Gruntled Employees

A Lousy Christmas Present

From Firing at Will, Chapter 6, "How to Fire an Employee":

One consideration that’s worth keeping in mind is the broader time frame. For example, it’s never a good idea to fire someone right before Christmas. That then becomes the story: “Those bastards fired me two days before Christmas.” That never sounds good, and it may actually increase the risk of a lawsuit.

Other days to avoid: The employee’s birthday. The day after her mother dies. The day after the Red Sox win the World Series. The basic rule here is this: be sensitive about the timing, but don’t worry about the “rules” about times and days. 

Throughout the book, I talk about the need to fire a problem employee once you know that he or she is never going to work out. But there are exceptions, and Christmastime is one of them. Yes, I know it's the end of the year, and maybe there are tax or accounting implications. But don't do it. Either plan ahead and do it in November, or wait until a couple of weeks into the new year. Don't make the story "I got fired at the holidays."

Speaking of holidays, it's not too late to get a copy for your managerial loved ones' digital stockings. You can pick up the Kindle version here and the Nook version here. And if you want to go old school, the paperback version is available from Amazon here.

Firing at Will listed as "Hot New Release"

As many of you now know, my new book Firing at Will: A Manager's Guide was published by Apress last week. It's an unlawyerly guide to the riskiest thing you can do at work with your clothes on: firing employees.

So far, so good. Amazon is currently listing it as number 7 on its Kindle list of "Hot New Releases in Business Management & Leadership." (It's right behind the Steve Jobs biography. No, not that Steve Jobs biography. The other one.)

You can order the Kindle version here, the paperback version here (convenient for stocking stuffers), and the Nook version here. If you have any friends or family members who are managers, supervisors, or employers, Firing at Will can make their lives 37 percent easier (that number completely made up; your mileage may vary).

So I've been writing this book

I'll be honest with you: I've never been a fan of people who abandon their blogs for a few months and then come back with a lame explanation of how busy they've been. So I'm reluctant to do that here, knowing how long it's been since I've posted. But I do feel the need to give you an update and explain how I'm taking Gruntled Employees to the next level.

First and foremost, I wrote a book for managers and employers that embodies the Gruntled Employees philosophy. It's called Firing at Will: A Manager's Guide, and its tagline is "An Unlawyerly Guide to Management's Riskiest HR Decision." It's being published by Apress and its official publication date is November 22, although it may come out a couple of weeks early. You can check out the book's website, its Facebook page (click "Like" if you're so inclined), and you can preorder it from Amazon.

I've described the book's topic — firing employees — as being the riskiest thing you can do at work with your clothes on. Even though it's a book for employers and managers written by a management-side employment litigator, it's actually very much a pro-employee book. Because as longtime Gruntled readers know, how well you treat your employees is the biggest factor in how well they'll perform — and in how likely they will be to sue you. As the book says, people don't sue people they like.

The book's style will be familiar to Gruntled readers. I had no interest in writing a book that sounds like the back of a rental-car agreement. There isn't a hereinafter or a pursuant to in the 300 pages. In fact, it was this blog that led the publisher to reach out to me and suggest the project.

Besides writing the book, another major change this year has been the decision to close Shepherd Law Group after 13 years and step away from practicing law. As much as I loved the practice — giving advice to employers and standing up for them in court — I felt it was time to bring my message to a larger audience. As a practicing lawyer, I was only helping one client at any given moment. By writing and speaking, I can help many more employers at the same time by teaching them how to improve their workplaces. And the best way for employers to do that is by freeing individuals to do their best work.

One area where I'm trying to help employers is in pricing professional services. Specifically, I want to teach law firms, accounting firms, ad agencies, consultancies, design firms, and other professional companies how to price their knowledge instead of billing for time. I've formed Prefix, LLC to focus on this, and I write about the topic over at The Client Revolution.

So now you're caught up. Please check out the book when you have a moment. And thanks for reading.

The seven deadly sins of the workplace

We have a rule at Shepherd Law Group: we won't try to talk you out of firing an employee. I believe that once a manager has made the difficult decision to fire someone, the relationship with that employee is already irreparably broken. At that point, it would be a mistake to try to talk the manager out of it. Instead, our advice would focus on how to do it the right way and minimize the risk of an expensive lawsuit.

