Category: Commentary & Opinion

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Fight or Flight? When an Employee Sues You, Should You Litigate or Settle?

Two weeks ago, the New York Times‘ You’re the Boss Blog asked the following question:

How do you handle employee litigation?

Do you dig in your heels and fight, settle, or some combination of the two?

The NYT‘s blog post recounted the story of one small business owner who chose to stand his ground and assume the risk of taking an employment case to trial. As a result the employee dropped his settlement demand to a nuisance value, $10,000.

The reality, however, is that there is no easy answer to the question of how your company should respond to a lawsuit by an employee. You must weigh all of the following factors to come to the right decision for your business in each case.

  • Is the plaintiff a current or former employee?
  • How much can you afford to spend, and will litigation now impede your ability to fund a settlement later?
  • Do you have employment practices liability insurance coverage?
  • Is there a risk that a settlement will incent other employees to bring claims, or will long, protected litigation deter copycat claims?
  • What is your tolerance for the distractions of litigation—responding to discovery, gathering documents, dealing with the hassles of electronic discovery, attending depositions, and attending court dates?
  • Do you want to subject your managers, supervisors, and other employees to depositions?
  • What is the reputation of the plaintiff’s attorney—is s/he going to make the case more difficult and expensive than necessary?
  • What is the likelihood the assigned judge will grant a summary judgment motion and dismiss the case?
  • How tight or loose are juries in your jurisdiction?

How you answer these question will dictate whether you litigate or offer a settlement, and, if it’s the latter, when you make that offer. Keep in mind, however, that even if you choose to offer a settlement, no case resolves without two willing parties. If the other side is not willing to meet you at a fair and reasonable value for the claim, then the choice has been made for you, lest you become an easy mark for every disgruntled employee.

Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Jon at (216) 736-7226 or jth@kjk.com.

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Stihl Instills Manufacturing Skills Into High School Students’ Learning Via Summer Camp

Stihl Inc. is trying to train potential employees well before they hit the job market.

The Virginia Beach, Virginia, maker of power tools runs an annual summer camp in which area high school students turn raw materials into finished goods. All told, 40 high school students from grades nine through 12 participated in Stihl’s camp in 2012.

During the four-day event, five teams of students competed against one another to build a chassis, a printed circuit board and a parts kit. The teams spent the first day figuring out what they needed and securing resources.

On day two, the students toured Stihl’s high-tech factory to learn about manufacturing steps they must execute and how to develop a production timeline.

Projecting market demand—the number of units that will need to be made—and completing a prototype occupied day three. The camp concluded the following day with a competition between the teams, with local dignitaries, academics and business leaders serving as judges.

During the camps, teams compete against each other and are evaluated on various categories, including production efficiency, inventory management, quality standards and innovation. “There is one clear winner,” says Simon Nance, Stihl’s manager of learning and development and the camp’s director.

Although Stihl does not use the event to directly recruit students, Nance says the hope is that at least some of the participants will consider manufacturing careers. A larger goal is to help usher in a “renaissance in manufacturing” in the United States by immersing them in the details of the process.

“That’s not being taught in high schools or anywhere else,” Nance says.

Some camp participants have inquired about the prospect of internships or even jobs with Stihl upon graduation. “We’re staying in contact with them, because these young people could be our future workforce.”

Stihl launched the camp in 2011 in which students collaborated on teams to build clocks. Stihl has not yet decided which item it will have students make at its 2013 camp but is weighing five possible projects. Whichever one is chosen will require student teams to perform computer numerical control machining, drilling, tapping (cutting internal threads), assembly, testing and packing.

Garry Kranz is a Workforce contributing editor. Comment below or email editors@workforce.com Follow Workforce on Twitter at @workforcenews.

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Work, Cancer and Us

It was about 20 years ago when I read a compelling series of stories by a San Diego reporter. The articles, which ultimately garnered national recognition for the writer and the newspaper, didn’t rely on traditional hot-button topics such as corruption or scandal in public education—this particular scribe’s daily beat.

