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Summer Vacations Can Pose Thorny Issues for Employers

As summer approaches, many employers are being inundated with employee requests to take vacation days.


To address this, companies often establish formal vacation policies that give senior employees first pick of days or provide vacation on a first-come first-serve basis.


But these tactics may hurt employee morale and defeat the purpose of offering vacation days at all, experts say.


“There are companies that try to be flexible and say to employees, ‘We understand everyone wants to take time off, so let’s work together to enable everyone to do this,’ ” says Tom Klett, a consultant in the Stamford, Connecticut, office of Watson Wyatt Worldwide.


Employers need to be proactive and ask employees early on in the year when they are planning vacation days, says Jerry Glass, a managing partner at F&H Solutions Group, a human resources consulting company.


“Being proactive is important because there are two things that will upset an employee,” he says. “One is if a company tells them they can take a vacation and then says they can’t. The other is not allowing them to take the days when they want to.”


Canceling vacation is a rare occurrence, but if an employer does need to do this, they should reimburse the employee at least partially for any expenses they may have accrued from booking a trip, Glass says.


Many companies take a “Use it or lose it” approach to vacation, which is a way of encouraging employees to plan their vacation time in advance. Under this policy, employees lose their accrued vacation time if they don’t use it all within a calendar year.


But the use-it-or-lose-it policy can also hurt employee morale because employees often want more flexibility, Glass says.


To address this, companies should allow employees to carry over a certain number of days, like up to a week, into the next calendar year or receive compensation for days not taken, he says.


Some states, like California, don’t allow employers to adopt use-it-or-lose-it policies without some carry-over, says Gerald Hathaway, a partner in the New York office of law firm Littler Mendelson. Also, many states mandate that companies clearly communicate to employees their use-it-or-lose-it policies.


“It’s always prudent for employers to have these policies clearly stated in their communications and in their employee handbook,” Hathaway says.


To get the most out of employee productivity and keep employee morale high, which is the point of having vacation policies in the first place, companies should try to be flexible and creative with how they approach vacation, Klett says. For example, some companies have clubs or groups that plan trips for employees.


“There is more guilt associated with vacations today than there ever has been before,” Klett says. “If employers remove that guilt a little bit, it will pay off for them.”


—Jessica Marquez

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Violating a Noncompete Agreement Costs Ohio Firm Millions

A sunroom manufacturer must pay $1 million in punitive damages for interfering with the noncompete contract of a competitor’s former employee–part of a $8.6 million judgment a jury in Akron, Ohio, ordered Four Seasons Solar Products to pay to Patio Enclosures Inc.


The Ohio Supreme Court refused to hear Four Seasons’ appeal in late May. The employee, Joe Cheney, had already been ordered to stop working for Four Seasons.


Successful claims of violating a noncompete contract generally do not include punitive damages, but end with an injunction barring the employee from the new job.


“The overarching goal in every case is to stop the employee from hurting the employer,” says Alan Dalinka, an attorney with DLA Piper Rudnick’s Chicago office who has litigated noncompete agreements across the nation.


“In a contract dispute it’s very rare that punitive damages are awarded,” says Stephen Lichtenstein, chairman of the law, taxation and financial planning department at Bentley College in Waltham, Massachusetts.


But the size of the punitive damage award levied against Four Seasons indicates that “in today’s day and age, when there’s a heightened scrutiny of corporate ethics, cases of this sort might have more jury appeal,” says Aretta Bernard, who litigated the case with her partner Ron Kopp of Roetzel & Andress.


Punitive damages for misappropriation of trade secrets are more common. The Akron jury assessed Four Seasons $5 million in punitive damages and $2.6 million in compensatory damages for stealing Patio Enclosures’ business plan for company-owned retail outlets.


An appeals court filing shows that the breakdown of the awards in the trial also includes $20,000 in actual damages in addition to $1 million in punitive damages for tortious interference with (the noncompete) contract. Roetzel & Andress says that in addition, Four Seasons will have to pay “significant sums” for prejudgment and postjudgment interest and attorney fees.


