Dealership Management Practices

Loss Prevention Policy

Employees’ attitude can have a significant impact on a company's loss experience. Controlling the actions of employees and the overall work environment can help prevent losses. The safety program's foundation must be built upon management support.

  • A safety policy should be written to address the unique needs of each organization. We recommend the following elements be part of any loss prevention policy:
  • Statement indicating that every attempt will be made to create a safe work environment and reduce the potential for accidents.
  • The organization's intention to comply with state, federal, and local laws, as well as accepted standards of safe work practices.
  • Precedence of safety over saving time or taking short cuts.
  • Importance of protecting the public, employees, and company operations.
  • Signature of owner or senior management.

In developing a policy, management should assess the organization's true attitude toward loss prevention and be willing to accept ultimate responsibility to prevent losses.

Duties and Responsibilities


Owners/managers have the ultimate responsibility for the control of losses in your business. Owners/managers should implement a loss prevention program and provide leadership in order to achieve the program's objective. Owners/managers can accomplish this by doing the following:

  • Adopt a safety policy statement.
  • Give leadership and direction in the administration of loss prevention activities and give fair consideration to recommendations to prevent losses.
  • Appoint a designated person to coordinate the loss prevention program.
  • Review the accident summary reports in order to keep informed on your loss record and insist on appropriate action when loss trends are unfavorable.
  • Review serious losses to satisfy that loss causes are being investigated and proper corrective action is being taken.
  • Give positive recognition to those supervisors and employees who are performing well in their safety efforts.
  • Participate in monthly loss prevention meetings and give feedback to management on their safety efforts.

Designated Person

The designated person should be responsible for developing, implementing, and supervising the entire program to assure that it is in accordance with company policy. The designated person's duties should include the following:

  • Coordinate all loss prevention activities for your business.
  • Establish, implement, and enforce loss prevention rules, regulations, and procedures.
  • Conduct facility inspections and attend departmental loss prevention meetings.
  • Review supervisors' accident investigation reports and see that action is taken to prevent reoccurrence. Establish procedures for reporting and completing accident reports.
  • Establish and coordinate loss prevention training programs for managers, supervisors, and employees as required.
  • Solicit loss prevention ideas from managers, supervisors, and employees for implementation whenever possible to encourage commitment to the loss prevention program.
  • Act as chairperson of your safety committee.
Department Managers
  • Instruct new employees and review departmental safety procedures with all employees.
  • Investigate all accidents promptly to discover their cause of loss and to implement corrective action. Complete and forward accident investigation reports to designated person for review.
  • Conduct loss prevention meetings on a regular schedule to discuss loss trends, hazards in the workplace and safety topics.
  • Know and support your loss prevention program and assigned responsibilities. Encourage participation from employees by soliciting new ideas and rewarding safe job performance.
  • Conduct inspections of department on a regular basis to identify and correct unsafe acts and conditions.

Human Resources Policy Manual

The following outline can be used as a guide for developing an employee handbook.

  1. Introduction to your business.
    1. A signed note of welcome from you.
    2. Brief history of your business.
  2. New employee indoctrination.
    1. Explanation of probationary periods.
    2. Explanation of your policies including safety regulations and details of penalties for violations.
    3. Training program with emphasis on safe practices.
    4. Binding arbitration program.
  3. Benefits (health, life, disability insurance; profit sharing, retirement plan, etc.)
    1. Eligibility.
    2. Coverages and limitations.
    3. Enrollment procedures.
    4. Notification procedures when personal information changes.
    5. Duration of coverage.
    6. Cost of the plan.
    7. Claiming benefits.
  4. Equipment policy.
    1. Personal tools (determine needs and provisions if stolen).
    2. Company tools.
    3. Personal protective equipment.
  5. Working hours.
    1. Absenteeism and punctuality.
    2. Breaks, lunch and dinner hours.
    3. Overtime policy.
    4. Vacation/holidays/leave of absence.
  6. Wage and salary policy.
    1. Increases.
    2. Advancements and transfers.
    3. Salary advances.
    4. Sick pay.
    5. Layoffs/termination.
  7. Employee responsibilities.
    1. Relationship with customers.
    2. Personal appearance.
    3. Alcoholic beverages and narcotics.
    4. Use of building and facilities.
    5. Company property.
    6. Removal of parts, scrap, etc.
    7. Suggestions.
    8. Moonlighting.
    9. Good housekeeping.
    10. Code of ethics.
  8. Receipt of handbook (signed and dated).

