How Should Companies Prepare When Putting Employees in Global Hot Spots?

Shannon Green

Corporate Counsel

02-11-2011

It's a company's worst nightmare: A prominent employee held captive by rioters, cut off from any human contact, as an entire nation descends into turmoil.

On Jan. 28, as the tension mounted across Egypt, Google Inc. marketing executive Wael Ghonim went missing. It was widely reported that one of Ghonim's last tweets before he vanished was: "Pray for #Egypt. Very worried as it seems that government is planning a war crime tomorrow. We are all ready to die #Jan25."

Based in Dubai, 30-year-old Ghonim is the head of marketing for Google in the Middle East and North Africa. He has also been something of a political rabble-rouser in the Egyptian uprising. According to The Associated Press, Ghonim played a key role in organizing the initial online crusade, and now that he's been released he's emerging as the face of the youth-led movement.

Ghonim's family and employer were left in the dark about his whereabouts for nine days until his proposed release by the government was announced on Egyptian state television this past Sunday night. When he was set free Monday, the company tweeted: "Huge relief— Wael Ghonim has been released. Our love to him and his family."

As markets become more global, an increased number of corporations are expanding international operations. These multinational businesses inevitably sometimes assign their employees to unstable regions.

What do companies in the U.S. need to do to protect themselves from liability when workers find themselves in harm's way?

"For most multinational corporations, local populations can comprise about 99 percent of their workforce abroad," said Donald C. Dowling Jr., a partner in the New York office of White & Case. Dowling concentrates his practice on cross-border human resources law issues for multinational employers.

"So when it comes to the 99 percent of employees who are locals, terrorism and war just becomes another workplace safety issue," said Dowling. Every company has its own workplace safety law, and the duty of care to local workers arises under those laws, he said.

"Companies tend not to worry as much about the health and safety of their people off the job if they're not business travelers or short-term expatriates," said Dowling. Those two groups are different because they arguably, at least under New York law, are on the job 24 hours a day, he said.

To protect their employees, many companies pulled their expatriates out of Egypt as soon as danger began to escalate.

Rob Sherman, vice president of public affairs for HSBC-North America, said in an e-mail to CorpCounsel.com Monday: "The safety and well-being of our employees is a top concern, and we're pleased that even as the situation in Egypt remains fluid, all our 1200 employees are safe. Most of the ten HSBC expatriate employees in Egypt have relocated to Dubai, where they continue to support our Egyptian banking operation."

Dowling has a client that could not pull its workers from the region.

"I was just dealing with a client -- they're academics in Egypt -- in the country studying the situation and writing reports on it," said Dowling. "They can't really tell their employees not to be there," he said. "The only reason they're in Egypt and they're not in a peaceful place like France is because they're in there studying the situation."

From a humanitarian or commonsense point of view, there are safety and security issues at hand, said Dowling. How many guards do you give them? Do you tell them not to leave their hotel? Those are very important security questions, but they're not questions to ask your lawyer, he said.

You should have adequate security. But the bigger issue is -- how do you protect yourself from a lawsuit?

Because in real life, no matter how good a company's security is, if someone gets injured or killed, said Dowling, then their estate sues and says it wasn't good enough. "If you gave them a bodyguard and an armor-plated car, they say you should've given them two bodyguards and a tank," Dowling said. "Because, by definition, if they got killed it wasn't good enough."

Business travelers and expatriates are most likely to bring personal injury claims against a multinational corporation in the U.S., where they assume their awards will be largest. So how do you set up in advance a defense against a U.S. personal injury claim that arises in the business traveler or expatriate context?

"There's a very important answer, and that's workers' comp," said Dowling.

Take, for example, a New York company sending a worker on a business trip abroad. "There's New York case law that says if you're on a business trip, you're working 24 hours a day," Dowling said. So even if that worker gets killed in their hotel, they have a capped workers' comp claim.

"In a situation like that, after the catastrophe happens, the employer is rarely going to want to challenge the workers' comp claim," said Dowling. "What they're worried about is the employee, or his widow, going to a personal injury lawyer and trying to bring an uncapped claim against the company."

In a claim like that, the employer should raise the affirmative defense of the workers' comp bar, Dowling said, which "says you can't sue an employer in an uncapped personal injury claim. You've got to go through the workers' comp system."

Dowling has also advised clients on the front end to purchase supplementary voluntary workers' comp insurance when their employees are entering dangerous regions.

"In the past I've advised clients, or talked to clients, about having the employee sign something acknowledging that their exclusive remedy is the workers' comp system," said Dowling.

He tells multinational corporations to have workers say in writing that they understand that the employer does not have a duty to buy the supplementary voluntary workers' comp. In order to induce the employer to buy the coverage, they renounce their right to bring a claim above the insurance cap.

"So you basically can try to contractually keep your people in the U.S. state workers' comp system as long as you can," he said. "If you're sending someone abroad for five years, it's going to be hard. But if it's over 30 days, but less than 6 months, it's not necessarily that hard," he said.

One type of document that Dowling doesn't place a lot of faith in, however, is the assumption of risk waiver. He said that the agreements might make companies feel more secure -- and they can't hurt -- but "there's not a lot of case law supporting those in the employment context."