But even though courts may be reluctant to award damages for violating a noncompete contract–California prohibits such contracts–the existence of such a contract may help a company pursue a trade secrets claim, Dalinka says.


“Even if the agreement not to compete may not be enforceable, the act of asking somebody to sign it shows under the Trade Secrets Act that you are taking steps to protect the information,” Dalinka says.


Most states, including Ohio, base their trade secret laws on the federal Uniform Trade Secrets Act, which defines trade secrets and requires that businesses make “efforts that are reasonable under the circumstances to maintain (their) secrecy.”


Noncompete contracts may be unreasonable–and unenforceable–if written too broadly, as everyone is presumed to have the right to work.


“It is a restraint of trade,” Lichtenstein says. “It’s a legal restraint of trade because you’re only restrained in a certain geographical area for a period of time.” Noncompete agreements are common when someone sells or buys a business.


But even in states that recognize noncompete employment contracts, “sometimes those agreements are enforceable and sometimes they are not,” says Arnold Pedowitz, a Manhattan attorney and co-editor of the book Covenants Not to Compete: A State by State Survey.


“Just because an employee has signed an agreement that is clear does not mean that a court will uphold it. In New York, a court will uphold it only if the employee is trading upon secrets or confidential information, or if he is a unique employee … like a Howard Stern,” Pedowitz says.


In the Patio Enclosures case, Cheney had signed a contract promising confidentiality and not to compete.


“Here we seem to have a new company that encouraged a guy to break his noncompete, and compelled him to use his confidential knowledge. The new company was a bad actor,” Pedowitz says.


The Court of Appeals for Ohio’s 9th Judicial Circuit ruled unanimously that Four Seasons “pilfered confidential, trade secret information from (Cheney), all the while holding a job offer in the balance … (and) required (him) to use, and rewarded him with a bonus incentive plan for using, the information he had learned at (Patio Enclosures).”


Cheney had promised not to compete with Patio Enclosures for two years and within 50 miles of one of its outlets, standard language for a noncompete contract. He informed Four Seasons of the contract, but the company hired him anyway.


Patio Enclosures did not sue Four Seasons until it found out the extent of the company’s machinations in the course of suing Cheney.


“The verdict was the result of some very bad facts and some bad decisions by the hierarchy of the company,” Bernard said.


“I give advice to companies around the country,” Pedowitz said, “and when they ask me for advice now, I will refer to this [$8.6 million] judgment. (Companies) have to speak with competent counsel before they get involved in hiring away another company’s employee.”


—Robert Kahn

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0606_LexisNexis

Wild Oats Markets, Inc., a nationwide chain of natural and organic food markets, currently operates in more than 110 stores in 25 states across the U.S. and British Columbia. The company currently employs more than 8,600 people and adds between 10 and 12 new stores every year.


Growing Pains


The chain’s growing popularity, while great for the company, however, often posed significant challenges for the Human Resources department. This team is required to not only fill all staff positions for new stores, it must also stay on top of normal employee turnover at the existing stores—hiring an average of 675 new employees every month. The department’s goal is simple: to fill open positions with high-quality employees who have cleared all required background screenings — as quickly as possible.


“Every day a store position sits unfilled, the company risks losing customer satisfaction because the store can’t provide the level of customer service that people expect,” says Gloria Fletcher, Regional Loss Prevention Manager. “So it represents a loss of income for our company and a loss of satisfaction for our patrons.”


Upon close evaluation, the company discovered a hiring bottleneck in one critical area: the background screening process. Until three years ago, these background checks were being obtained from a third-party provider, but the process had its share of challenges.


The background checks were fairly expensive and often required as much as five to seven working days to complete a report. The process also required that all applicant data — from every store — be transferred to company headquarters in Boulder, Col., and entered by a single employee. This data entry alone required at least a half-hour per applicant, and the physical transfer of data added another layer of delays, possible confusion and potential errors to an already cumbersome process.


Worse still, the former screening process occasionally netted false reports — erroneously stating that either an innocent applicant had a criminal record, or that someone didn’t have a criminal record who, in fact, did.


