Gruntled Employees

Why employment lawyers screamed more than those Denny's chickens

2010-02-08T00:33:43-05:00

If you couldn't find the remote after the Saints pantsed the Colts (regretting their "We're baaa-ack!" call in the pregame yet?) in this evening's Super Bowl, you were stuck watching CBS's new show "Undercover Boss." I have to admit: I wasn't planning on watching it, and when the remote fell between the sofa cushions, I then planned on hating it. But in the end, I didn't. I'm not saying that I'm going to fan it on Facebook and start planning my life around it, but I did watch this debut episode.

The premise is simple: The president of a huge company goes "undercover" as a frontline worker for his own company to see just how miserable his employees can be. (In the pilot, it was Waste Management president and COO Larry O'Donnell.) To explain the camera crew following him around, a cover story was created that he was part of a documentary about working in entry-level jobs. (Oooh ... clever. The old base-your-lies-on-the-truth gambit.) Then at the end of the hour, he tears off his disguise (which apparently was a day of stubble, which distracted people from his five-hundred-dollar glasses) and reveals his COO-ness. Then he promotes all the nice people and ~~sternly rebukes~~ vaguely needles the employment-law-violating plant manager. Cue the credits.

After a night filled with chickens screaming during commercials for Denny's, I'm certain that employer attorneys around the nation had a similar reaction. Letting a camera crew film your bad employment practices and labor-law violations? Yikes.

On the other hand, the message that a company president should have firsthand experience with what his or her frontline employees are experiencing is a good one. Perhaps if more executives watch "Undercover Boss," they might worry more about how their employees are being treated.

Now pardon me while I go work on my day-old stubble so that no one recognizes me at work tomorrow ...

Gruntled at Solo Practice University

2010-01-25T09:34:12-05:00

One of my big goals for 2010 was to adjust my role as a commentator (mainly over at The Client Revolution) on the state of the practice of law and become more of a change agent dedicated to helping fix it. Today I'm taking a first step in that direction by joining the faculty of the pioneering Solo Practice University. If you're not familiar with SPU you should head on over and check it out. Under the leadership of legal-education trailblazer Susan Cartier Liebel (who also blogs at the ABA Blawg 100 site Build A Solo Practice @ SPU), Solo Practice University picks up where law school left off. One of the most common complaints about legal education is its weakness in providing practical education about how to actually be a lawyer. SPU's got it covered.

What really convinced me to join the faculty was ... well ... the faculty itself. Check them out here. This is a phenomenal collection of big thinkers in the world of legal practice. Students (both active practitioners and current law-school students) have access to these big minds and can start learning how to improve their own practices right away.

I'm teaching a course called "Fixing Your Fees, Fixing Your Practice." In it, I'll be doling out practical advice on how to abandon the billable hour and replace it with open prices. The context for this advice will be real-world examples from our employment-law firm, Shepherd Law Group. If the change away from hourly billing is going to happen, it's going to happen first with the solo and small-firm lawyers. And in my new role as an SPU faculty member, I'm going to help make that happen. So check out all the things you can be learning. Then enroll and start getting the real-world secrets about running your practice that you never got in law school.

Here's a short video (2:38) on the real reasons I've joined this great faculty:

Why FOX can hire Conan as soon as he leaves NBC

2010-01-13T23:56:37-05:00

People are still talking about the late-night wars at NBC. One interesting thing I keep hearing is that Conan O'Brien is ... well ... kinda screwed. His statement yesterday rejecting NBC's plan to move him and "The Tonight Show" was brilliant and worthy of respect. (See "How Conan O'Brien powned NBC.") But even if he makes good on his promise to leave NBC rather than move, many have speculated that he will not be able to head on over to FOX (or ABC or cable) because of his noncompete agreement.

As far as I know, no copy of Conan's employment agreement has found its way online. Presumably, when he packed up and moved to California to take over the show, he signed an agreement that spelled out his and NBC's mutual obligations. For example, some have reported that NBC promised that it wouldn't run "The Tonight Show" any later than 12:05 a.m. Eastern. (For those of you who've forgotten, "a.m." is Latin for "no longer tonight.") If this report is true, then presumably NBC is not in breach with its plan to run "The Not-Really-Tonight Show" after the reworked 11:35 version of the Leno debacle. (I don't think that's what they're calling it, but it would be refreshing.)

But commentators have suggested that Conan would be bound by a noncompete that would prevent him from competing with NBC for a year or two. See reports here (ironically from CBS, who must be LTAO) and here. The blog "Concurring Opinions" also has a nice write-up of possible contractual issues in the Conan matter here.

But Conan isn't bound by a noncompete.

Let me point out for a moment that I write this without having seen his NBC agreement, and without any actual knowledge of his negotiations. So how do I know that he's not bound? Well, noncompetes are a specialty of Shepherd, our employment-law firm.