We also have a corollary to that rule: we won't try to talk you into firing an employee. For all good managers, firing someone is a very difficult decision, not to be made lightly. Instead, we will advise the manager on how best to handle the situation, and wait until he or she comes to the termination decision naturally.

But that said, there are seven deadly workplace sins — seven capital crimes — that require the firing of an employee. They are:

1. Workplace violence
2. Dishonesty
3. Theft
4. Criminal activity
5. Insubordination
6. Sexual harassment, if it's serious or willful
7. Discrimination, if it's serious or willful

The first four are obvious and self-explanatory. As for the fifth, insurbordination, I mean it in the real sense of the word. Flippancy is not insubordination. (If it were, I would be unemployable. On second thought, maybe that's why I have my own firm.)

I'm sure there will be grumbles over the qualifiers I placed on the last two, sexual harassment and discrimination. Employers should take both of these very seriously. But there are degrees of harassment and discrimination, and termination might be overkill for boorish behavior that lacks malice and that could be cured with training.

What do you think? Do you agree that these are capital crimes in the workplace? Have I forgotten any? Leave your comments below.

Sugarcoated terminations

This might sound obvious, but when you’re firing an employee, you need to tell the truth.

Actually, that’s only half right. Well, closer to two thirds.

Anyone who’s ever watched Law and Order or been in a courtroom knows by heart the oath that witnesses take before testifying:

Do you swear to tell the truth, the whole truth, and nothing but the truth?

I do.

Makes sense. It really breaks down this way:

1. You’ll tell the truth
2. You won’t leave anything out, and
3. You won’t add any lies.

For a witness in a court proceeding where the goal is to get justice, this three-part standard for testimony is the best way to do it.

But the workplace is not a court of law. (Yeah, I heard you say “duh.”) The goal isn’t necessarily justice. Instead, the goal is to run a workplace the right way and to avoid unnecessary and costly litigation.

Firing an employee is a high-risk situation. When you do it, you should follow only the first and third prongs of the testimonial oath:

• You’ll tell the truth
• You won’t add any lies.

What you say could come back to haunt you and the company in a lawsuit, so make sure that everything you say is the truth. Otherwise, if it can be shown that you lied at this point, it’s not hard for a judge or jury to think that you or the company lied at other points. Cases are won and lost on credibility, more than they are on laws and lawyering.

But forget about the “whole truth” part (the “you won’t leave anything out” part). You have no obligation to tell the fired employee absolutely everything, and you almost certainly shouldn’t. For example, you might fire somebody because their performance is bad and because, frankly, you just don’t like them. In the termination meeting, you should leave out the “frankly, I just don’t like you” part.

Managers and HR professionals understandably want to take the edge off these high-stress meetings. There is a desire to sugarcoat the termination a bit, to relieve the tension and perhaps allow the employee to save some face on the way out. That’s fine.

But resist the temptation to say anything that’s not true. It’s not worth it. Instead, sugarcoat the termination by leaving out the part of the truth that might be incendiary and hurtful. A terminated employee is entitled to know why he or she is being fired, but not every single reason.

Keep the whole truth to yourself.

"Please leave your layoff message after the beep"

The always-excellent Carolyn Elefant has this post, "U.K. Lawyers Get the Message: 1-800-U-R-Fired," over at one of my favorite blawgs, Legal Blog Watch. Carolyn reports (citing a Daily Mail story) on how 14 trainee solicitors (which is British for "baby lawyers") were laid off by Freshfields in London. Freshfields sounds like an organic supermarket chain, but is actually the fourth-largest law firm in the world and a member of Britain's "Magic Circle" (which sounds like a Harry Potter sequel, but isn't).

Like most major law firms, Freshfields has had to trim its staff in response to the worldwide economic crisis. What makes them different is the way they did it: by leaving the unlucky 14 a voicemail. Not only that, but instead of partners doing the deed, they staffed it out to HR.

What's British for power tool?

Apparently, Magic Circle firms respond to bad press the same way their American cousins do: by defending the indefensible. The Mail story quoted a firm flack:

It was not ideal from our perspective but we were trying to get the information out as soon as possible. We did not want to take the chance of them hearing first from someone else.

To be fair, Freshfields gave the laid-off lawyers a severance to soften the blow. How much? you might ask. Well, the firm spokesperson wanted to be discreet:

Those people that we have not retained received an ex-gratia payment. We feel it would not be appropriate to confirm the exact amount.