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.

Hiring Practices Overview

I. Employment applications/interviews

  1. Information collected on application forms, in job interviews, background or reference checks should focus on applicant's ability to perform the essential functions of the job.
  2. Questions about an applicant's prior workers compensation history should be excluded at the pre-employment stage.
  3. Questions about medical history should be excluded at the pre-employment stage. No medical tests should be given before a formal job offer has been made.
  4. Post-offer medical exams require uniformity of all applicants for a particular job. HIV testing should be excluded.
  5. Job descriptions should be used for all positions and adequately describe the essential functions of the job.

II. Screening practices

  1. If employees are going to be placed in a position of handling money, checks, securities, then a criminal history check should be completed to screen the applicant's background.
  2. Motor vehicle record (MVR) checks should be completed on all drivers of company owned vehicles and/or vehicles operated for business where allowed or required by law. In some court decisions, employers were held for negligent liability when hiring employees driving company vehicles without checking their driving records. The company should have a written policy outlining unacceptable criteria and procedures to manage the MVR program and follow such policy.
  3. Previous employer verification should be checked to confirm all work experience and references, dates of employment and previous employers.
  4. To ensure proper identity of applicants, names, addresses, phone numbers and Social Security Numbers (SSN) should be verified.
  5. To prevent against employee dishonesty, credit history should be screened. A written policy describing unacceptable criteria is required for this employment practice to avoid discrimination.
  6. Pre-employment drug screens should be required for all applicants.

III. Job requirements/descriptions

  1. Job title - purpose of the job
    1. Describe the ultimate services desired.
    2. Define the relationship of this job to others in the organization.
    3. Describe the consequences of poor or non-performance.
  2. Actual duties of the job
    1. Describe the most important duties to be performed.
    2. Describe all secondary duties.
    3. Define how often the duties are performed.
    4. Describe the nature and scope of decision-making.
  3. Job completion
    1. Describe the reporting relationships.
    2. Identify the internal contacts involved.
    3. Define the general working conditions (e.g., workstation, hours, hazards).
  4. Required human relations and personal skills
    1. Identify interpersonal skills to support relationships with others.
    2. Describe the detailed orientation of the job.
    3. Define the specific skills absolutely essential for the job.
    4. Describe required personal grooming and attitudes for the job.

Note: it is recommended that employees sign a release, which pertains to the specific information they are providing to the employer.

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.

Safeguarding the Privacy of Your Customers’ Information

Your legal obligations

The FTC requires businesses to have a written program in place documenting the steps you have taken to safeguard your customer’s personal information.

The FTC’s final “standards for safeguarding information” rule (“safeguards rule”) requires you to take steps to ensure the security of customer data.

Have you completed your information security plan?


President Clinton signed the Gramm-Leach-Bliley Act into law on November 12, 1999. The GLBA’s Title V dealt with privacy, and, in particular, the disclosure of so-called nonpublic personal information. No later than July 1, 2001, under GLBA and under the FTC’s final “privacy of customer information” rule (“privacy rule”), auto dealers and (according to regulations issued by other federal regulatory agencies) other “financial institutions” were required to provide “customers” and, in some cases, “consumers,” initial privacy notices and then follow-up with annual privacy notices to continuing “customers.”

The GLBA also mandated that each federal regulatory agency (including the FTC) issue an appropriate rule governing the way “financial institutions” subject to that agency’s jurisdiction would be required to “safeguard customer records and information.” The safeguards rule was published in the Federal Register on May 23, 2002 (16 CFR 314). Compliance is mandatory no later than May 23, 2003. (The rule is posted on the internet at http://www.ftc.gov/os/2002/05/67fr36585.pdf.)

