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Posted on October 2, 2008June 27, 2018

Louisiana Blue Cross Confirms Data Breach

Blue Cross & Blue Shield of Louisiana compromised the personal data of about 1,700 brokers via an e-mail last week, exposing information such as Social Security numbers, phone numbers and addresses, a Blue Cross spokesman said.


The breach occurred Thursday, September 25, when a document containing the data was accidentally attached to a general e-mail being sent to brokers notifying them of a software upgrade. The brokers who received the e-mail were the same people whose information was exposed. The spokesman said no customer data was involved.


Blue Cross recalled the e-mail within moments of sending it, the spokesman said, but the e-mail still made its way to the brokers. The insurer notified them of the error, apologized and requested recipients delete the information and confirm with Blue Cross they had done so.


The company is offering free credit monitoring to the affected brokers for 12 months and has taken steps with its technology systems to assure such an error does not occur again, the spokesman said.


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


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Posted on October 2, 2008June 27, 2018

Senate Approves Bailout Bill; Financial Market Rescue Gains Momentum With Executive Pay Intact

Strong Senate approval on Wednesday night, October 1, gave new momentum to a $700 billion rescue of financial markets that includes curbs on executive pay at financial firms that participate in the program.


The package is largely the same as the one that failed in the House earlier in the week. But the Senate added several tax measures, a higher limit on deposit insurance and legislation that would require cost, and coverage parity between mental health and medical benefits in insurance plans that offer both.


The underlying bill authorizes the federal purchase of troubled mortgage-based assets from banks and other financial institutions to avert a systemic Wall Street failure. Proponents of the legislation, including business groups that are fiercely lobbying Capitol Hill, warn that a credit freeze already is limiting loans for consumers, students and businesses.


After nearly two weeks of bipartisan talks and two major setbacks, senators hailed their chamber’s 74-25 vote as a breakthrough. Both presidential candidates—Sens. John McCain, R-Arizona, and Barack Obama, D-Illinois—supported the bill.


“This vote tonight is the turning point,” said Sen. Max Baucus, D-Montana and chairman of the Senate Finance Committee, on Monday at a press conference after the vote.


Now the bill returns to an uncertain fate in the House, where it fell 228-205 on Monday, September 29. A vote on the Senate-approved version could come Friday.


“Inaction is not an option,” said Senate Majority Leader Harry Reid, D-Nevada. “It’s my expectation that the House of Representatives will follow suit.”


Even if the House tweaks the bill further, it is unlikely to change the carefully negotiated executive compensation provisions.


Under the bill, a company that sells assets directly to the government would be barred from giving golden parachute severance packages to departing executives and would be compelled to “exclude incentives for executive officers … to take unnecessary and excessive risks.” It also would have to recover bonus or incentive compensation paid to a senior executive based on performance measures that later proved inaccurate.


If a firm sells more than $300 million in assets to the government at an auction, it would be prohibited from offering golden parachutes to newly hired senior executives. The company would be subject to a 20 percent excise tax on golden parachute payments to fired executives. Tax deductions would be limited for compensation above $500,000.


Initially, the Bush administration resisted the executive compensation provisions. But the business community is now onboard in a move that has helped build bipartisan support for the bill.


“It’s not unreasonable for the government to have control and oversight on compensation for companies that sell assets to the government,” said Tom Lehner, policy director at the Business Roundtable, a Washington group representing CEOs of big companies.


It won’t be clear how many of the executive compensation restrictions will work until the Treasury Department writes corresponding regulations.


Charles Tharp, executive vice president for policy at the Center on Executive Compensation in Washington, is concerned that amorphous definitions could hamper corporations.


“I don’t know how you comply with vague statements like ‘inappropriate’ or ‘excessive risk,’ ” Tharp said. “I don’t know what excessive risk is. It really ties the hands of the board.”


He also warned that “there needs to be more thought on how to implement” the golden parachute limits. Those rules could prevent weak firms from finding new leaders.


