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Panel OKs Heath Coverage Extension for Ill Students

Legislation approved by the House Energy and Commerce Committee on July 16 would allow seriously ill college students to continue coverage under their parents’ health insurance plans even if they can’t maintain status as full-time students.


The measure, H.R. 2851, approved on a 40-0 vote, would allow college students to retain coverage for up to 12 months after they take a leave of absence. Coverage would continue on the same basis as prior to the student going on leave.


The legislation is modeled after a 2006 New Hampshire law known as “Michelle’s Law.” The New Hampshire law was named for Michelle Morse, a Manchester, New Hampshire, college student who continued her studies while battling cancer so that she could maintain health insurance coverage. Morse died in 2005.


Unlike the New Hampshire law, which only applies to fully insured policies offered by commercial insurers and health maintenance organizations because of federal pre-emption of state laws that relate to employee benefit plans, the federal legislation would apply to both insured and self-insured plans.


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

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States Not Waiting for U.S. Reform

When Congress passed the Immigration Reform and Control Act of 1986, the measure was supposed to resolve the nation’s illegal immigration problem. It didn’t work.


    Twenty years later, lawmakers took another crack at the issue. But a deeply divided Congress was unable to reach agreement, and immigration reform died in 2007.


    By then, a new front in the immigration battle had opened. In June 2004, Kris Kobach, a law professor at the University of Missouri-Kansas City, authored a paper suggesting that states could help improve national security in the post-9/11 era by enforcing federal immigration laws. He argued that federal immigration law contained a clause that gave states some limited enforcement authority. Kobach spoke from experience: From 2001 to 2003, he had been an immigration specialist in the U.S. Attorney General’s Office and, after the terrorist attacks of 2001, was put in charge of efforts to tighten border security.


    As national immigration reform was collapsing, Arizona state Rep. Russell Pearce, a Republican from Mesa and an outspoken critic of U.S. immigration policy, decided to test how far his state could go in regulating illegal immigration itself. He settled on the workplace as the spot to focus enforcement efforts.


“When you start having different procedures in different states, it starts to open the door to all kids of discrimination complaints. We want one national system.”
—Lynn Shotwell, executive director, American Council on
International Personnel

    Pearce sponsored a bill to make Arizona employers confirm the legal status of all newly hired workers, relying partly on Kobach’s argument as the legal basis for the measure. The bill passed and Arizona’s new employer sanction law was signed in July 2007, mandating that all employers in the state use the federal E-Verify system, which had been set up as a voluntary program.


    A coalition of employer groups sued in federal court that same month to block the law. One of the key arguments was that states do not have the authority to enact immigration laws. The first round in Arizona federal court went to the state and an appeal was heard June 12 in federal court in San Francisco. A ruling may come later this summer.


    Meanwhile, other states and cities began enacting their own laws. The National Conference of State Legislatures found that 41 states enacted 170 immigration-related laws in 2007. In the first quarter of 2008, state legislatures considered more than 1,100 immigration-related bills.


    “We are really concerned about these state laws,” says Lynn Shotwell, executive director of the Washington-based American Council on International Personnel, which represents large multinational corporations. The hodgepodge of rules not only complicates the hiring process for large corporations, but also raises the potential of mistakes that can lead to legal problems, she says.
 


Workforce Management, June 23, 2008, p. 52 — Subscribe Now!

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Lessons From the Olympics

The Summer Olympics start August 8, and you just might be surprised to know that there are several lessons that HR professionals can garner from the event. Before you dismiss the connection outright, think about the Olympic model as one of the most effective motivation processes in the world. What better example is there than a system that motivates tens of thousands of individuals to make extraordinary sacrifices and to develop themselves beyond the capabilities of athletes who preceded them? The Olympic model routinely brings out record-breaking human performances. Unlike the corporate model, where professionals are paid thousands in salary and benefits just for showing up, the Olympics motivate without money and only reward performance. As with most sports, competing in the Olympics offers little statistical chance of even winning a medal, so it only makes sense to study the Olympics to see if there are any motivational principles we can use to set records with employee performance.

    The Olympics and HR share the same ultimate goal, which is getting the most out of human talent. Other things that HR has in common with the Olympics include the use of metrics, a continuous improvement process, teamwork and the use of technology to enable greater human performance. Both the Olympics and business are competitions (although it is often forgotten that business is so). By studying this model, which has operated successfully for decades around the globe, HR can capture some operational principles that can be modified and then applied to the way that HR manages employees. Here are four of those key principles:


    Competition is a powerful tool. Thousands participate in the Olympics, and millions watch them. That demonstrates that the competitive model excites people. Just to get a berth on your country’s team, you must successfully compete against your own teammates. In direct contrast, HR tends to discourage both internal and external competition, because it prefers harmony and it doesn’t like the discord associated with the heat of competition.


