What You Should Know When Selecting Software for Your Organization - Part Three

In Part One of this series, “Assess, then Search,” I began with a description of the needs assessment phase. For Step Two, I described the actual product search phase. Here, in Step Three, I turn to the evaluation and decision phase.

Sifting through the rubble

Depending on the type of procurement, you may have anywhere from zero to 30 responses to an RFI. It may seem daunting, but there are tricks to sorting through the responses to help you narrow the list to a few key options.

Start with your most firm requirements. Do you need something that allows a certain number of concurrent connections without performance loss? Does each product work with the other applications you plan to keep? Will it adequately accommodate your remote access needs? Does it work with your server OS? Whatever they are, the core “must have” features should drive your first pass through the product materials and RFI answers. Create your short list and set the others aside in case you need to go back to them.

Next, rank the “nice to have” features and start with a weighted rating system. Some product selection committees use the “greatest number of hits” method (where every positive answer gets one point). Others use a weighting and voting formula that assigns a relative value to the features based on importance, then rates how well the solution addresses each item. For example, Mac compatibility may get a relative value of 6, compared to Windows compatibility’s 10. If the product is very strong on its Mac OS compatibility, the most that vendor will get is a 6, whereas if it also is not ideally used on a Windows PC, it might get a 5 or 6. Because the Windows feature is more important, even a 50% rating counts about the same as a 100% hit on the Mac feature.

Do your homework

Armed with a short list, the committee members need to become sleuths, using all available tools to find out as much as possible about the company, the product and the customers who use it. Try web searches (and be sure to browse at least 3-5 pages deep into the results), call references (and ask them for the names of other customers who use the product in your industry who may have not been put on the reference list), contact companies listed as technology partners (find out if the partnership is robust or just passive) and go visit the company’s office (make sure you are dealing with more than a garage project). "Trust, but verify."

If you have the time and budget, go sit with users who already employ the solution in business environments like yours. You can learn more from just one of these trips than you may learn in a product demo by a skilled sales rep. If you divide and conquer the list of customers, make sure each person uses the same checklist and reporting form to get data for apples-to-apples review back in the office.

Structure the demo

With a lot of good background information, it is time to prepare for the product demo. Even if you have seen a generic product demo already, go to the effort to host a quasi-proof of concept. Based on your own expected daily usage, write a script of challenges that you will expect the software to handle once the product has been installed. Explain your goals for each scenario (“to see how fast a typical user can accomplish the task,” for example, or “to see how many efficient ways a user may complete the task”) and the other systems that would normally be involved.

Allow adequate time for the vendors to perform each scenario, followed by specific question & answer time to review the results. Your research will help you target questions as you address any concerns uncovered when talking to other customers, for example, or that have arisen since the RFI responses came back.

Make sure you carefully manage the demo to avoid wasting time on lesser topics to the detriment of discussions on important matters. If necessary, have a facilitator who can make sure the discussion moves around the room and one or two eager participants who may not accurately represent all interests do not dominate the Q&A session.

Consider the consequences

Once the demos are over, reconvene the committee for a frank discussion. The risks you must worry about at this step are typically bias, hidden agendas and ignorance. Some people got on the committee in order to make sure their department’s needs receive priority over others’ needs, while other people may simply have had their minds made up before the entire process began. One of the worst and typically unexpected obstacles for product selection committees, however, is ignorance.

You cannot safely assume that everyone in the group came equipped with the same knowledge or comprehends the needs or solutions. Ask. Does everyone know about the platform compatibility issues you have or expect? Does everyone understand the new technologies proposed and how to compare them? Does everyone have a clear understanding of how each vendor proposes to address need X? You cannot rely on the vendors’ ability to sell their solution unless you are willing to take the risk that you may not end up with the best result.

Consistency in Employment Practices: Angel or Hobgoblin?

There is an old saying, “consistency is the hobgoblin of small minds,” that is often used by those who reject accountability and rules. But these people misquote Emerson, who actually wrote, “foolish consistency is the hobgoblin of small minds.”

In fact, based on decades of court decisions in employment law cases, consistency is the simplest way to limit many employment law claims against the employer. I am sure Emerson would agree that such consistency is neither foolish nor a hobgoblin.

To begin with, you need clear, written policies and procedures. (See earlier post, "The Importance of Written Policies.") That seems obvious, but for too many small businesses (defined here as organizations with annual revenues under $25 million), management continues to believe they are “too small” to worry about such formalities or, as I have heard stated a number of times, “we cannot afford to act like a larger company.” (See earlier post, "Managing Risk Through Compliance.")

Perhaps an ulterior motive for not writing down policies and procedures is that managers want to avoid accountability for themselves. The downside, unfortunately, is that it creates a greater risk of exposure to employment practice-based lawsuits. Worse, it makes those suits more expensive because there is more litigation over establishing what the employer’s actual policies were in practice, rather than focusing only on the grievance at the root of the claim.

Especially in a small organization, “flexibility” can appear suspiciously like bias in favor or against a particular race, gender, nation of origin or other protected class. Even where the EEOC lacks jurisdiction, private law suits can threaten significant financial injury to small businesses and organizations. Grant one employee’s request for flexible work hours but deny another and you may face allegations of illegal discrimination without the support of written policies and documented business needs.

If you lack written policies and procedures, make sure you provide true business reasons for your personnel decisions and document them thoroughly—ideally in a written answer to the request. But beware: even a drowsy jury will perk up and spot a sneaky effort to cloak a preferential favor with a fake business reason. And the verdict will not likely be pretty.

7 Items You Should Have in Separation Agreements for U.S. Workers Over 40

The Age Discrimination in Employment Act of 1967 (“ADEA”), was signed into law by President Johnson. Its stated goal is to protect workers age 40 and older from age discrimination. Since enactment, the ADEA has been amended several times, including changes within the Older Workers Benefit Protection Act (1990). Since the OWBPA, the general practice followed by most employment law attorneys has included formal separation agreements in order to foreclose claims and prevent problems while the employee is willing to trade a release for valuable consideration.

Before the Termination Notice

When an employee does not perform as required, it is vital that the employer document the substandard performance and the employer’s efforts to obtain satisfactory performance from that employee. (See earlier post, “Wasting Money With The Wrong Staff.”) You should ensure that you adequately communicated those performance expectations and that those standards are reasonable and consistent for all employees in the same job classification. (More on that in a later post.)

If the termination is for economic reasons, you have less concern about performance but new concerns when hiring afterwards. The laid-off employees will pay close attention to anything that looks like an effort to replace them with younger (and presumably cheaper) staff. Make sure you maintain documentation of the economic considerations other than the relative cost benefits of hiring younger staff at lower salaries. Eliminating an entire department is more defensible than only part of the department.

Make certain the documentation is complete and the personnel file is in order. (For suggestions on important employment agreement documents and terms, see my earlier post, "When Hiring, Consider Firing First".) It is essential that you follow your own policies and procedures to the letter. And never attempt to cover up an economic termination with manufactured performance failures.