Perhaps more relevant to your needs is the FTC’s “financial institutions and consumer data: Complying with the safeguards rule” which may be found on the internet at http://www.ftc.gov/bcp/conline/pubs/buspubs/safeguards.pdf.

Objectives of the FTC’s Safeguards Rule

It is important that you understand why the GLBA required the federal agencies, including the FTC, to publish “safeguards rules.” Browsing through your local newspaper or watching the evening news may offer some answers. “Identity theft” is in the news quite often these days and is quickly becoming a national problem.

In a recent high profile case an employee of a software vendor, who provided services to the three national credit agencies, sold customer information to identity thieves. At last report authorities knew of at least 30,000 victims and an estimated $2.7 million in losses.

Consider the number of consumer customers your business currently has and the much larger number of “customer files” that your business has established over the years and still maintains, whether in paper form or in digital or other data preservation formats, or both. In particular, think about the active files now “sitting around your offices” or in your computer’s “active files database.” Now consider how “safe” and “well-protected” that information is. Whatever your answer might be, the stated objectives of the safeguards rule are:

  1. Ensure the security and confidentiality of customer information;
  2. Protect against any anticipated threats or hazards to the security or integrity of such information; and
  3. Protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.

Let’s review your security plan

  • You must have a written information security plan. This plan should “describe your program to protect customer information.” Depending upon your organization’s size and complexity, the plan could be as short as one or two pages or much, much longer. That is because the safeguards rule specifies that your program should be appropriate to your dealership’s “size and complexity, the nature and scope of its activities, and the sensitivity of the customer information at issue.”
  • You must have designated the employee or employees who will coordinate your safeguards program. Ideally, the employee(s) should be identified in the plan, and, as personnel changes, you must be certain to always have one or more employees who are designated as the “safeguards” point person(s), and the employee(s) should know that he, she or they have been so designated.
  • You must have identified and assessed the risks that must be addressed in safeguarding customer information in each relevant area of your organization’s operation and evaluate, and at reasonable intervals re-evaluate, the effectiveness of current safeguards for controlling these risks.
  • You must have a program for monitoring the plan and the safeguards in place.
  • You must have procedures for regularly checking the adequacy of the security you have established with respect to maintaining customer information.
  • You must evaluate all aspects of your program from time to time, to make appropriate adjustments and to explain why you believed the adjustments were appropriate.
  • You must always select appropriate “service providers” and require them (by contract) to implement safeguards that are appropriate to their organization in protecting consumer information.
In addition, the safeguards rule requires that you consider all areas of your operation, with special emphasis on three critical areas: employee management and training; information systems; and managing system failures.

In the FTC’s brochure that is cited in this bulletin, the FTC suggests the following practices be implemented. (Please refer to the actual FTC document on their website for complete content):