“Not being able to offer severance will make it harder to recruit and retain people,” Tharp said. “Severance gives someone an incentive to join a troubled company and turn it around.”


Sen. Christopher Dodd, D-Connecticut and chairman of the Senate Banking Committee, downplayed such worries about the bill. He pointed out that the executive compensation rules are calibrated based on how companies participate in the rescue.


“I don’t think this is any great restraint,” Dodd said in an interview after the Senate vote. “Besides, these firms won’t be doing much hiring given the shape they’re in.”


Even though it’s not yet law, the financial rescue measure may add more urgency to pay considerations in corporate America.


“Compensation committees already have started to focus on reducing severance multiples and change in control payments over the past year,” said Steven Seelig, executive compensation counsel at Watson Wyatt in Arlington, Virginia.


–Mark Schoeff Jr.



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Posted on October 2, 2008June 27, 2018

Pension Benefit Guaranty Corp. Takes Over Paper Mill’s Pension Plan

The Pension Benefit Guaranty Corp. has taken over the pension plan of Marcal Paper Mills Inc. of Elmwood Park, N.J., the agency announced Tuesday, Sept. 30.


Marcal Paper filed for Chapter 11 bankruptcy protection in November 2006, and sold substantially all of its assets to NexBank SSB, an affiliate of Highland Capital Management, on January 29, a news release from the PBGC says. That transaction closed May 30 and did not include the pension plan.
 
The PBGC estimates that the plan is 73 percent funded, with $18.7 million in assets to cover $25.7 million in benefit liabilities. The agency expects to be responsible for $5.4 million of the $7 million shortfall.


Officials at Marcal Paper and Highland Capital were unable to immediately comment.



Filed by Jennifer Byrd of Pensions & Investments, a sister publication of Workforce Management.


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Posted on October 2, 2008June 27, 2018

No WARNing Ex-Workers Sue Bill Heard Enterprises

Former employees of Bill Heard Enterprises Inc. have filed a lawsuit against the company, alleging that they did not receive notice before losing their jobs when Heard car dealerships closed.


Two employees of the Bill Heard store in Huntsville, Alabama, filed the suit, which seeks class-action status, in the Northern Alabama U.S. District Court. They filed it Thursday, September 25, one day after the world’s top-selling Chevrolet dealer group closed its 13 remaining stores.


The suit seeks to encompass all employees who lost their jobs this month but did not receive notice or compensation. Under the federal Worker Adjustment and Retraining Notification Act, qualifying employees must receive 60 days’ notice before the closing of their workplace. Under WARN, a company does not have to give employees notice of their termination if it “could not reasonably foresee business circumstances” that led to the closing, according to an explanation of the law in a government brochure.


The employees seek back pay for the 60 days that Heard should have paid them after notifying the workers that the company was closing its stores. They also seek reimbursement of legal fees.


The company filed for Chapter 11 bankruptcy protection Sunday, September 28.


At the first bankruptcy hearing a day later in a courtroom in Decatur, Alabama, Judge Jack Caddell asked whether the company would face any WARN-related legal trouble. A lawyer for the company vigorously denied that it faced any such liability.

Filed by Chrissie Thompson of Automotive News, a sister publication of Workforce Management. April Wortham of Automotive News contributed to this report. To comment, e-mail editors@workforce.com.


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Posted on October 2, 2008June 27, 2018

Moodle Goes Corporate

While many companies may be skeptical of the value of open-source or free downloadable software systems, Moodle, a learning management system, is proving that high value doesn’t necessarily correlate to high price. Moodle was created by a developer in Perth, Australia, and over the past several years has developed an almost cult-like following. It currently has more than a half-million users and developers who blog daily at Moodle.org about how they use it and how they can improve it. They also share best practices from around the world.

While Moodle’s foundations are planted firmly in academic use, more and more of its users are coming from the corporate world, and not just from startups. The software, which can be downloaded free onto any computer and can scale from one to 200,000 users, is now being used in global organizations, including Subaru and Cisco, as a platform for training and for building communities of knowledge to share best practices and collect corporate information for future training programs.


