New Law Impacts HR Policies | A provision in the much-heralded Economic Development Reorganization Act of 2010 is causing havoc
David Felper, chairman of the litigation and labor employment division for the Worcester-based law firm of Bowditch & Dewey, calls the new requirement a “huge mistake” from the perspective of employers.
“This will create significant issues for employers and employees,” he said.
Those “significant issues” could include legal sanctions for failure to comply with the new notification rule, or simply low morale if an employee has to be notified over each and every little note in his or her file.
Buried Provision
While some executives may view this provision as yet another unwanted intrusion of state government on how they run their business, it was actually a state business group that pushed for the law.
The Republican leadership in the state Senate added the language in question to Senate Bill 2582 this summer. Pushing for the measure was the state’s largest business advocacy group, the Associated Industries of Massachusetts. According to Brad MacDougall, an associate vice president for government affairs with AIM, the group has been trying to get the language passed for years.
Letting employees know about workplace issues is good business practice because it encourages them to remedy the issue and be more productive, according to MacDougall.
Plus, for employers, it provides documented evidence to justify a termination or evidence in a dispute about an unemployment insurance claim.
In fact, AIM was lobbying for even broader language in the bill, according to state Sen. Michael Knapik, R-Westfield, one of the supporters of the law. AIM recommended adding a “Thatta Boy” provision, as Knapik referred to it, which would have required employers to notify employees when positive reviews are placed in an employee’s personnel file, not just negative ones.
There were some other reasons for the rule change as well, Knapik noted. For example, the new statute also changes the number of times employees can request to see their personnel files. Before, employees could ask to view their personnel file at any time, which some businesses considered a burden. The new provision limits employees to two requests per year.
The state’s law enforcement union, the Massachusetts Coalition of Police, was also in support of the law, according to Kenneth Scanzio, the group’s vice president and legislative affairs director.
“When something negative goes in a personnel file, the employee should be notified right away,” he said. “If there’s a problem, they should be given an opportunity to correct it.”
Some employers already had such a policy in place. For others, it’s requiring changes. Darren Wardwell, HR director at Spencer-based manufacturer Flexcon researched the changes and attended a legal seminar discussing the topic. Flexcon has instituted new procedures to ensure that employees are notified if such information is placed in their files.
UMass Memorial Medical Center previously had a system in place notifying employees when information goes in their personnel files. Spokesperson Rob Brogna said the hospital system is awaiting further guidance from the state to ensure their policy complies with the new law.
That guidance will likely be coming from the state attorney general’s office, which is listed in the new statute as being the enforcement office for the provision. Harry Pierre, a spokesperson for AG Martha Coakley, said they will be reviewing issues related to the statute on a case-by-case basis. Failure to comply with the law could result in fines between $500 and $2,500.
With all the uncertainty about exactly how the rule will be enforced and what exactly employers’ new responsibilities are, HR lawyers are worried about the potential fallout. For one, Felper, of Bowditch & Dewey, said the change could be a particular challenge for companies that have out-of-state operations.
While Felper admits that it is good business practice to notify employees of improvements that could be made, he argues that function is already served by annual or semi-annual employee reviews.
Bowditch lawyers are exploring the law, including investigating if some documents that may be covered could be shielded from the law as internal communications of the business.
There could be other ways companies can deal with the issue too, according to Kimberly Rozak, head of Worcester-based law firm Mirick O’Connell’s labor practice.
The law only covers information that is placed in an employee’s personnel file, Rozak notes. If the information does not go in the personnel file, the employee doesn’t have to be notified.
A hazard with that approach is that it may look suspicious if multiple documents are placed in an employee’s file directly before a termination or sanction, without giving the employee time to fix the issue.
As a good rule of thumb, Rozak said that if the information will be used at some point to assess the employee’s relationship with the company, then the employee must be notified.
Gary Goldberg, an independent Worcester labor attorney, has seen this issue brewing for years. The underlying question, as he sees it, is what information should be placed in a personnel file, which is a question the courts have provided little guidance on.
“In an age of e-mail and digital communication, this question becomes much more difficult,” he said.
There are so many work documents produced today and a lot of grey area about which ones count as personnel records. Does an e-mail from one manager to another noting that an employee was late constitute a notification?
The only answer, Goldberg said, is for companies to do their best.
If they believe a document is damning enough that it could impact an employee’s relationship with the company, then the employee should be notified. n
Buried on page 109 of the 135-page Economic Development Reorganization Act passed by the Legislature in August are 11 lines that have human resource professionals scratching their heads. Those 11 lines dictate that businesses notify their employees if certain types of information are placed in a worker’s personnel file. Basically, if a company records anything bad about an employee — such as a note from a manager that an employee has consistently arrived late for work — the worker must be notified.
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