On 12/8/05, Dr. Tom Rogers and Jim Velos of The Rogers Group, interviewed me on their Voice America Business channel program: Business Dis-eases: Cure Them or Die. The direct link to the interview is here.

This post summarizes the 45 minute interview. I’ve also added comments not included in the interview due to time constraints.

TOPIC #1: REFERENCES-WHAT SHOULD OR CAN A BUSINESS SAY ABOUT A FORMER EMPLOYEE?

What most businesses fear is being sued for slander, libel or defamation. Generally, a business is legally protected for speaking the truth and providing a good faith assessment of job performance. Nevertheless, it’s in the defense of these lawsuits where legal expenses pile up. Therefore, avoidance is key.

I generally encourage employers to only confirm whether or not a former employee worked for them, job titles and dates of employment. Don’t discuss money earned, performance or behavior. This should help minimize problems. Then again, there’s usually nothing wrong with giving a great recommendation. Nevertheless, if a business tells a prospective employer only the essentials (confirm employment, dates, job titles), and the prospective employer asks for additional or more specific information, a business’ silence or refusal to answer, should be clear enough indication that a former employee had issues.

Additional Comments: Check out George Lenard’s Employment Blawg for a great discussion concerning a businesses’ in-house communication regarding employee performance, and how such communication can amount to defamation because some courts consider communication to a coworker to be unprivileged third party publication. Such situations arise when considering an employee for a lateral position, promotion or demotion.

In 2005, the appellate court of Illinois ruled against the employer in the case of Popko v. Continental Casualty Company. The direct link to George Lenard’s (George’s Employment Blawg) discussion is here. The HTML version of the decision can be found here. This narrowly construed case holds that Illinois employers may be liable for damages when they discharge an employee based on an improperly conducted and incomplete investigation of allegedly defamatory allegations against that employee. The lesson for employers is don’t communicate anything in-house or to a third party which hasn’t been confirmed to be true and is used to make an adverse employment decision.

TOPIC #2: WHAT SHOULD A SMALL OR MID-SIZED BUSINESS DO IF EMPLOYEES ARE CONSIDERING JOINING A LABOR UNION?

Businesses subject to the National Labor Relations Act, Railway Labor Relations Act, or other state or local labor relations laws must carefully monitor all communications concerning a labor organizing campaign. Federal, state and local laws, and courts and labor boards, are specific in what an employer can say or do during an organizing campaign. Moreover, penalties can be costly and burdensome.

A business shouldn’t say or do anything which indicates that it will take adverse action against employees who support unionization. A business can state why it’s for or against a union.

Also, management can’t absolutely prohibit organizing. The law permits organizing and limits management’s ability to prevent organizing. However, this doesn’t grant employees absolute immunity from negative actions or give employees the privilege to organize on company time. For example, employees can still be disciplined, discharged, or demoted, in the normal course of business, as long as such actions would still be taken in the absence of an organizing campaign.

It should be noted that some companies voluntarily unionize via neutrality agreements and voluntary recognition agreements (in the interview I incorrectly called these check off and card check agreements; these are components of voluntary recognition and neutrality agreements). These agreements help to eliminate the time and expense of a union prevention campaign and minimize the negative after effects of such campaigns. It can also make dealing with the union and employees easier and more congenial.

Generally, businesses know if there’s organizing by listening to and observing their workforce. Typical signs are talk or rumors of organizing, fliers or posters, and buttons or other forms of clothing depicting union logos or slogans. This doesn’t mean that an employer should be proactively monitoring all employee behavior and communications. This just means that an employer should keep its eyes and ears open.

When do I get involved with matters concerning union or labor association organizing?

The best time for me to get involved is at the start of a campaign, or when my client first gets wind of union activity. To be most effective, an organizing campaign should be dealt with from the start, from point “A” (as in “A to Z”), not from “L to Z,” when it’s well underway.

There are strategies for diminishing or diluting an incumbent union’s power. These are costly and success is contingent upon a variety of factors.

One strategy is to sell the business or close the part of the business undergoing organizing. Although successors in interest are bound by current labor agreements, sale or closing might negatively impact the union. However, there are laws which regulate shutdown and sale due to organizing activity. So consult a good attorney before undertaking such endeavors.