I put a hint in the second paragraph above. Go back and reread it. I'll wait. [... tick ... tick ...] Got it? That's right: "moved to California." Conan shoots "The Tonight Show" in Universal City, California. (I need to get a city named after my company.) And California, as many of you know, prohibits noncompetes. Section 16600 of the California Business and Professions Code makes employment-related noncompetes — like the one Conan reportedly has — void.

Now if NBC was smart — and given how they've handled all of this, there's not much chance of that being the case — they may have tried to do an end run around 16600 by placing a choice-of-law provision in the contract. NBC is headquartered at 30 Rock in Manhattan, so they could have insisted in the agreement that New York law govern it. And if NBC got him to sign it back in 2004 when they promised the show to him, that might have made some sense. But not now.

Because in August 2008, New York decided to protect oppressed millionaire TV broadcasters by enacting the Broadcast Employees Freedom To Work Act, which banned postemployment noncompetes for broadcast-industry employees. Oh ... so sad.

Actually, don't feel bad, NBC. Even if New York hadn't gone and done that, there was no way that a California court was going to honor a choice-of-law clause to enforce a noncompete that restricts a California worker (Conan) from plying his lawful trade. Either way, no noncompete is going to stop Conan from broadcasting on FOX or ABC or Telemundo or YouTube.

To be sure, Conan's agreement might have some penalty if he walks out on NBC (assuming NBC didn't breach the contract themselves by make "The Tonight Show" into "The Not-Really-Tonight Show"). At the very least, he could well be walking away from millions of dollars by not finishing out his term.

But NBC can't stop him from working. And how sure am I about this, especially since I haven't read the contract? This is how sure: If NBC sues Conan for violating a postemployment noncompete agreement, my firm will offer to defend him. For nothing. (Not soliciting work here, of course. But if he calls, we'll do it.)

See you after "24," Conan.

How Conan O'Brien powned NBC

2010-01-12T23:35:00-05:00

(For the definition of "to pown," check out Urban Dictionary here.) (Noob.)

I've got to be honest with you. I've never been a big Conan O'Brien fan. At least, not until today.

This afternoon, the New York Times reported that Conan had rejected NBC's plan to move his "Tonight Show" from its 11:35 p.m. slot to 12:05 a.m. to accommodate Jay Leno's return to late-night television. This is just the latest step in a drama that has quickly spun out of NBC's control.

Some background, in case you haven't been paying attention:

Conan replaced David Letterman on "Late Night" (at 11:35 p.m. Eastern) in 1993, when Letterman jumped over to CBS after losing out to Leno as Johnny Carson's successor at "The Tonight Show." In 2004, NBC announced that Conan would succeed Leno — five years later, in 2009. (I mean really: who makes hiring decisions years in advance? Oh, right. Big law firms. Brilliant.)

This fall, Conan indeed replaced Leno at the helm of "The Tonight Show." But NBC wanted to keep the great comedic talent that is Jay Leno (OK, that's a little sarcasm; I'm even less of a fan of Jay) (good name, though). So it came up with a "revolutionary" idea to create an ersatz version of "The Tonight Show" featuring Leno that would run weeknights at 10 p.m. Eastern. The rationale was that "The Jay Leno Show" would be much cheaper (even paying crazy money to Leno) than to pay to fill five hours of scripted TV dramas during that slot.

But the gamble failed. The show was panned and the ratings tanked. Despite having earlier said that they would give the show a year, NBC panicked last week and pulled the plug. But apparently, they want to have their cake and eat it during late-night too. Instead of sending Leno to the cruise-ship circuit, NBC has decided to move "Leno" (the show) to "The Tonight Show's" time slot: 11:35. But they would shorten "Leno" (again, the show) to thirty minutes, and start Conan's "Tonight Show" at 12:05 a.m.

(The Times has reported in a different article that Conan's contract did not specify what time slot his show would run in. Some have suggested that this was bad lawyering. On the other hand, AP has reported that the contract does say it can't begin the show later than 12:05.)

Of course, the common-sense question is "How can 'The Tonight Show' begin when it's no longer tonight?"

So today, Conan released a statement rejecting the move to 12:05, instantly garnering massive worldwide support on Twitter and in the blogosphere. Now normally, when you hear that someone "released a statement," you immediately think boring nothingness generated by lawyers. But here's where Conan really shined. First, he almost certainly wrote it himself (probably with help, but that's OK). Second, he completely avoided coming across whiny, pouty, angry, or victim-y. Third, he chose not to trash anyone, not even NBC. He favorably mentioned Carson, Letterman, and his "Late Show" successor Jimmy Fallon (who's really getting screwed by being bumped to 1:05, where he could lose both his viewers). Fourth, he spoke respectfully, with much language about the tradition and importance of "The Tonight Show's" six decades following the late local news.

And fifth, and I think most important, he was funny. I don't mean LOL funny; but with a light-hearted irreverence that humanizes him and his message without making the reader question the seriousness of his feelings.