Magic Paperwork

At the separation conference with the employee, you should already have prepared the following documents:

1. Separation Agreement with Release of All Claims
2. COBRA notification paperwork (if applicable)
3. Final paycheck as required by state law

The separation agreement, even for terminations for cause, should include these seven things:

a. A brief statement of the reason for separation. If the termination is for cause, the employer usually has more leverage than in other situations. This section does not have to restate the list of violations in detail, but can simply categorize the grounds as “for cause” or other terms used in the organization’s personnel manual or collective bargaining agreement.

b. A release of all claims against the employer. This need not be mutual, but cannot be prospective under federal and most states’ laws. The goal is to foreclose any claims based on anything that occurred prior to the effective date of the agreement. You do not want a stray overtime or discrimination claim to pop up later based on events prior to termination.

c. A statement of the compensation terms. All contracts must be supported by an adequate exchange of value. In return for the employee’s agreement to never pursue any claims he may have, the employer should provide something of obvious value. This can be cash, health insurance premiums, payment of unused leave beyond what the employee is entitled to receive, or other forms of compensation. You want the employee to see the benefit of accepting the offer, so frame the compensation accordingly without going overboard.

d. An ADEA/OWBPA clause. Workers over 40 must have at least 21 days to review the agreement or take it to their own legal counsel. They also have 7 days to revoke their signature. Never count the day you provide the document or the day it is signed. Therefore, you should not give the compensation until the 8th day after the employee has returned the signed agreement, counting the day after you receive it as the first day.

e. A confidentiality clause specifically for the separation agreement. Again, it need not be mutual. You want the employee to keep secret the existence of the agreement and any payments under it. A penalty clause may be difficult to enforce unless you spread compensation over a lengthy period, but you should include it, anyway. The risk of attorneys fees, litigation and even embarrassment may be enough to discourage violation, even for a “judgment-proof” former employee.

f. A jurisdiction and venue provision. Within the confines of your local employment laws, attempt to limit the places where the employee may litigate any disputes under the agreement. You want all litigation to take place where it is convenient for your lawyers to handle any disputes.

g. A general confidentiality clause for the organization’s secrets. You should have a confidentiality agreement already in place and signed at hiring, but consider re-stating it in the separation agreement. If you do not have one signed by the employee, then make certain to include it. Consider adding stipulated penalties and remedies to the extent appropriate in your jurisdiction. For some secrets, such as data covered under personal data privacy act, you probably have a duty to exact this agreement or confirmation.

Closing the Deal

Walk the employee through the documents, answer questions—but do not give legal advice—and make sure the employee understands the OWBPA timeframes. It never hurts to explain how the employee will benefit from accepting the package deal rather than refusing to sign, as long as you do not cross the line into legal advice, coercion or threats. If the worker is under age 40, you can agree to making payments faster than the OWBPA times, but you do not have to.

Some managers have balked at the prospect of “paying off” employees they terminate for cause. There is a good argument that such compensation is not necessary. However, if the goal is certainty and “buying peace,” a modest payment can be far cheaper than the deductible under your employment practices insurance policy. Unless you are a law firm, litigation will be a distraction from your primary mission and will involve significant non-financial costs even to win. Even for law firms, time spent suing or defending your own firm is money lost from work that could be billed to the firm’s clients. When the odds against collecting your legal expenses from a former employee are very low, you have a lot to gain from this strategy.

Whether for cause or economic reasons, employers who terminate staff need to always keep the ADEA and OWBPA in mind. It is generally a good practice to follow these same guidelines for all involuntary separations, but doing so with so-called older workers can help avoid costly employment discrimination claims.

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NOTE:
This article is only a general guideline based on U.S. law. It is not intended to be and should not be relied upon as legal advice. Your state and local laws may give you more or fewer options in employment situations and local laws vary considerably. You should only use this as a discussion guide when reviewing your particular situation with a lawyer licensed in your jurisdiction.

Avoiding Problems After a Major Disaster Hits Your Home

This week, my post is featured on another blog, the LSLA Newsroom. Please read it there: "LSLA NEWSROOM: Avoiding Disaster After a Major Disaster Hits Your Home."

Drafting Good Policies for Social Media Use at Work – Part One

The Risks and Reasons

Social media is not going away. It is going to explode on the work scene. New tools like Google’s Wave are coming out, which means FaceBook-type communication is becoming the norm, not the exceptional. If you think the lines between personal and work life are blurred now, just wait.

The benefits of limited social media usage at work have become more clear, especially in very dynamic industries. B2C businesses can put their fingers on the pulse of consumer frenzies as they develop and build both brand awareness and loyalty with direct connections to their prospective customers. B2B businesses can monitor industry developments and buzz about their competitors by customers while shoring up their reputations and proactively cutting off damaging rumors as they start. Advocacy groups can connect easily and see instantaneous developments that may be successful in other places while gathering supporters who are passionate about their cause. Communities of all kinds have sprung up across the social mediasphere and continue to multiply.

There are many risks hidden beneath each social media (SM) page, however. Most can occur very easily both intentionally and unintentionally:

+ Divulging trade secrets
+ Violating data privacy laws
+ Libel and defamation
+ Violating federal and state securities laws
+ Breaches of professional confidentiality obligations
+ Misrepresentation of authority
+ Brand dilution
+ Harassment

Because intentional acts are obviously a threat, I will focus on unintentional ways your staff may cause problems for themselves and your organization through their SM usage.

1. Identity & Authority
When a person speaks, the audience often looks to see what authority she has. Online, the clues can be found in the commentator’s profile: email address, employer name, job title and even business address. If your staff use their work email addresses for their personal online socializing, there is a risk of confusion by the public as to which positions, photos and postings are the employees and which ones represent the employer.

It is one thing to embarrass oneself online with pictures showing a wild time. It is another thing to put your employer in a bad light by linking your crazy cavorting to the company—or worse, posting pictures from a company event without company approval.

2. Breaches of Confidentiality
A recent case where a law firm associate publicly Tweeted as he was reviewing documents during discovery grabbed headlines in some circles. He did not reveal any names, but his opposing counsel was listening and learned through implication about the existence of a potential treasure trove of evidence that the firm had not yet even evaluated, much less disclosed during litigation. In technology, the risk of divulging trade secrets is high, as many senior managers are unaware how decipherable some comments are to those who know the programming language or engineering terms. If a tech grumbles about a particularly thorny challenge with enough detail, the cat will be out of the bag about what he is working on before anyone has a chance to prevent it.

Data privacy laws apply to the employees of an organization as well as the organization itself—even when the employees are “off the clock,” so to speak. There are serious consequences for violating various privacy and confidentiality laws, even if there is no immediate, actual harm.

3. Insider Information
Public companies always run the risk of crossing lines related to their stock. If some news leaks through a few FaceBook photos or updates, then an executive buys or sells shares even coincidentally, the company and the executive can spend dozens of hours and a lot of money defending allegations of improper trading even when they are not guilty. Likewise, in the age where your competitors “listen” with ears not to the ground, but to their Twitter space, random, disparate Tweets by different people located thousands of miles apart aggregate into a picture that can cost you your edge.

4. Harassment
Abusive language and constant messaging would not be tolerable inside the organization’s network. But some employees feel the freedom to act disrespectfully when in their own little SM worlds. They forget about the profile information that lists where they work, their work email address or even what they do, and then blast a peer or worse, a supervisor, and think no one will tie the post back to their place of employment. Cyber stalking and cyber bullying have become well-known terms, which is unfortunate.

In the next post in this series, I will survey some of the guidance available when crafting your own social media policy.

What You Should Know When Selecting Software for Your Organization - Part Two

In my earlier post on this subject, I outlined Step One, “Assess, then Search.” The idea is to build a frame around the search to help limit the distractions by irrelevant solutions. Once your needs assessment is complete, what do you do with the resulting list?

For Step Two, the actual product search phase, I will explore some of the self-created risks many software buyers face during this important decision process as well as how to work through them.

