An HR professional may have personal liability for participation in employment actions under federal, state and local employment laws depending on how the term “employer” is defined in the particular employment law and interpreted by courts. There may also be personal liability for HR professionals under common law.

At the federal level, one of the most difficult employment laws to administer—the Family and Medical Leave Act—provides for personal liability because the employer is defined in FMLA regulation 825.800 as “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” The Fair Labor Standards Act includes a similar definition of the employer, thus also providing for personal liability of managers. Under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act and the Americans with Disabilities Act, the current interpretation of the term “employer” is contested. The U.S. Circuit Courts of Appeals have not usually found personal liability under these laws. Ultimately, the U.S. Supreme Court may rule on this issue.

Many states and localities have fair employment laws that may provide for personal liability of the company manager. Although these statutes are modeled after the federal laws, often, unlike the federal ones, they do provide for personal liability for managers of the employer. As discussed in the SHRM Legal Report, Personal Liability of Human Resource Professionals in Employment Litigation, more cases alleging discriminatory acts in employment are brought in the state court system than in the federal system. Increasingly, the risk for personal liability is under state—not federal—law.

Common-law claims are not based on federal, state or local statutes but on case law. These claims may include intentional infliction of emotional distress, such as severe anxiety caused by sexual harassment, and defamation, such as a false and malicious reference given on a former employee. Common-law claims may also be for wrongful termination under exceptions for employment-at-will. An example of this would be when an employee is terminated for whistle-blowing about an illegal employer activity.

You can help protect yourself from liability by complying with all applicable employment laws, following your company’s policies and procedures and consulting legal counsel for definitive guidance for complicated situations. Many employers also obtain insurance against many employment claims with employment practices liability insurance (EPLI). If your employer does not currently have EPLI coverage, you may want to consider this protection for HR staff as well as other management employees.

 
Please Note: This material is provided as general information and is not a substitute for legal or other professional advice. Contact the Knowledge Center for more information.
 

Express Request
SHRM’s Express Request (ER) service allows members to request and receive resources on over 100 timely HR topics via e-mail. Available Express Requests are listed on the web site, and responses are sent immediately.