And that's the real trick. Too many people — employers, employees, and their lawyers — hide behind a thin veneer of pomposity, haughtiness, verbosity, and legalese. That never works — ever. All it does is turn off the reader, and may even turn the reader against the writer. Instead, Conan wrote with charm — a perfect blend of humor and seriousness. Now unless NBC backs down and kicks Leno to cable, it has no chance of winning this contest. Conan powned them.

Read Conan's complete statement in the Times article here.

• • •

For more TV-related goodness, check out how "Lost" beat out the President's State of the Union, at our sister blog, The Client Revolution.

Client Revolution hosting next week's Blawg Review

2010-01-07T23:53:54-05:00

Hey, blawggers and blawg readers!

Actually, as I've said before, I'm not a fan of using the term blawg to mean "law-related blog." The problem with it is that blawg sounds exactly like blog. When you're speaking and you say "blawg," there's no way of conveying that you mean "law-related blog" without also saying something pedantic like "with an A and a W instead of an O." Yeesh.

Anywho, I'm honored to have been invited to host Blawg Review #246 on Monday over at our sister site, The Client Revolution. For those of you unfamiliar with it, Blawg Review is a blog carnival, which comes out every week and contains links to many other blog posts from the past week, often centered around a theme. You can see examples at the main Blawg Review site (but remember that the individual editions are hosted at the hosts' own blogs).

In preparing for this, I need your help. Please submit your favorite blawg posts of this week — either ones you wrote or ones you read. The Submission Guidelines are here.

In the meantime, think of me while you're watching the NFL playoffs this weekend; I'll be here crawling the blogosphere (blawgosphere?) looking for a few dozen gems to share.

"If you treat me with respect, I'll do more for you"

2010-01-05T00:56:55-05:00

On Sundays, The New York Times runs a business-section column called "Corner Office," which features well-written and well-edited interviews with executives. This past Sunday, Adam Bryant interviewed former Continental Airlines CEO Gordon Bethune. The piece, entitled "Remember to Share the Stage," featured several real-life examples of the kind of management that Gruntled Employees seeks to cultivate. I don't know anything about Bethune beyond what appeared in this piece, and I can't say that I've ever thought of Continental Airlines as a model company, but the advice is solid.

When asked about his most important leadership lessons, Bethune gave a response that is straight out of our philosophy here:

I was a mechanic in the Navy. And mechanics in the Navy are like mechanics in airlines. You may have more stripes than I do, but you don’t know how to fix the airplane. You want me to fix it? You know how much faster I could fix the airplane when I wanted to, than when I didn’t want to? So I’ve always felt that if you treat me with respect, I’ll do more for you.

Seems simple, doesn't it? And yet, many managers and executives and HR pros have difficulty remembering this.

Bethune explained the value of trusting his employees:

The really good people want autonomy — you let me do it, and I’ll do it. So I told the people I recruited: “You come in here and you’ve got to keep me informed, but you’re the guy, and you’ll make these decisions. It won’t be me second-guessing you. But everybody’s going to win together. We’re part of a team, but you’re going to run your part.” That’s all they want. They want a chance to do it.

And he recognized the value of open and truthful communications with his people:

And we never lied. You don’t lie to your own doctor. You don’t lie to your own attorney, and you don’t lie to your employees.

Respecting your employees, giving them autonomy and accountability, and being open and honest with them. A manager can learn a lot by flipping through the Sunday paper.

Read the entire piece here.

• • •

Speaking of open and honest communication: I've been away from Gruntled Employees for a little while, but now I'm back. I appreciate your patience and your continued support.

What do you think of Gordon Bethune's management lessons? Let me know in the comments or on Twitter.

Gruntled employees have birthdays at work

2009-09-30T15:01:45-04:00

Today is my birthday. I'm 42.

I spent much of the past year telling people I was "thirty-eleven — in my very late thirties." But now I've resigned myself to fortyhood.

Many years ago, when I first went away to school, I remember being bummed out that no one knew it was my birthday. When I mentioned it to my mother, she asked in a way that only mothers can: "Well, did you tell anyone it was your birthday?" I hadn't, of course. Now I do. And it makes the day more fun.

Some people don't make a big deal out of birthdays. Some think birthdays should be limited to friends and family. Some workplaces even have policies restricting or forbidding the at-work celebration of birthdays. Wow. What fun places to work those must be.

Today, my work colleagues wished me "happy birthday" with a funny group card, a banana bread, and a bookstore gift certificate. We're also going out for a drink later. And trust me: this has nothing to with my being the boss. We do similar things for everyone's birthday. It makes our workplace seem like more of a family, and that's a good thing in my book.

People like to be reminded from time to time that they're special. Making a point of celebrating a person's birthday is one way of doing it.

Managers: if your workplace doesn't celebrate your employees' birthdays, why not? Because of expense? Give me a break: people can chip in a few bucks, or it can come out of petty cash. Because it's a distraction from work? Please. The goodwill that you generate by treating your employees as people — as special people — will more than make up for any expense or lost productivity. Add everyone's birthday to the calendar, and do something nice for them on their special day.