No, these stories were of a much more personal nature. Drew Silvern chronicled the grim, unfair reality of being a 34-year-old diagnosed with brain cancer. During the next three years, Silvern pulled no punches as he took us on an incredibly private journey of living with a death sentence. Graphic descriptions of medical procedures—the fist-to-gut reaction to being told the cancer had returned—were juxtaposed by deep spiritual musings, thoughts of family and friends and an amazing dedication to his craft.

Silvern died in 1997 at age 37. Amid the emotion stirred by such a story, what struck me as I recently reread his journal was his bravery: Silvern went public when no one would have blamed him for staying private.

His employer, the San Diego Union-Tribune, could have backed away from publishing an explicitly detailed, difficult and, quite frankly, uncomfortable story. But they didn’t.

Cancer at work still reflects the attributes Silvern delivered to his readers nearly two decades ago. Though communications and acceptance have improved, cancer is an uncomfortable subject to confront and remains just as difficult to discuss.

Look around your workplace. If you don’t know someone who has been afflicted by cancer, chances are good that your colleague does. In fact, it could be the co-worker sitting next to you.

More than 1.7 million people will be diagnosed with cancer this year in the United States. Nearly half of those people range in age from 19 to 64—the prime ages of our workforce. Cancer costs employers $264 billion annually in health care costs and lost productivity. But the good news is that 90 percent of cancer survivors under 55 years old will return to work within a year of their diagnosis.

I fall into that category. I actually returned to work the day after receiving treatment for skin cancer in 2009. I’ve never spoken publicly about it. It’s personal and I feel like I can handle it on my own. With regular checkups and a very aggressive dermatologist, we’ve kept my cancer in check.

Perhaps my reluctance to discuss it until now is ill-advised, but I suspect I’m not the only one who works in relative silence with cancer. I pondered the ramifications of going public with this information. How will it affect my relationship with colleagues or with employers past, present and future? Will it kill my career growth? Even worse, am I seen as damaged goods?

Then I realized that’s just silly. Silence is not golden. With more cancer survivors in the workplace than ever before, and employers combing every avenue to keep health care costs in check, turning a blind eye is ignorant.

Cancer at work is not going away and has gone national in a big way. Good Morning America‘s Robin Roberts and actress Christina Applegate have publicly shared their battles with cancer. In our cover story, four people also tell their survival stories. You might have one, too.

Fortunately organizations such as the National Business Group on Health and the National Comprehensive Cancer Network also see the importance in addressing it. The groups are teaming on an employer’s guide to cancer care this year.

From employee assistance programs and wellness initiatives to improving your communication techniques, the tool kit aims to help improve employers and managers deal with cancer-related issues in the workplace. It could be the most valuable tool kit your management team ever picked up.

Because we all work with people like Drew Silvern, Robin Roberts and Christina Applegate. And me.

Rick Bell is Workforce’s managing editor. Comment below or email editors@workforce.com.

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Customer Preference Does Not Protect Employers From Race Discrimination Claims

CNN reports that a Flint, Michigan, nurse is suing her hospitalbecause it kowtowed to a man’s request that no African-American employees care for his baby. The lawsuit [pdf] outlines her key allegations:

11. The father told the Charge Nurse that he did not want any African Americans taking care of his baby. While telling the Charge Nurse, he pulled up his sleeve and showed some type of tattoo which was believed to be a swastika of some kind.

12. After the father made the discriminatory request to not allow African Americans to take care of his baby, instead of flatly denying the request, the Charge Nurse called the Nurse Manager, Defendant Osika.

13. Defendant Osika told the Charge Nurse, Herholz, to re-assign the baby to another nurse and to advise Plaintiff that Defendant Osika, would speak to her supervisor and take care of it the next day.

14. Plaintiff was re-assigned on or about October 31, 2012 because she is African American….

19. When Plaintiff reported to her work, she learned that during that day there was a note prominently posted on the assignment clipboard that read as follows: “NO AFRICAN AMERICAN NURSE TO TAKE CARE OF BABY.” Plaintiff was shown a picture of the note.

Let’s make this as clear as possible. Adhering to the request of a customer is not a defense to a race discrimination claim. As one court succinctly stated : “It is now widely accepted that a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.” (Note that the same might not hold true for a customer preference based on gender, because employers can claim a bona fide occupational qualification as a defense to a sex discrimination claim).