    Unfortunately, avoiding competition means lower levels of excitement and productivity. Some firms have embraced the competitive model. While firms like Google and Microsoft use contests to identify potential hires, MGM Grand has really mastered the science, employing “black box” competitions to seek out and identify talent anywhere within a function regardless of tenure and experience.


    In the food and beverage department, for example, any employee can sign up to compete in tournament-style culinary challenges in which winning contestants move on to the next round. Contestants are provided black boxes that contain ingredients they must use to prepare an original dish (anyone who has watched Iron Chef knows how this works). The challenges allow employees new and old, with and without experience, and from anywhere within the function, to showcase their skills and abilities to complete truly job-relevant challenges.


    In the recent past, black-box challenges have enabled a 23-year-old sous chef in a nonrated venue to be promoted to executive chef in a four-star venue, and a wait-staff member to be promoted to general manager, both having proved their ability to manage all aspects of the job through various challenges. Not only do the challenges enable superstars to shine, but they also remove all doubt among other employees why someone got promoted.


    Performance-based hiring is best. In the Olympics, you don’t make the team based on seniority, education or experience. Selection is based solely on the person’s performance in real-life trials. Corporations could benefit by shifting some of their emphasis away from interviewing and instead give candidates real problems or simulations to solve, as Microsoft, Google and GE have done.


    Reward superior results, not effort. In the Olympics, medals go exclusively to those who produce the top numbers. There is no “show-up pay” or guarantees. Although dozens might compete in a grueling event, only three will be recognized and rewarded with medals. HR, by contrast, tries to utilize the “soccer mom” model, where everyone gets equal praise and some reward and the differential between the top and the average performers may be marginal. HR also can over-praise intangible factors like effort, heart, loyalty, commitment, perseverance and values. The lesson is that dramatic differentiation in rewards sends a clear message that exceptional performance is the goal. Average results have little value because only exceptional results can teach us how to change the process so that all can improve.


    Compare yourself with the best in the world. In the Olympics, the standard is an external “best in the world” standard. You compare everything you do with the holder of the continually improving world record. HR metrics, rather than being internally focused, also need to be compared directly with the best HR results in the world. Winning requires comparing yourself with the results produced by the world’s best firm—and then beating them.


    The overall lesson to be learned from the Olympics is that it’s not the shoes that create champions, despite what the advertising slogan says. Obviously it takes talent, but it’s equally important to have great managers and superior processes to select, develop, motivate and get the talent to work together as a team. Sounds a lot like HR.

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Wal-Mart Slams Lawsuit Claiming Its 401(k) Fees Are Over the Top

Wal-Mart, hit with a class-action lawsuit that claims fees in its $9.9 billion 401(k) plan are excessive, has fired back. In a 35-page response to the original complaint, the company called the employees’ allegations little more than “mere speculation,” lacking any substance.


According to Wal-Mart’s filing, the suit’s “myopic focus on the fees charged by the plan’s investment options—without regard to the roles that these fees play in the overall costs of administering the plan—ignores the economics of participant directed individual account plans.”


Wal-Mart also said that “ERISA does not require plan fiduciaries to consider only ‘price’ in selecting investment options, much less to select the least expensive alternative available.”


The original complaint against Wal-Mart was filed in March, led by employee Jeremy Braden. Like many of the roughly dozen other lawsuits filed against large plan sponsors since late 2006, the suit against Wal-Mart accuses the company of violating its duty as a fiduciary by offering costly funds in its 401(k).


In its response, Wal-Mart said the suit led by Braden was “virtually identical” to the other suits.


The claim against Wal-Mart also states that the company should have disclosed to participants how it selected the funds in the 401(k) plan. In addition, the workers say Wal-Mart should have offered details on revenue-sharing arrangements in its plans, in which fees charged to workers are used to pay 401(k) providers for other services, including record keeping and plan administration.


Such disclosures, which are not required, are “demonstrably immaterial to any investment decision faced by participants,” Wal-Mart said, adding that Braden fails to suggest that he would have invested his 401(k) differently if any of the additional information was provided to participants.


Derek Loeser, an attorney at law firm Keller Rohrback who is representing Braden and other Wal-Mart workers, was unavailable for comment.


Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Law Students Seek Diversity at Legal Firms

It’s not just corporate clients pressuring law firms to increase the diversity of their staffs. It’s also the law students whom they will hire as associates one day—or maybe not be able to hire if they fail to diversify.

