This blog post also appears on From the Ground Up, our firm’s blog that serves as a legal source for construction, real estate, and development news. The information in this post should be helpful to employers across industries.
Just as unforeseen site conditions can test a contractor’s problem-solving skills, unexpected events can test a construction-industry employer’s crisis-management readiness. Crisis can hit at any time, and individuals involved in human resources are usually and rightly on the front lines of working with a company’s management team to address the challenges that a crisis presents.
- An employee espousing racist views at a rally is recorded by a member of the public who sends the video to the HR manager, threatening to contact the media if the employee is not immediately fired.
- A former employee uploads a YouTube video, claiming that a jobsite has a multitude of safety violations. The video is picked up by the local news as the “Viral Video of the Day,” which prompts protests outside the company’s headquarters.
- A manager responds to an e-mail “phishing” scam, which results in a ransom demand to recover employee social security numbers and other personal information as well as the company’s proprietary industry data.
Employers across the country find themselves in these and similar situations every day. When they arise, individuals involved in human resources play a critical role in helping to navigate the team through the crisis. A crisis can often create legal liability in the employment realm and having a sound crisis-management plan—and individuals who are prepared to implement that plan—can help reduce legal risks. Here are a few ways to prepare before a crisis hits and to effectively manage the crisis when it does.
Plan Before a Crisis, Plan Again When It Hits, and Be Flexible
Knee-jerk reactions to crisis often prompt a secondary crisis—for example, an unvetted statement to the media that can significantly hurt a company’s credibility if the statement is later disproved. Planning before a crisis arises and planning a path to manage it at the outset are key to effective crisis management. Strong planning—and sticking to the plan—can also help to reduce the size and impact of the inevitable bumps along the road.
Before a crisis hits, HR and other management team members can develop a plan for unexpected events and crises. The plan should address the following questions:
- Who needs to be involved in decisions about how to respond to the crisis? Identifying the triage team before an issue arises will help ensure that the team gets up and running more quickly to get ahead of the crisis. Otherwise, the company will spend the crucial first part of a crisis in determining who should be involved, rather than mobilizing and responding quickly. Although different circumstances may result in variations of the critical team members, preplanning can still reduce the initial scurry of decisions about who is involved.
- What person or persons are authorized to speak on behalf of the company, and how are they prepared to speak? Designating an effective communicator with public-speaking skills can help reduce the risk of making misstatements to the public that could come back to harm the company later. And because it is not just what the company says in response to the crisis, but how the company says it, the company’s authorized communicator should pay careful attention to tone and language in the company’s response.
- What third-party vendors—from PR specialists to investigators to legal support—might the company rely on in a crisis? Knowing which trusted advisers to call when a crisis hits will save critical time.
- If a crisis involves compromises in technology, what backup systems exist, and is there a plan to minimize business disruption? Data breaches are becoming more and more common and having a robust contingency plan in place that addresses both the breach and the company’s ongoing operations is a critical piece of any crisis-management plan.
When a crisis does hit, the company should:
- Assemble the triage team together as soon as possible.
- Address outside support and confirm confidentiality obligations—without creating e-mails or text messages that could be subject to later misinterpretation. Utilizing an attorney may help facilitate candid discussions necessary in a crisis.
- Set up a meeting schedule, identify goals and points of connection, and assign tasks to be accomplished along the way.
- To the extent possible, wait to make critical decisions until sufficient facts have been confirmed. Too often, a lack of information or making assumptions about a situation leads to haphazard actions that can create a host of problems, including legal exposure.
- Be prepared to be flexible. Having a plan with goals and tasks provides a helpful baseline from which to work, but crises are often fluid situations that require some degree of flexibility.
Be Knowledgeable and Share Knowledge
HR professionals frequently deal with legal issues that are lurking beneath a crisis, and acting without understanding can exacerbate the crisis over the long term. That’s why HR professionals must be knowledgeable about common employee-related issues that can create liability and be on the lookout for them. The following are some legal issues that commonly arise in crisis:
Defamation and similar claims. Crisis creates pressure to make broad statements about the circumstances. Take the second example above: pressure to respond to the “viral video” about safety issues may create pressure to disparage a former employee. But public statements about the former employee, especially if false, but even if simply negative or disparaging, may create legal risk. Human resources, with appropriate legal support, can help reduce the likelihood that company statements are interpreted in a way that damages the reputation of individuals and brings about liability. And HR professionals often know and work closely with important company values and principles, and can help communication professionals frame positive statements, which tend to create much less risk than statements impugning someone. Similarly, even internal communications to other employees can raise potential risks of damaging current or former employees—an HR professional must support the company’s goals about providing access to information, while at the same time balancing the risks that come along with sharing that information. But HR professionals should also be aware that certain jurisdictions have protections for statements that are reasonable in light of business interests. Knowing the protections in the company’s jurisdiction can help HR professionals be careful not to paralyze the company from taking action or prevent it from making statements that may have business value.
Social media. In today’s 24/7 digital world, most crisis situations involve social media. HR professionals should be familiar with the law in their company’s jurisdiction about reviewing social media and taking action concerning it. Laws may restrict how employers learn about social media or restrict the use of information discovered in social media. These laws may be quite detailed, and HR professionals should ensure that the company does not succumb to pressure to address a crisis by violating employee rights related to social media use.
“Due process.” While private contractors do not have to worry about constitutional due process, juries and judges expect fairness. If employees are organized, collective bargaining agreements include process requirements, and a company’s employee handbook may also provide some measure of process for potential conduct violations. It is incumbent HR professionals make sure that a crisis response does not undermine the company’s ability to comply with its processes for employees.
Employment decisions such as termination of employment. Every jurisdiction protects employees from retaliation for certain types of activity that is considered “whistleblowing” or protected activity—for example, raising concerns about public health and safety, or reporting in good faith a perceived violation of the law. These issues often arise when employees are in crisis situations. Before employment action is taken, HR professionals must work closely with executives and legal advisers to make sure that employment decisions are made for legitimate reasons or, if a situation is unclear (which is often the case), that the risks and benefits of all potential employment actions are carefully considered.
Be Strategic—and Part of the Team
HR professionals constantly engage in company strategies and can be instrumental in implementing a company’s crisis strategy. The company must balance individual rights, the company’s public perception, the company’s internal morale, and a host of other values when determining how to respond to a crisis. This balance is often difficult to achieve because some actions further certain goals, while others create risk. HR professionals must work collaboratively with their executive teams, listen and participate, and help the company find the right balance for navigating the waters of significant crisis.
HR professionals are usually leaders within their organization, and crisis response requires leadership and teamwork. By working to plan, imparting knowledge, and developing and implementing a company’s strategy, HR professionals can be key to managing the inevitable crisis and putting the company in the best position to manage unexpected crisis and recover without long-term damage.