If you find yourself in a position of having to face down a customer making such a request, take a stand. Tell the customer, “We don’t treat our employees like that, and if you can’t deal, we don’t need your business.” Be the better corporate citizen. It’s not just the legal way to act, it’s the moral way to act.

Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Jon at (216) 736-7226 or jth@kjk.com.

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U.S. Labor Department Seeks Clamp Down on Union Activity Advice

The U.S. Labor Department is close to finalizing a rule that, according to employment law experts, will force employers to file complex and detailed disclosure reports with the government any time they receive “advice” from their labor relations consultants.

For more than 50 years, compliance with a somewhat obscure law—the Labor-Management Reporting and Disclosure Act, or LMRDA—has not been unduly onerous.

The law’s reporting requirements contain an “advice” exception for many of the activities consultants and lawyers have undertaken in representing employers. The exception was broadly interpreted to make “persuader activities” reportable only when a labor consultant spoke directly to employees in an effort to persuade them to reject union representation.

But in June 2011, the Labor Department dropped a bombshell. It proposed that the advice exception be substantially narrowed because the broad reading of the exception had resulted in the “underreporting” of persuader activity. The proposed rule rejects the distinction between direct and indirect activity, making “all actions, conduct or communications that have a direct or indirect object to persuade employees” subject to the reporting requirement, including writing speeches for employers to give to employees and training supervisors how to conduct employee meetings.

The publication of the proposed rule provoked an unusually vociferous response. More than 8,000 comments were posted on the government’s regulations.gov website during the public comment period. The Labor Department could present a final rule for review by the Office of Management and Budget as early as April.

“We believe that the [proposed rule] is way too broad,” says Michael Lotito, co-chair of the Workplace Policy Institute at law firm Littler Mendelson. The expanded reporting requirement, he says, “intrudes into the confidentiality between lawyer and client” and will leave HR managers uncertain as to what does and does not constitute “advice.”

“They’re going to have to decide whether a particular interaction is reportable,” Lotito says. “A lot of this is not necessarily advice.”

Employers will have to be “much more cautious about getting help from any outsider,” says Maurice Baskin, an employment law specialist at Venable LLP.

LMRDA, which was enacted in 1959, grew out of concerns that some employers and their labor relations consultants were interfering with the right of employees to organize unions and bargain collectively under the National Labor Relations Act. Following the recommendations of a Senate investigation, it sought to promote transparency by requiring employers to report any arrangement with a consultant undertaken to persuade employees not to exercise their right to organize and bargain collectively.

A provision of the law created an exception for consultants who merely give “advice” to an employer. The term “advice” was not, however, specifically defined, making it, as one early commentator noted, “susceptible of several different interpretations.”

“When the statute passed, DoL issued their interpretation of the advice exception: As long as the third-party lawyer or consultant did not talk directly to employees … it was not necessary to report the nature of financial arrangement between employer and the third party,” Lotito says.

“A “usual indication that an employer-consultant agreement is exempt is the fact that the consultant has no direct contact with employees and limits his activity to providing to the employer or his supervisors [sic] advice or materials for use in persuading employees which the employer has the right to accept or reject,” the Labor Department said in a 1989 memorandum.

The Labor Department now wants to change the rules. “We now believe that the ‘department’s current interpretation of the advice exemption may be overbroad, and could sweep within it agreements and arrangements between employers and labor consultants that involve certain persuader activity that Congress intended to be reported under the LMRDA,” it said in announcing the proposed rule.

Employment lawyers fear the Labor Department has created a minefield for employers by eliminating the direct contact distinction and bringing the providing of “advice or materials for use in persuading employees” within the scope of LMRDA’s reporting requirement.

“When an employer calls a lawyer … the lawyer is really doing two things at once,” Lotito says. “He’s providing the employer with legal advice, and he’s providing advice designed to persuade. … The problem is you can’t separate the legal advice from the persuasion because they’re one and the same thing.”

Both Lotito and Baskin foresee extensive litigation if the Labor Department’s proposals are adopted into a final rule. “As a threshold matter, HR people are going to have to familiarize themselves with the requirements and educate their organization about those requirements,” Lotito says.