What is on your technology shopping list?

A thorough needs assessment will guide the initial shopping phase, whether you issue a Request for Information (RFI), search key terms on the Web or seek referrals from other organizations who use similar software. Many use a detailed checklist that moves from general feature to specific function to narrow the list to a select few.

The essential features and requirements should be there, but do not hesitate to add your wish list of nice-to-have features as well. You may not be aware of what is available and if you do not ask, you may never know what you can have within your budget. Most large businesses use a comprehensive matrix of questions and answer spaces, often provided in Word or Excel format to allow the responding vendors to fill in their answers.

One mistake that many purchases make is to become too wedded to their list. As you learn more about what is available, your feature list may evolve and mature. If your needs change, there is nothing wrong with changing what you ask of the prospective vendors. Never be afraid to throw out the information gathering results and start over or at least send out a second round of questions. The vendor needs to earn your business and it is their job to sell you, not the other way around.

When I was pitching software, it was nice to find prospective customers who actually sought unstructured input and suggestions on thorny business needs. Whether in the RFI or during a sales presentation, find a way to open the discussion to allow creative problem-solving with the vendor’s professional staff (not simply a sales executive who may promise you anything to get the deal).

Make sure your checklist addresses these vendor qualities in addition to your software feature needs:

-> Customer Satisfaction with the product AND the company – What do their customers say about each? How willing are they to give you names?
-> History of providing update communications – How well do they alert customers about known issues before the customers report them? Or do they pretend each report is an amazing discovery they have never seen before? (See also, "Is Your Software Vendor Your 'Friend'?")
-> Business maturity – How long has the company been in business and in the software business? How sophisticated are their developers and product design professionals? Who drives development, the Sales department or a professional software design expert?
-> Market focus – How many customers like you do they already have? What do they know about your industry or business model?

Who is on your product selection committee?

Whether you have an IT Department, a single Network Administrator or an outside consultant, make sure you get sound advice and input from your trusted tekkie who is up on current tech standards and trends. Technology changes rapidly and the accepted guidelines from even two years ago may no longer hold. Technical input is crucial to ensuring that your investment will not fall apart under everyday usage.

At least as important, however, are the actual users. IT can guide you, but be aware that they often look at software purchases in terms of how much trouble the product will be to install and maintain, not how well-suited it is to your business operations needs. IT, for example, may prefer web-based solutions because they are easier to deploy and maintain. Users, however, may need more power at the desktop level or off-line capabilities. Who wins a stand-off in that situation? Do the needs of the many outweigh the needs of the few, or the one? On the otherhand, users tend to want products that are not much different from what they already have or know. Ease of use is an understandable demand, but fear of change may color their input and pull you away from a product that will help you grow and expand for years to come.

The software vendors will play to the power on your selection committee. If they see that as IT, you can expect pitches that tout the technology “under the hood” and back-end qualities such as the application product interface (API) rather than features in the user interface or usability. If the vendors sense that users are at the helm, then you should hear more about ease of use, simplicity and configurability for the users and less about reliability, stability or technological limitations. Let them know right away that power is balanced between IT and users, even if there is a chief decision maker in the event of a tie who will consider both sides’ needs and input.

In the final post in this series, I will cover the evaluation phase.

Ready to Hire Again? Strategize Before You Advertise to Avoid Discrimination Claims (Part Two)

In the first post of this two-part series, I covered the “Pre-Hiring Checklist” and “Inadvertent Discrimination.” This post addresses the importance of training and having a consistent, reliable business practice within your hiring process.

Train and Prepare Your Hiring Committee

All of your preparations will be useless unless you adequately share the vision and guidelines with everyone who is part of the hiring process—including your receptionists and support staff. Do not leave it to chance that an uninformed staff member who may only interact with a prospect one time can slip up with a comment about something on the “off limits list.”

If you can, train everyone at one time and well before the first phone inquiries come in. If not, at least get to everyone expected to be in each step of the process, starting with those who handle phone, email, in-person and other inquiries. Make a small cheat sheet to give them at training, ideally written in “Do” language, rather than “Do Not,” to avoid planting the wrong words in their minds. Some use a two-column approach, with the "OK" list on the left, and "Not OK" list on the right. For example:

OK-------------------------------------Not OK

“Where did you fly in from today?”-----“What country are you from, anyway?”

“Have you worked in sales long?”-------“How old are you?”

“The [weather] is really [whatever]!”---“You talk like someone from Russia.”

If at all practicable, track the EEO profile of your applicants just as you do your employees for the EEO-1 report. This could be in the form of voluntary questions on the web application screen, as many now have, or in some separate form with no identifying details on it given directly to the HR officer of your organization and separated from the employment application and resume. Ideally, collect race and gender only in an anonymous fashion. Never try to guess based on surname, first name, etc.

Inconsistency is the True Hobgoblin

Finally, take extensive steps to make sure all interactions with all applicants are consistent, fair and respectful. In other words, treat everyone the same to the extent you can and document how you did. Ideally, your organization already has in place a structured, formal procedure for the hiring (and separation) process. If not, here are some considerations for standardization.

1. All job openings must be advertised by and all resumes and applications must go through one office or officer, such as your Human Resources (HR) manager. This makes it easier to keep track of the process, resumes and activity related to each hire. The right HR officer can keep you out of trouble 9 times out of 10 if he or she is part of the effort from the start.

2. All offers of employment must be issued by the HR officer. No matter who makes the decisions on start date, salary, etc., let the HR officer issue the offer letter. That way you know it goes out in a standardized form and no one is treated differently allegedly on an impermissible basis.

3. All offers of employment must be in writing. End all compensation and employment term discussions with caveats such as, “Of course, it all has to be consistent with our internal policies and practices.”

4. All letters or indications of acceptance must be given to the HR officer. Create the official “POC” for this process and stick with it. That way, you can rest assured that the employee manual, benefits enrollment forms, etc., all go out timely and consistently. The last thing you need is for a pregnant new employee to allege discrimination because her benefits were delayed when the HR officer did not “get the memo.”[1]

With proper preparation and solid execution, you will start this new economic cycle with the best new staff to help you grow beyond your goals in coming years!

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Important Notes

This article is not intended to be legal advice. You should consult with counsel regarding the specific laws in your area, because they vary extensively from state to state. If your employees have a collective bargaining unit, of course, other rules and limitations will apply, but the guidance above may still be within your reserved management powers if not specifically addressed in the union contract.

[1] For many of the same reasons, all notices of resignation must be given to the HR officer, all resignations must be accepted in writing by an officer of the organization and given to the HR officer and all separation agreements must be issued by the HR officer. Once you have this in place, you will regret having taken so long to do it.

Ready to Hire Again? Strategize Before You Advertise to Avoid Discrimination Claims (Part One)

As the economy turns the corner and business picks up in general, hiring is sure to begin in earnest. There are a lot of potential employees for your business and you should expect a flood of resumes once you advertise your openings.

Before you post the job ad, however, think strategically about your hiring plans. Employees can be invaluable assets as easily as costly mistakes. For small businesses and nonprofits, each hire is a significant investment of time and money. But each “fire” is usually much more costly. One employee with an unprofessional attitude or serious gap in ethics can ruin your reputation if not your entire business.

This two-part series of posts will address the “Pre-Hiring Checklist,” “Inadvertent Discrimination,” “Train and Prepare the Hiring Committee,” and “Inconsistency is the True Hobgoblin.”