Of course, of course. And it's not like that word would get out. A secret's a secret, old chap. Oh, wait. What's this? The Internet? Bloody hell!

Turns out the firm gave severance payments of a whopping £700.

Apparently, "ex-gratia" is British for cheap.

This cowardly method for firing people is in danger of becoming a trend. Last year, the Chicago Sun-Times fired people over the phone. Recently, the Boston Globe reported on a local social-media-software company revealing layoffs via Twitter and blogs. And Gruntled Employees' very first post, nearly three years ago, was on firing by email: "Radio Shack Deletes 400 Workers, Common Sense."

File this under "Just because you can, doesn't mean you should." Employers: don't fire people by phone, email, voicemail, Twitter, or blogs.

Be a person. And fire in person.

One employer's alternative to layoffs

We’ve written a lot about layoffs lately: "Of layoffs and leaks," "Layoffs: Do you want the good news first?" "The pink-slip blues," and "Monday, Bloody Monday." But here’s one company that took a daring and innovative approach: instead of laying people off at Boston’s Beth Israel Deaconess Medical Center, CEO Paul Levy gathered employees in an auditorium and asked for their help. The extraordinary meeting was chronicled in Kevin Cullen’s Boston Globe column, “A head with a heart”:

"I want to run an idea by you that I think is important, and I'd like to get your reaction to it," Levy began. "I'd like to do what we can to protect the lower-wage earners — the transporters, the housekeepers, the food service people. A lot of these people work really hard, and I don't want to put an additional burden on them.

"Now, if we protect these workers, it means the rest of us will have to make a bigger sacrifice," he continued. "It means that others will have to give up more of their salary or benefits."

He had barely gotten the words out of his mouth when Sherman Auditorium erupted in applause. Thunderous, heartfelt, sustained applause.

Cullen goes on to report that the workers began flooding Levy’s inbox with suggestions on how to avoid mass layoffs:

The consensus was that the workers don't want anyone to get laid off and are willing to give up pay and benefits to make sure no one does. A nurse said her floor voted unanimously to forgo a 3 percent raise. A guy in finance who got laid off from his last job at a hospital in Rhode Island suggested working one less day a week. Another nurse said she was willing to give up some vacation and sick time. A respiratory therapist suggested eliminating bonuses.

Maybe it will work, and maybe it won’t. But Levy and Beth Israel deserve credit for considering alternatives before dropping the layoff hammer.

By the way, Paul — who's no stranger to innovation — was recently listed as a CEO who twitters (@paulflevy), and he writes an excellent blog called “Running a hospital.” He (reluctantly) posts about some of the feedback he’s received since Kevin’s column appeared ("Pay it forward").

Good work, Paul.

[Full disclosure: My firm has done a small amount of work for Beth Israel, but I have never met Paul.]

Economic crisis? Meet the cure: COBRA premiums

If your company was one of those that laid off a combined half million employees in the past six months, you’ve already sent out a bunch of COBRA notices. Thanks to the Obama Administration and Congress, now you have to do it again.

Last week, President Obama signed into law the American Recovery and Reinvestment Act of 2009, commonly called the Stimulus Act. The new law weighed in at 407 pages and roughly $800 billion. Hidden in the thicket of “shovel-ready” projects is a provision that dramatically changes employers’ COBRA responsibilities.

COBRA continuation coverage applies to workers at companies employing 20 or more employees. When an eligible worker loses health-insurance benefits after leaving a job, COBRA provides the employee the opportunity to receive the same benefits for up to 18 months. Until now, the employee was solely responsible for the premiums.

But under the Stimulus Act, employers now have to pay 65% of the worker’s premiums for nine months. The federal government will then reimburse the employer by allowing it to take a credit on payroll taxes. In effect, though, the employers are lending this money to the federal government to help finance the economic recovery. Because in the lull between the recent Lilly Ledbetter Fair Pay Act and the upcoming, ironically named Employee Free Choice Act, it must have seemed like a good idea to pile on employers some more.

(The stock market seems to disagree, with the S&P 500 down 13% since the Inauguration and more than 20% since New Year's Day.)

