Gruntled Employees

Dear [insert name]: You're fired

Our very first post was about RadioShack's submoronic firing of 400 employees last year by email (see "Radio Shack Deletes 400 Workers, Common Sense"). Now, the blogosphere is abuzz with CompUsa's decision to close its remaining stores (see CNNMoney article) and its soulless form letter notifying its employees. The excellent tech blog Engadget included what it describes as a copy of the form letter sent to employees in a biting post, "CompUSA sends out layoff letters: bad service extends to employees, too." Here is the letter, taken from the Engadget post (the store number and location were previously redacted, which is lawyerspeak for blotted out):

Now I can't personally vouch for the authenticity of the letter, and Engadget describes its source as an anonymous CompUSA employee. Nor could I confirm the identity of CompUSA's HR director, although there is an HR person with that name in the DFW metropolitan area. It certainly looks like an authentic WARN Act letter, which the government requires.

But what a letter. I appreciate that CompUSA had a lot of employees to fire, but couldn't they have bothered to insert the unlucky recipient's name in each letter? (You know, guys, they have computers that can do that now.) Did they need to keep reminding the fired worker that CompUSA is incorporated (at least for now) — four times in a three-paragraph letter? Couldn't they get a human being to actually sign the letter? Repeating the name in boldfaced italics doesn't count.

You're firing people. Have the decency to act like it means something to you. It certainly means something to the employees. A personalized letter — or even a seemingly personalized mail-merged special — with a real human being's signature makes a difference. It might not seem like a lot — it might even seem like a waste of time — but people notice these things.

Getting fired sucks. But getting fired suckily (by email, by form letter, during the holidays) sucks even more. Worse, it makes the fired employees more disgruntled, and thus more likely to sue. You've already messed up the big things (running your company into the ground); at least try not to mess up the little things.

Bonus irony note: Check out CompUSA's tagline:

Obviously they didn't get it. They didn't get it at all.

Here are some other voices on the topic:

• Tampa Bay's Channel 10 News has a story on the company's remarkable retention-bonus scheme: if you work the next two months until the store closes, you get — wait for it — a whole week's pay! (Woo.) The station has posted a PDF of the "Separation Bonus Plan"; the story is here: "Employees cry foul over CompUSA closings"
• The incomparable New York Times technology columnist David Pogue had this explanation for the company's failure back when they began their store closings last March: "The Gutting of CompUSA."
• The always excellent HR Capitalist has this great post on how another stumbling company, Circuit City, tried to lure back some of their previously fired, higher-paid workers at a lower wage: "Circuit City - We Fired You, Please Present This Coupon to Get Your Old Job Back for Less Pay..."
• That particular move garnered Circuit City a spot on the Fortune "Top 101 Dumbest Moments in Business 2007."

*******

[Updated 20 December 2007 to clarify the Circuit City references, and to add more on what CompUSA could have done right. Big shout out to Martin Ebel, the top Commonwealth of Massachusetts civil-rights lawyer and frequent Gruntled commenter (which is different from a commentator). Another big shout out to Christopher Mirabile, world-class general counsel, for pointing out the Engadget post.]

Fire stupidly, lose your own job (eventually)

US Attorney General Alberto Gonzales resigned today, largely because of how he mishandled the firing of nine Assistant US Attorneys last year. We covered the story last March in "Attorneygate moral: Don't fire stupidly," where we sagely predicted that Gonzales would be out by Opening Day. (Missed it by this much.) For comprehensive background on the firings and their aftermath, read the excellent summaries at Peter Lattman's ever-fabulous Wall Street Journal Law Blog here and at the Washington Post's site here.

Gruntled Employees doesn't much care about the politics of the issue. Instead, the important lesson for employers and managers and HR professionals is the one we talked about in March:

The moral is: Fire who you want to fire, own the decision, and then shut up about it.

It's hard to fire someone, if you're any kind of a real human being. And it should be, because it's someone else's life your messing with. You should struggle with the decision. But once you've made the decision, you have to act on it and own it. Resist the temptation to make explanations and excuses that (you hope) will get you or your company off the hook.

In the Attorneygate case, who is to say whether firing the AUSAs was fair? Doesn't matter (except to the AUSAs, their families, and the decisionmakers who pulled the trigger). The law says that they are subject to removal by the President. Period. They are — like most American workers — employees at will.

After-the-fact explanations for why you fired someone rarely tell the whole story. The real answers are usually incredibly complicated, and don't sound as clean as a better-manufactured reason. But the manufactured reason isn't the truth. And people will generally learn the truth, eventually. And when people start to see the holes in your just-right story, they're going to think you're covering up something more nefarious, like discrimination, or politics, or favoritism.