Pre-hiring checklist

Ask yourself—or if you are large enough to enjoy a management team, have them discuss—the following questions:

1. How much contact will this person have with our customers, funders, boardmembers and or investors?
2. How important will this person be to our success in the next 6 months? What about the next 3 years?
3. How will our expectations of this person evolve during the next 12-36 months?
4. How easily will we be able to replace this person on short notice?
5. How much time and effort will we actually devote to training and mentoring this new hire?
6. If the position is one that generates revenue, how long will it take for the new hire to generate enough revenue to cover his or her entire compensation package as well as all of the missed revenue during the training and learning phases (i.e., when can we expect them to pass the “initial break-even” point)?
7. What else will we need to hire, buy, lease or divert to get this new hire up to the skill level we expect?
8. How long do we anticipate we will need this new hire?
9. What skills should the new hire already have acquired before reporting to work?
10. What off-duty expectations do we have of employees in this category?

Each question can easily lead to more as you explore the long-term and short-term vision for both the ideal and the worst-case disaster hire. Once the pre-advertising analysis is finished, make sure your job description matches the answers, then draft your advertisement.

Inadvertent Discrimination

As you think through the job expectations, be careful not to develop a physical image of the candidate. Focus only on skills, qualities and capabilities OTHER THAN age, gender, race, national origin or religion. Unless your position fits into a very limited set of exceptions [1], it is illegal to discriminate in any aspect of the employment process on the basis of the following, and questions about these topics are OFF LIMITS:

-> Birthplace
-> Ancestry
-> Culture
-> Linguistic Characteristics that may indicate some protected status
-> Religious Beliefs
-> Gender (including actual and potential pregnancy)
-> Age
-> Physical and Mental Disability

Even though very small businesses may not be covered by the federal laws, it is generally a wise practice to behave in business as if you are covered by them because one day you may be. Some states have equivalent laws and many government contracts require compliance even if the business falls under the size limits. For Title VII of the Civil Rights Act and the Americans with Disabilities Act, the minimum size is 15 employees. For the Age Discrimination in Employment Act, the minimum size is 20 employees. Those employee numbers only have to occur for 20 working weeks in the current or previous work year to put your organization under their umbrellas.

To be continued in the next post...
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Important Notes

This article is not intended to be legal advice. You should consult with counsel regarding the specific laws in your area, because they vary extensively from state to state. If your employees have a collective bargaining unit, of course, other rules and limitations will apply, but the guidance above may still be within your reserved management powers if not specifically addressed in the union contract.


[1] A good list of these exceptions and the various anti-discrimination acts is available on the EEOC web site.

Don’t Follow; Filter! Sifting Through Twitter's Vast Ocean of Information

Almost every day I see notice that one or more new Twitterers have chosen to “follow” me. The ones that catch my attention, though are those who follow over a thousand others. The first thought that comes to me is, “do they even read those Tweets? How can they possibly make sense out of thousands of 140-character messages every hour!?”

Whether or not you are an experienced Twitterer (or FaceBook user) with hundreds or thousands of followers (or “friends”), you know, of course, that it would be a full time job to do so. But the truly experienced Twitterers (translation: been on Twitter more than 60 days and have posted at least 100 Tweets) knew a few tricks that you may find helpful.

Tip #1: Twitter is incomplete

The simple interface gets you hooked. Yet, beyond sending out a Tweet or two, there is so much more you want to do but cannot find inside Twitter’s web interface. By design or by accident, the basic Twitter screen is one avid users outgrow rapidly.

There are some partial features new to the user interface, but they are themselves incomplete. Case in point: search. Twitter Search was apparently intended for other software developers to use, and until recently, was only available on another web page. Advanced Twitter Search is actually quite useful, but you still have to know where it is to use it.

With the basic search field on your Twitter home page, you can put in terms and phrases—yes, even including those fantastic hashtags—and get a quick list of Tweets with that term or phrase. You can even save your searches. Unfortunately, there is no “logic” feature to allow you to construct queries above exact match searches. Twitter has a simple tutorial for using Search to find people here.

Another feature that is missing is the ability to categorize your “Follows.” If you follow Congress, your favorite news site, product recalls, weather updates, your friends and a few companies who sell products you adore, all their Tweets are blended into one murky river of short messages. Twitter alone does not help you out here. For that, you need to read Tip #2.

Tip #2: Tools!

For a free service, it is astounding how many developers have built equally free software or constructed free-to-use web pages to expand the ways people can use Twitter. These tools are divided into two categories for simplicity: general Twitter usage tools and Twitter Search tools.

The venerable reference guide from way back in 2007, “Twitter Toolbox,” is still available online to give you a summary of over 60 tools to help Twitterers Tweet more effectively. Most of them are actually web developer tools to help others incorporate the power of Twitter in their web pages. A better list for users is OpenJason’s “100 Twitter Tools.”, posted earlier this year.

You can also get ideas for useful tools from those you follow. Each Tweet typically names the service or software the Twitterer used to post the update. Bing or Google the name and test them yourself. That is where I found TweetDeck and Seesmic, among other tools I use.

For searching, there are separate lists of suggested tools that will guide your quest for the perfect way to find needles in the world’s most dynamic information haystack. Ari Herzog did a fine job with his critique, “6 Twitter Search Services Compared” a few months ago. Loren Baker outlined “9 Twitter Search Apps: Better than Twitter & Google” for the Search Engine Journal. There are likely many more lists of suggested tools out there.

Tip #3: Be careful what you wish for!

After you master the Twitter basics and settled on some tools, you are ready to begin sifting through the ocean for tiny plankton. Businesses may want to keep on-going searches for their company and product names. Politicians may want to watch for “mentions” of their opponents’ names and Twitter account names. Students can set up searches to keep track of trending discussions on current events or famous people. Prospective travelers can watch for discussions about their dream destinations.

There really is no limit--which is a problem of its own. You can easily over-do the searching and monitoring to the point where you are overwhelmed once again. In that case, go back to Tip #2 and find a new tool!

UPDATE: After publishing the above article, I found this helpful slideshow, thanks to a post on the "Small Business CEO" site: "Small Business Trends Radio has recently launched a slideshow showing readers 10 Ways To Build Twitter Followers."

Managing Your Reputation Online - Part Three: Monitoring What is Out There

In Part One of this series, I introduced the risks. In Part Two, I outlined a checklist of preventive measures. Now, let’s look at some practical ways to monitor your business reputation in the blogosphere and other virtual spaces.

Keep your eyes open

Reputation (and brand) management is ultimately a legal issue, so some general legal principles seem appropriate here. One that American law students learn early in law school is that “equity favors the vigilant, not those who sleep on their rights.” Another legal concept is the “Limitations Period” (in Louisiana, “Prescription Period”) codified in statutes.

Where the statutes of limitation are specific laws enacted in the various states and by Congress and give set time limits to file a lawsuit or criminal charge after a violation of some other statute, principles of equity are typically less rigid and applied in the spirit of reasonableness. Both have the goal and effect of placing a time limit on when you can take legal action.

Some of the time periods begin when an action occurs. Others only when the injured party “knew or should have known” about it. It is the second part of that you should worry about. If your name has been misappropriated or your protected property has been stolen, you will have to show that you did not turn a blind eye or blissfully live without any of the reasonable efforts a prudent businessperson would have undertaken to protect his or her own valuable property.