• • •

By the way, two days ago was Gruntled Employees' third birthday. We began with a post about how RadioShack fired people by email. Three years — and over 120,000 pageviews later — employers are still trying to figure out how to keep their employees gruntled. Thanks to everyone who's stopped by. I appreciate all of you.

Why I'm glad I'm not Microsoft's employment lawyer

2009-08-26T01:42:32-04:00

First off, in case anyone missed it, I'm an Apple guy. My firm's all Macs and iPhones, and I know nothing about worms, trojan horses, or blue screens of death. Unsurprisingly, I'm not a fan of Microsoft.

But put my bias aside for a moment. Decide for yourself whether Microsoft passes the smell test here. This is a website image (click to magnify) from a Microsoft website intended for an American business audience:

Now look at the Polish version of the same site with the same photograph (again, click to magnify):

Notice anything different? Yes, the words are all in Polish. Good. What else? Yes, the monitor on the table in front of the woman isn't plugged into anything. Very good. Anything more subtle? Yes, the white laptop looks strikingly like a MacBook minus the Apple logo. Excellent. Is that it?

Oh yeah. The black guy is now a white guy. (Microsoft has since changed the Polish site to revert the new white guy back to the old black guy.)

D'oh.

Actually, that's not entirely true. Only the head and neck were changed. If you look carefully, you'll see that the white dude has the black dude's hand and wrist.

Let me be clear: I'm not saying that Microsoft did this because they're racist. It's far more likely that they did this because they're clueless. Some marketing flunky probably came up with data showing that there weren't a lot of blacks in Poland (or, apparently, monitors with power cords). Maybe they even tested too see if focus groups responded better to a white man than a black man. (Asians and white women are apparently OK.) But the point is, they did it. And they got caught. Looking stupid.

Three lessons for employers here:

Don't do something cute like this thinking that no one will find out. People always find out.
Ignore what marketers or even customers tell you about race or religion or sex or any other protected class. You can't use that information as an excuse to discriminate. If a plumbing company has a racist customer who says, "Don't send a black plumber to my house," you say, "Too bad." The customer isn't always right. Instead, tell the customer, "You're not our customer anymore."
Understand that stupid things like this have a tendency to find their ways into lawsuits. Someone somewhere will someday bring an unrelated race-discrimination claim against Microsoft, valid or not. If his or her lawyer is good enough, this little Photoshop flop will be used as evidence of bias, or at least a lack of sensitivity. It may not be legitimately so, and it may not be persuasive, but it will be something that Microsoft's employment lawyers will have to deal with.

That's why I'm glad I'm not their employment lawyer.

• • •

Hat tip to the excellent blog TechCrunch, which broke this story in a post by Michael Arrington ("Marketing Decapitation In Poland: Asians Ok, Blacks Maybe Not"). Make sure you read the comments there; many are hilarious. The two images came from that story. As I mentioned, the Photoshopped Polish one is no longer on the Microsoft site. But I've seen no statement from Microsoft denying what happened.

Update Microsoft has apologized in a statement, CNET has reported. Also, PhotoshopDisasters has good coverage here, Reddit has some terrific discussion here, and now TechCrunch has started up a contest inspired by this.

The seven deadly sins of the workplace

2009-08-22T23:36:46-04:00

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:

Workplace violence
Dishonesty
Theft
Criminal activity
Insubordination
Sexual harassment, if it's serious or willful
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.

Five reasons Twitterers make better employees

2009-08-20T20:37:16-04:00

Many employers are fretting that Twitter — like email and The Google and The Interweb — are a drain on employees' time and attention, and generally a bad thing for business. Some companies have already taken to banning Twitter from the workplace: most notably, the White House (even though Twitter got the President elected), the Marine Corps (even though the Chairman of the Joint Chiefs has 4,000 followers), and the Green Bay Packers (no wonder Brett Favre left).

But I take issue with that.

And I'll even go a step farther. I've met enough people in the Twitterverse to conclude that Twitterers make better employees. Let's call them tworkers, since Twitterers *heart* neologisms. And remember, I write from the perspective of a management employment lawyer.

Here then are five reasons, which are each — of course — Twitterable (in fact they're twooshes — exactly 140 characters long):

1. Tworkers are usually extroverts. They don’t shy away from attention and they like showing off. They understand their roles as performers.
2. Tworkers are interested in being part of a community, one they help build. They care about people, and they’re sharing and compassionate.

3. Tworkers are unafraid of trying new things, but not because something is a fad. They are always looking for a better way of doing things.

4. Tworkers have the ability to quickly make friends with strangers. They also know that what they say reflects upon them and their company.

5. Tworkers know how to express themselves concisely in plain English. They say what they mean. They get to the point without wasting words.

As an employer, and as an employment lawyer, these are qualities that I want to see in my workplace. Or tworkplace.

Employers: don't ban Twitter from the workplace. Instead, look for good tworkers.