    In January 2007, a group of students at Stanford Law School launched an organization called Building a Better Legal Profession. They were inspired to establish the organization after they failed to find a resource that would give them diversity rankings for law firms in New York City.


    So they took it upon themselves to develop diversity statistics and construct their own database. What they discovered shocked them: One-third of the firms in New York had no Hispanic partner and nearly one-third did not have an African-American partner.


    After the group publicized its findings in October, it received more than 10,000 visitors to its Web site—and the numbers keep rising. It also received a burst of media coverage after an event in Washington at the National Press Club.


    The popularity of its work demonstrates the emphasis that young people put on diversity, according to one of the organization’s founders.


    “This is important to my generation,” says Andrew Bruck, a Stanford law graduate who is now clerking for the chief justice of the New Jersey Supreme Court. “I’ve grown up with friends who are black, Hispanic, gay and lesbian, and I expect that [diversity] from my employer.”


    Each spring, law firms hire students like Bruck for their summer associate programs. It’s the pool of talent they cull to make offers for permanent employment.


“This is important to my generation. I’ve grown up with friends who
are black, Hispanic, gay and lesbian, and I expect that [diversity]
from my employer.”
—Andrew Bruck, Stanford law graduate

    That creates an opportunity for students to use their market power to change the way law firms recruit and retain minorities, according to Bruck. If his organization shows a firm lacks minority leadership, it could reduce the number of students willing to accept summer positions there.


    “Firms don’t want to be known as the place that doesn’t have any black partners,” Bruck says.


    The students are trying to get companies to join them in their effort. They sent a letter to Fortune 500 companies in January highlighting the law firm diversity ranking, hoping that they would take the results into account when deciding which firms to hire.


    Andrew Canter, a Stanford law graduate and co-founder of the group, says many companies have implemented their own diversity goals and policies. They need to push law firms, though, to make a difference more widely in the legal profession.


    “Corporations spend a lot of time on [diversity] internally but have less frequently chosen to use market power with outside counsel,” says Canter, a fellow at the Mississippi Center for Justice.


    If that situation continues, the students will be missing a key ally in their diversity push, which may be stalling as large law firm clients demand cost cutting more than increases in minority partners.


    “I’m seeing a sense of stagnation,” Canter says. “We’re hearing that diversity is a third- or fourth-level priority.”


    The issue will have to rise on the to-do list, or law firms will miss their chance to hire future attorneys like Bruck and Canter.


Workforce Management, July 14, 2008, p. 34 — Subscribe Now!

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Social Security No-match Letters Considered

Aramark Facility Services is a nationwide company that employs 170,000 people. In early 2003, the Social Security Administration sent Aramark letters advising that Social Security numbers for 48 of its janitors did not match information in the agency’s database.


    In response, Aramark sent letters to the 48 janitors threatening termination if they did not provide documentation to confirm their correct Social Security numbers. The union representing the workers requested additional time for the employees to respond, but Aramark refused and fired 33 workers who were unable to provide documentation to confirm their correct Social Security numbers.


    The union filed a grievance alleging Aramark violated the collective bargaining agreement by firing the workers without just cause. The arbitrator decided in favor of the workers, finding no “convincing information” that any of the workers were undocumented. Aramark brought suit in U.S. District Court in California to overturn the arbitration award. The district court found in favor of Aramark, holding that the failure to provide documentation constituted constructive notice of ineligibility to work in the United States.


    The U.S Court of Appeals for the 9th Circuit in San Francisco disagreed with the district court’s decision, and held that “no-match” letters do not constitute constructive notice of ineligibility for employment in the U.S. because “the main purpose of the no-match letters is not immigration-related.” The court noted that the Social Security Administration, the IRS and the Department of Homeland Security have all issued guidance indicating that a Social Security number discrepancy alone does not automatically mean an employee lacks proper work authorization. The no-match letters received by Aramark were not intended to make a statement about the affected employees’ immigration status and, without more, did not provide Aramark with notice of any immigration violations. Aramark Facility Servs. v. Serv. Employees Int’l Union Local 1877, 9th Cir. No. 06-56662 (6/16/08).


    Impact: Because “no-match” letters are often the result of inaccurate or incomplete employer records, employers are advised that, upon receipt of a no-match letter, the employee should be given a reasonable time to investigate the discrepancy.


Workforce Management, July 14, 2008, p. 10 — Subscribe Now!

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Steering Minorities Toward Patent Law

Anand Sharma was a panelist at a National Bar Association meeting a couple years ago, discussing ways to increase the number of African-American lawyers practicing patent law.