Set up monitoring tools

What should you do to monitor yourself, then? With each medium, there are useful tools and ways to monitor for potential problems. These are a few of the better ones available today:

1. Search Engine Alerts. In today’s information age, it is not considered vain to set a Google Alert or Yahoo Alert to “listen” for your own name or other protected words or phrases. They are easy to set up and manage and then work tirelessly to continuously monitor for your selected terms among pages that these search engines index.

2. Social Media Tag Searches. Social media is raging into our lives. Who does not know anyone with a FaceBook, Twitter, MySpace or similar account? That means there is a lot of “chatter” out there, some of it not so pretty. You cannot ignore the SM world, even if you are not a participant at this point. Use free tools like the web-based TagBulb or downloadable TagFetch to watch for key words that people use to “tag” their comments.

3. Twitter. Twitter searching has become a world of its own. You already get the automatic “@username” feature in your Twitter home page that keeps up with every Tweet that includes your username. To broaden that monitoring, however, you need a tool. There are countless tools available now. If you use a third-party application to manage your Twitterings, look for features built in that let you filter and search. Otherwise, try TwitterSearch (same company, different web page) or TweetBeep tools.

4. Newsfeeds. This is getting into higher levels of technicality, but the tools are no more difficult to use than some of the others mentioned above. An RSS feed reader is simply another monitoring device that watches the “stream” of information flowing through the Internet. RSS (“really simple syndication”) is how many web sites these days send their content out when it is updated. It is very common for news sites, so you cannot afford to overlook it. Unless you have an aggregator like Gregarius, Bloglines or one of the many other RSS Feed Aggregators out there, you would have to check each individual RSS feed.

5. Video and other media sites. YouTube allows people to “broadcast yourself” and Flickr makes every photographer world-renowned (at least for a few seconds after posting). How do you sift through the noise? In addition to search engine alerts, consider something like Video-Alerts.com, a free service that specifically focuses on YouTube.

(Of course, each of the strategies above can also be used for monitoring trends in your industry or tracking competitors, but that is outside the scope of this series.)

Finally, during my research for this post, I found other useful posts on this topic that you might find helpful: A slideshow, “Why you should monitor social media” posted this week by Connie Bensen of Alterian; a good video essay on how some businesses use Twitter to monitor their own names, and a blog post on how to monitor your name on Twitter.

In a later post, I will focus on what action to take should you find a problem. Until then, get those alerts set up!

You know about the FMLA, but what about the SFMLA or MFLE?

Changes to the FMLA

By now most know that the Family and Medical Leave Act of 1993 (29 U.S.C. 2654) (FMLA) requires “covered employers” to give “eligible employees” up to 12 weeks of unpaid leave per year for their own or close family member’s medical care. Yet a number of organizations I have worked with are unaware of the changes in 2008 and 2009 to the statute and regulations. [1]

Even though you may not have employees who have been called up to active duty, do not assume that the so-called "Service-member's Family and Medical Leave Act," or SFMLA, is irrelevant to your business. There were two sets of changes to the FMLA in 2008 designed to benefit the men and women who have actively served in our armed forces and their families: one added added to the FMLA provisions to make them more clearly applicable to deployment-related situations; the other actually added a new 26-week leave benefit in lieu of the FMLA. Together, they are formally known as the "Military Family Leave Entitlements."

Qualifying Exigency Leave

The FMLA has always had a short list of qualifying events that enable an "eligible employee" to use unpaid FMLA time off from a "covered employer" without losing his or her job permanently. To that list, Congress added "any qualifying exigency arising out of the active military service of the spouse, child or parent of the employee." At first glance, this seems to be a huge expansion of FMLA definitions. According to the United States Department of Labor, "qualifying exigencies" include anything the employer and employee agree is a "qualifying exigency," but also:

° Issues arising from a covered military member’s short notice deployment (i.e., deployment on seven or less days of notice) for a period of seven days from the date of notification

° Military events and related activities, such as official ceremonies, programs, or events sponsored by the military or family support or assistance programs and informational briefings sponsored or promoted by the military, military service organizations, or the American Red Cross that are related to the active duty or or call to active duty status of a covered military member

° Certain childcare and related activities arising from the active duty or call to active duty status of a covered military member, such as arranging for alternative childcare, providing childcare on a non-routine, urgent, immediate need basis, enrolling or transferring a child in a new school or day care facility, and attending certain meetings at a school or a day care facility if they are necessary due to circumstances arising from the active duty or call to active duty of the covered military member

° Making or updating financial and legal arrangements to address a covered military member’s absence

° Attending counseling provided by someone other than a health care provider for oneself, the covered military member, or the child of the covered military member, the need for which arises from the active duty or call to active duty status of the covered military member

° Taking up to five days of leave to spend time with a covered military member who is on short-term temporary, rest and recuperation leave during deployment

° Attending to certain post-deployment activities, including attending arrival ceremonies, reintegration briefings and events, and other official ceremonies or programs sponsored by the military for a period of 90 days following the termination of the covered military member’s active duty status, and addressing issues arising from the death of a covered military member

(emphasis in DOL original)

These extra benefits do not apply to members of the regular armed forces. They were expressly enacted by Congress to help the members of National Guard and Reserves who are called to active duty from their regular lives and should be seen and applied in that light. Qualifying Exigency Leave is merely a new basis for use of the 12-weeks of FMLA within a rolling 12-month period.

Military Caregiver Leave

The new leave benefit is a 26-week unpaid leave option for "eligible employees" working for "covered employers" who need the time either for themselves or their spouse, child, parent or next of kin. The 26-weeks must fit within a rolling 12-month window, just like the 12-week FMLA leave benefit. Eligible employees cannot add the two together: the FMLA's 12 weeks and the Military Caregive Leave can total no more than 26 weeks and only care for a covered servicemember can extend beyond the 12 weeks provided by FMLA.

Unlike Qualifying Exigency Leave, however, Military Caregiver Leave applies to both "regular" Armed Forces servicemembers and "reserves" called up from National Guard or Reserves. The serious injury or illness here must be incurred in the line of duty AND make the covered servicemember unable to perform the duties of his or her office, grade, rank or rating.

The Department of Labor maintains a good set of FMLA informational materials on its website as part of the Compliance Assistance section. Those interested in learning more can find a pdf Fact Sheet on the Military Family Leave Entitlements here.

NOTES:

[1] I will address the technical definitions of "covered employer" and "eligible employee" under the FMLA generally in a later post.

What You Should Know When Selecting Software for Your Organization - Part One

Software is expensive and changing your office work flow to adapt to any new system is time-consuming and stressful. Your organization expects you to make the best decision for a software solution that they can master easily and keep using for a long time without major changes.

It still amazes me to see software designed or configured to place extra work on the humans for the computer’s convenience. When shopping for software, here are some tips to help you assess not only viability, but usability.

1. Decide what you need and want, THEN shop.
2. Stay open to changing your requirements after you shop.
3. Let the actual users have a voice.
4. Keep the future open-ended.
5. Make a long-term decision.

Step one: Assess, then Search. Too many people do the reverse and window shop before they really have a solid sense of the features they need. Can you get more bangs for your bucks with a solution that addresses the needs of multiple units? Can you eliminate multiple software and information management systems with one purchase?

With the right people on your committee (even if it is only you), the process can move best by starting with the needs assessment. If you show the kids the candy store first, you may never get your shopping done. Better, ask product-agnostic questions of the business process improvement experts in each affected unit.[1] Hopefully, they already know the processes they need to improve or would like to, but for the archaic software they have to use.