Partnering for Success


Because the company’s priority is to protect its assets and provide a safe environment for its staff and customers, Wild Oats was committed to obtaining the most current and correct background screenings possible. Therefore, three years ago, Wild Oats decided to switch to another screening provider — LexisNexis Screening Solutions.


LexisNexis Screening Solutions not only proposed a solution that was more affordable for Wild Oats, it offered a host of benefits that promised to simplify and streamline the company’s entire background screening process.


A Smooth Transition


Once Wild Oats decided to go with a new background-screening provider, it began the complex task of putting the new process in place. Fortunately, this implementation went much smoother than Wild Oats ever expected.


“Switching to LexisNexis was such an easy transition,” explained Fletcher. “We had every store call in to one of four regional conference calls, which provided a full explanation and real-time training on the new system. All the people that were going to use the new system were online, and we were online with them and LexisNexis — all at the same time. Basically, LexisNexis taught everyone how to use the system by phone, and it was absolutely wonderful.”


As a follow-up, LexisNexis helped Wild Oats create a training document that can be used for new users. This can be e-mailed to new users, along with their individual access codes, passwords and a step-by-step process for using the tool.


“We are growing so fast, and LexisNexis Screening Solutions can definitely keep up with us,” said Fletcher. “They can quickly adapt the program to our needs, and can help us add a new store simply with a phone call.”


Faster, Better Background Checks


Once the new process was underway, Wild Oats noticed immediate improvements to the background screening process. Unlike Wild Oats’ previous provider, LexisNexis Screening Solutions reported “clear” background checks directly back to each store — enabling them to continue with the hiring process without further delay.


Plus, each store can enter applicants’ data directly into the LexisNexis system, which initiates the background screening process immediately. This not only creates a more streamlined — and efficient — process, it freed up the resources of Fletcher, who was previously entering the data, so she could focus her attention on more important matters.


“Now, all the stores have to do is enter applicant data right from their system — a process that takes only a few minutes,” said Fletcher. “This was a huge selling feature for LexisNexis Screening Solutions. It takes key managers only about three minutes per applicant, and they love it because the software is so user-friendly.”


Within 48 to 72 hours, the store director, assistant store director or service manager then receives a report back for all cleared applicants, enabling the store to move forward with the hiring process and getting the person on the floor.


Meanwhile, all background check findings that need further investigation are automatically delivered directly to Wild Oats headquarters in Boulder, Colorado, where they can be reviewed by the corporate HR team. Since the bulk of the background checks are clear—and automatically sent to the individual stores—Fletcher can devote more time to addressing legitimate background check issues — such as any criminal activity, warrants or charges, including DUIs, DWIs, and issuance of bad checks.


“Plus, if an applicant wants to contest any items on their background check, they are directed to work with LexisNexis Screening Solutions — not us — for resolution,” added Fletcher. “This takes one more responsibility off our shoulders.”


Customization and Complete Satisfaction


Although LexisNexis background checks are completed in a consistently fast timeframe, Fletcher also touts their quality. “LexisNexis Screening Solutions never sends out background check reports before they are absolutely done,” she says. “Even if I put a rush on a report in order to fill a certain position, the LexisNexis specialist will do his or her best, but refuses to provide a complete report until they’re sure it’s totally right. I feel good about that too.”


When it comes to customer support, Fletcher is equally pleased. LexisNexis Screening Solutions works closely with Wild Oats to customize the software for its individual needs — providing a different menu of background checks for different job titles. For example, Wild Oats obtains one social security number search and one county criminal record search for basic applicants; but for key managers, Wild Oats’ process automatically adds a national criminal search, as well.


“LexisNexis quickly and easily adjusted the software so it would be very quick and user-friendly for the people in our stores,” said Fletcher. “The software includes unique drop-down menus that are unique to our company — and LexisNexis worked with us directly to establish our individual parameters.”


Using Wild Oats’ customized rules, LexisNexis Screening Solutions instantly verifies an applicant’s social security number — thus helping Wild Oats halt the entire application process for invalid numbers and eliminating the expense continuing with more advanced background checks.


