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."