Related posts

The First Rule of Managerial Eptitude

2009-08-18T23:15:46-04:00

A while back, we talked about our Universal Truth (you can tell it's important since it's capitalized):

Inept managers lead to disgruntled employees, which in turn lead to diminishing profits.

Ept managers lead to gruntled employees, which in turn lead to minishing profits.

To that end, we thought we'd offer up the Rules of Managerial Eptitude (again with the capitalizing).

The first one is probably the sentence I've said most often to managers during the past 15 years:

1. Write it down.

Whenever something happens in the workplace that could have future consequences, write it down. Anywhere. I don't really care where. Grab a piece of paper, put the date and time on it, and write down whatever it is. Then put it somewhere safe.

I used to say "Document everything." It sounded more lawyerly, what with its seven syllables and all. But I slowly realized that people worry more about "documenting" something than about just writing it down. People tend to draft documents, which seems like more work. Better to just jot a note. Then stick it in a private file (and not a personnel file, unless and until it becomes a "personnel document" being used to make a personnel decision.)

So why is writing something down so important?

Because it's magic.

Well, almost. Stuff that gets written down takes on a talismanic quality. (That's right, kids. Stuff and talismanic in the same sentence. Don't try that at home.) People — judges, jurors, hearing officers, mediators, arbitrators, and even you and I — tend to believe that something is true by virtue of its being written down.

Imagine we have a case against each other in court. You get on the stand and testify about my dastardly deed. On cross-examination, my crack lawyer asks you when the deed occurred. "Uh," you mumble, "sometime in the spring?" My crack lawyer deadpans, "Sometime in the spring." You look away and say, "I think." My crack lawyer says, "No further questions."

Then I get on the stand. My crack lawyer now asks me when the dastardly deed occurred. I look over at the jury box and say in a strong, clear voice,"On April 16, at 3:45 in the afternoon." Crack lawyer: "How can you be so sure?" I look at the jurors again. "Well, partly because it's my mother's birthday. But mostly because I ... wrote ... it ... down." Game, set, and match, baby. You can't handle the truth! Shepherd out.

Uh, sorry. Actually, my crack lawyer would then make a big show of producing my jotted-down (and date- and timestamped) note, and then the jurors would be all "Oh yes he did." And I'd win.

Something written is more real — more believable — than something unwritten. Sure, I could have written the note the night before the trial began. There isn't going to be any C.S.I.-style carbon-dating of my note going on. But the jury knows that people don't generally do that. If I said I wrote the note at 3:45 p.m. on April 16, it's probably because I did. Which means my side of the story is probably more accurate. Which means I'll probably win.

So managers: write it down. Winning's better than losing.

"We don't treat our employees like children"

2009-08-17T14:45:35-04:00

Heidi and I don't get out very often, so when my parents offered to take our daughters for the weekend, we had some important decisions to make. We wanted to go out for a nice dinner in Boston. So do we go to an old favorite, a place where we knew that we were likely to have a good experience? Or do we get adventurous and try something new? Since we had two evenings to cover, we decided to do both.

Friday night, we went to a new (for us) place. The food was really quite good (the chef is world famous), but the service was indifferent. We kept overhearing waitstaff complaining about coworkers — "I'm not working with Aziz again!" The overall experience was meh.

On Saturday, we blew off adventurous and returned to our favorite Boston restaurant: Sorellina. (BTW: The website starts playing music, which I'm usually not a fan of. But it's really cool Italian ambience music, so it works for me.)

What a difference. The food, as always, was excellent. But it was the service that makes it stand out.

We arrived very early — 5:30 — so that we'd have to time for a movie afterward. They had just opened for the day, and the management and staff were having their daily premeal meeting. Now many high-quality restaurants have a daily meeting like this, but this got me thinking: maybe companies in other industries would benefit from having a daily "premeal" meeting.

Every person we dealt with was gracious, polite, genuine, eye-sparkly (to borrow from Tom Peters), and warm: the hostess, the bartenders, the waitstaff, the busboys, and the general manager. They did things without being asked, like splitting the (fantastic) tuna tartare appetizer into two beautiful dishes so that we could share it, or bringing Heidi an extra wineglass so that she could try a sip of my Shiraz. We never felt rushed, nor did we ever feel ignored. It was a terrific team performance.

Our waitress, Katrina, was bright, charming, and knowledgeable, with an arch sense of humor. (It took great restraint for me not to ask whether people comment on her name. Hurricane? Too soon. "Walking on Sunshine"? Also too soon.) She told us that she had been working there for three and a half years. She also pointed out that many of the servers had been there as long or longer.

During the meal, the general manager, Dominick Minots, came over to chat with us. No particular reason — even though we've been there a bunch of times over the years and even had the Shepherd Law Group holiday party there in 2007, we weren't exactly regulars. He asked how we were enjoying our meal in a way that showed that he actually cared about the answer. I asked him about the long tenure of their staff, mentioning that it was unusual in the restaurant industry. His answers resonated.