Matthew Heller is a writer based in Los Angeles. Comment below or email editors@workforce.com.

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Finding Your Way Through ‘Nemo’: How to Prepare for a Storm

Just three months after Hurricane Sandy hammered the Northeast, a winter storm dubbed “Nemo” is expected to deliver another pounding to the region, plunging businesses into yet another state of emergency.

Peppercomm, a New York-based public relations firm, said it cautioned employees to stay informed about the approaching blizzard—up to 3 feet of snow is predicted this weekend along with widespread power outages lasting into early next week—and use their best judgment when deciding to travel to work.

“First and foremost, our employees’ safety is our No. 1 priority,” the firm said in an email on Feb. 8. “Almost every employee is equipped to work from home, and many of our employees are doing this today.”

If the storm does go down as one of the worst blizzards in New York’s history and business is affected after the weekend, Peppercomm said its disaster plan, which effectively guided the firm through Hurricane Sandy and its aftermath, is ready to be implemented. The firm uses a text message service that allows it to communicate with employees in the event of an emergency.

It also has a private Facebook group where employees can provide personal updates and have the necessary conversations that would allow client work to continue from outside the office. And in case the Tri-State area loses power, Peppercomm has employees in San Francisco and other locations that could manage the workload of the New York office.

The Society for Human Resource Management suggests companies have disaster plans similar to the one Peppercomm created. SHRM encourages companies to regularly update contact lists as communicating with employees is critical. “Through effective communication … employees know about not only what is expected but also what resources they can turn to for support during the crisis, and others can know about their role in the emergency,” according to the organization.

In anticipation of losing telephone service, employers should consider using their website as a way to effectively communicate with employees during an emergency. Things like expected hours of operation, when facilities will be reopening or the location of a temporary work site could be communicated through a company’s website, according to SHRM.

SHRM also recommends employers have a comprehensive understanding of their obligations under laws like the Family and Medical Leave Act because “employees who are physically or emotionally injured as the result of a natural disaster also may be entitled to FMLA leave.”

It is also important for business to understand which employees it is required to pay if inclement weather causes work sites to close, SHRM says. If a work site is closed and an employer is unable to offer work to a nonexempt employee, the employer is not required to pay that employee when the work site is closed. Employers are required to pay exempt employees’ full salary if a work site is closed or unable to open for less than a full workweek. However, employers may require exempt employees to use allowed leave time in such a situation, according to SHRM.

Max Mihelich is Workforce’s editorial intern. Comment below or email editors@workforce.com

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In Defense of Corporate Diversity Programs

The exhibit at the Oregon Museum of Science and Industry was called “Race: Are We So Different?” Invited by several sponsors, including Portland State University, hundreds of community members of diverse races recently viewed the exhibit and then came together for a discussion.

Although the message of the exhibit was that biologically we are all pretty much the same, most of the people who stood and shared their thoughts introduced a different theme. Simply put, the consensus of the group was: “I want to be me.” Nobody, from African-Americans to Arab-Americans, wanted simply to blend in with others.

“I am not willing to give up my culture, which is thousands of years old,” a man from Iraq said.

“We don’t know enough about each other,” a Latina added. “Lack of knowledge is a hindrance.”

“We’re all supposed to climb into our white man’s suit and act like a white man,” said an African-American woman. “We need to be ourselves culturally.”

Jilma Meneses, chief diversity officer at Portland State University, moderated the discussion. She said the comments mirrored current trends in the workplace, where people of color are expecting not just to be stirred into the melting pot, but to be acknowledged and even honored for their cultural differences.

“That’s so important for retention at any workplace,” Meneses said. “That’s one of my priorities to honor and celebrate our employees of all backgrounds.”

The recent presidential election and voter demographics showed how many different ingredients there are in the American melting pot. According to the U.S. Bureau of Labor Statistics, people of color make up 36 percent of the labor force. By 2050, the bureau predicts that there will be no racial or ethnic majority in the United States.

In part to address demographic shifts, workforce diversity programs began appearing in corporations in the 1980s. But they have received mixed reviews over the years. A 2007 study by Harvard University sociology professor Frank Dobbin concluded that most of the 708 diversity programs he examined had failed, and in many cases had created a diversity backlash. Poorly managed programs had exacerbated an already existing communication and cultural divide in some organizations.

