Don't Forget Your Senior Execs - They Need Compliance Training Too

I came across an interesting article in last month’s National Law Journal that highlights the growing trend of individual manager liability for employment litigation. (Employment Litigation Gets Personal for Company Managers: More executives sued personally for workplace actions).  It’s a reminder of why comprehensive ethics and legal compliance training should reach everyone in the organization – even the execs who presumably “know all the rules.”

Individual managers have been named in lawsuits for years. The risk of personal liability is extremely stressful and can put enormous pressure on an employer to settle even the most frivolous lawsuits. But what’s new is the rate and frequency that managers are being named as parties to lawsuits, and who’s being named as a party. Plaintiffs aren’t just targeting frontline managers who have extensive employee contact – they’re reaching to the top of the house and targeting high profile executives.  The hottest new trend for personal exec liability? Wage and hour violations, which can easily run into the millions of dollars.

Too many organizations excuse their most senior levels of management when it comes to ethics and compliance training programs.  Unfortunately, this is where the stakes can be the highest, bad practices can be the most deeply ingrained, and many transgressors have a sense of righteous impunity.  The Federal Sentencing Guidelines are crystal clear about the breadth of your ethics training obligations – they run from the lowest to the highest levels of the workforce, and periodic refresher training is expected.  Skipping over senior execs leaves both the organization, and individuals, dangerously exposed.

Will you get some pushback from top management when they discover they need to take the same training as everyone else?  Yes. Will managing that pushback be a walk in the park compared to explaining why key leaders were excused from ethics and compliance training in the event of litigation or regulatory review?  You bet.  The busy schedules of your execs, and their supposed mastery of the rules, will fall on deaf ears when questions about your ethics and compliance training programs matter most.

In today’s world of high stakes employment litigation, it’s so important that you educate all employees about the basics of your Code of Ethics as well as key workplace laws. Clearly wage and hour liability is a new topic to add to the mix, along with basic ethics, harassment and discrimination training.