  • Employee management and training - The success or failure of your information security plan depends largely on the employees who implement it.
  • You will want to check references prior to hiring employees who will have access to customer information.
  • You may want to ask every new employee to sign an agreement to follow your organization’s confidentiality and security standards for handling customer information.
  • You will need to train employees to take basic steps to maintain the security, confidentiality and integrity of customer information, such as:
    • locking rooms and file cabinets where paper records are kept;
    • using strong passwords (at least eight characters long);
    • encrypting sensitive customer information when it is transmitted electronically over networks or stored online;
    • referring calls or other requests for customer information to designated individuals who have had safeguards training; and
  • You will want to instruct and regularly remind all employees of your organization’s policy - and the legal requirement - to keep customer information secure and confidential. You may want to provide employees with a detailed description of the kind of customer information you handle (name, address, account number, and any other relevant information) and post reminders about their responsibility for security in areas where such information is stored – in file rooms, for example.
  • You will want to limit access to customer information to employees who have a business reason for seeing it. For example, grant access to customer information files to employees who respond to customer inquiries, but only to the extent they need it to do their job.
  • Information systems - Information systems include network and software design, and information processing, storage, transmission, retrieval, and disposal. Here are some suggestions on how to maintain security throughout the life cycle of customer information - that is, from data entry to data disposal:
    • Store records in a secure area. Make sure only authorized employees have access to the area. For example:
      • store paper records in a room, cabinet, or other container that is locked when unattended;
      • store electronic customer information on a secure server that is accessible only with a password - or has other security protections - and is kept in a physically-secure area;
      • don't store sensitive customer data on a machine with an internet connection; and
      • maintain secure backup media and keep archived data secure, for example, by storing off-line or in a physically secure area.
    • Provide for secure data transmission (with clear instructions and simple security tools) when you collect or transmit customer information. Specifically:
      • if you collect information directly from consumers, make secure transmission automatic. Caution consumers against transmitting sensitive data, like account numbers, via electronic mail; and
      • if you must transmit sensitive data by electronic mail, ensure that such messages are password protected so that only authorized employees have access.
    • Dispose of customer information in a secure manner. For example:
      • hire or designate a records retention manager to supervise the disposal of records containing nonpublic personal information; and
      • shred or recycle customer information recorded on paper and store it in a secure area until a recycling service picks it up, and promptly dispose of outdated customer information.
    • Use appropriate oversight or audit procedures to detect the improper disclosure or theft of customer information.
  • Managing system failures – Effective security management includes the prevention, detection and response to attacks, intrusions or other system failures. Consider the following suggestions:
    • Maintain up-to-date and appropriate programs and controls by:
      • following a written contingency plan to address any breaches of your physical, administrative or technical safeguards;
      • checking with software vendors regularly to obtain and install patches that resolve software vulnerabilities;
      • using anti-virus software that updates automatically;
      • maintaining up-to-date firewalls, particularly if you use broadband Internet access or allow employees to connect to your network from home or other off- site locations; and
      • providing central management of security tools for your employees and passing along updates about any security risks or breaches.
    • Take steps to preserve the security, confidentiality and integrity of customer information in the event of a computer or other technological failure. For example, back up all customer data regularly.
    • Maintain systems and procedures to ensure that access to nonpublic consumer information is granted only to legitimate and valid users.
    • Notify customers promptly if their nonpublic personal information is subject to loss, damage or unauthorized access.

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.

Americans with Disabilities Act Overview

  1. Who must comply?
    1. Employers with 25 or more employees must comply, effective July 26, 1992.
    2. Employers with 15-24 employees must comply, effective July 26, 1994.
  2. Employment practices
    1. Employers may not discriminate against an individual with a disability in hiring or promotion if the person is otherwise qualified for the job.
    2. Employers can ask about one's ability to perform a job but cannot inquire if someone has a disability or subject a person to tests that tend to screen out people with disabilities.
    3. Employers will need to provide “reasonable accommodations” to individuals with disabilities. This includes steps such as job restructuring and modification of equipment.
    4. Employers do not need to provide accommodations that impose an “undue hardship” on business operations.
  3. Public accommodations
    1. Auxiliary aids and services must be provided to individuals with vision or hearing impairments or other individuals with disabilities, unless an undue burden would result.
    2. Physical barriers in existing facilities must be removed, if removal is readily achievable. If not, alternative methods of providing the services must be offered, if they are readily achievable.
    3. All new construction and alterations of facilities must be accessible.
  4. Physical aspects of the workplace
    1. Employers should review access or path of travel to worksite, parking area, building entrance, hallways, steps, ramps, and elevators.
    2. Employers should review access to employer provided facilities such as washrooms, cafeterias and training rooms.
    3. Employers should review the workstation such as desks, telephones, computers, work processors, supply and copying rooms.
  5. Employer checklist
    1. Qualification Standards
      1. Job descriptions should adequately describe the essential functions of the job.
      2. Recruitment/selection criteria should be job-related and consistent with business necessity.
      3. Employment skill tests should be job-related and necessary from a business standpoint.
      4. Employment skill tests should be offered uniformly to all applicants for a particular job.
      5. Employment skill tests should be modified for employees with disabilities when needed.
    2. Medical examinations
      1. No medical tests given before a formal job offer has been made.
      2. Post-offer medical exams require uniformity of all applicants for a particular job.
      3. HIV testing should be excluded.
    3. Inquiries regarding disabilities
      1. Information collected either on application forms, in job interviews, background or reference checks focus on applicant's ability to perform the essential functions of the job, not on the disability.
      2. Questions about an applicant's prior worker compensation history should be excluded at the pre-employment stage.
      3. Questions about HIV or AIDS should be excluded at the pre-employment stage.
    4. Reasonable accommodations
      1. Requests for reasonable accommodations should be documented, including a copy of the actual request, cost for accommodations and dates when each step occurred.
      2. Reasonable accommodations should be provided to qualified applicants or employees on a case-by-case basis, unless the employer can prove undue hardship.
      3. Reasonable accommodations not provided should have appropriate factors documented, including nature and cost of accommodations and the effect of the accommodation upon the operation.
    5. State disability laws
      1. Review state disability laws to determine if they are more stringent than the ADA.