"We don't treat our employees like children," he said. Everyone was accountable to each other, to the restaurant, and to the guests. For them, team was the key concept. Not in a there's-no-I-in-team sense, but in a sense that the team worked together to make the guests' experiences as enjoyable as they can be. And it showed.

How many companies can honestly say that they don't treat their employees like children? Too many worry about policies and rules and personnel manuals. How can an employer expect someone to feel accountable and have a sense of responsibility when it legislates all aspects of the employees' conduct?

If you want your workplace to provide world-class results like Sorellina, start by treating your employees like grown-ups.

Strippers take it off ... off payroll, that is

2009-08-13T22:54:15-04:00

Everyone knows that strippers are properly considered independent contractors. Right?

Yeah, right.

A Massaschusetts court this week ruled that a strip club had violated state wage laws when it improperly classified its exotic dancers as independent contractors. Instead, they should have been treated as W-2 employees. (Although to be fair, the IRS hates it when you get glitter on your tax returns.)

The Boston Globe reported that Massachusetts superior court Judge Frances McIntyre granted summary judgment on liability in favor of the clothing-challenged professionals (look: how many different ways can you say "stripper"?) working at King Arthur's Lounge in Chelsea, near Boston. The case, which the judge certified as a class action (oh, there's gotta be a pun there somewhere), now proceeds to trial to determine the damages, which could run into the thousands of dollars per ecdysiast (helpful Wikipedia definition included in a somewhat NSFW entry).

The Globe explained how it all worked:

King Arthur’s Lounge, a club that has been the scene of more than one notorious crime, did not pay the strippers any salaries, required each to pony up $35 to perform each night, and kept $10 of every $30 that each made for “private dancing’’ in secluded booths, according to a state judge who granted a stripper’s motion for summary judgment on the issue of liability.

Apparently, the performers were allowed to keep the singles that patrons tucked in their garters, or whatever, while they performed on the open stage. But they had to turn over a third of their "private dancing" (read: lap dance) tips to management.

The club argued that the dancers were independent contractors because of the independent discretion they exercised. Writes the Globe:

In arguing that the strippers were independent contractors, King Arthur’s said that Chaves got to pick her own music, costumes, partners, and routines. The club also said it never gave her written rules to follow or documentation that she was an employee.

Uh ... no written rules means you're not an employee? As if.

This case was a loser from the start. Most of the time, when an employer tries to pass an employee off as an independent contractor, it is violating the law. This is especially so in Massachusetts, where a statute says that an employee whose trade is the same as the business's cannot be an independent contractor. To get around this, the club argued that it was in the alcohol business, and that strippers were just something extra. You know, like darts.

The judge basically called that ridiculous:

A court would need to be blind to human instinct to decide that live nude entertainment was equivalent to the wallpaper of routinely televised matches, games, tournaments, and sports talk in such a place. The dancing is an integral part of King Arthur’s business.

As we've said here before (see "How to lose a wage-and-hour case"), you can't win a wage case if you mess up an employee's pay. There's no defense if you got it wrong. Our advice to employers: make sure you get the pay right. Or be prepared to settle if you don't.

And bring plenty of singles.

Division-leading employee management

2009-07-16T10:25:49-04:00

If you know me, you know that I'm a big Red Sox fan. This is always a tough week, because baseball goes into midseason hibernation, with no games scheduled on the Monday before and Wednesday after the All-Star Game. (In fact, those two days are the only days in the calendar without any games in the four major North American sports.) (The fourth one is hockey, although I'll entertain arguments that it's not a major sport.)

But even without a Red Sox game on the schedule (they even have today off, more's the pity), I thought it appropriate to showcase an important management and HR lesson from the majors.

Every HR pro and manager should read "Pedroia benefits from the embrace of hardball’s softer side," by Dan Shaughnessy, an award-winning sports columnist for The Boston Globe. Dan is hands down the Globe's best writer, sports or otherwise.

The article, from a week ago, talks about how the Red Sox All-Star second baseman and reigning American League Most Valuable Player Dustin Pedroia was scratched from a game to be with his wife, Kelli, who was hospitalized with late-pregnancy complications. The Sox ended up getting blown away, 6–0, by the A's. Dan writes:

No problem. The important thing was that Kelli Pedroia was OK and Dustin Pedroia had some peace of mind.
The episode is a perfect demonstration of Terry Francona’s managing style and the evolution of old-fashioned hardball rules. In the bad old days, players heard about family emergencies and baby deliveries via Western Union. Management did not encourage players to leave. Ever.

Not anymore. Today, the Red Sox get it. Family comes first. Dan sums it up:

Players’ families come first. It earns him a lot of loyalty in his clubhouse.
“Times have changed,’’ said Francona. “Different people probably feel differently. If one of our players’ wives is giving birth, I think they should be there. I just feel what I feel and do what I feel is right.’’

Pedroia certainly won’t forget these last few days. He has new appreciation for his bosses.

“It’s the best,’’ he said. “The Red Sox organization. [GM] Theo [Epstein] texted me late last night. My whole team. That’s why we’re a great team, because we care about each other.’’

