1. TED SMITH Cornell Smith & Mierl, L.L.P. 1221 S. MoPac Expwy., Suite 330 Austin, Texas 78746 tsmith@cornellsmith.com (512) 328-1540 EMPLOYMENT LAW 2005: How to Keep your Employees as Assets, not Liabilities

2. EMPLOYMENT LITIGATION PREVENTION TWO KINDS OF EMPLOYEES: AT WILL & FOR CAUSE AT WILL & FOR CAUSE GENERAL RULES OF THUMB: HIRING TO FIRING HIRING TO FIRING TOP TEN WAYS TO AVOID EMPLOYMENT LITIGATION

3. THE TWO TYPES OF EMPLOYEES "FOR CAUSE" EMPLOYEES"FOR CAUSE" EMPLOYEES MAY BE TERMINATED FOR A GOOD REASON ONLY "AT-WILL" EMPLOYEES"AT-WILL" EMPLOYEES MAY BE TERMINATED Ý For Good Reason Ý For Bad Reason Ý For No Reason Ý But….

4. …Not for an Illegal Reason Such As: S Filing personal bankruptcy S Asking questions about overtime pay S Refusal to engage in a criminal act S Filing of a workers’ compensation claim S Retaliation for taking FMLA leave

5. UNLAWFUL DISCRIMINATION S Sex/pregnancy/sexual orientation S Race S National origin S U.S. Citizenship S Religion S Age (protecting persons age 40 and over) S Disability S Retaliation for having claimed discrimination

6. GENERAL RULES OF THUMB KEY INTERVIEWING RULES l If It Is Not Job-Related, Don’t Ask! EXAMPLES: EXAMPLES: –Are you married? –Do you have young children? –How old are you? l Be Consistent

7. KEY MANAGING RULES l Be Familiar With Your Personnel Handbook l Avoid Legal Pitfalls -- Involve Human Resources / Legal Counsel l Be Honest In Employee Evaluations

8. KEY MANAGING RULES l Be Consistent In Disciplinary Actions l Document! Document! Document! l Anything You Say Can Be Used Against You And The Company

9. KEY FIRING RULES l Avoid Legal Pitfalls -- Involve Human Resources / Legal Counsel l Follow Written And Oral Company Policies l Consider Progressive Discipline

10. KEY FIRING RULES l Consider Whether Employee Was Counseled l Has The File Been Properly Documented? l Be Considerate! l Be Honest About The Basis For The Decision

11. KEY FIRING RULES l State Just The Facts To Avoid Slander / Libel l Listen Politely To Their Side l Check Company Policy Before Giving Any Reference Or Recommendations

12. THE TOP TEN COMMON EMPLOYMENT LAW MYTHS

13. “I PAY EVERYONE A SALARY TO AVOID OVERTIME.”

14. WE LEASE OUR EMPLOYEES SO WE’RE NOT LIABLE!

15. SINCE SHE CONSENTED, IT’S NOT HARASSMENT

16. NO OFFENSE WAS INTENDED SO IT’S NOT HARASSMENT

17. IT WASN’T A FORMAL COMPLAINT

18. AT LEAST THERE’S NO INDIVIDUAL LIABILITY

19. DOCUMENTING PROBLEMS BLOWS THEM OUT OF PROPORTION

20. THE EQUAL OPPORTUNITY SCREAMER IS NOT A PROBLEM

21. ANNUAL EVALUATIONS ARE A GREAT IDEA

22. WE CAN’T AFFORD TRAINING

23. NO. 1 WAY TO KEEP YOUR EMPLOYEES AS ASSETS, NOT LIABILITIES! HIRE A TOP-NOTCH EMPLOYMENT LAWYER TO TRAIN YOUR MANAGEMENT!

24. TED SMITH Cornell Smith & Mierl, L.L.P. 1221 S. MoPac Expwy., Suite 330 Austin, Texas 78746 tsmith@cornellsmith.com (512) 328-1540 EMPLOYMENT LAW 2005: How to Keep your Employees as Assets, not Liabilities