The Attorney General could have said this: "We fired these prosecutors because we wanted to make a change and put some other people in those spots. And the law says we can." It might not make for a pretty story, but it was probably the truth. The story would have died in a few days, and Alberto Gonzales might still be running the Justice Department and waiting for Justice Stevens to retire. Instead, it's Monster.com for him.

Don't fire stupidly. Fire smartly, quickly, and honestly. And then shut up.

Attorneygate moral: Don't fire stupidly

OK. Time to weigh in on the Justice Department's disastrous firing of the US Attorneys, but from an employment-law perspective instead of a political one. For some background on the story, go to Peter Lattman's always-excellent Wall Street Journal Law Blog. His posts on the topics are archived here. The Washington Post has a nice summary here and a handy chart with art here.

Here's the short version: The Justice Department fired eight United States Attorneys in late 2006. (A US Attorney is the senior federal law-enforcement officer in his or her judicial district; there are 93 districts in the country.) The President appoints the US Attorneys, subject to the Senate's confirmation. Their terms are four years long, but they are subject to removal by the President (see 28 U.S.C. 541(c)). Just like that. In other words, they are employees at will, like 99 or so percent of the rest of us.

So the President fires these eight prosecutors. So what? They're political appointees, and he wants to replace them with new political appointees. The law allows it. Big deal.

Here's the problem, and the lesson for all employers. The White House could have said, "Yes, the President has decided to replace these eight US Attorneys. They're political appointees who serve at the pleasure of the President. It is the President's pleasure to replace them, and the law says he can do that." But the White House and the Justice Department instead started playing the explanations game. Rather than just owning the firings and then shutting up, they started giving reasons and stories that kept changing: Performance problems. Not political. It was Harriet Miers's idea. It was Karl Rove's. Attorney General Alberto Gonzales wasn't involved. OK, he was. (For a summary of the shifting stories, see Dan Eggen's "Accounts of Prosecutors' Dismissals Keep Shifting" in the March 17 Washington Post. Another cool graphic with problematic email quotes is here.)

Now everyone's up in arms over this. Congress wants explanations. Constitutional showdown and all that. Counterstories about how great the prosecutors were. Heck, one of them — David C. Iglesias — is widely reputed to be the model for the main character in A Few Good Men. Great. Now you've gone and fired Tom Cruise. And we're talking the old version: Oscar-nominated, box-office guarantee, Top Gun, Jerry Maguire Tom Cruise — not Scientology-promoting, psychiatry-slamming, couch-jumping Tom Cruise.

The problem wasn't necessarily the firing. Who are we to say that these eight (effectively) at-will employees should have kept their jobs. It's not our decision.

The problem was saying too much about it, and then having the stories change. Once that happened, Congress and the press smelled the blood in the water. Don't be surprised if we hear from some plaintiff-side employment lawyers, too. And Attorney General Gonzales will be sending out résumés by the time Opening Day rolls around.

The moral is: Fire who you want to fire, own the decision, and then shut up about it.

Otherwise Congress will be investigating you for firing Lt. Kaffee.

Fire them anyway

I recently posted on what I called the 30 riskiest firings. But I want to be clear: just because firing one of the listed employees is risky doesn't mean you shouldn't do it.

We have a rule at my firm: we never tell a client not to fire someone they want to fire.

Actually, in a dozen years of advising employers, I have never dealt with a manager or HR pro who wanted to fire an employee. It's not an easy thing to do, and it causes plenty of angst and sleepless nights. (Yes, I know: it causes more for the fired employee.) When my clients ask me about firing an employee, it's because they feel they need to fire that person. Once they've reached that decision point, the relationship with the employee is irreparably broken, and it's time for that employee to go.

My job isn't to talk them out of it. My job is to help them do it the right way, to minimize the chance of litigation (see the recent post on retained dignity), and to improve the chances of defeating a lawsuit if it comes to that.

The list of 30 riskiest firings is just a reminder about being careful. It's not an admonition against firing who you need to.

In his provocatively titled and insightful book, Fire Someone Today, Bob Pritchett writes:

When we don't fire someone we should, our inaction is malicious. We are hurting our organization and wasting the employee's time on a job with no future. Our motivations are most likely selfish; at the very best, we are just being stupid.

You can learn more about the book in the booklist to the right. Bob's blog is here.

The 30 riskiest firings

Firing an employee is never without risk. But some firings are riskier than others. They're riskier because the employees have potential claims available to them that other employees don't have.

This is not to say that the employees on this list are more likely to sue than others. (Anyone claiming that women or blacks or gays or handicapped people are more likely to sue because they are women or blacks or gays or handicapped people is an idiot.) But if they choose to sue, they can create more problems than other fired employees can. That's why they're riskier.

The list, which I've developed over the past dozen years litigating employment cases for employers, is not a ranking; it's in no particular order.