The new COBRA subsidy does not cover every employee equally. The law phases out the subsidy for so-called “high-income individuals” — people making more than $125,000 a year (or $250,000 a year for married joint filers) — in a complicated scheme involving taxable premium reductions. And while the subsidy applies to workers who are “involuntarily terminated,” the Act does not define that term. The Conference Committee report suggested that people fired for gross misconduct would not be eligible.

What’s particularly tricky is that the Act reaches back in time to cover employees laid off since September 1, 2008 (and goes forward through December 31, 2009). That means that employers who sent out COBRA notices to laid-off employees over the past six months now have to contact them to give the workers another chance to elect COBRA coverage. A new and improved COBRA notice form is expected from the Department of Labor by March 17. What’s not clear is how to treat employees who got their COBRA coverage paid for as part of a severance agreement. Like the recovery process itself, this issue is a work in progress.

What you can do

• Read the text of the Stimulus Act of 2009 (but not while driving or operating heavy machinery)
• Immediately reexamine COBRA eligibility over past six months
• Talk to your employment counsel about how to handle employees already laid off
• Contemplate the seeming prescience in this quote from the end of the 1986 Stallone classic, Cobra:
  

         DETECTIVE MONTE
I personally would have looked for a more subtle solution, but that's not your style.
    (offers his hand)
No hard feelings.

         COBRETTI (after punching Monte)
No hard feelings.

The pink-slip blues

Great piece in today's New York Times discussing the pain of layoffs from the other side of the table. In "Handing Out the Pink Slips Can Hurt, Too," Matt Cooper, an executive at a recruitment-outsourcing firm called Accolo, describes his experience in letting people go. The article is well written and sincere. Matt writes:

It was gut-wrenching knowing that a bomb was about to go off. I had hired and trained many of these people. We wanted to be as humane as we could in letting them go.

I don't think anyone expects people to feel sorry for an employer who has to do the laying off; obviously, it's much harder on the laid-off employees. But it's worth remembering that most of the time, the people doing the terminations have taken it personally, too, and are doing it as a last resort.

Managers and employers: the more you can convey this to the people you are firing, the less likely they will be to sue you.

Another important lesson from the piece:

We offered as much severance as we could, and the other executives and I told the remaining employees that we didn’t want to close the door on those who lost their jobs. We encouraged them to reach out to their ex-colleagues and keep in touch. Then we all got on LinkedIn and wrote endorsements for those who were laid off.

It cost nothing to write those LinkedIn references, except a little bit of time and thought. But I'll bet that those employees appreciated it.

Well done, Matt.

Monday, Bloody Monday

I was going to write something about the Supreme Court's decision Monday in Crawford, further expanding the ability of employees to win retaliation lawsuits, but that's going to have to wait. (For those who can't wait, a PDF of the decision is here.)

Instead, the biggest news on the workplace front was Monday's 70,000-plus employees' getting laid off by major US employers. Twenty thousand at Caterpillar. Another 26,000 at Pfizer. Eight thousand at Sprint, and 7,000 at Home Depot. CNN has an especially cheerful chart here breaking down the 207,000 workers laid off in 2009. (They also came up with the "Bloody Monday" reference, near as I can tell.)

We've already posted on the media's propensity to play up bad economic news (see "Fear sells"). And we still need to point out that the S&P 500 is up more than 12 percent in the ten weeks since November 20. (Granted, it had been up as high as 24 percent just a few weeks ago.) But these layoff numbers are too huge to ignore.

What can you say?

Over at KnowHR, Frank Roche's post "How in the Hell Do You Lose 71,400 Jobs in One Day?" sums it up well. And I particularly like his advice:

I wish I had some really great HR advice today. I’m a little shell shocked, but here’s what I’d say: For those of you who are still there ... kick ass. Do your best work. Stop going to meetings. Start doing things. Make money.

Now’s the time to do our best work.

I completely agree. I would add that HR professionals, managers, and executives need to get in the trenches and rally the troops (feel free to add any other militaristic metaphors you like). Fear is driving the economy, and fearful employees are not gruntled employees. Thus, fear diminishes profits.

Talk to your employees. Tell them that it's going to be all right, that we'll make it through this OK. Live together, die alone. (No, wait ... that's something else.)

Tell them to do one extra thing today that will help make the company more profitable. Make one extra call to get a sales appointment. Perform one extra quality check of a component. Think of one extra idea for innovation.

And then do it again tomorrow. And the next day.

Pretty soon, there'll be no more recession. And no more Bloody Mondays.