    During his flight from Detroit back home to Washington, the intellectual property lawyer came up with an idea on how to help achieve the goal.


    Sharma, a partner at Finnegan Henderson Farabow Garrett & Dunner in Washington, began thinking about his own background. He was born in Guyana to parents of Indian descent.


    His father received a scholarship to Howard University, a historically black college in Washington. He also had aunts and uncles who graduated from Howard. His firm is located only a few miles from the campus.


    Sharma persuaded Finnegan Henderson to work with Howard to establish an introductory patent course at the school’s College of Engineering. Sharma, Finnegan’s diversity chair, and a colleague, Malcolm Meeks, teach the class on a voluntary basis.


    “We’re exposing the engineers at Howard to patent law,” Sharma says.


    He hopes to persuade many of them to complement their scientific expertise with a law degree to defend technological advances from theft by competitors.


    The recent BlackBerry lawsuit, which threatened to shut down the system, is an example of the fierce competition involving new ideas, Sharma says.


    Companies are seeking more intellectual property help, making it one of the hottest legal fields. “There’s a war out there for talent,” Sharma says.


    He and his firm want to ensure that minorities are a significant part of the candidate mix. In addition to the Howard course, Finnegan Henderson also sponsors a patents and technology seminar at Howard each spring.


    This year’s event, held in early April, featured lawyers from Wachovia, FedEx, Scientific Atlanta and AT&T. They spoke to about 50 students, some of whom asked thought-provoking questions about how to protect a breakthrough.


Diversity in the legal profession will take time. “If there were an immediate, quick solution, you would see it in place already.”
—Anand Sharam, partner, Finnegan Henderson Farabow Garrett & Dunner

    Such curiosity should serve them well. “As we move toward a knowledge-based economy, you’re all going to touch IP (intellectual property) at some point,” Meeks says.


    Fostering more diverse points of view in an area that is central to U.S. and global growth will benefit businesses, according to the Howard panelists. Having more backgrounds at the table strengthens legal solutions.


    “Diversity is key to a culture of creativity,” says Bert Jennings III, executive director of intellectual property and corporate development at AT&T. “Everyone is going to look at a problem through their own lens, and that lens is their experience.”


    Another argument for diversity is that companies must appeal to an array of consumer races and ethnicities in domestic and global markets.


    “Our customer base is becoming more diverse,” says Carmen Adams, senior vice president and assistant general counsel for Wachovia. “People feel comfortable when they look across the table and see someone who looks like them.”


    But making all law firms as diverse as Finnegan Henderson, where women or minorities serve as directors in nine of 12 departments, will take time.


    “If there were an immediate, quick solution, you would see it in place already,” Sharma says.


Workforce Management, July 14, 2008, p. 36 — Subscribe Now!

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Weak Economy Slowingbut Not StoppingRPO

The disappearance of jobs because of the poor economy is cutting into some U.S. companies’ recruitment process outsourcing endeavors, but the damage isn’t across the board and plenty of bright spots remain, according to employers and RPO vendors.


    While some companies with existing RPO contracts have trimmed hiring from expected levels for the rest of 2008, those de­fi­cits are being made up for by companies in industries that remain unaffected by hard times.


    The economy has not dampened recruiting efforts at Astra­Zeneca or its contract with RPO vendor the RightThing, which the Wilmington, Delaware, pharmaceutical manufacturer initially used to bump up its sales force by 800 representatives last year.


    Things are going so well that AstraZeneca expanded its initial contract with the RightThing to cover business-as-usual hiring in sales as well as sourcing for non-sales positions at the director level and below, according to Bill Warner, the company’s U.S. sales recruitment manager.


    Economic woes aren’t affecting pharmaceuticals and other growth industries, or industries such as retail that have high turnover and need to fill jobs no matter what, says Rebecca Callahan, RPO senior vice president at Spherion, an RPO industry leader. “They’ll look at outsourcing because it’s a more cost-effective way to do it,” she says.


    By contrast, RPO contracts in certain fuel-dependent industries, such as the airline business or tourism, have been hit hard, Callahan says. Because rising fuel costs have hurt their business, “Companies that thought they needed to hire 100 people now need zero, but five months from now they may need 500,” Callahan says. Shifting recruiting work to an outside vendor is one way to smooth out those drastic swings, she says.


    At Aon, an HR outsourcer that provides RPO as part of an overall HR outsourcing package, current clients are forecasting decreases in hiring activity, says Pat Tomlinson, the company’s RPO division practice director. But there’s no corresponding decrease in the level of interest that potential clients are showing in RPO, Tomlinson says.