By verifying social security numbers, Wild Oats weeds out illegal immigrants and avoids the hefty fines associated with hiring them. If an illegal immigrant applies for a position, the system can recognize the invalid social security number and Wild Oats refers the applicant to the Social Security office for resolution. Typically, the company never hears from the applicant again.


In fact, Wild Oats recently encountered this situation in one of its Florida stores, where five illegal immigrants had applied for store positions using fraudulent social security numbers. Because the LexisNexis background check caught this early, the company turned the applicants away, and thus avoided a potential fine of $10,000 per person — a possible total of $50,000.


Furthermore, Wild Oats always receives personalized service.


“I’m always called back or sent an e-mail reply to my questions immediately,” says Fletcher. “Whether I need a customized report summarizing our average monthly expenditures, or up-to-date information on laws in various states, LexisNexis is always ready to help.”


For example, LexisNexis recently provided Wild Oats with the most current information on which states require DMV permits for company drivers. Because these regulations vary from state to state, LexisNexis Screening Solutions’ comprehensive expertise prevents Wild Oats from having to become an expert in laws from 24 different U.S. states and Canada.


“After the transition to LexisNexis, our store personnel was a lot happier because they were getting their results back so much quicker and they could more rapidly fill their open positions,” said Fletcher. “And our customers are happy because there are enough people on the floor to service their needs.”

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Five Questions for Ernest Lareau

In October, DuPont announced a 13-year HR outsourcing deal with Convergys estimated to be worth $1.1 billion, the biggest such deal ever. Convergys will handle all of the HR processes for the company’s 60,000 employees in 70 countries worldwide. Following his speech at HRO World in New York last month, Ernest Lareau, DuPont HR director, portfolio and program management, spoke to Workforce Management staff writer Jessica Marquez.


Workforce Management: How did you narrow down your search to one provider?

Ernest Lareau: We developed a tool that asks questions based on five criteria and ranks each provider based on those criteria. The criteria were price, global capabilities, maturity of their business in the HRO space, technology and how adept they were at the processes we needed handled. This tool removes emotion and subjectivity from the process.


WM: Why did you decide on a 13-year contract?

Lareau: In effect, it is a 10-year contract. In the first year, we are taking our highly fragmented infrastructure, which consists of over 150 HR processes, and applying standards. The next step is implementation, which will start later this year through 2007. So it’s two years into the process before we really have the global infrastructure running. And then I view the first year of operations as a settling into the environment.


WM: You anticipate 20 percent initial cost savings from the deal and 30 percent within five years. How did you come up with those numbers?

Lareau: We set objectives based on external benchmarks. … We said from where we are today we want to see a certain amount of improvement on Day 1, and then continuous improvement year over year. We added a benchmark clause to our contract with Convergys that states that in the event that benchmarks change over time, we have flexibility to move with the benchmarks. We also put a clause in the contract to provide incentives to both sides to pursue those future benchmarks.


WM: Some analysts are skeptical that Convergys can handle a deal of this size. What do you say to that?

Lareau: We have been with them now for six months, and so far they are meeting our expectations. We are having the normal ups and downs that you have with any large HR BPO relationship, but we are feeling good about what they have done to date.


WM: The Florida attorney general recently filed a case alleging that Convergys failed to protect the personal information of Florida state employees. Have you spoken to Convergys about this?

Lareau: We have a very open dialogue, and they have told us everything they can tell us about the situation with Florida. My personal opinion is that the issues with the state of Florida are more of a Florida problem than a Convergys problem, and it’s an election year, so they are getting sucked in.


Workforce Management, May 22, 2006, p. 7 — Subscribe Now!

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0606_Manpower R&S

Challenge


W


hen Visteon Corporation spun off from former parent Ford Motor Co. in 2000, the tier-one automotive engineering and systems provider had to decide how it wanted to handle employee recruiting.


At the time, Visteon had no specialized recruiting professionals and its cycle time for new hires averaged more than 70 days. The company’s options were to build a recruiting team from the ground up or outsource the non-core recruiting function.


Solution


Visteon partnered with Manpower’s Resource Consulting Group (now Manpower Business Solutions) to manage its professional employee recruitment process, including candidate sourcing, screening, hiring and on-boarding at approximately 25 U.S. locations. This solution, now known as Recruitment Process Outsourcing (RPO), was ahead of its time just six years ago.


