Is HR Legally Liable for a Boss's Bad Behavior?

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A person with no HR background ended up in charge of her company's HR tasks.  After a few years, she noticed that one of the owners of the company became more and more bold, brash, and downright rude/mean, sometimes. It's a situation where the HR person didn't feel like she could say anything to the offender because she is the other owner/president's wife and he is very aware of how she acts, but it doesn't seem to bother him much.

She became concerned that this owner is going to cause an ill-fated relationship with a certain employee to the point where this employee could possibly file a suit against the company upon departure/termination if it comes to that at some point.

The same owners are also making business decisions that are not completely kosher.

Can the HR department get into legal hot water over how they treat employees? Can HR people go to jail for illegal decisions made by the business owners?

Employee Treatment

First, let's talk about how they treat certain employees. If she's simply a jerk, it's not illegal and while it's horrible and awful, it doesn't rise to the level of law-breaking unless she's doing it because of her target's race, gender, religion, or some other protected status.

Now, of course, she may be doing this just because she's a jerk, but because the target is a different race or from a different country than the other employees, it will look like illegal discrimination and she will have difficulty proving that it's not.

But, let's assume that whatever it is that she is doing violates the law. Say, she's targeting this employee because he's 60 and she thinks he's too old to work and would like to replace him with a nice 25-year-old. If you don't put a stop to it, can you as the HR manager face liability?

We asked employment attorney, Jon Hyman what the law is surrounding this. He said:

“If it’s discrimination liability, then there likely is no issue for the individuals, since Title VII and the other federal employment discrimination laws do not provide for any individual liability. Your mileage may vary, however, under state law.

“For example, under Ohio’s employment discrimination statute, managers and supervisors can be held individually liable for their own acts of discrimination. There are also potential common law claims under states law (e.g., intentional infliction of emotional distress) that, while hard to establish, create yet another avenue of individual liability.”

So, from a legal standpoint, since you're not the one doing the discriminating unless your state law specifically says that the HR person can be held liable, you're in the clear.

Now, does that mean you shouldn't put a stop to it? Absolutely not. People like to pretend that if you're not violating the law, you're acting in a moral manner, but that's not always true. If you're not speaking up and documenting this, you are part of the problem.

I totally get that you need your job just as much as everyone else needs their jobs and when you have an immature, screaming owner or owner's wife, it's likely that you standing up to her will result in your own termination.

You need to decide if your own integrity is worth the paycheck. That's not something I say to try to be self-righteous — all of us have to deal with bosses and co-workers who aren't perfect and we have to decide what level of tolerance we have for that.

Illegal Business Decisions

Now, let's talk about the “not completely kosher” business decisions. Your liability will depend on your role in the company. It's doubtful that the HR manager is responsible for fuzzy accounting practices. It's not your area of expertise and you're not expected to be an expert. You're not expected to audit it either.

That said, just because you won't land in jail for something you didn't do doesn't mean you are all in the clear. You have a moral obligation to report illegal behavior, but you should only do so if you are confident that their behavior violates the law. There are plenty of unethical business practices that aren't necessarily illegal.

Reporting some illegal behavior is covered under whistle-blower protection laws, although people who are willing to behave unethically in the first place are likely to retaliate anyway. So, you'd likely have to fight them in court to be reinstated. That's the problem with working for unethical people — they tend to be unethical in everything.

Depending on what they are doing, there is probably a state or federal agency that governs that situation. Most of them allow anonymous reporting and you can call and ask if the practice is a violation of the law.

Regardless of whether you are legally liable for any of this, we strongly recommend looking for a new job so you can work with people who aren't horrible.