>>>>What do you need to be able to perform your tasks more effectively?
>>>>What steps in your daily work could you eliminate with better technology tools?
>>>>Are there other important objectives you could address if freed from inefficient tasks?

After each of these, use the “What’s stopping you?” analysis to drill down to the functions relevant to your software search.

Q: What do you need to be able to perform your tasks more effectively?
A: Forms we can fill out onscreen, rather than paper that must be scanned into the database
>>>>Q: What’s stopping you from having these forms?
>>>>A: We need the ability to modify screens in our software as our needs change.

Now you have a feature that is real. One that addresses a business need without the emotion from those who fear change or hate your present software. Continue to build this list, even if some of the features are contradictory or extremely unlikely to be found in a commercial, off-the-shelf system (COTS). You are in the planning stage, so it is OK to start big.

In subsequent posts, I will explore some of the self-created risks many software buyers face during this important decision process as well as how to work through them.

[1] If you have not already gone through the BPI phase, review my earlier posts that outline a generic BPI plan and consider hiring a qualified expert to guide you.

Can You Safely Pay “Fees” to Representatives of Foreign Countries to Help Secure Business?

"Suddenly, without warning..."

Several years ago, a colleague of mine was a passenger in a car stopped at an eastern EU country’s border with another EU member country. My friend expected no trouble, but after the passports were stamped, the border guard began to give the driver an increasing amount of difficulty and walked him into the shadows away from where they were parked.

A short moment later, the driver returned to the vehicle and they drove off. After a mile or so, my colleague asked about the incident and the driver confessed that he had paid a small bribe to get them through. It turns out that the vehicle he was using to show my friend the region that weekend belonged to his father. The guard suspected as much and threatened to report some bogus charge to the revenue inspectors who might have conducted the equivalent of an extreme IRS business audit (only without the taxpayer rights we have here). To avoid the risk, the driver paid the equivalent of $40 USD and the guard allowed them on their way. And it had been his own countryman! He was returning to his own country, not entering another! Was this a bribe? You bet. Did it violate the FCPA? Let's take a look.

Background

The anti-bribery portions of what is known as the Foreign Corrupt Practices Act (FCPA) were written to address some of the ways American businesses were participating in corruption practiced in other countries.[1] As businesses expanded into the global marketplace, they ran head-first into “traditions” and “customs” that are illegal in the United States[2].

Senators William Proxmire and Harrison Williams introduced the bill with strong support from others in both chambers and lofty goals in the wake of Watergate. In reality, corruption is not unique to developing countries or those on other continents. The FCPA is also not entirely unique. However, U.S. and European Union countries appear to be the most stringent in holding domestic organizations liable for actions by their foreign employees, agents and subsidiary organizations.

Elements of an FCPA Violation
The FCPA applies to all companies who are subject to the jurisdiction of the Securities & Exchange Commission because they “issue” publicly-traded securities, as well as all “domestic concerns” (any individual who is a citizen, national, or resident of the United States, or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States, or a territory, possession, or commonwealth of the United States). That pretty much covers the options.

Assuming you or your organization is within one of those definitions, it is time to examine the elements of a violation and some tips for staying out of trouble. There are four elements of an FCPA charge (15 U.S.C. §78dd-1(a)):

• corrupt intent


• connected with a "payment"


• to a prohibited recipient


• for a qualified business purpose.

Corrupt Intent. The issue of intent is generally key in criminal statutes and the FCPA is no exception. Simply put, was the payment intended to influence a foreign official to act illegally, or intentionally not act when legally required to do so, or induce such official to improperly use his or her influence to accomplish indirectly an act or omission that would be illegal if done directly.

Payment. Payment can be the obvious (cash, property, etc.) as well as merely the promise to give something of value (reciprocal official misconduct, e.g.). It is a defense to prosecution if the defendant can prove that the payment is legal in the official’s country. Likewise, if the “payment” is travel expenses for a lawful trade excursion to promote or demonstrate the company’s products or services—or if “payment” is directly related to the legitimate performance of a lawful agreement with the foreign agency or government—the defendant can avoid penalties.

Prohibited Recipient. The U.S. Department of Justice has this comment on whether a recipient is a “foreign official:”

The prohibition extends only to corrupt payments to a foreign official, a foreign political party or party official, or any candidate for foreign political office. A "foreign official" means any officer or employee of a foreign government, a public international organization, or any department or agency thereof, or any person acting in an official capacity. You should consider utilizing the Department of Justice's Foreign Corrupt Practices Act Opinion Procedure for particular questions as to the definition of a "foreign official," such as whether a member of a royal family, a member of a legislative body, or an official of a state-owned business enterprise would be considered a "foreign official."[3]

Business Purpose. Finally, the corruptly intended payment to the foreign official must be for the purpose of obtaining or keeping business—even if from someone other than the foreign government. The FCPA’s primary purpose, after all, was to address the wide-spread practices by major companies of paying bribes to gain an unfair advantage over smaller rivals or Uncle Sam himself (which begs the question as to whether the issue would have garnered Congressional attention if all companies of all sizes could equally have afforded to “pay to play”).

Analysis of the Bribe
The driver in our story definitely made a payment to a government official. The payment was illegal under his country's laws, and made to influence the official to act or fail to act. We have two elements and have knocked out one affirmative defense.

But that is as far across the FCPA line as this story goes. There is a strong argument that the border guard was only dissuaded from his own illegal or improper act, but we do not know enough about that country's laws to be sure. On the other hand, the key element missing from the story is the lack of a business purpose by my colleague. Even if the payment never touched my friend's hands, had this payment been paid with the intent to obtain or keep business, then without any warning or opportunity for the American parent company to act to prevent the violation, an FCPA violation might have occurred. Without any connection to gaining or keeping business, then, my friend appears safe this time.

Compliance Begins at Home
No doubt, the FCPA crossed my colleague's mind when the driver confessed miles down the road to paying a bribe to a border guard. Had my friend been better versed on the FCPA, he might have gotten more rest that night. Here are some practical steps you can take now to sleep better yourself.

Policy. Begin with an understanding of the law and a thorough anti-corruption policy review in your U.S.-based company and all of its subsidiaries and members. If you do not already have a clear, blatant policy that prohibits all influence compensation and all efforts to directly or indirectly improperly influence government officials everywhere[4], draft one now and publish it to all staff. You must avoid any appearance of impliedly condoning that which you have not strongly discouraged.

Training. Follow that with training to all staff on why you have the policy, what actions are prohibited, the potential penalties to them individually and the company and how to report anything they feel may violate the FCPA. Keep records of the dates and attendees at each such training and be prepared to show them to auditors and potential investigators.

Safe Harbor. It is important to have a policy that encourages self-reporting and sincere efforts to comply or remediate violations. Consider a whistle-blower clause in your policy that provides reasonable protections for innocent staff who report FCPA violations. Beware the self-serving tattle-tale, however, who may want to benefit from an action he or she reports.

Conclusion
There are myriad scenarios that can arise when conducting business abroad or with representatives of foreign governments and businesses. This article is not intended to give legal advice or to take the place of an open, honest evaluation by a qualified attorney in your jurisdiction. The most that any post such as this can do is help you understand the questions you should ask your own legal counsel.

The risks are high: fines in the millions of U.S. Dollars and imprisonment for years for each violation. Not the kind of reward you want for your business or yourself.