“A year ago most companies using Moodle were in the smaller scale,” says Jason Cole, author of the book Using Moodle and chief learning officer for Remote-Learner, a Moodle hosting partner in Denver. “Not anymore. Today there is an enormous range, from mom and pop shops to mega-companies using Moodle to create and manage course content.”


Subaru dealers bond via Moodle
    Automotive manufacturer Subaru is one large company that has embraced the open-source tool for training management. Darryl Draper, a national customer relationship and loyalty training manager for Subaru of America in Cherry Hill, New Jersey, delivers and tracks customer service training courses for more than 600 Subaru dealerships across the country using Moodle.


Face-to-face training in an industry where 300 percent turnover rates are not uncommon had become too much for Draper, and Moodle offered an alternative. “There were some markets where as soon as I finished training I’d have to go back again,” she says. “It was all reactive. I had no time to develop a strategic training plan.”


Instead she opted to develop online course content and deliver it to dealers via the company’s intranet. Subaru had been using another LMS package to track some course content, but it wasn’t flexible enough to do what Draper needed. “I wanted robust training where dealers could collaborate,” she says of her quest to find a new e-learning management system.


Moodle, with its open-source platform, gave her that flexibility. Using the software, which she hosts through Remote-Learner, she developed two versions of each course, giving users self-paced options with content and tests, as well as developing interactive communities of practice within the Moodle platform. In the communities, trainees have a place to study the course material while sharing ideas and questions with other users.


“The dealers love the communities,” she says. “They talk, and share information and develop best practices. There are a lot of robust dialogs taking place in those forums.”


Draper monitors the forums to make sure conversations stay on track and to collect questions and responses that she thinks will be valuable to other users, which she stores in wikis or glossaries at a separate internal Moodle site.


“We have a lot of executives who will retire soon and they have valuable knowledge,” she says. “The Moodle communities let us gather their best practices into a knowledge database.”


Cisco supports entrepreneurs
    Cisco, the global manufacturer of networking solutions, uses Moodle for its Entrepreneur Institute, which partners with organizations and governments to use Web 2.0 tools to deliver entrepreneur education and business planning skills. Cisco uses the LMS to offer self-paced courses, assessments, and registration options to users around the world, from students in Latin America to nonprofit groups in the EU.


“We wanted an open-source tool because the institute is a free program, and it’s in line with our community approach,” says Vito Amato, solutions architect for Cisco in Scottsdale, Arizona. “We also wanted to use something that our customers can replicate for their own businesses.”


Amato also likes the way Moodle integrates seamlessly with other systems, such as Salesforce.com and WebEx, and that it is available in dozens of languages right out of the box. “That’s important for a project working in emerging markets,” he says.


But Amato is quick to point out that Moodle should not be ventured into without planning. “You need to understand what you want to accomplish from a business perspective before you choose any software tool,” he says, noting that too often users select technology solutions before they define their project goals.


“First look at how an application meets the needs of your business, then determine what software meets your needs,” he says. “It’s much easier to map the technology to the business than the other way around.” Like Subaru, Cisco also outsources the hosting of the Moodle system. It is using MoodleRooms, a Moodle service provider in Baltimore. Even though Cisco has a huge IT staff, Amato says the company would rather hire specialists to host and manage the Moodle system while his team focuses on the goals of the institute.


“It’s one thing to download and play with Moodle, but if you want to scale the application, it’s a lot more cost-effective to outsource,” he says. “I don’t have to spend time and energy worrying about managing the hardware or the software. I let the experts do that.”


PHS meets regulatory requirements
However, not everyone relies on outside experts to manage the Moodle technology. Pediatric Home Service, a small children’s at-home health care provider in St. Paul, Minnesota, hosts Moodle in-house. The company, which has 136 employees, uses it to deliver, manage and track all of its in-house competency training—a critical element of a home health care provider’s business, since competency training is closely monitored by regulatory groups including the Food and Drug Administration and the Occupational Safety and Health Administration.