Concerns also have been raised about disconnects between diversity programs and improvements in minority representation. William Powell, executive director of The Leadership Advisor consulting firm, wrote in a July 2011 blog post: “What ruffles my feathers is how diversity has devolved into this tickbox that organizations use to show they are ‘progressive.’ “

But many organizations are making a real effort to acknowledge and even honor individual workers’ heritage and cultural backgrounds and are seeing results in higher productivity and employee engagement. At Loews Coronado Bay, a high-end resort hotel in San Diego, employees are treated with as much respect as the guests, says Barbara Vale, director of human resources. To that end, assuring the comfort of employees, who are predominantly Asian, Filipino and Latino, is paramount. Cafeteria meals are not only free, but are a virtual smorgasbord, reflecting the tastes of each cultural group. “It’s about making them feel comfortable and embracing where they’re from,” Vale says.

Vale says she also acquaints herself with important holidays and celebrations from each culture and adds them to her calendar. On the Mexican Mother’s Day, for example, every Latina mom gets a rose.

Debbie Stogel of the Anti-Defamation League, a century-old organization that works to overcome anti-Semitism and bigotry, says such gestures are a good start. “I think it’s a great idea, but I think there does need to be more. I think there needs to be education and learning about other people’s culture and background.”

From her Los Angeles office, Stogel directs the ADL’s national A Workplace of Difference program, which leads workplace anti-bias and diversity trainings. “What we do is put folks through interactive activities that allow them to experience how to value each other’s differences.”

“I think there needs to be education and learning about other people’s culture and background,” Stogel says. And that includes everyone.

“We don’t in any way, shape or form take white males for granted,” she says. “They do have a culture and a history and a heritage, and that is something to be appreciated.”

Susan G. Hauser is a writer based in Portland, Oregon. Comment below or email editors@workforce.com.

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Kiss and Tell

A suggestion for business leaders this Valentine’s Day: don’t just focus on your honey. Get sweet on your workforce as well. And tell anyone who’ll listen how much you love your people.
Appreciating workers is age-old advice, but it comes with contemporary twists as Feb. 14 approaches. For one thing, a number of signs indicate the balance of power is shifting toward employees and away from employers. Highly skilled positions are getting harder to fill, overall job growth is continuing, and the economy is in general expanding—albeit in fits and starts.
What’s more, as we discuss in our upcoming February cover story, “re-shoring” is under way. That is, U.S. employers are recognizing limits to the shift of work to lower-wage locations offshore. Manufacturing and service-sector jobs are returning to or being generated in America, for reasons including long-distance communications challenges, higher wage rates in the developing world and steep transportation costs.
Ravin Jesuthasan, global practice leader for talent management at consulting firm Towers Watson, says organizations in some cases rushed to send work overseas and didn’t recognize the downsides. Now there’s growing interest in bringing some operations back to America’s shores. We’re “reaching a point of balance with offshoring,” Jesuthasan says.
All this means U.S. employers are going to have to woo workers more than they have over the past five years or so. But as you romance your recruits, the formula for success today is not the same as it was decades ago. The employee satisfaction focus of the 1950s and ’60s alone won’t cut it in today’s cut-throat global business climate. A new employer-employee relationship is in order. It’s a kind of tough love, where companies are exacting about their expectations and clear that jobs are far from guaranteed even as they foster a caring, inspiring culture.
In other words, admit that decisions about whether to offshore some operations and jobs will be based on hard numbers such as costs. And push people to work hard. But do that in part by giving them a stirring vision to pursue. That’s a rarity today, with only 4 percent of employees saying they are inspired by values and a commitment to a mission and purpose.
What’s more, offer generous severance packages if jobs are lost and show concern for workers’ long-term well-being by investing in training—which typically helps both employee and employer.
And share the wealth if things are going well. Consider giving a box of bonus bonbons akin to what Random House’s CEO gave his employees in the wake of the success of Fifty Shades of Grey.
Showing genuine affection and generosity for employees matters more than ever these days, because company cultures are exposed as never before. Feedback site Glassdoor offers a window into how workers are treated, as do other sites and the continuous stream of social media posts by workers everywhere.
Ahead-of-the-curve companies are entering the conversations about what they’re like to work at. They are showcasing their cultures through their own websites and encouraging employees to be brand ambassadors who talk about prized programs like software company SAP’s “social sabbatical” that allows high-potential employees to help out businesses in developing countries. In effect, these companies are loud and proud about how much their employees mean to them.
Valentine’s Day is a time to rekindle the spark. Why not use it as an occasion to shower your employees with affection? Fall in love in a modern way, and don’t be shy about how much you adore your workforce.
Ed Frauenheim is senior editor at Workforce. Comment below or email efrauenheim@workforce.com.