The Department of Justice publishes the “ADA Guide for Small Businesses” and it is available to print or download from their website at www.ada.gov.

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.

Discrimination and Sexual Harassment in the Workplace: Prevention Starts at the Top

Lawsuits alleging discrimination in the workplace more than tripled in the 1990s. These stories are in the newspaper and on the evening news almost daily. The most common complaints involve race, sex, disability, and age. The uncertainty of today’s business climate, along with the downturn in the stock market, and, most importantly, layoffs, increases the likelihood of legal action. And your business can find itself in legal trouble even if you, the owner, did not make a conscious decision to discriminate against anyone in a situation involving a hiring, firing, or layoff.

Of critical importance is the need for you to consult with your legal counsel prior to implementing any policies, procedures, or statements regarding discrimination or harassment in your workplace.

Owners and Managers Set the Tone

What can businesses do to protect themselves from lawsuits alleging discriminatory work practices? The first step is to examine your company culture. Owners and managers set the example that most employees follow. Is it considered permissible for employees to tell insensitive jokes around the water  cooler? If so, where do you draw the line? “Zero tolerance” regarding discriminatory behavior of any kind. This means everything from jokes and e-mail to hiring and firing policies. Management must be aware that employees watch them for cues as to what is allowed in the workplace and what is not. Never forget that actions speak much louder than words. Owners, managers, and supervisors must talk the talk and “walk the walk.” How easy would it be right now to prove that you condone harassment or a hostile work environment? If the answer is not “impossible,” there are steps you can take to protect yourself.

Buzzwords are Important

“Diversity,” “sensitivity training,” and “politically correct” are popular buzzwords right now for good reason. These are the tools and rules being used by corporate America to promote harmony in the workplace, improve culture, and prevent legal action resulting from harassment and discrimination. It is the employer’s responsibility to write and issue a policy stating that discrimination and harassment in the workplace will not be tolerated. Managers must then be trained on how to implement and enforce this policy. They must learn the necessity for having a diverse workforce and how to be sensitive about an employee’s age, race, color, gender, and religious affiliations. Educating management and employees about equitable and fair treatment for everyone is critical. Managers should also be knowledgeable of state and federal statutes prohibiting employment discrimination including:

  • Title VII of the Civil Rights Act of 1964 that prohibits employment discrimination on the basis of race, color, religion, gender, or national origin;
  • The Age Discrimination in Employment Act of 1967, as amended (ADEA), which prohibits employment discrimination against individuals 40 years of age and older;
  • The Equal Pay Act of 1963 (EPA), which prohibits discrimination on the basis of gender in compensation for substantially similar work under similar conditions; and
  • Title I of the Americans with Disabilities Act of 1990 (ADA), which prohibits employment discrimination on the basis of disability in both the public and private sectors, excluding the federal government.

Start with a Formal Policy

A written policy prohibiting employment discrimination and harassment is a necessity. It forms the foundation for company culture and is the basis for management and employee training. While this list is not all-inclusive, some of the more common provisions in an antidiscrimination policy are:

  1. Definitions of discrimination and harassment (available at the EEOC website located at www.eeoc.gov).
  2. Declaration of a “zero tolerance” policy.
  3. A list of persons within the company to whom employees must report discrimination.
  4. Steps the company will take upon receipt of an employee complaint (investigations, etc.).
  5. How the employee will be advised of the general outcome of the complaint.
  6. Zero tolerance regarding retaliation.

