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A lawsuit seeking class-action status has been filed against Kenexa Corp., a Wayne, Pennsylvania-based recruitment software and recruitment process outsourcing firm, alleging the company’s top officers misled investors and violated federal securities law between May 8, 2007, and November 7, 2007, according to a court filing.

The company said Friday, June 12, that the allegations are without merit and it will defend itself.

The complaint in the lawsuit cites positive comments made by the CEO and CFO regarding Kenexa during first- and second-quarter earnings releases on May 8, 2007 and August 8, 2007. However, the company missed its third-quarter revenue estimates.

And, on November 7, 2007, Kenexa reported it lost a customer in its recruitment process outsourcing division and cited longer sales cycles, according to the lawsuit. As a result, Kenexa’s shares fell to $16.61 from $27.84, the suit said.

The named plaintiff in the suit is the Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund.

—Staffing Industry Analysts

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The Obama administration’s executive compensation proposals would not only increase the workload of compensation and HR managers, but they may also change how firms—particularly those in the financial services sector—recruit talent.

On June 10, Treasury Secretary Timothy Geithner proposed a series of changes to how companies determine executive compensation. Among them was allowing shareholders to have a nonbinding vote on executive compensation and an effort to reduce incentives that result in executives taking excessive risks. Specifically, the administration wants companies to replace short-term bonus plans with more long-term incentive plans, such as granting restricted stock.

If passed into law, these proposals could mark a massive change for financial services firms, which largely rely on mammoth annual bonuses to recruit and retain talent, experts say.

“The days of an individual producer making a $20 million bonus in a year are going to decline,” said David Swinford, president and CEO of Pearl Meyer Partners, a New York-based executive compensation consultant.

The challenge for HR and compensation professionals will be to figure out how to define risk and structure compensation in a way that makes sense, experts say.

“What’s troubling about this idea of defining risk is that when you look at the blowup we are living in right now, it didn’t seem incredibly risky before it happened,” said Alan Johnson, a New York-based compensation consultant. “Who thought we could go broke on mortgages?”

To address this, compensation and HR executives will have to work closely with their compensation committees to develop an analysis that assesses the risk of their companies’ incentive plans, said Andrew Goldstein, co-practice leader of executive compensation in North America for Watson Wyatt Worldwide.

While the proposals still have to go through Congress, experts agree that these changes along with President Barack Obama’s call for increased regulation of financial services companies will result in these companies changing the profile of their ideal job candidates.

“I do think that HR will put more emphasis on people who follow rules well as opposed to the super-entrepreneurial types,” Swinford said.

The days of getting rich quick on Wall Street are over, and that means companies are going to want employees who have a longer-term perspective, said Jack Dolmat-Connell, CEO of DolmatConnell & Partners, a Boston-based executive compensation consulting firm.

All of the increased regulation over the financial services industry may make it harder for these firms to attract and retain talent, Goldstein said.

“The question is whether those people who would have otherwise been attracted to work in this industry still want to do so, given more government regulation,” he said. “I think some of the bloom is off the rose.”

—Jessica Marquez

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The White House hopes the old dogs at General Motors can learn new tricks.

Steven Rattner, head of President Barack Obama’s auto task force, says changing GM’s bureaucratic culture is critical to reinvigorating the bankrupt automaker.

“Addressing cultural issues is just as fundamental to our assignment as addressing the balance sheet or financing,” he said in published reports.

But GM lifers dominate the company’s senior management. Of the automaker’s 12 executives with a rank of group vice president or above, only three have been with GM less than 20 years.

Take the two men most responsible for GM’s future cars and trucks: Tom Stephens, vice chairman for global product development, and John Smith, group vice president for global product planning. Each has spent 40 years at GM.

On June 12, purchasing boss Bo Andersson left GM. He was a relative newcomer, having joined in 1987. Change may come as others follow him out the door.

“We will lean out the management structure so that it will allow us to make faster decisions,” GM chief financial officer Ray Young said. He declined to say how many will leave, but said, “We will eliminate layers of management.”

Filed by James B. Treece and David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Companies can be found liable for discrimination against disabled people under state civil rights law even if the discrimination is unintentional, the California Supreme Court said in a decision issued Thursday, June 11.

The case involved Kenneth Munson, who has a physical disability that requires the use of a wheelchair, according to the decision in Kenneth Munson v. Del Taco Inc.