One of the most important steps in achieving a successful RPO relationship is the integration of RPO processes into the existing business structure and culture. With that in mind, Manpower and Visteon set out to make RPO a seamless extension of the organization.


A team of 15 people was selected to reside at the Visteon corporate offices. The group included specialty recruiters in finance and engineering to source, identify and evaluate candidate talent; staffing consultants who interface with Visteon hiring managers and human resources professionals to handle candidate offers; and placement coordinators who manage new hire on-boarding.


Initially, the team was charged with managing direct hires for the product development group, which consisted mainly of engineers, and staff groups that included human resources and finance professionals. Within 18 months, hiring for manufacturing positions was added to the RPO program. At the three-year mark, growth continued with the addition of hourly and salaried hiring for new plant launches and management of the program that assists current Visteon employees seeking other positions within the organization. After four years, the program was extended again, and Manpower Business Solutions started working with Visteon to redeploy talent within Visteon when program launches came to an end or positions were eliminated.


Continued success and improvements resulted in further expansion for the program, including a targeted, pilot hiring program in Mexico as a means to possibly expand the level of U.S. services into that country. Today, the RPO team supports Visteon in virtually all hiring, including specialty recruiting needs, giving it a capacity of about 1,000 internal and external placements annually.


Until an employee’s first day, Manpower Business Solutions, through the RPO program, serves as the face of the automotive supplier by overseeing sourcing and talent reviews; scheduling interviews; managing offers; handling post-offer processing, and all other communication and interaction with candidates.


In addition to the hiring programs, Manpower Business Solutions continues to assist Visteon in redeploying talent within Visteon. Manpower Business Solutions also manages an employee voluntary resignation/retirement process that ensures smooth transitions from Visteon as well as recovering any company assets held by departing employees.


Results


With its innovative HR strategies and process management expertise, the RPO program has earned high praise from Visteon by delivering performance improvement, cost savings, workforce diversity and organizational flexibility.


Not only does Manpower Business Solutions score well on service evaluations from hiring managers, but metrics also show that the programs are good for Visteon’s business.


As an end-to-end program, RPO has:


  • Reduced cycle time-to-hire from 74 days to 27 days.
  • Built candidate retention at 90 days to more than 99 percent.
  • Hired nearly 5,000 people to date.
  • Consistently scored “exceeds expectations” on new hire and customer satisfaction surveys.

In May 2006, Manpower Business Solutions received the Visteon Important Partner award in recognition of its high level of supplier performance.


As the Visteon and Manpower Business Solutions partnership enters its sixth year, the RPO program continues to increase service offerings, streamline processes and achieve hard-dollar cost savings. Meanwhile, Visteon points to the RPO program as a benchmark for HR vendors providing outsourced services.

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2006 Workstream User Conference

Event: 2006 Workstream User Conference, May 23-24, San Francisco Hilton Financial District, San Francisco


Conference Info: For more information about Workstream, go to Workstream.com


Day 1: Tuesday, May 23, 2006


Say goodbye to software: Workstream, which specializes in software that manages what’s called the “employee lifecycle,” from recruiting through retirement, is one of several HR technology companies that delivers its product via the Web, using the “software as a service” model. And so it should come as no surprise that the conference’s keynote speaker, Tim Chou, is the author of the book The End of Software (2004). Chou, a Ph.D. in electrical engineering, was most recently president of Oracle on Demand, said to be the fastest-growing business inside the company.


In his book, and in his keynote, Chou argues that the cost of maintaining traditional software is sky high for end users and threatens to kill off a company’s ability to buy new products (and for software companies to sell them). He estimates that 75 percent of the corporate IT dollar is spent just managing software systems. Chou says that advances in technology over the past 30 years have driven the cost of computer hardware down by a factor of 1,000. That advance, he says, “has been limited by physics and manufacturing technology.” The shift to software-as-a-service technology “represents the same shift in software technology—only it’s not limited by physics. The tide is rising—the only debate is the rate.”


