Discrimination suits are forcing supermarket companies to re-evaluate their human-resource practices as never before.
In recent years, supermarket companies have been slammed with such suits, resulting in large judgments in favor of the plaintiffs. Ingles Markets is just the latest, with four current and former employees filing a sexual discrimination suit against the Black Mountain, N.C.-based company last month. Publix Super Markets settled with workers for $81.5 million last year and Albertson's was hit with a $29.5 million judgment in 1994.
Other casualties include Lucky Stores and Safeway.
Companies facing discrimination suits tend to have common problems, such as poor documentation of employment procedures and little training in company policies, legal observers told SN. But labor experts say that, with some fine-tuning, many companies can greatly decrease the threat of discrimination claims.
Dennis Brown, a partner with the labor law firm Littler Mendelson, said the recent rash of cases turned the supermarket industry into a prime target for discrimination suits.
"The grocery industry has been the subject of scrutiny, more so than other industries," Brown said.
Brown said a survey of his firm's lawyers found that poor documentation of employment policies and procedures was the biggest problem in all industries and for all sizes of companies. Businesses either had no records or the documentation contained large holes about hiring, evaluating, reviewing and firing employees. Each employee must be documented the same way to prove why and how decisions were made. It also shows that everyone was treated equally, Brown said.
"The No. 1 problem we see is poor documentation," Brown said. "Grocery companies are no different than other businesses."
Many companies also have overwhelmed and poorly supported human resource departments that can't keep up with all the laws and regulations, as well as training and employment records, said Peter Foster, vice president and national employment specialist with the insurance brokerage firm J&H Marsh & McLennan.
"Sometimes the person who is responsible for human resources is also responsible for risk management, or the chief financial officer is doing the human resources also," Foster said. "They're wearing two or three hats."
When companies grow fast, employment policies are often placed on the backburner. The lack of procedures and knowledge of laws makes a company a prime target for a discrimination claim, Foster said.
"The courts have found that ignorance of the law is not an answer," Foster said.
Proper training can also prevent problems. All employees must learn a company's rules and stances, especially on sexual and racial discrimination, Brown said. And supervisors need to be trained as well, not only on the policies but how to prevent discrimination.
"There are many instances where no training has led to liability," Brown said.
Companies should establish a system to handle concerns and complaints from employees. If a good procedure is in place, claims can often be handled internally before they turn into lawsuits, Brown said.
Strong policies can also give companies more control over the work force. Because they don't have the proper procedures, many employers won't fire problem employees for fear of a lawsuit, Foster said. Holding onto such workers is demoralizing and can lead to inconsistent treatment of employees, which opens a company up to claims.
"It sends a message to other employees that some behavior will be tolerated," Foster said.
Even though implementing proper employment policies can be expensive, and learning them can be time-consuming, Foster said doing so is crucial. Employment-related lawsuits drain a company more than financially. They bring down morale and create a poor image of the business, Foster said.