Inside Dentistry
February 2012
Volume 8, Issue 2

Employment Law Basics

Labor lawyer offers practical advice on how to avoid potentially costly legal issues.

By Christopher J. Boman, Esq.

Employment law issues continue to become increasingly complex, and dental practitioners/practice owners can struggle to comply with state and federal laws in an effort to reduce—if not prevent—claims and liabilities. However, it is often the most fundamental of issues that get employers into trouble with the law.

When examining basic employment law issues, the goal for every dental office should be to eliminate repetitive practices that could be found unlawful and could give rise to a class action lawsuit. Because they have the money and the power, and there is an automatic bias against employers; therefore, it is important to ensure that every policy is followed through consistently and that everything is properly documented. Above all, management must appear reasonable and fair.

Employee Handbooks

It is essential that every practice have an employee handbook that specifies rules and expectations to clarify such policies and to ensure that employees are aware of them. Without a handbook, it is difficult to prove a policy was in place and understood by your staff members.

Compensation Plans

The employee compensation plan is just as important as the job application, but it is often overlooked. While employees who accept a position with a dental practice based on a specified compensation rate have entered into an implied contract for compensation before they start working, they should understand that oral agreements alone are not valid. Employee compensation plans must be in writing in order to be binding. In particular, practices with bonus offerings or a commission structure should have compensation plans presented in writing to employees. Employers also must ensure that modifications to compensation plans are in writing.

Job Applications

A well-designed job application is the cornerstone to an effective hiring process and can help protect the employer against legal missteps. Canned, form-type application templates are often outdated, asking questions that could trigger liability for dental practices. For example, if a high school diploma is an essential qualification for a particular position, to avoid a possible age-discrimination claim, the application should ask candidates whether or not applicants graduated from high school instead of asking when they graduated. By using a well-drafted application—rather than resumes—employers can elicit the facts rather than the candidate’s self-promotion document. In addition, applications allow employers to obtain approval to conduct various background checks.

It is important that employers obtain a signature and affirmation from applicants confirming that the information provided on the application is accurate and complete. This may provide grounds for termination of applicants who misrepresent themselves. Employers should also take steps to ensure that the information submitted by the applicant is verified; background checks should be consistently conducted for all applicants to avoid discrimination claims.

Arbitration Agreements

It is recommended that dental offices use a binding arbitration agreement as part of their employee handbook and personnel policies. It should be noted that arbitration agreements are necessary for all prospective employees, not just those who are actually hired, as some applicants may allege that they were not hired due to discrimination. Including an arbitration provision in all job applications ensures that those who are not hired by the practice will have to submit to arbitration on claims for “failure to hire.” While some states require the employer to pay for the arbitration, it remains a smart strategy for dental practice owners to have an arbitration agreement in place.

Performance Evaluations

Performance evaluation should be provided consistently and on schedule. While heavy workloads may make it difficult to handle such evaluations in a timely way, employers who do not conduct performance reviews on schedule—or at all—may encounter problems. They may find it difficult to terminate problem employees without notice regarding issues that need to be improved, and inconsistent patterns of providing performance evaluations could be perceived as a bias. In addition, performance evaluations—including self-evaluations for exempt employees—can prove helpful in preventing misclassification claims and in helping employers comply with their legal obligations.

Exit Interviews

Practices that conduct exit interviews should ensure that they are conducted every time a staff member leaves the organization. In addition to providing information about the industry and market conditions, exit interviews can help companies defend themselves in lawsuits initiated by employees. Specifically, if a departing employee signs an exit interview document claiming that there were no problems, it will be difficult to claim otherwise in support of a later lawsuit. However, exit interviews also pose their own risks. They can incentivize employees who may not have otherwise made claims to make them.


It is the employer’s obligation to track hours worked for nonexempt salaried or hourly employees, as these records are imperative to an employer’s compliance with wage and hour laws. Employers should document employees’ meal and rest periods in writing each day, including when they were taken, how long they lasted, and whether and why they were waived. Additionally, at the end of every pay period, the total hours worked for each employee should be verified. Employees who refuse to take their meal period can create problems for their employers. Employers must monitor those situations and ensure that these employees are taking and documenting the proper breaks to avoid class-action lawsuits that can lead to costly settlements. It is important to be aware of state requirements on meal/rest periods, as they differ from state to state. “Stolen” hours from manipulated time cards is considered theft, and dishonest employees can take advantage if employers are not watchful. Employers should, therefore, create documents that are irrefutable in court, and be fair and respectful to staff; it is widely believed that when supervisors and their staff trust one another, a level of integrity is easier to maintain.

State and Federal Wage/Hour Laws

Employers must understand the interaction between state and federal laws, and know when to refer to the appropriate rules. Both federal and state law may apply depending on the situation and locality. Dental offices can be sued for federal law in one state, and sued for the same thing elsewhere under a state law. Dental practices can also be sued in one court (state or federal court) for violations of both state and federal law.


In an effort to save money, many dental practices do not seek the proper legal advice when terminating employees. One of the biggest mistakes employers make is involving legal counsel after an employee has already been terminated. A 5-minute telephone call to a qualified legal expert can sometimes help a company avoid a lawsuit. Even at-will employment has its risks with termination. A poorly administered termination containing little or no documentation can present a very serious problem for employers who later seek to show that a termination was for legitimate, nondiscriminatory reasons. Specifically, an employer should document the reasons for the employee’s termination. For example, if the employer simply states “at will employment,” the employee can allege an unlawful reason, placing the burden on the employer to establish after the fact that the reason for the termination was not an unlawful one.

About the Author

Christopher J. Boman, Esq. | is a partner with the management-side labor and employment law firm of Fisher & Phillips LLP (www.laborlawyers.com) in its Irvine, California, office offering preventive counseling and defense of claims. He can be reached at cboman@laborlawyers.com.

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