Another strategy applies only to multi-unit or multi-location businesses. If there are one or a few unions representing employees then a business may try to arrange to have all unionized employees represented by a different union at each location or each unit. For example, if 30,000 employees are represented by one union at 30 locations, a business can arrange for 30 unions at each location. Thereby, union power might be greatly diminished.

Accretion is another strategy. This occurs when a single bargaining unit gets combined with or merged into another bargaining unit. Or, it occurs when one union in a company merges with another union. Again, the intended impact should be to diminish a union’s strength not to increase it.

Additional Comments: Other strategies to diminish or dilute a union’s power include unit clarification wherein certain individuals or groups of employees are added to or removed from an existing bargaining unit. Also, there’s unit consolidation wherein existing but fragmented units are combined into one unit.

I received some feedback that my interview was too biased in favor of management. I am a management side labor and employment attorney. So, I take management’s side. I’m also sympathetic to business and management because I am an independent businessperson and many of my friends and relatives were or are business owners.

However, regardless of my personal inclinations, I recognize that in todays America, labor unions appear to be the last protector of above-average middle and lower class wages. I’m not citing statistics to support this notion, but if you looked at the various wages or salaries of classes, trades and professions, and removed all unionized wages from those groups, the average wage should drop significantly. Moreover, right now, labor unions are among the last guardians of health care benefits for the middle and lower income working classes.

So, I’m not completely anti-labor. What I’m against is the notion that management needs a “middleman” or a third party intervenor, which doesn’t have a record of accomplishment in business, to obtain a productive workforce. Proactive and preventive human resources should help to render such intermediaries or third parties obsolete.

TOPIC #3: CAN A BUSINESS GET RID OF AN INCUMBENT LABOR UNION?

Yes. But it’s difficult and costly. Under most federal, a state and local law, the most common means of getting rid of an incumbent union is via a decertification or employer petition.

Under federal law, a decertification or RD petition requires a 30% showing of interest by unionized employees just to proceed to a vote. In order to pass, a majority of the represented employees must vote to decertify. These petitions are filed by the employees themselves or by a competing labor organization.

The employer or RM petition is filed by management, and proceeds to a decertification vote if the employer provides sufficient evidence that the union has lost its majority status. Again, a majority of the unionized employees have to be in favor of decertification in order to pass.

Statistically speaking only a third of all decertification petitions are successful. I don’t know the most common reasons for success. However, the greatest chance for decertification is when it’s evident that the incumbent union has lost the confidence or faith of its members.

Additional Comments: Assuming a decertification campaign is necessary, an employer can expect to spend thousands of dollars on such a campaign.

Regardless of how a decertification campaign is initiated, a business needs to determine the costs and benefits of a campaign. It’s a cliche, but it may boil down to “the devil you know versus the devil you don’t know.” Moreover, no matter what happens, success, failure or a combination thereof, once a campaign or vote is finished, management and employees have to go back to work with each other and make money.

TOPIC #4: DURING A STRIKE, WHAT RIGHTS DO EMPLOYERS HAVE TO LOCKOUT OR REPLACE STRIKERS?

Generally, federal, state and local law grants employers some latitude in deciding whether to hire temporary or permanent replacement workers during a strike. Another factor affecting an employer’s authority is whether the collective bargaining agreement contains any stipulations concerning replacement workers.

Any employer contemplating the hiring of replacement workers has to be clear on the law, the collective bargaining agreement and how much money and morale will be lost or gained. Get a good labor lawyer.

Additional Comment: Be cognizant of the potential for pickets and boycotts.

TOPIC #5: WHAT ARE THE RESULTS OF BAD PERSONNEL DECISIONS?

Loss of money. Businesses lose money due to the cost of hiring and training a new employee, unemployment and workers compensation, loss of morale, defending a wrongful discharge or civil rights lawsuit or an agency complaint, and a variety of other costs.

TOPIC #6: IF MY BUSINESS IS SUED BY AN EMPLOYEE, WHAT KIND OF LEGAL EXPENSES AM I LOOKING AT?

A lawsuit will probably cost thousands of dollars.

If a business hires outside counsel to represent it, the business should expect to pay $150-$400/hour on attorney fees. Yet, regardless of the type of complaint, a business has to devote time, energy and money to the complaint or suit.

