Michael P. Maslanka, Editor
Ford & Harrison LLP

Vol. 19, No. 6
June 2008

MIKE'S IN BOX

Are you prepared for disaster?

Michael P. Maslanka

Hurricane season is fast-approaching. And I thought this would be a good time to talk about disasters. Disasters are part of life. They're inevitable. It's just a matter of sometime, somewhere, somehow. That's a constant. But the variable is a company's response. That's what I want to talk to you about today.

Action No.1: Sit down with your insurance broker. Do it now, not later. Look at the kinds and amounts of coverage you have. Think about the worst disaster that can happen, and measure that against increased premium costs. Perform a risk/reward analysis. It doesn't cost a whole lot more to have a lot more coverage.

Insider tip: Don't rely on the payment of insurance proceeds for the survival of your business. An insurance company will fight you if it believes it has a legal right. A lawsuit you file over whether you suffered "business interruption" won't help meet your payroll or pay your landlord. So make sure you have cash in the bank to weather a disaster of whatever type.

Action No. 2: Do a census of your employees. People are your most valuable asset. A business can't run without them, so make sure you know where they will go in an emergency or evacuation. And by the way, don't hesitate to promise confidentiality. Not every employee will be comfortable disclosing whom they will bunk with in an emergency. Be sensitive to those issues, but get the information.

Action No. 3: Find a bunker for the bosses. Core management must stay together. Decisions will need to be made, so make sure the core management sticks together like a ball of sushi rice. If an evacuation is required, think about having key managers evacuate to the same safe location. Employees are going to be looking for leadership. Make sure you're going to be able to provide it.

Action No. 4: Cell phones, no bueno; PDAs, bueno. Remember the sad day of September 11, 2001? Communication was disrupted. People couldn't contact one another. It added to the confusion and, yes, the fear. One device that did work: BlackBerries and similar devices. You can configure them for user-to-user communication, and they kept running on September 11. Talk to your IT people today, or get a consultant involved now.

Action No. 5: Back up your data. You must protect your records. You must back up your data. Make sure it's backed up in a remote location where it will be safe. There are companies that have scouted out locations in the United States that are least likely to suffer any type of catastrophe, national or otherwise. They have little bunkers where they store your backup data. Find one ― use one.

Action No. 6: Get up on the law. Texas law, specifically Texas Labor Code § 22.001, deals with disasters. It makes it unlawful to fire or discriminate against employees who leave their places of employment to obey a general public evacuation order issued during an emergency. What's an emergency? Well, the law contemplates evacuations during disasters, which are defined as fire, flood, earthquake, storm, riot, paramilitary action, and, thank goodness, "volcanic activity." (Nice to know the Texas Legislature is on the ball.)

By the way, hurricanes bring devastation ― crumpled buildings, uprooted trees, and flattened facilities. And somebody needs to clean it all up. You can use your exempt employees to do so without them losing exempt status. But don't get greedy. If your exempt employees perform nonexempt work long enough after the crisis period passes, they must be paid overtime for all work over 40 hours in a workweek.

Also, the Occupational Safety and Health Administration (OSHA) comes into play. Protracted exposure to heat in the sun may cause safety and health risks for your employees. Asking an employee to perform activities that could expose him to the risk of becoming a crime victim, such as requiring someone to perform business activities in neighborhoods where looting is occurring, also can pose a safety risk. Need more help? OSHA has put together an invaluable webpage addressing many of those safety concerns. Take a look at www.osha.gov/oshadoc/hurricanerecovery.html.

And finally, remember the wise counsel of General Dwight Eisenhower, who said that you should trust planning but not plans. Be flexible, err on the side of giving your employees a break, and don't be afraid to do the right thing at the right time.

Michael P. Maslanka is the editor of Texas Employment Law Letter and managing partner in the Dallas office of Ford & Harrison LLP. You can reach him at mmaslanka@fordharrison.com.

Copyright 2008 M. Lee Smith Publishers LLC

TEXAS EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Texas employment law. Questions about individual problems should be addressed to the employment law attorney of your choice. The State Bar of Texas does designate attorneys as board certified in labor law.