    That’s especially the case for companies looking to fill jobs for IT, engineering and senior-level sales professionals. The U.S. unemployment rate is holding steady at 2 percent to 2.5 percent for such jobs, says Chris Kilpatrick, vice president at CDI Talent Management, a recruiting and RPO specialist and sometime partner of Northgate/ Arinso, a global HR outsourcing specialist. Companies “are looking for an RPO partner who can go out and find those people globally because the demand is so high,” Kilpatrick says.


    Any contraction in the U.S. job market is being countered by growth elsewhere, Kilpatrick adds. “Customers are pointing us internationally to the Asia Pacific region, where their growth is very robust,” he says.


    For every potential customer that’s holding off on possible RPO projects because they’ve stopped hiring, there’s another that’s ready to sign on because they’re restructuring or moving quickly into a new low-cost product area and need to staff up quickly, says Johnny Ramondino, Northgate/Arinso’s senior director of business development. RPO “is starting to prove recession-proof,” Ramondino says.


    For HR departments, RPO is a good way to weather an economic downturn, because instead of making recruiting a fixed cost, employers can pay as they go, says Lisa Rowan, HR and talent management services program director at market researcher IDC. “You have hedged your bets a little,” she says.


Workforce Management, July 14, 2008, p. 44 — Subscribe Now!

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Section for Layoffs Based on Non-age Factors

A group of employees over the age of 40 had their jobs eliminated in 1996 by Knolls Atomic Power Lab Inc., a subsidiary of Lockheed Martin Corp. Of the 31 employees laid off, 30 were more than 40 years old. The workforce as a whole was 60 percent over 40.


    Several laid-off employees sued under the Age Discrimination in Employment Act, using a “disparate impact” theory. A jury found in favor of the plaintiffs. The U.S. Court of Appeals for the 2nd Circuit in New York (by a 2-1 vote) vacated the district court judgment and remanded the case with instructions to enter judgment for the employer. The 2nd Circuit majority held that it is the plaintiffs’ burden to prove that the employer’s justification was unreasonable.


    On review by the U.S. Supreme Court, the justices emphasized (by a vote of 7-1) that employees alleging age discrimination must first isolate and identify the specific employment practices that allegedly discriminate against older employees. Congress placed the burden on employers to prove their decisions were ultimately motivated by reasonable factors other than age. The court acknowledged that “putting employers to the work of persuading fact-finders that their choices are reasonable makes it harder and costlier to defend” and that “this will sometimes affect the way employers do business with their employees.” Meacham v. Knolls Atomic Power Lab., 2008 U.S. LEXIS 5029.


    Impact: The high court makes it more difficult for employers to defend themselves against age discrimination suits, and employers—not plaintiffs—bear the burden of persuading a court that discriminatory employment decisions were based on “reasonable factors other than age


Workforce Management, July 14, 2008, p. 10 — Subscribe Now!

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Chapter and Verse on Coaching

Here’s a list of books on coaching recommended by experienced executive coaches and officials from coach training organizations, including International Coach Federation president Diane Brennan:


    Adaptive Coaching: The Art and Practice of a Client-Centered Approach to Performance Improvement, by Terry R. Bacon and Karen I. Spear, both with Lore Research Institute, a professional development firm (Davies-Black, 2003).


    A Manager’s Guide to Coaching: Simple and Effective Ways to Get the Best From Your Employees, by certified executive coaches Brian Emerson and Anne Loehr and published by the American Management Association’s book division (AMACOM, March 2008).


    Becoming a Resonant Leader: Develop Your Emotional Intelligence, Renew Your Relationships, Sustain Your Effectiveness, by Case Western Reserve organizational behavior professor Richard Boyatzis and Annie McKee, longtime Fortune 500 executive coach and co-founder of the Teleos Leadership Institute (Harvard Business School Press, March 2008).


    Evidence Based Coaching Handbook: Putting Best Practices to Work for Your Clients, a coaching textbook edited by Dianne R. Stober and Anthony M. Grant (Wiley, 2006).


    Executive Coaching with Backbone and Heart: A Systems Approach to Engaging Leaders with Their Challenges, by executive coach and author Mary Beth O’Neill (2nd edition, Jossey-Bass, 2007).


    The Philosophy and Practice of Coaching: Insights and Issues for a New Era, coaching textbook edited by David B. Drake, Diane Brennan and Kim Gørtz (Jossey-Bass, 2008).


    What Got You Here Won’t Get You There: How Successful People Become Even More Successful, by Marshall Goldsmith, longtime executive coach to the corporate elite and Dartmouth MBA school professor. Co-written with Mark Reiter. (Hyperion, 2007).