Additional Comments: Consider the costs versus benefits of litigation and settlement. Businesses should keep in mind that, no matter how much a complaint or lawsuit hurts or angers them, settlement is always an option, and the door to settlement should always be left open as this could be cheaper than litigation.

TOPIC #7: IF THE EMPLOYER WINS A LAWSUIT FILED BY A FORMER EMPLOYEE, CAN THE EMPLOYER RECOVER ATTORNEY’S FEES FROM THE EMPLOYEE?

Yes, it’s possible if the employer can sufficiently prove that the employee sued in bad faith and/or as a means to harass the employer. If the employee sued in good faith, odds are the employer won’t recover fees and expenses.

Additional Comments: It’s difficult to prove bad faith and frivolous. Judges require more than circumstantial evidence. An employer usually needs documentation or an admission from the employee or the employee’s attorney.

TOPIC #8: WHAT ARE THE WORST THINGS COMPANIES CAN DO TO INVITE A LAWSUIT?

Poor communication is what leads to most problems including lawsuits.

The best and simplest communication strategy is for management to be transparent. Management should take the time and effort to clue employees in as to why the company is doing or not doing something. The less employees feel deceived and manipulated by management, and the more secure employees feel in the workplace, the less likely the company will be hit with a lawsuit or complaint.

Furthermore, allow employees to provide feedback without the threat of retaliation. Let them vent frustration and emote, in an appropriate manner. Obviously, no company wants an employee showing up to work with a gun and threatening coworkers and customers. Teach management the difference between venting and abusive behavior.

It’s up to management to create a company culture conducive to effective communication so that lawsuits and complaints are resolved prior to proceeding to a third party.

Management shouldn’t take action, or even appear to take action, based on any class protected by federal, state or local civil rights or labor laws. These classes generally include race, gender, age, disability, military status, religion, national origin and increasingly sexual orientation.

Additional Comments: Management has to consider what to disclose, to whom to disclose and when to disclose. The why, who, why and what are contingent upon the exercise of good judgment. And good judgment is an indicator of good management. In other words, it’s easy talking about transparency, it’s another matter knowing how to do it right.

TOPIC #9: DO EMPLOYEES HAVE TO SUBMIT ISSUES OR COMPLAINTS IN WRITING TO MANAGEMENT?

No. Although it’s preferable that a written concern or complaint is submitted in an employee’s own words, it shouldn’t be required.

Management should try to create as little bureaucracy as possible. Requiring that employees put concerns or complaints in writing creates more bureaucracy and could increase a business’ exposure and liability. An employee could just as easily go to any member of management or HR, and have that person create a documented record. Moreover, some employees may have poor writing skills or be unable to write in English. To require everything in writing may be intimidating and prevent communication. As an example of how management can document an issue, I refer to how I conduct investigations.

During an investigation, I interview witnesses. When conducting witness interviews, I often take written notes. The investigation process can be intimidating. So when I interview, I tell the interviewee exactly what I’m doing and why. I explain some aspects of the investigation (not all because discretion is just as important as transparency). I also tell the interviewee that I will be taking notes. However, I tell the interviewee that if they’re concerned about what I’m writing, they should feel free to ask, and I’ll explain and/or show them my notes. After the interview, I’ll make more notes and summarize my impressions. My method is also an example of transparency and discretion; I “walk the walk” as well as “talk the talk.”

Additional Comments: Courts are pretty clear that for an issue to be communicated to management, it’s generally irrelevant if the issue is communicated verbally or in writing. Exceptions may exist where a contract or collective bargaining agreement stipulates otherwise. The bottom line is that management should provide simple and reasonable methods for employee to communicate issues or complaints.

TOPIC #10: WHAT ARE THE BEST THINGS A COMPANY CAN DO TO ENSURE THAT A LAWSUIT IS NEVER FILED?

There’s no sure thing. However, transparent management and effective communication will help to minimize employment related expenses. Create a free-flowing environment where issues are promptly communicated and resolved. Again, management needs to exercise good judgment relative to how it handles and resolves issues.

Also, employers need to balance the good with the bad. That is, employers should recognize good performance and behavior. Reward employees who have great attendance, provide profitable or money saving improvements, or who do things beyond the call like charity work or community outreach that make the company look good in the community.

Additional Comment: Focus on preventive and proactive HR.

TOPIC #11: HOW DOES AN EMPLOYEE HANDBOOK FACTOR INTO ALL OF THIS?