“Moodle works not only to host training, but it also tracks user data for regulators,” notes Pam Clifton, senior vice president of operations for Pediatric Home Service. “We can generate reports on the spot to prove completion rates, or to zero in on test questions that are frequently missed,” she says. “Before we started using Moodle that information was all on paper.”


Pediatric Home Service started using Moodle three years ago after the training staff found it didn’t have the budget for an off-the-shelf LMS. “The others were cost-prohibitive, but with Moodle the price is certainly right,” says Carol Widstrand, training and technology communication specialist for the organization. Because the company has a strong IT staff and wanted to focus its training dollars on developing content, it opted to host the system in-house.


“We definitely started out slowly,” Widstrand says about the choice to keep the system in-house. To avoid becoming overwhelmed, Widstrand’s team rolled the system out to individual departments one at a time, and did not use all the features right away.


They have also come to rely on the Moodle.org Web site when problems arise. “It’s a very good resource. You can troll for information, pose questions and take tutorials,” Widstrand says. “When I post a question I usually have a response from someone within 24 hours.”


Regardless of the size of an organization, or whether Moodle is hosted in-house or is outsourced, most users agree that the key for organizations is to go slow and know what they are trying to accomplish.


“Start off at the 10,000-foot level,” suggests Becki Nielson, education manager for Pediatric Home Service. “Once you have a big picture of what the whole organization needs, you can think about how you will use Moodle in the long term. That has worked best for us.”

Posted on October 1, 2008June 27, 2018

Congress Extends Health Premium Subsidies

Congress has given a five-month extension to a federal trade law that provides health insurance premium subsidies to workers who lose their jobs due to foreign competition and older pension-plan participants whose plans fail.


Legislators voted over the weekend of September 27—as part of a broader bill—to continue a program created by a 2002 law in which eligible beneficiaries receive a 65 percent tax credit to partially offset the cost of health insurance coverage they purchase, such as COBRA continuation coverage. The 2002 law creating the health coverage tax credit expired at the end of last year.


Last year, the House passed legislation that would significantly expand  the health coverage tax credit by increasing the amount of the credit to 85 percent and in certain circumstances allowing beneficiaries to retain COBRA coverage until they were eligible for Medicare at 65 or became eligible or enrolled in another health care plan. While the federal premium subsidies for COBRA coverage would have run out after 30 months, a young employee potentially would have had a right to purchase COBRA coverage for decades.


The Senate, though, did not act on that measure.


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.Workforce Management’s online news feed is now available via Twitter.



 

Posted on September 30, 2008June 27, 2018

Survey Health Management Reduces Care Costs

Although the rate of increase in health care costs continues unabated, some employers are successfully mitigating the expense through a variety of health management techniques, Towers Perrin’s annual Health Care Cost survey has found.

“The high performers will pay on average 14 percent less in 2009” than low-performing employers will, said Dave Guilmette, managing director of the Towers Perrin health and welfare practice based in Stamford, Connecticut, in a press release Wednesday, September 24, announcing this year’s survey findings.


Employees at these high-performing companies also share in this success, paying an average of $350 less annually for their health insurance than their peers at low-performing employers, the survey found.


The survey also projected a 6 percent increase in health benefit costs for employers in 2009, with single coverage averaging $4,860 and family coverage averaging $14,244.


Among other survey highlights:
• 78 percent of high-performing employers say their company plays a major role in identifying and managing employee health risks, compared with 38 percent of low performers.
• 76 percent of high performers say they’re committed to building a culture of health in their organizations, compared with 31 percent of low-performing employers.
• 74 percent of high performers say they actively help employees understand and manage their health, compared with 22 percent of low-performing employers.


“The common theme is the business value of health,” Guilmette said.


“Rather than focus on managing the cost of illness, high-performing companies are focusing more on managing the health of their workforces. Simply put, high-performing companies see that good health is good business.”


The 2009 Towers Perrin Health Care Cost survey included detailed information on the health benefit programs offered by 321 of the Fortune 1000. These companies collectively provide health care coverage to 6.6 million U.S. employees, retirees and dependents, spending a total of $32 billion annually.