To my thinking, it's no coincidence that the Red Sox are the only team to have won the World Series twice this decade, and that they currently lead the American League. (Pedroia, who fans voted in to be the starting second baseman on the AL All-Star team, also ended up skipping the Midseason Classic to be with his wife. Again, Sox management was completely supportive.)

Do you want your team to lead its division? Remember what's important to your players, and they'll remember that.

Debating noncompetes

2009-07-13T11:49:13-04:00

Whether a noncompete is enforceable depends on what state you're in. In California, as most of you know, employment noncompetes are completely illegal. At the other end of the spectrum is Florida, where noncompetes are presumptively enforceable — the employee has to prove that the restriction is unreasonable, instead of the usual requirement that the employer prove its reasonableness. The other 48 states fall in between to different degrees. My state, the Commonwealth of Massachusetts (we call our state a "commonwealth" because we're, you know, special; can you name the other three?) will enforce noncompetes, but only when they're necessary to protect a company's secrets or customer relationships.

But now some people want to change that.

The Massachusetts House of Representatives (you know, the august body whose previous three speakers were indicted) is currently entertaining two bills to radically cut back the power of employers to use noncompetes. One bill, House No. 1799, places huge restrictions on noncompetes: they can only be enforced on employees earning $100,000 a year, they can only last two years, and the employer has to pay a ransom of half the employee's salary (up to $100,000) during the enforcement period. The other, House No. 1794, stands Massachusetts with California in completely banning noncompetes.

It's as yet unclear how much support these bills have or will get. In a recent column in The Boston Globe ("Start-ups stifled by noncompetes"), Scott Kirsner suggests that startups and their backers (unsurprisingly) are against noncompetes, while established companies (unsurprisingly) favor them. (Full disclosure: Scott's piece mentions two of my noncompete clients, although I didn't hear from him.) In the same piece, Governor Deval Patrick gives his principled take on noncompetes. Scott writes:

Governor Deval Patrick hasn’t taken a position on noncompetes. When I spoke with him earlier this month, he said, “I don’t have a stake in the status quo’’ but added that he hadn’t heard a consensus view from people in the innovation economy as to whether they’re a positive or a negative for businesses: “If there’s consensus in the industry, I’m happy to support that.’’

But the governor could end up with his finger in the wind for a while looking for that consensus. You see, in every noncompete lawsuit, there are two companies: the old, or enforcing, company; and the new, or hiring, company. (Usually, the new company is an interested third party rather than an actual defendant in the lawsuit.) And over time, companies may find themselves on both sides of the issue. Lawyers, too. Most noncompete cases are litigated by management-side lawyers (like me) rather than employee-side lawyers.

The Globe ran a nice editorial framing the issue in yesterday's paper: "Clause for concern." When I spoke with deputy editorial-page editor Dante Ramos last week, I was a bit apprehensive about criticizing these legislative bids to gut or kill noncompetes. I didn't want to be seen as self-interested; companies around the country pay us a lot of money to litigate noncompete cases. To be sure, the death of noncompetes in Massachusetts will mean a long-term loss of that type of business. (It will also mean a short-term jump.)

But the bills are bad policy. Massachusetts has a 300-year-old tradition of protecting the freedom to contract; California doesn't have a 300-year-old tradition of anything. While many companies try to enforce noncompetes for the wrong reasons (spite, vindictiveness, anger, desire to stifle competition), Massachusetts judges usually see through this and deny enforcement. And in some circumstances, enforcing a noncompete is the only way to prevent unfair competition. Throwing noncompetes out like H. 1794 would do is the whole baby-and-bathwater thing. And H. 1799's mishmash of arbitrary restrictions on noncompetes lacks principle — it's neither for noncompetes nor against them. (That said, the drafter is a fine lawyer and experienced noncompete litgator.) At least the outright ban of 1794 stands for something, which I can respect if not agree with.

Companies shouldn't use noncompetes to try to make employees stay. That's what management is for. But used sparingly and wisely, noncompetes can be an important tool for protecting companies' secrets and customer relationships.

• • •

The other three "commonwealths" are Pennsylvania, Virginia, and Kentucky. Puerto Rico is a commonwealth, too, but not in the same way. Go figure.

Sugarcoated terminations

2009-06-29T15:03:36-04:00

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:

You’ll tell the truth
You won’t leave anything out, and
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.

The wrong question

2009-06-27T02:29:36-04:00

Too often, when managers and HR professionals get employee requests for special treatment, accommodations, or departures from policy, they ask themselves the wrong question:

What if another employee finds out, and then asks for the same special treatment, or accuses us of not treating everyone equally?

This question is common, understandable, and well meaning. HR pros and good managers know that different treatment (or as the lawyers say, disparate treatment, which means "Look at me: I went to law school and learned how to talk different. I mean, disparate. D'oh!") can potentially lead to discrimination lawsuits. The problem is that when you treat people uniformly, you end up treating them uniformly badly.