Biggest Mistakes Made by Employers

  • Mishandling of claims or concerns expressed by employees.
  • Failure to take action when the complaint is made.
  • Reluctance to address issue.
  • Failure to conduct a thorough investigation.
  • Failure to take appropriate action against the alleged accused.
  • Failure to document the investigation and actions taken and keep the records.
  • Improperly dealing with the complaint.
  • Use extreme caution when taking any action that could be considered retaliatory, particularly during or immediately after the investigation.
  • Failure to keep employees informed.
  • Failure to know employee and supervisor rights and responsibilities.
  • Failure to have and then review antidiscrimination policies on a regular basis.

Written Policies and Reporting Procedures Help to Protect Employers

Ensure your business is complying with the law by:

  1. Developing a policy addressing harassment and discrimination. HR policies must address all forms of discrimination and harassment, and not be limited strictly to sexual harassment. The policy also must include formal procedures (employees and management) for reporting harassment and discrimination.
  2. Make sure employees are aware of and understand your policy. New employee orientation programs should include an introduction to the policy, how to report complaints, who to report them to. Employees should sign a form acknowledging receipt of the policy and training.
  3. Managers should also receive specific training on what constitutes harassment and discrimination, how to handle employee complaints, and what corrective actions are to be taken, including specific state laws with specific training requirements: Cal., Conn.
  4. Compliance with your own policy is critical. It is important to point out that the Supreme Court also ruled (in the two cases mentioned earlier in this article) that an employer can be vicariously liable for its supervisor’s actions. Management must respond promptly, follow-up quickly and take corrective action as necessary.
  5. Monitor the workplace for compliance with all policies and procedures. If your policy states that display of sexually explicit pictures is prohibited (and it should), these pictures should not be allowed anywhere in the business, including the service and parts departments.

Other Thoughts

There are many areas of your business that require attention to detail and sound policies, including:

  • Develop human resource policies – it is an excellent place to include a discrimination policy.
  • Hiring, counseling (poor performance), performance evaluations, and termination policies must be documented and well understood by employees and management.
  • Remember that sexual harassment is a form of sex discrimination.
  • Ensure all alleged complaints reported to management are documented as part of your investigation process.
  • Train, educate, and inform.

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.

Workplace Substance Abuse Overview

  1. Written substance abuse policy
    1. Let employees and applicants know that drug and alcohol use on the job or that affects job performance is not tolerated.
    2. Explain why you are establishing the policy (workplace safety, worker health, productivity, public liability).
    3. Express to employees what will happen if they violate the policy.
    4. State your position on drug testing and the consequences of a positive test result.
    5. Describe the responsibility of an employee with a drug or alcohol problem to seek and complete treatment.
    6. Identify company or community resources where employees with problems can get help.
    7. Make clear that participation in an employee assistance program is confidential and will not jeopardize employment or advancement, but that participation will not protect employees from disciplinary action for continued unacceptable job performance or rule violations.
    8. Explain thoroughly the policy to employees and have them acknowledge in writing that they have received and understand the policy.
    9. Be fair and consistent in applying the policy to all employees.
    10. Comply with all state and Federal laws and policies.
  2. Employee education and awareness
    1. Implement an employee education and awareness program for new and current employees.
    2. Explain in writing your workplace substance abuse policy to employees.
    3. Inform employees on how drugs and alcohol actually affect the company's productivity, service quality, absenteeism and accident/loss costs.
    4. Explain drug testing procedures with special attention to the consequences of testing positive, and procedures for ensuring accuracy and confidentiality.
    5. Comply with all state and Federal laws and policies.
  3. Starting a drug testing program – contact an attorney
    1. A drug testing program should meet the following, as a minimum:
      1. Statutory or regulatory requirements.
      2. Disability discrimination provisions.
    2. Before implementation, decide who will be tested.
    3. Determine when tests will be given. On a random basis? As part of a pre-employment program?
    4. Identify the drugs that will be tested.
    5. Determine frequency of tests.
    6. Decide before implementation, action to be taken if an applicant tests positive.
    7. Decide before implementation action to be taken if an employee tests positive.
    8. Determine what tests you will use and what procedures you will follow.