Take the “engagement IQ” quiz: In another session, Susan Haslett of Towers Perrin posed interesting questions about the level of employee engagement with their companies. See how you do:


1) Have U.S. employee engagement levels moved up or down since 2003?


2) There is a strong demonstrated link between employee engagement and:


  • Workforce retention
  • Workforce performance (quality, cost management, customer service)
  • Company financial performance

3) The No. 1 global driver of employee engagement in Towers Perrin’s 2005 study relates to which area?


  • Senior leadership and frontline manager effectiveness
  • Learning and development opportunities
  • Fairness in determining pay

4) Which country has the highest percentage of highly engaged employees? Which has the lowest?
Belgium, Brazil, Canada, China, France, Germany, India, Ireland, Italy, Japan, Korea, Mexico, Netherlands, Spain, U.K., U.S.

Ready for the answers?


  1. Down
  2. All of the above
  3. Learning and development opportunities
  4. Mexico=40 percent of employees highly engaged; Japan=2 percent of employees highly engaged.

By the way, Haslett said engagement for U.S. workers was somewhere in the middle of the pack, at 15 percent to 20 percent of U.S. workers being highly engaged.


–Carroll Lachnit





 

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Work-site Raids Fail to Appease Conservatives

A high-profile effort by the Department of Homeland Security to crack down on businesses that employ undocumented workers has failed to mollify a House conservative who plays a role in immigration policy. And that response signals the potential difficulty Congress faces in passing reform this year.


From April 19 through May 9, U.S. Immigration and Customs Enforcement, a division of DHS, arrested owners and executives of three companies across the country. In what ICE called the biggest raid in history, it arrested 1,187 illegal immigrant employees of IFCO Systems North America Inc., a Houston pallet manufacturer.


Those results don’t impress Rep. John Hostettler, R-Indiana, chairman of the House Judiciary Subcommittee on Immigration, Border Security and Claims. Hostettler criticizes the Bush administration for failing to enforce existing immigration laws.


Hostettler’s position is emblematic of conservatives who were influential in gaining House approval of an immigration bill in December that focused strictly on border security.


In mid-May, the Senate began debate on comprehensive immigration legislation that would include a guest worker program and a pathway to legal status for undocumented workers. Leaders hoped to approve a bill by Memorial Day. The broader Senate approach is backed by President Bush and the Essential Worker Immigration Coalition, a group of business organizations that argue a strong immigrant workforce is crucial to economic growth. In a national address last week, Bush proposed a new biometric identification card for legal foreign workers. Employers could then verify eligibility, leaving them “with no excuse for violating” immigration laws.


Melding the House and Senate bills into a final measure would require potentially volatile negotiations. The work-site enforcements are seen as a way for the Bush administration to mollify conservative critics who want to crack down on illegal immigrants.


That strategy is not working on Hostettler, who asserts that the immigration debate won’t be decided until voters go to the polls this fall and, he hopes, support candidates who favor tough immigration policies.


“The administration is not focused on workplace compliance,” Hostettler says. “They’re not getting it. They’re not going to get it. This issue is going to have to have an electoral solution.”


In the meantime, Hostettler backs an idea offered by the Center for Immigration Studies. In a new report, the think tank asserts that enforcing current immigration laws would reduce the number of illegal aliens by 1.5 million annually through “attrition.”


A linchpin is mandatory workplace verification. “If enough Wal-Marts and McDonald’s are continually confronted with enforcement of laws on the books today, these folks would comply with the law,” Hostettler says.


Employers ignore immigration laws because they’re rarely punished for breaking them, according to Mark Krikorian, executive director of the Center for Immigration Studies.


One obstacle to establishing a new respect for immigration laws is mixed signals emanating from the Department of Homeland Security, Hostettler and Krikorian say. Hundreds of illegal workers detained in the IFCO raid have been released. A customs official says that the agency prioritizes the prosecution of employers.


“Congress has only appropriated enough beds for ICE to detain 20,800 illegal aliens at any given time,” says Dean Boyd, a customs spokesman. “In many areas of the country, our beds will be filled with illegal aliens who have committed heinous criminal violations.”


—Mark Schoeff Jr.