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


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Posted on September 30, 2008June 27, 2018

ERISA Doesn’t Pre-Empt San Francisco Health Mandate, Court Rules

A San Francisco law that requires employers to spend a set amount on employee health care costs is not pre-empted by the Employee Retirement Income Security Act of 1974, the 9th U.S. Circuit Court of Appeals has ruled.

The 9th Circuit reasoned that the ordinance does not conflict with ERISA because it does not require the creation of an “employee welfare benefit plan” within the meaning of that federal law. In its Tuesday, September 30, decision, the court cited two U.S. Supreme Court cases that found “an employer’s obligation to make monetary payments based on the amount of time worked by an employee, over and above ordinary raises, does not necessarily create an ERISA plan.”


However, because the San Francisco decision conflicts with a 2007 4th U.S. Circuit Court of Appeals ruling that had held a similar law in Maryland was pre-empted by ERISA, the issue ultimately may be decided by the U.S. Supreme Court, ERISA experts predict.


“This would unwind the fabric of ERISA if it were allowed to stand, because you’d have states, cities and even local municipalities setting different levels of requirements for health care benefits in each of their jurisdictions. It goes against the very policy ERISA put in place,” said J.D. Piro, an attorney with Hewitt Associates Inc. in Norwalk, Conn.


In Golden Gate Restaurant Assn. v. City and County of San Francisco, the restaurant owners group had successfully challenged the 2006 San Francisco ordinance, arguing that its spending requirements were pre-empted by ERISA, which precludes state and local governments from enacting laws dictating the contents of employee benefit plans. Although the U.S. District Court on December 26, 2007, ruled in favor of the restaurant group, its decision had been stayed pending the outcome of the appeal.


The case has received national attention, and the U.S. Department of Labor filed an amicus brief warning that upholding the San Francisco law would “open plan sponsors to a potentially bewildering and conflicting array of mandates.”


Under the San Francisco law, employers with 100 or more employees have to make health care expenditures of at least $1.76 per hour for every eligible employee working in the city for at 10 or more hours per week. For-profit employers with 20 to 99 employees and nonprofit employers with 50 or more employees have to spend $1.17 per hour for eligible workers.


Employers that fail to comply with the ordinance are subject to fines equal to 150 percent of the amount they are mandated to spend on employee health care.

Calls to the restaurant association and the city and county of San Francisco were not immediately returned.


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


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Posted on September 30, 2008June 27, 2018

Dear Workforce We Have Solid Leadership Programs. How Do We Reinforce It Post-Training

Dear Learning to Lead:

The questions you ask are excellent ones, in regard to seeing a return on your training investments as well as a desire to see positive behavior change.

First, when offering any kind of training, you should choose it based on the competencies you want your learners to develop. Your training leaders should be an integral part of any kickoff or rollout of training. They set the stage and context for the training, allowing people to understand its value to the organization’s before they even begin training.

Training leaders also are vital in the transference after the training. It is therefore equally important to educate them about the content and also provide them with tools to support application. They will be called upon to reinforce and model the behaviors that the learners experienced in training.

For your learning population, there are many follow-up or interim activities you can create that offer refresher training, practice labs and “lunch and learn” sessions. What is most important is to have the learners involved in crafting these interim activities. They will embrace and will be more likely to complete the activities if they had a hand in their design.

Finally, when possible, the performance management system should be used by your future leaders to craft one or more objectives that are tied to applying the learning over time, reviewed at regular intervals. We all know the saying: “If it doesn’t get measured, it doesn’t get done.”

To the final part of your question: Yes, it is possible to measure employee behavior. The questions asked of the participants and those around them (peers, direct reports and managers) should reflect behavior seen/experienced before the training as well as after. It is advisable to allow at least three months after the training to capture behavior change. The 360-degree evaluation tool is very common in the industry, and it too rates behavior.

