to be increased consistency in the interview process and this will be facilitated by the online training program.

• Orientation

The New Hire Orientation is managed by Human Resource Professionals in their respective locations. This should be checked to ensure there is not significant inconsistency in the programs presented, the duration of the orientation and the materials distributed.

• Promotions

The Promotions Policy needs to be revised to offer some flexibility for promotions. Historically, there have been deviations from this process and this can lead to disparate treatment claims, regardless of merit.

IV. Supervisor Interviews

Interviews of various managers at the various XXX locations should be conducted regarding:

A. Communication

The underlying reason for many of the employee relation issues may revolve around communication. This includes both the perceived lack of communication and miscommunication between headquarters and the various locations. The failure to communicate or ineffective communication often exacerbates other problems faced by a company.

For the most part, the managers at the different locations believe they do not receive effective communications from the next level.

B. Supervisor Morale

Generally, supervisor morale is low. While most supervisors seem to enjoy working for XXX, at times, they feel frustrated and without support from upper management. A number of things are driving supervisor's morale down. The lack of communication and inclusion for those locations outside of HQ is a source of concern for many supervisors.

C. Favoritism in the Workplace

There is a general sense at the various location that some employees are favored over others.

D. Physical Environment

The majority of the locations had limited complaints regarding the physical environment.

E. Training and Advancement

There was generally good feedback on the issue of training. Supervisors felt there was adequate training for their position.

As for advancement, some issues were raised regarding the inconsistency in the promotion process (addressed above). This will continue to be an issue until we revise the current Promotions Policy and move in the direction of more consistency in this process.

F. Discipline/Corrective Action

This is an area that requires significant attention. There are issues with lack of communication and lack of consistency with this process. Oftentimes, these decisions are not based on metrics, but rather, other objective and subjective criteria that must be documented to support a termination. This has led to frustration on the part of Human Resources in other locations as well as the business managers because they may need to retain a mediocre employee simply because the corrective action process was not properly managed.

Summary of Audit Process

1. Employment Manual Revisions

• Job Posting Policy

• Performance Management Policy

• Timekeeping/Overtime Policy

• Pay Deductions Policy

• Employee Benefits Policy

• Family and Medical Leave Policies

• Vacation Policy

• Personal Leave Policy

• Promotions Policy

• Sexual Harassment Policy

• Anti-Harassment Policy

• EEO Policy

• Affirmative Action Policy

• Corrective Action Policy (to conform to new Corrective Action Plan for managers)

• E-mail/Computer Policy

• Business and Travel Policy

2. Application/Recruitment Process/Job Descriptions

Review and streamline the application and recruitment process to ensure that it is uniform and compliant with the law.

3. Leaves of Absence

This process needs to be streamlined, including revisions of the current Leave of Absence Forms (including but not limited to FMLA leaves).

4. Temporary Workforce

Legal and Human Resources must continue our review of the temporary workforce and action plan regarding the significant temporary worker population within XXX.

5. Independent Contractors

Revise the current Consultants Agreement and reinforce to managers that all independent contractor candidates be discussed with the Legal Department to ensure that they are truly independent contractors.

6. Corrective Action/Discipline

Revise Corrective Action Policy to conform to new Correction Actions developed by Legal and Human Resources.

7. Training

Implement new training programs as provided by the Law Department and a new Investigation Training program for all Human Resources Professionals.

8. Restrictive Covenants

Implement a uniform restrictive covenant policy for all applicable employees.

9. Payroll/Recordkeeping Practices

Review and streamline the recordkeeping process to ensure that all records are kept in an organized fashion and for the time required by law.

10. New Hire Orientation

This process needs to be revised to ensure uniformity and avoid different basic programs being utilized at different locations.

11. Improved Communication

Improved communication between management and subordinates to minimize the general perception that employees, including high level supervisors, are not included in vital decision-making.

CHAPTER 2

General Product Liability Considerations

2.1 Product Liability Concerns and Costs

Product liability claims, product recall cases, and related litigation, besides hurting the company's brand, image, and reputation, will entail many costs, expenses, and legal fees such as:

• Costs related to product incidents, including recall, retrofit, management and employee time, and lost profits

• Legal costs, including litigation costs

• Increased insurance costs

• Costs including those associated with a loss control program and other risk management—related processes

In order to implement a risk management program that covers all legal issues related to product liability in a specific jurisdiction or country, companies must consider the various legal theories related to product liability in that jurisdiction or country before implementing a risk mitigation program. In the United States, such legal theories include:

2.1.1 Typical Legal Theories on which a Plaintiff May Base a Product Liability Claim and/or Class Action

• Breach of express warranty

• Express warranty can be created by:

• "Affirmation of fact or promise" made by the seller to the buyer, which relates to the product and becomes part of the basis of the bargain

• Advertisements, labels, literature, samples or models, catalogues, and brochures

• Breach of implied warranty

• Implied warranty of merchantability is implied by law in every contract with a merchant for the sale of goods—a guarantee that product will be merchantable (of commercially acceptable quality).

• Implied warranty of fitness for particular purpose arises when the seller has reason to know that buyer wants goods for a particular purpose and buyer is relying on seller's skill to select suitable goods.

• Negligence

A manufacturer of goods has a duty to use reasonable care in the design of goods so as to protect those who will use them from an unreasonable risk of harm while the goods are being used for their intended purpose, or for any purpose, which could reasonably be expected. This duty extends to unintended yet reasonably foreseeable uses, as well as intended uses.

• Strict liability

In the United States, the Restatement of Torts Section 402 sets forth the special liability of the seller of a product in a defective condition resulting in physical harm to the consumer.

• 402A. Special Liability of Seller of Product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if the seller is engaged in the business of selling such a product, and it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

• Deceptive and unfair trade practices (DUTP)

• In the United States, every state has a statue prohibiting deceptive trade practices.

• DUTP claims are not based on contract; contractual limitations on liability, therefore, do not apply.

• Claims are not based on warranty, so disclaimers of warranty do not apply.

• DUTP can include:

• Failure to disclose information

• Oral and written misrepresentations

• Ambiguous representations

• Breach of warranty obligations

• US consumer class actions against manufacturers

(Continues...)

Excerpted from Agreements, Forms and Checklists for Risk Managers by Bryan E. Hopkins. Copyright © 2014 Bryan E. Hopkins. Excerpted by permission of Trafford Publishing.
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Edition details

• Publisher: TraffordSG
• Publication date: 2014
• Language: English
• ISBN 10: 1490703411
• ISBN 13: 9781490703411
• Binding: Paperback
• Number of pages: 424