Notes

[1] These sections are found at 15 U.S.C. §78dd-1 through §78dd-3.
[2] It is beyond the scope of this post to take on the relative moralities and legalities between corruption that has existed in the U.S. versus abroad.
[3] “Foreign Official” http://www.usdoj.gov/criminal/fraud/docs/dojdocb.html. The USDOJ site has a valuable Fraud section with the text of statutes, analysis and the Attorney General guidance mandated by the FCPA.
[4] Public companies are under additional accounting and record-keeping rules designed to make assets traceable and records of asset dispositions auditable, but those are outside the scope of this post. And with ratification in 1998 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, anti-bribery rules have risen to the level of international treaty. More on that in a subsequent post.

Business Process Improvement for Nonprofits - Part 9: Final Step?

Step 9 – Start Again

This is not like the penalty card in some board game that sends you back to the beginning. Instead, see this as closing a loop and taking the opportunity to circle back through the process in a healthy, endless review and improvement of your business processes.

As one process improves, it may help you identify others that need improvement or even pave the way to improve related processes you could not have changed before. As your staff gets on the BPI wagon, they will start spotting opportunities for even minor improvements in isolated processes. Finding ways to improve the work they do makes the work itself more interesting in some ways and certainly focuses their minds where you want them: thinking about the best way to perform their responsibilities at work.

If you collect your project materials in an electronic folder, review and update them to adapt to each new initiative, and document the baselines before and performance results after your changes, you will develop quite a history of progressive improvement for your department or entire organization. It will become a legacy anyone can be proud of.

Here is the final outline of this series of posts:

1. Diagnosis/Assessment: “What is happening now?” “Exactly how do we do everything that we do?”

2. Analyze Workflow: “Is this the best way we can operate?” “Do we need to do any parts of our work better/cheaper/faster/with fewer people?”

3. Identify Options for Improvement: “Where can we work differently?”

4. Design new processes or steps: “What will work for our organization?”

5. Gather feedback: “Is this in line with the organization’s mission?” “Does it actually improve the way we work?”

6. Test the new workflow: “Does it work in the real world?”

7. Monitor the results: “Are we getting the results we sought?”
8. Diagnosis/Assessment: “If no improvement, why?” “If that worked, what else can we improve?”
9. Begin a renewed effort: no process is perfect and no office runs perfectly. There is always room for improvement!

Happy BPI'ing!

Managing Your Reputation Online - Part Two: Protect What You Can

In Part One of this series, I introduced the risks. Here, I want to provide a check-list for small business and nonprofit managers to use as a guide in their efforts to take preventive measures.

1. Register any TMs you want to keep. The United States Patent and Trademark Office has a good page of FAQs to help you determine what type of registration--if any--you need. For most registrations, you do not need an attorney. The PTO has an online Trademark Electronic Application System. For copyrights, no registration is necessary, but some people prefer to do so. The U.S. Copyright Office also has an online registration page.


2. Mark all Copyrights and Marks you claim. Use the "TM" for trademarks and "SM" for service marks for the ones you claim, whether or not you register them. Only after registration can you use the "®" symbol. Copyrights can be publicly proclaimed with a "copyright notice" much like you see in printed materials showing the symbol or word "copyright," the year of first publication and the owner's name (e.g., "©2009 Your Name").


3. Reserve all rights. Although the trademark, service mark and copyright "marks" plainly flag your intellectual property ("IP"), some holders go farther and add--especially on copyrights--words such as "all rights reserved." This tells the world that you have not waived any rights to your IP and want to be contacted for permission before use. It is not necessary and does not really have legal effect, but also does not hurt anything.


4. Provide a process for obtaining permissions and licenses. If you want to help others honor your IP rights and seek permission before using your IP, then avoid the common mistake of failing to provide a way for them to find and ask you. Post contact information in the material, for example. Photographers can register their artwork at sites like Photrade.com. The point is to make it easy to find you so they can ask permission and give you a chance to grant it (with or without payment).


5. File for any patents you want. All the above information is NOT applicable to patents. Patent applications are, well, different. Though it is not required, it is highly advisable to seek legal assistance with any patent application or response to PTO questions or challenges. It also surprises people to find out that the information they submit to the PTO becomes public. That is because the very act of getting a patent is not to keep your secrets, but to keep your rights to the unique product or process.



6. Be Consistent with using and labeling your IP. If you have unregistered TMs, SMs or Copyrights, be sure to always tag them with those little symbols. Once per paragraph or page is enough, but always on any exterior text or artwork. You want everyone to know that you know your rights and are intent on protecting them.


7. Educate your staff. When do they use the TM or the ©? What do they do if someone outside your business asks to use the mark? What can be claimed as a SM? If you have to, bring in an IP lawyer to give a quick training class. Some will do it as part of their business development efforts (especially if you at least provide lunch) and others offer it to clients who use their services.


8. Register with third-party problem-solving organizations like the BBB and BBB Online. You can do everything right and still end up with a dispute that can damage your reputation. Register in advance and be prepared to use the alternative dispute resolution services if you cannot resolve the dispute with a letter or phone call. You are not in the business of litigating over customer or IP issues, so the faster you can resolve minor matters, the faster you can return to your primary mission.


9. Take all customer complaints seriously. These days, it takes very little for a disgruntled customer to proclaim to the world how sorry your product, staff or services are. They can email all their friends, post a very descriptive story on their FaceBook or other social media site or go global with a video diatribe on YouTube. In fact, while sitting on hold or standing in line, they can "Tweet their beef" to the entire world with only a cell phone.


10. Make sure you have good quality control systems. The best problem solving system is a problem prevention system. Take QC seriously and make sure your customers know it. Give them an EASY way to provide feedback and suggestions. Invite them into the dialogue with you on how to improve, then listen to what they have to say. It is much cheaper than cleaning up a mess after the fact.


11. Bolster your reputation with good testimonials BEFORE any bad ones arrive. This is even better than an “ounce of prevention.” Elicit quotable feedback and display the positive comments prominently. It builds your relationship with the quoted customer and helps others see that perhaps their dissatisfaction is not the norm. These must be honest and you must get permission prior to publication, but even customers who decline will be glad you asked.

My next segment in this series will cover monitoring your digital reputation.

Environmental Issues Can Arise In Everyday Life for Small Businesses

How much effort do you put into ensuring compliance with environmental laws? If you think they do not apply to your business or cannot become a risk to your operations, consider this story.

A small business came to me for help with a contract dispute. The business whose assets it was buying filed for bankruptcy before the deal was finished. A party’s bankruptcy can definitely ruin a good deal, but this one took some unusual turns. The bankrupt company had every intention of selling its assets to my client. It was so eager to liquidate, in fact, that the employees essentially loaded everything into trucks in one state and had it all delivered to my client a few states away.

It looked like the only thing left to resolve was payment. That is, until they opened the trucks on the receiving end. To their surprise, there were numerous unmarked barrels of unidentified substances in the trailers and no paperwork to explain them. If you know anything about federal or state laws that regulate hazardous chemicals, you have likely guessed where this is leading.

The RCRA
The Resource Conservation and Recovery Act (42 USC §6901, et seq.) was originally enacted in 1976 to address the growing consequences of municipal and industrial wastes that were causing increasing problems as industry evolved faster than the regulations. Both “hazardous” and “solid” (though not necessarily hazardous) wastes are carefully defined and regulated under different sections of the statute and different regulations.

The key part of RCRA is subtitle C, where Congress fashioned the “cradle to grave” concept to track regulated substances from the creation point until disposal. The Environmental Protection Agency [1] was charged with creating regulations[2] and procedures to accomplish this task.