An employee handbook is a key document within a company. It’s a statement about company ideology and helps to create company culture. It communicates what a company is about, how it treats its employees and what employees can expect of the company. The handbook should be a document which seamlessly integrates into a company’s plans and vision. It shouldn’t be a stand alone document.

Moreover, many courts consider employee handbooks to be binding contracts, depending on the language contained within these documents and the rights vested by them.

Management should ensure that all employees receive a handbook and should document that all employees have received and read the document. If possible, management should periodically review the handbook with employees.

Additional Comments: Courts frown upon employers who have handbooks containing policies which primarily benefit the company, but the workforce is ignorant of them. Under these circumstances, courts tend to disregard any evidence pertaining to such a handbook. It’s key for management to ensure that employees receive, read and understand their handbooks.

TOPIC #12: HOW DOES A COMPANY LEGALLY FIRE A BAD EMPLOYEE OR BAD HIRE?

If the employment at will doctrine applies (it applies in most states), then a company can legally fire an employee at any time, for any reason, with or without notice or cause. There are exceptions to the doctrine.

Exceptions include civil rights protections such as discharge based on race, gender, etc. Also, there are whistle blower and retaliation protections for employees. Additionally, some states recognize the common law wrongful termination exception. Finally, collective bargaining agreements or other contractual rights may limit the employment at will doctrine.

Additionally, companies might want to regard unemployment compensation as a mitigating factor to employment at will. Unemployment compensation can cost a company a lot of money if not properly anticipated. One factor to winning unemployment compensation claims is carefully documenting personnel actions. One of the keys with documentation is to focus on how a third party will view it.

TOPIC #13: HOW CAN A COMPANY AVOID PAYING UNEMPLOYMENT COMPENSATION?

Generally, employees separated for no cause, including personality conflict, receive unemployment compensation. With some exceptions, employees terminated for cause don’t get unemployment compensation. Exceptions include unproven or undocumented misconduct or performance problems. Also, employees who quit (create the circumstances for separation) usually don’t get unemployment compensation. The most noteworthy exception is constructive discharge.

Constructive discharge occurs when the employer creates a workplace which is so unbearable that the employee quits; the employee is forced to quit. Such circumstances include when the employer demands that the employee do something illegal, overlook illegal conduct or the employer creates a hostile environment based on race, sex, religion, sexual orientation, etc.

Relative to discharge for performance related issues, the employer will need to show that they took exhaustive measures to remediate the employee’s performance. This means giving the employee multiple opportunities to improve or using progressive discipline. Again, documentation is key.

When a company encounters state unemployment compensation personnel, they’re encountering third party bureaucrats who may seem like they’re trying to run the employer’s business. No business wants government bureaucrats telling them how to run their business. So, as a business owner or executive, what do you do to avoid this? Don’t get personal. Stay objective. Document carefully, and make the best case possible. Finally, remember that bureaucrats are people too.

Some companies have an attorney or third party provider handle unemployment compensation matters for them.

TOPIC #14: WHAT GENERAL ADVICE CAN YOU OFFER?

Don’t take action on the basis of a legally protected class or activity. Use objective criteria for decision making. Act on the basis of performance and/or conduct/behavior. Conversely, if a business person relies on their gut for decision making, ensure that they exercise sound judgment.

TOPIC #15: WHAT’S THE MOST OUTRAGEOUS THING THAT YOU’VE BEEN INVOLVED WITH?

Anything involving sex, drugs, violence and especially children.

I’ve always believed that the most bizarre or unacceptable behavior you can imagine, if an employee believes they can get away with it, they’ll try to get away with it at work. I don’t know why. Without getting too metaphysical, I guess it’s just the human condition.

I advise employers, deal with the issues and don’t get too personnel. For example, if you’re an employer dealing with a sex abuser, it’s not your role to judge their morality, or suitability for society, let the legal system do that. Your job is to judge their suitability for continued employment, make money and provide for your customers and employees. For example, it’s okay to say that you have children and wouldn’t allow that employee to get within 100 yards of yours or anyone’s kids; it’s another thing to say that the employee is unfit for society and should be locked away.

TOPIC #16: A FINAL THOUGHT

There’s right and wrong ways of dealing with employees. Focus on profits and positive and preventive HR. And try to look at issues and work from your employees’ perspective.