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Basic American Foods Feeds Skilled Development-Focused Culture

Headquartered in California, Basic American Foods (BAF) is an innovator in convenience and refrigerated foods. The company continues to grow, staying customer focused. BAF knows the key ingredient to its success is its employees and their continued development. To ensure that the organization is doing all it can to develop its employees; BAF has adopted Halogen Software’s talent management solutions. The organization’s investment in Halogen eAppraisal and e360 Mutlirater has enabled it to:

  • Generate a complete picture of employee performance
  • Increase employee engagement and satisfaction with the process
  • Hold employees accountable to Lean principles, and
  • Create a feedback rich culture, focused on development

Register now to download this free white paper titled Basic American Foods feeds skilled development-focused culture, sponsored by Halogen Software.

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Tobacco Cessation Report Lights Up Coverage Gaps, Confusing Language

Many health insurers are not offering members free tobacco cessation treatment as required under the 2010 federal health reform law, according to a new report from Georgetown University’s Health Policy Institute.

Other insurers offering the benefit don’t make it clear to members that it is available to them, and some other policies put up barriers to members to participate in programs to help them quit smoking, according to the report.

Researchers found “significant variation in how private health insurance coverage works for tobacco cessation treatment” when analyzing 39 insurance contracts in six states. The contracts included individual, small group and state and federal employee benefit plans.

“It is shocking to see the huge variation in what appears to be a straightforward inexpensive benefit that has significant medical evidence on treatment that works,” said Mila Kofman, principal author of the report and former Maine Superintendent of Insurance. “It is even more disappointing to find that some in the insurance industry are trying to avoid covering tobacco cessation treatment as required by the Affordable Care Act.”

The Patient Protection and Affordable Care Act required health plans and employers to cover tobacco cessation treatment with no cost sharing to members starting with new plans in September 2010. In 2014, individual and small group plans must include preventative and wellness services such as smoking cessation as part of essential benefits under the law.

Tobacco is the leading cause of preventable death in the United States, killing more than 400,000 people annually and costing $193 billion each year in direct medical costs and productivity losses. Studies have shown that cessation programs do help people quit smoking and participation rates are higher when there’s no co-payment, co-insurance or other cost sharing.

A 2006 report by Millman found that annual employer medical and life insurance claims drop by $192 per worker who quits smoking, for instance.

Among the shortcoming of the 39 contracts studied in the Georgetown study:

  • 15 contracts did not cover prescription drugs that have shown to help individuals quit smoking.
  • 24 contracts excluded over the counter medications to help quit tobacco.
  • Only four contracts included as a covered benefit individual counseling, phone counseling, group counseling, prescription drugs and over the counter medications.
  • Seven the contracts required cost-sharing for counseling by in-network providers
  • Six of the 24 contracts that covered prescriptions for quitting smoking required cost-sharing
  • One contract required individuals to fill out a health risk assessment to access prescriptions and over the counter medications for tobacco cessation

“Covering effective tobacco cessation treatments is a smart way for insurers to avoid the cost of future illness, and it is the law,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids, which funded the study.

The report authors recommend that regulators require insurers to communicate clearly to members their policies on tobacco cessation treatment and also provide insurers guidance on limitations to coverage under the law.

Report is here: http://www.tobaccofreekids.org/pressoffice/2012/georgetown/coveragereport.pdf

Rebecca Vesely is a writer based in San Francisco. Comment below or email editors@workforce.com.