The federal regulations that applied to those mystery barrels transported across state lines are discussed on the EPA site’s Manifest pages for Transporters. The Hazardous Waste Manifest System is a set of forms, reports, and procedures designed to seamlessly track hazardous waste from the time it leaves the generator facility where it was produced, until it reaches the off-site waste management facility that will store, treat, or dispose of the hazardous waste. The system allows the waste generator to verify that its waste has been properly delivered, and that no waste has been lost or unaccounted for in the process.

The RCRA "Bite"

The teeth in RCRA are in 42 U.S.C. § 6928: violators face civil penalties up to $25,000 per day for violating a compliance order as well as criminal fines of up to $50,000 per day or imprisonment up to two years for the first offense, double for a subsequent offense. If the violator is a person who knows at the time that his actions risk imminent danger of death or serious bodily injury to another person, the fines can go up to $250,000 and the prison sentence to 15 years. For a business so convicted, the fine can be $1 million. Note well that these penalties even apply to used oil that is not regulated under RCRA!

Armed with the information above, my client had a significant bargaining chip to use to bring the matter to a prompt, acceptable result. The seller had either knowingly transported or caused to be transported “without a manifest, any hazardous waste or any used oil not identified or listed as a hazardous waste under this subchapter required by regulations promulgated under this subchapter (or by a State in the case of a State program authorized under this subchapter) to be accompanied by a manifest.” (42 U.S.C. § 6928 (d)(5)) Compliance was simple—label the containers and list them on the truck’s manifest—but had not occurred. In disregarding those steps, the seller had thereby put my client into risk of sanctions had it not reported the incident.[3] Had the seller not violated RCRA, the matter may have been protracted in bankruptcy court for months longer and with uncertain results.

Environmental Law Compliance

So-called “environmental law” conjures images that most small businesses cannot envision for themselves. Yet, there is no minimum quantity rule that exempts those who produce, store, transport or dispose of regulated materials.[4] When in doubt, your business should request a manifest before accepting delivery of any substance that you are not certain is unregulated. If you do not know whether your activities are regulated by the RCRA, you should review widely-available online resources to confirm that any substances or materials you produce, including useable products, or discard are not covered.[5] Even though recycling can remove certain materials from the manifest system requirements, materials such as electronic components require special handling to protect the environment, waste disposal workers and your organization.

Compliance is relatively simple unless you are a hazardous waste disposal company or produce huge amounts of regulated wastes that you do not sell. Non-compliance can put you out of business.

Notes
[1] The EPA’s website has good resources for understanding which wastes are regulated, what to do in case of an accidental spill, and even a public database of documents and guidelines.

[2] The EPA’s Hazardous Waste Regulations page has links to federal regulations that make up the Hazardous Waste Management System. Regulations that govern non-hazardous wastes regulated under RCRA are described on a separate Non-hazardous Waste Regulations page.

[3] Most states with environmental regulations have mechanisms for voluntary reporting of discovered violations that provide a window for penalty-free remediation to regain compliance.

[4] To find RCRA compliance guidance on a state-by-state basis, use tools like the ones in this gateway from the Environmental Compliance Assistance Platform (a project of the National Center for Manufacturing Sciences (NCMS) with support from the U.S. EPA).

[5] For a better understanding of environmental regulations that may apply to your business, try the National Compliance Assistance Centers portal (also supported by EPA).

When Hiring, Consider Firing First

Beginning With the End in Mind

When hiring new staff, few managers think about the possibility they may have to fire or lay off that employee. Yet, as with prenuptial agreements, the best time to prevent problems at separation is when the relationship begins.

Even though you hire someone without an employment contract (known as “at will employment” in many states), you can still have other agreements that are enforceable but do not change the nature of the employment into a contract. Some companies actually go to the extent of having employment contracts with everyone for two-week terms, renewable every two weeks unless and until a violation or termination event occurs. For the purposes of this article, I will use “employee agreement” to mean terms other than length of employment.

Your employee agreement should address issues such as those that may arise before, during or after employment. Make the agreement a condition of hiring, to be clear to everyone how important the terms are. Get existing employees to sign one, such as to continue employment at their anniversary, upon promotion or to receive a raise. That satisfies the need for “consideration” unambiguously.

A Checklist

1. Acknowledgement that employee has received and agreement that the employee will read and adhere to policies and procedures. Can you show an auditor that your employees actually received their policy manuals? This is an annual agreement in many places, coinciding with the delivery of updates to the organization’s written policy manual. Get a signature that establishes the employee received his or her copy and promises to read and abide by them. It is not essential to proving those facts, but it helps.

2. Agreement that the employee will not violate criminal laws while performing job duties or on worksite or using employer property. It seems like this would be unnecessary. Why do you need someone to agree to avoid actions that are already illegal? Yet, as many international businesses know, it is essential that the organization show that illegal behavior was not permitted, condoned, promoted or implicitly rewarded. How would you show that? Start with policies that expressly prohibit illegal behaviors, from outright bribes down to cutting regulatory corners, then continue hammering the message with periodic compliance reviews and training on the rules applicable to their jobs. Together, these will help your organization defend itself should someone go astray.

3. Agreement that the employee will keep employer's and customers' secrets. This provision deserves careful drafting. You may have additional responsibilities to accommodate on confidentiality due to professional standards or customer contracts. “Secrets” is a term that means different things in different contexts. Try to define it anyway. Be specific AND general. Supplement with training and periodic reminders of how easily secrets are leaked and stolen, as well as the potential damages that can result.

4. Agreement regarding ownership of intellectual property rights for works created during the course of and term of employment. It is as old as artistry itself: the debate over who owns works created by someone while in the employ of another. Laws attempt to clarify the matter, but sometimes do the opposite. Even worse, some contracts applicable to the organization may contravene local laws where the employee is working or the organization’s agreements with its staff. Do not limit your concern to patents, for copyright is the most common protection and applies to more work than others, especially in today’s “information age” organizations. And keep in mind the growing blur between work and non-work areas of your employee’s lives. What about ideas or blog posts written at 2 a.m.?

5. Agreement that the employee will cooperate in compliance reviews and investigations of compliance issues during and after employment. Get this one up front and remind every hire how important compliance is to you and your organization. Nothing positive is gained from being unclear here. By stating expectations and values at the beginning of the relationship, you will be more likely to see those values throughout the term.

6. Agreement that the employee will submit to additional screening deemed necessary by employer to perform job duties or enter certain work sites or work on certain projects. More and more employers require pre-hire drug screening. Those in sensitive industries have policies for additional screenings after start date. You generally want everyone on notice that you may require an individual to submit to screening upon ANY indication that his or her performance may be impaired. Whether you ever need to use this or not, put them on notice at the outset and help avoid problems later.

7. Agreement regarding use of company property and facilities. What happens if the employee loses his or her company-provided smart phone? What if client files disappear the last week of employment?

Important Notes

This article is not intended to give legal advice to anyone. It is merely to serve as a discussion-starter. You should consult with qualified legal counsel regarding the specific laws in your area, because they vary extensively from state to state. If your employees have a collective bargaining unit, of course, other rules and limitations will apply, but the guidance above may still be within your reserved management powers if not specifically addressed in the union contract.

For a guide when settling employment law disputes, read this article by Robert B. Fitzpatrick: http://www.robertbfitzpatrick.com/images/settlement.pdf. Although published in 2003, it serves as a good starting point in the event your efforts to prevent employment issues are not completely successful.