Be sure your drug testing program is fair, accurate and legally defensible. Remember, it should be undertaken only as part of a comprehensive drug-free workplace program.

Note: Consult with a lawyer about drug testing before implementing any drug testing policy.

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.

Wrongful Termination Overview

  1. Pre-employment interview
    1. Make it understood to the applicant employment will be on an "at will" basis and that no one in the company is authorized to make exceptions.
    2. Review with applicant work rules, policies and safety program.
    3. Discuss the job description with the applicant and ensure the job requirements are understood.
    4. Ensure applicant understands eligibility for benefits and what benefits they will receive.
  2. Compliance with public policy
    1. Know and comply with specific regulations applicable to your business.
    2. Ensure all violations of public policies/regulations are reported to management.
    3. Never ask, suggest, direct or order an employee to engage in illegal conduct or activity.
  3. Performance reviews
    1. Implement a regular schedule, such as, annual performance reviews.
    2. Ensure that all employees know and understand performance standards of their job.
    3. All employees should be treated equally and fairly when evaluating employee performance.
    4. Discuss and document all performance problems with employees. Ensure management reviews all disciplinary actions.
    5. When doing performance reviews, ensure employees understand their review by asking them to sign the review form.
  4. Termination
    1. Discuss the dismissal in advance with only the appropriate people to review all facts, including discipline actions of other employees under similar circumstances.
    2. Ensure the discharge is because of a lawful reason that can be proved, especially if a similar circumstance did not result in discharge.
    3. If it cannot be proved, then it is best to set a precedent and inform all employees that such circumstances will result in future discharge.
    4. Conduct the termination in a business manner and have all important documents, such as:
      1. Specific business-related reasons for the discharge
      2. Previous written warnings on performance
      3. Severance policy and termination benefits
      4. Checklists for return of company materials
    5. Have another member of management present to witness reactions of the discharged employee and to ensure all termination policies are followed.

Safety Orientation

A professional management approach to employee orientation is a systematic and a sound substitute for trial and error learning and hit-and-miss instruction. The foundation of all orientation activity is planning. Planning includes designing to the particular training needs of employees, both individually as well as in a group. These needs should be determined by a careful check of the requirements of specific jobs in comparison with expected job performance. Each job function should be defined in terms of duties and responsibilities, quality of work expected and mistakes and errors to be avoided.

The goal of effective training is to reduce and eliminate unsafe acts. This training should begin the day the employee is hired. First impressions are critical; therefore, it is essential to start employees with a positive attitude toward safety.

Employee Orientation

A successful orientation process has two basic phases, and both should be completed before the new employee actually begins working. They are:

General orientation

Job orientation

General Orientation

Objectives of this training include a firm understanding of the company's loss prevention philosophy, compliance with company rules and all pertinent regulations, and general familiarity with your business.

Job Orientation

The training in this phase is the department manager’s opportunity to ensure the employee starts off on the "right foot.” Managers should train employees on safe operating practices in doing their assigned job, explain all hazards of the job and provide proper protective equipment to avoid personal injury or illness.

As an aid to ensure that all appropriate information has been presented, an employee orientation checklist should be used and signed by the employee. This checklist should be maintained in the individual personnel files.

An effective employee training effort increases worker skill, satisfaction, and motivation. The results are increased productivity, reduced absenteeism, fewer on-the-job injuries, lower incidence of worker sabotage and less employee turnover. A successful employee training program is a critical component of an organization's loss prevention program.

The information provided herein should be used as general guidelines only. Only an attorney engaged in the active practice of law can give you the accurate legal advice you may need. So, please refer all questions to your attorney.


Safety Committees

Safety and health committees are being used with greater frequency than ever before as an effective means to control losses. These committees assist management in matters of safety and health as they relate to operations. A successful committee has a defined purpose and has management's support in carrying out its assigned responsibilities.