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Senate Ends Debate, Adds Employer Sanctions; Showdown With House Looms

The Senate has voted to end debate on immigration legislation that now includes a provision for employer sanctions, while a leading House conservative plans this week to introduce a measure that would require the nearly 12 million undocumented people in the U.S. to “self-deport” and return legally as guest workers.


Rep. Mike Pence, R-Indiana, hopes his proposal, which includes tough employer sanctions, will be a catalyst for compromise between Senate and House versions of immigration reform bills.


On Wednesday, May 24, the Senate voted to limit debate on its immigration reform bill, meaning that final passage is likely this week. The legislation will include a pathway to citizenship for undocumented workers.


The measure would slap fines of up to $20,000 on employers who hire illegal aliens and mandate that companies participate in the Electronic Employment Verification System.


The system would come online 18 months after the secretary of labor receives implementation funds. In the pilot verification program, employers are charged about 25 cents per initial query and up to 48 cents per additional verification.


The Senate bill also authorizes 2,200 additional work-site enforcement agents annually for five years for the Bureau of Immigration and Customs Enforcement.


The House measure, approved in December, would make illegal aliens felons and enhance border security. It contains workplace provisions similar to those in the Senate bill.


The House and Senate are headed for contentious negotiations, with conservatives vowing to oppose “amnesty” for illegal aliens.


Pence calls his position “the real rational middle ground” on immigration reform. Without it, he believes, there will be no bicameral agreement.


“I feel like we’re headed for a train wreck,” he said in a May 23 speech at the Heritage Foundation in Washington. Pence is chairman of the Republican Study Committee, a group of 110 House conservatives.


House Majority Leader John Boehner, R-Ohio, says Pence’s offering is “one of many things that will be floated in the coming weeks … as we attempt to forge a compromise. Trying to find a pathway that is acceptable to the House and Senate is going to be very difficult.”


Pence’s plan is based on an idea formulated by Helen Krieble, who hires 10 guest workers a year for her business, the Colorado Horse Park. Under the proposal, private worker placement agencies, called “Ellis Island Centers,” would be licensed by the federal government to match guest workers with jobs that businesses verify cannot be filled with American workers.


U.S. companies would apply for workers through the agencies. Presumably, placement firms like Manpower and Adecco would be utilized. Specific corporations cannot be named in federal legislation.


Self-deportation and return should take about a week, Pence says. Guest workers would receive a “W visa,” a wallet-size biometric card that can be swiped to verify employment eligibility.


Market demand would determine the number of visas allowed during the first three years of the program. After that, the Department of Labor would set limits. Workers could stay in the country for up to six years before returning home or applying for citizenship through a separate process.


Like the Senate bill, Pence’s proposal contains employer sanctions and requires that they utilize a national employment verification system. Pence didn’t have an estimate on the cost to companies.


“Employer enforcement is the key,” says Pence, whose grandfather is an Irish immigrant. “Once in place, jobs for illegal aliens will dry up. Why hire an illegal alien when you can hire a legal guest worker and eliminate the possibility of a big fine?”


A business organization that is advocating immigration reform has doubts about the Pence plan. It’s unrealistic that 12 million illegal aliens will self-deport, says John Gay, vice president for government affairs and public policy at the National Restaurant Association and co-chair of the Essential Worker Immigration Coalition.


Other issues that must be addressed are a lack of green cards—about 10,000 are available for low-skill workers each year—and the need to establish a flow of immigrant employees to maintain the U.S. economy.


“We’ve got a permanent need for these workers and it’s growing,” says Gay, whose organization supports the comprehensive approach to immigration that is emerging in the Senate.


—Mark Schoeff Jr.

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Toyota’s U.S. Chief Advocates Greater Role for Women in Auto Industry

With Toyota’s sexual harassment scandal still lingering, Jim Press, the company’s top American executive, stated the obvious during a speech in Detroit: Women should play a more prominent role in the auto industry.


“We need to do a lot more,” Press said during a recent luncheon speech to Inforum, a professional women’s group in Detroit. “We’re making progress.”