Know that there are many avenues you can take, but one thing is very important: Training alone will not provide you with solid behavior change with the majority of the learners. Instead, a robust program focusing on solid implementation before, during and after the actual training—including a variety of audiences—should be the goal.

SOURCE: Annamarie Lang, consultant, leadership solutions group, Development Dimensions International Inc., Pittsburgh.

LEARN MORE: A “catastrophic shortage” of qualified leaders plagues many of the world’s largest global organizations. Also, more tips from DDI on how to reinforce leadership development.

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Posted on September 30, 2008June 27, 2018

Helping Wall Street’s Newly Jobless

With hordes of suddenly jobless financiers knocking at her door every day, Cheryl Yung is working flat out.


In more than 10 years as a career coach specializing in helping sacked investment bankers rebuild their careers, Yung has never seen anything close to this. After the collapse of Lehman Brothers and rapid acceleration of layoffs all across Wall Street, her work now stretches to 12 hours a day and into the weekends.


“The word people on the front lines use around here is ‘bloodbath,’ ” says Yung, a senior vice president at outplacement firm Lee Hecht Harrison.


The tumult is shifting into overdrive at the companies that help people reassemble their professional lives. The outplacement industry, created largely to serve displaced workers in the Rust Belt, has been becoming white collar-and moving eastward-in recent years.


In the past 12 months, more than 20,000 New Yorkers have lost their Wall Street jobs.


Thousands more are certain to follow in the coming weeks, including as many as half of the 10,000 former Lehman employees now at Barclays Bank under 90-day contracts as the British owner sorts out its staffing needs. Major layoffs also loom at Merrill Lynch as it is merged into Bank of America and at American International Group, which was effectively nationalized.


“Every industry takes its turn for big restructuring and layoffs,” says Celeste Calfe, president of the Association of Career Firms North America. “It’s finance’s turn now.”


Many banking industry executives are warning recently laid off Wall Street workers that their former jobs won’t return anytime soon and they should cast their lots elsewhere.


The tough part is finding positions that pay anywhere near the ones that saw the average Wall Street employee collecting $180,000 in bonus pay alone last year.


“In the past, there was a belief by people like me that you ride the cycle, cut people and expenses when you need to, and when it’s over you rehire,” says Jim Fitzgerald, Wachovia’s regional president for wholesale banking in New York and Connecticut. “That’s not going to happen this time.”


 Networking no longer an option
    For those who assist the professional casualties of Wall Street’s implosion, the problem is not simply the volume of displaced workers. Experts say job opportunities are evaporating all across finance.


“In the past, people got jobs through networking, but now there’s nowhere to network to,” Yung says.


Generally, financial institutions pay for up to six months of career transition services, which don’t come cheap.


Counselors typically charge individuals $500 just to review a résumé, according to Calfe. Outplacement has grown into a $10 billion business worldwide with more than 800 firms, including leaders Lee Hecht Harrison, Right Management and DBM Career Services.


Those who have just lost Wall Street jobs at first tend to view her much like they would a doctor, Yung says. They welcome the help but at the same time are fearful of what they might hear-and she often delivers a bleak prognosis about their staying in finance.


In the end, many financiers will follow in the footsteps of people like Angela Jameson. Laid off late last year by Moody’s Investors Service, where she had worked for 15 years rating the credit of such retailers as Wal-Mart, Jameson began attending weekly two-hour meetings at Lee Hecht Harrison with half a dozen other displaced executives.


Changing careers
    “I had to go before these people and account for everything I did while looking for work-interviews, conversations, networking,” Jameson says. “It meant I had a goal.”


Her focus paid off this spring, when she landed a spot as a researcher at the International Council of Shopping Centers, a trade group.


Others have had to reinvent themselves.


After UBS laid him off, Frank Lugossy bought a wine shop last year in Greenwich, Connecticut. The former equity trader, whose inventory includes bottles of Sauterne and Cheval Blanc, says sales are robust.


“For sure, it’s not the same pay as Wall Street,” Lugossy says. “But I like working for myself now.”


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