Munson charged that when he visited a San Bernardino, California, restaurant operated by Lake Forest, California-based Del Taco Inc., he “encountered architectural barriers that denied him legally required access to the parking area and rest rooms,” according to the opinion.

Munson sued the company under the federal Americans with Disabilities Act and California’s Unruh Civil Rights Act. The 9th U.S. Circuit Court of Appeals in San Francisco asked the state Supreme Court to consider the case.

The court agreed with Munson in its unanimous decision that under the state law, a plaintiff “may obtain statutory damages on proof of an ADA access violation without the need to demonstrate additionally that the discrimination was intentional.”

After a federal district court ruling that had granted partial summary judgment in favor of Munson, the parties had agreed Munson would receive $12,000 in damages under the state law, pending an appeal.

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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InGenesis Medical Staffing, a San Antonio-based health care staffing firm, was awarded 12 U.S. Army health care staffing contracts through its InGenesis Arora joint venture, the company announced.

The contracts are part of a total award valued at $1.27 billion.

The Army Medical Command Health Care Acquisition Activity Center informed InGenesis of the award this week.

InGenesis will supply nurses, physicians and allied health care professionals to Army facilities in the Northern, Pacific, Southern and Western regions specified in the contracts. These areas include Army medical sites in all 50 states as well as Puerto Rico and South Korea.

InGenesis will compete with other contract winners to place staff over the five years of the contracts, but it’s the only company located west of the Mississippi to receive all 12 contracts allowing it to compete to place nurses, doctors and allied professionals in all regions.

“What makes it so unique for us is we will be able to, and be honored to, compete on all 12 of the contracts,” said InGenesis president and CEO Veronica Edwards.

—Staffing Industry Analysts

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The World Health Organization has declared the H1N1 flu a pandemic because of its expanding global reach, but the virus’s mild intensity means many employers with pandemic plans are probably content to wait and see.

“We’re watching the situation, but not doing anything different than what we’ve been doing,” said Delia Vetter, director of benefits for Boston-area-based technology firm EMC. “Our plan is designed to be able to respond to the recommendations of the WHO and the CDC.”

Vetter said the company plans to communicate about the pandemic declaration with its approximately 40,000 employees worldwide and ask them to take basic precautions against spreading illness.

The World Health Organization declared the outbreak to be a pandemic, the first declaration in 41 years, because of the flu’s easy human-to-human spread. As of Thursday, June 11, officials have confirmed nearly 28,774 cases of H1N1, commonly known as swine flu, in 74 countries.

“The world is now at the start of the 2009 influenza pandemic,” said Margaret Chan, director-general of the World Health Organization in a statement to the media.

The 144 deaths attributed to the strain, far fewer than the hundreds of thousands killed each year globally by seasonal flu, are the result of its moderate severity, health officials said. The U.S. accounts for 13,217 cases and 27 deaths; in Mexico, where the strain was first discovered, 6,241 cases and 108 deaths have been reported.

Pandemic-preparedness expert Edward Minyard, a partner at Accenture Technology Consulting, said the pandemic declaration has prompted public-sector employers, whose charters generally require them to have a pandemic plan, to review their preparedness plans and conduct preparedness exercises with other public agencies.

Minyard said the WHO’s announcement Thursday has reinforced the notion that the virus, though currently mild, is not going away soon and that employers would do well to be prepared should the flu become more virulent. Employers with plans should review them and make sure a company’s vendors are also prepared.

“In all honesty this announcement is not a surprise,” Minyard said. “The folks tracking this thing won’t do anything differently. Hopefully, though, those who weren’t doing anything will wake up to the need to have a plan in place.”

Many employers, however, are not prepared.

A survey released Tuesday, June 9, by Mercer showed that 40 percent of companies do not have an HR policy in place to deal with health-related emergencies. The swine flu pandemic has motivated more than half of the employers surveyed to create contingency and back-up plans.

Health officials said they expected more fatalities as the flu spreads to less-developed parts of the world, where public health systems are poorer.

“Although the pandemic appears to have moderate severity in comparatively well-off countries, it is prudent to anticipate a bleaker picture as the virus spreads to areas with limited resources, poor health care, and a high prevalence of underlying medical problems,” Chan said.

—Jeremy Smerd

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