In his first public appearance since being named president of Toyota Motor North America Inc., Press says the automaker relies on women to make key decisions in many high-ranking posts. He noted that women make up almost 60 percent of its car (versus light-truck) customers.


Press took the new job at Toyota’s New York-based holding company, pending board approval, after Hideaki Otaka, CEO of Toyota Motor North America, resigned. Press was president of Toyota’s U.S. sales company. Otaka was accused by his executive assistant, Sayaka Kobayashi, of sexual harassment.


Press also says that the number of women buying vehicles is rising and currently stands at 46 percent of total industry-wide sales.


Toyota markets its hot-selling hybrids to women, whom Press says often place a higher priority on fuel efficiency and low emissions than men do.


In addition to buying cars, Press said women are potentially superior salespeople than men. Saleswomen are less likely to ignore female customers or question their financing methods than salesmen.


“There’s growing evidence that women are better than men at selling cars,” Press says.


He noted that although just 8 percent of dealerships in the United States are owned by women, women-owned dealerships sell vehicles at a higher rate than stores owned by men.


Press declined to comment on the New York harassment accusations, with the lawsuit pending. He says he had been chosen for the promotion a month ago and it was scheduled to be announced in June. It was advanced when the allegations came to light.


A comfortable work environment is a priority for Toyota, he says.


“We’re going to make sure that nobody in our workplace feels uncomfortable going to work.”



—Greg Migliore



Migliore is a reporter for Automotive News, a sister publication of Workforce Management.

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Media Buyer Claims Age Discrimination

A McCann Erickson media executive has sued his longtime employer and its parent company, Interpublic Group of Cos., for age discrimination, alleging he was wrongfully dismissed in the struggling agency’s attempt to modernize itself.


The lawsuit, filed by George Hayes, a 30-year veteran of McCann’s media buying and planning operations, puts into relief what could turn out to be a major issue for the industry as large agencies refit themselves for a digital world. That process often requires stripping out layers of longtime employees in the search for an often younger breed of strategists and creatives who understand an increasingly complicated media environment.


In papers filed in New York State Supreme Court this month, Hayes, 54, alleges that since arriving last fall, Universal McCann’s new worldwide CEO, Nick Brien, has “value[d] youth instead of experience and desired younger persons in place of older persons and acted upon his discriminatory preference by terminating older persons, because of their age.”


Led by Brien, Universal McCann has been in the throes of a high-profile turnaround initiative following a couple years of client losses, including General Motors Corp. and Coca-Cola Co. Brien has named top executives in the U.S. and Europe and is working to improve the agency’s communication planning offering in an effort to offer clients better strategic guidance on how they should spend their marketing dollars.


Hayes claims that that effort is at the root of his dismissal. The lawsuit states: “The ultimate goal of McCann Erickson was to replace its older workers with younger employees, based not on performance, but on McCann Erickson’s discriminatory desire to create a more youthful image, which McCann Erickson felt it could achieve by ridding itself of it older employees and replacing them with younger employees.”


The lawsuit outlines a few meetings that, Hayes contends, demonstrate that preference. In one address to staffers at Universal McCann’s New York office, it is alleged that “Mr. Brien stated that the young people in the group ‘got it’ when it came to ‘new media’ of the digital age, that ‘things will be different around here.’ “


It also describes a November 18, 2005, meeting involving senior executives from the agency to which Hayes and “certain key executives of age” were not invited. The lawsuit does not specify which other executives were left out.


Hayes, an executive VP, learned December 13, 2005, that he was being dismissed, with the reason being “that Hayes did not have ‘the skill set’ needed to remain employed by McCann-Erickson,” the lawsuit says.


Hayes joined McCann in 1975 following a short stint at J. Walter Thompson. In 1996, he helped McCann launch Local Communications to handle spot buying for its client General Motors. Interpublic and Universal McCann lost GM’s media-buying business to Publicis Groupe’s GM Planworks unit last year, following a review.


Spokespeople for McCann Worldgroup, which houses McCann Erickson and Universal McCann, and Interpublic couldn’t immediately be reached for comment.


—Matthew Creamer


Creamer is a reporter for Advertising Age, a sister publication of Workforce Management.