Take care in firing employees who:

1. are female
2. are pregnant
3. were recently pregnant
4. are on family or medical leave
5. are just back from family or medical leave
6. recently asked for family or medical leave
7. are older than others (and at least 40)
8. are a different race from most
9. are a different national origin from most
10. are a different religion from most
11. are a different ethnicity from most
12. have a disability
13. have a mental disability
14. are thought to have a disability
15. associate with someone with a disability
16. are alcoholic
17. are gay or lesbian
18. are transsexual
19. have ever complained about discrimination
20. were sexual-harassment victims
21. are veterans
22. didn't get paid for all their time worked
23. didn't receive all their overtime pay
24. are about to receive a bonus, commission, or option grant
25. ever complained about an illegal practice
26. have criminal records
27. have drug problems
28. are involved with union organizing
29. are related to, friendly with, or live near a lawyer
30. are fired with less retained dignity than they could have

New HR metric: "retained dignity"

I was all set to write a post about dignity and fired employees, and then Nick Roy's HR Horizons beat me to it with a terrific post called "Firing Employees with Dignity." (Just to be clear: we're talking about firing employees in a way that preserves their dignity — not firing dignified employees.) In it, Nick talks about softening the emotional blow of firing people. He gives good advice, including "NEVER fire someone by email" — advice RadioShack could have used.

Here's what I can add: As a management-side employment litigator for the past dozen years, I've seen firsthand the effect of firing people without protecting their dignity. It is, in my experience, the number-one leading indicator of employee lawsuits. It is one thing to lose your job; it's another to lose face. Employees who feel like they lost more than their job — who feel like they were screwed over — are much, much more likely to sue.

In fact, you can mathematize it:

RD = 1 - (NA + FS)

where RD is the fired employee's retained dignity, NA is the employee's natural anger over being fired, and FS is amount by which the employee feels screwed. (All values are on a scale from .00 to 1.00.) You can then plug the retained dignity into a rough formula for the likelihood of an employee lawsuit:

P_lawsuit = (1 - RD) + [STR(case) * $]

where the probability of the fired employee suing is based on the retained dignity, the strength of the case, and the amount of money to be won.

Some forward-thinking companies are beginning to use HR metrics to quantify the return on investment for various human-capital operations and initiatives. (For more on this interesting topic, click on the books The HR Scorecard and The ROI of Human Capital in the booklist to the right.) Companies should consider adding retained dignity to these metrics.

There have always been ethical reasons for firing employees in a way that preserves their dignity. Now there are financial reasons, too. Higher retained-dignity scores mean lower employee-lawsuit costs.

Risking your job

Seth Godin's excellent blog had a great piece on mass layoffs called "50:1" — the number 50 being the Bureau of Labor Statistics' threshold for a "mass layoff." Seth's point is that you're more likely to have your job evaporate than you are to get fired for "attempting to do something great."

Too many people fear getting fired for taking a risk. Sometimes that risk means bucking the system. Sometimes that risk means trying something new and unproven. And sometimes that risk means doing what is right instead of doing what you've been told.

How many people involved in the H-P pretexting scandal knew it was wrong but did it anyway out of fear of being fired for refusing? Frankly, I don't know which would be worse: not refusing out of fear, or not knowing it was wrong in the first place.

Truly excellent companies foster a culture that encourages people to take risks in doing a great thing — or doing the right thing.

Radio Shack Deletes 400 Workers, Common Sense

On August 29, RadioShack Corp. fired about 400 employees by email. The good news is that it saved the price of a ream of paper, and maybe some postage. Apparently, no one thought about the bad news — the terrible press it received for its Internet Age management gaffe. The story has been all over the media, and the blogs have had a field day with it. (Nick Roy's HR Horizons wonders if people will shop at RadioShack after this; Lori Dorn's HR Lori weighs in; Matthew Stibbe's Bad Language blog slams the wording.)

According to news reports, the email waiting for the unlucky employees that Tuesday morning read: "The work force reduction notification is currently in progress. Unfortunately your position is one that has been eliminated." (Maybe we'll talk about this ridiculous use of corporatespeak in a future post.)

In its defense, the company noted that it had warned employees that the "work force reduction notifications" would be delivered electronically, and that employees were invited to ask questions on a company intranet.

Maybe it was more efficient to fire 400 people this way. But this is an example of losing sight of the obvious consequences of callous behavior in favor of increased efficiency. Yes, it's a lot of work to do a RIF (reduction in force). Yes, RadioShack is paying severance to these employees based. Fine. But it's a big deal to lose your job. And when employees feel they were treated without respect or dignity, they are much more likely to sue. And that will cost a whole lot more than a ream of paper.

The company has defended the RIF as being necessary to "improve its long-term competitive position in the marketplace." But improving its "competitive position in the marketplace" requires attracting the best talent. Who's going to want to work at RadioShack after seeing how they handled this RIF?