The focus of a safety committee is to reduce losses. The committees can be set up to fulfill the following basic functions:

  1. Monitor implementation of safety policies and communicate activities of the committee to employees and managers.
  2. Conduct regular inspections to identify unsafe acts and conditions.
  3. Submit recommendations to correct identified hazards or deficiencies.
  4. Identify the safety training needs of employees.
  5. Review accidents to determine causes of loss and make recommendations to prevent recurrence.

In establishing the committee, management should define: policies and procedures to be developed; role of participants; meeting format and commitment to schedule. An effective safety committee can contribute to reducing losses.

Policies and procedures should be developed that describe the committee's limit of authority, meeting frequency, attendance requirements and recordkeeping. The ideal committee size is five to seven and should be represented by as many departments as possible. The designated person should always be the committee chairperson. You or the manager should attend as many of these meetings as possible to show support for the program and to monitor the activities of the committee.

Suggested meeting agenda as follows:

  1. Meeting called to order.
  2. Read minutes of previous meeting.
  3. Discussion of old business.
  4. Review accident investigation reports.
    1. Determine causes
    2. Corrective action
    3. Approval by group
  5. Review of accident experience
    1. Number of total losses/claims
    2. Comparison to previous years
    3. Trends developed
  6. Comments by management.
    1. Response to committee suggestions for corrective action
    2. Operational changes that affect safety
  7. New business.
  8. Adjournment.

Accident Investigation
An accident investigation program should be established on the belief that all accidents have causes and if these causes are addressed, similar accidents can be prevented. Accident investigations are conducted in order to:

  1. Analyze an accident or "near miss" to determine cause.
  2. Identify loss-producing exposures.
  3. Develop corrective measures.
  4. Prevent recurrence.
  5. Improve efficiency.

An accident investigation should be performed by the manager responsible for the area where it occurs. The manager is responsible for filling out the accident investigation form completely, identifying causes, and addressing recommendations. The investigation should be conducted using the following guidelines:

  1. Investigation should be completed within 24 hours of the accident.
  2. Prevention of recurrence should be paramount; placing blame should not be an issue.
  3. Interview the employee(s) involved as soon as possible.
  4. Put the employee at ease; allow them to give their version of the accident without being interrupted.
  5. Ask appropriate questions but avoid putting the employee on the defensive by asking any "why" questions.
  6. Close the interview by stressing that prevention of similar accidents is the primary reason for the accident investigation.
Employee Motivation and Incentives

An active and effective safety program is a necessity that can prove beneficial. However, even within a comprehensive safety program breakdowns can occur. Unfortunately, safety can take a back seat due to distractions and boredom. An incentive program can be used as an additional tool to enhance safety efforts.

A well structured and implemented incentive program benefits both the employees and the employer. A reduction in accident frequency and severity provides an economic benefit to your business. An incentive program can also increase employee morale both on and off the job.

The following are some items to consider when establishing an incentive program.

  • A survey of the employees to determine their attitudes towards an incentive program. It should include how incentives are to be given out; who should get them; and what activities are to be used (safety suggestions, accidents, driving record, etc.).
  • You should assume an active role in the program.
  • Involve a variety of people in the planning process.
  • Establish clearly defined, realistic goals, but don't make them too easy.
  • Avoid establishing a program that would encourage employees not to report accidents.
  • Consider using a frequency or incident rate in the incentive program.
  • Review your loss history to determine a rate but go back far enough to provide an accurate reflection of actual performance.
  • Awards must be worth the effort in order to be effective.
  • Care should be used when money is part of the incentive program, once spent there is little "evidence" of the success.
  • Emphasize recognition and positive reinforcement in the program.
  • Reinvesting a portion of the "safety" savings into the program is a cost-effective method of keeping the program "fresh" and ongoing.
  • Post a bulletin board showing number of days without lost time injury/accident in the workplace.
  • Conduct lunch meetings (pizza, etc.) with employees to discuss injury/accident record and ways to promote safety.

A word of warning, a safety incentive/motivation program is not a panacea for an ineffective safety effort. It should be used to enhance safety efforts that are already in place.

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