So this is the wrong question to ask.

The right question to ask is this:

If I was requesting this special treatment in the same situation, would I think I deserved it?

If your being-honest-with-yourself answer is yes, then you should try to find a way to grant the request. Of course, don't discriminate (there are, like, laws against doing that). But don't disgruntle one employee just because other employees might not get the same treatment.

You'll end up with the wrong answer.

Does your company need a smartphone policy?

2009-06-25T00:56:37-04:00

Are your employees twittering during meetings? Texting during conference calls? Checking Facebook on their iPhones during training?

As more employees carry and use iPhones and BlackBerrys, some employers are fretting about an increase in impolite smartphone usage. A few days ago, The New York Times had a fine article by Alex Williams called "Mind Your BlackBerry or Mind Your Manners." In it, Alex cites questionable smartphone behavior in different workplace settings. Some companies have taken to policies banning BlackBerrys during work meetings. But more companies are facing up to the reality of the omnipresent smartphone: "Despite resistance, the etiquette debate seems to be tilting in the favor of smartphone use, many executives said."

What do you think? In this space, we've usually advocated a policy-lite approach that involves treating employees as grown-ups who have judgment. See, for example:

“A two-word corporate blogging policy”
“The world’s shortest employee handbook,” and
"A twitterable Twitter policy."

Is it time for an iPhone policy? (At my firm, the only BlackBerry policy is "No BlackBerrys." It's very similar to our Windows policy.)

I want to hear from you, managers, HR pros, in-house lawyers: Does your company need a smartphone policy? Leave your thoughts in the comments, or send me an @message or direct message on Twitter: @jayshep.

And while you're at it, take this quick, single-question poll.

Nickel-and-diming your employees

2009-06-24T01:16:23-04:00

Lucy works as a salesperson for a machine-parts company in the Pacific Northwest. She has to travel a lot to make sales calls; often out of state. Because she's on the road so much, she has to eat out all the time. She's not crazy about this, because she finds it difficult to eat healthily at fast-food and quick-service restaurants.

Her company appears to understand that she and her fellow salespeople have no choice but to eat out frequently. So it allows them to expense their meals on the road. But like too many companies, this one doesn't trust Lucy or her coworkers. It's apparently concerned that they will run up obscene meal expenses at luxury restaurants (at airports and rest areas — right!). So it came up with a policy.

Under this company's meal policy, Lucy and her colleagues can expense meals under the following restrictions:

they have to be traveling for work
they have to be 75 miles from home, and
they can't spend more than $17.50 per meal.

OK, now the first restriction makes sense: this is supposed to ameliorate the hassles of eating while traveling on company business.

The second restriction also seems to make sense; the company's not interested in feeding its people while they're at home. But there's an unforeseen consequence here. Much of Lucy's travel is by airplane, and she often has to leave her home early in the morning to catch her flight, making it difficult to make breakfast at home before she leaves. Ideally, she would check in at the terminal and go through airport security, and then grab some breakfast before her flight takes off. But the airport is just 22 miles from her house, so the meal policy doesn't cover her breakfast. If she wants coffee and a muffin at the airport, it's on her nickel.

The last restriction also seems to make sense, setting a spending limit to avoid excessive meal expenses. And $17.50 is probably enough to get breakfast or lunch at most quick-service places, and dinner at a fast-food joint. But the problems arise with how the policy is enforced.

To get her lunch paid for, Lucy has to charge the meal on her company-issued credit card, and then fax or scan her itemized receipt to an accounting gnome at the home office. More than once, she has received admonishing emails or phone calls from these gnomes about nonconforming meals expenses. These, not surprisingly, displease her.

Another unintended consequence: Lucy and her fellow salespeople are self-interested, like most human beings, and they are smart. They quickly learn how to game the system, and find ways to charge meals under "The Price is Right" rules: they come as close as possible to $17.50 without going over. So the company often ends up paying more for meals than it would have if it hadn't set the $17.50 limit.

But the biggest and most damaging unintended consequence is that Lucy and her colleagues resent the meal restrictions. It is an irritant to them, especially when they are waking up at five in the morning to board a crowded commuter flight to go and sell the company's machine parts. While it's impossible to measure, I'd bet you breakfast at an airport terminal that the amount they lose in forgone sales stemming from employee malaise dramatically outweighs any money the company saves on meal expenses.

Employers: resist the urge to have policies like these. Treat your employees like adults. If they spend unreasonable amounts on meals or other expenses, talk to them about it. If it's a persistent problem with a particular employee who's taking advantage of the company, fire that employee. But don't assume that all your employees are trying to bilk the company for an extra airport donut.

Notes: As you might imagine, I don't want Lucy to get fired, so I have changed some of the identifying information. But the story is true … Also, I'm no fan of nickel-and-diming, whether it's employers doing it to their employees, or lawyers doing it to their clients.

Thanks

2009-06-17T22:20:00-04:00

Gruntled Employees started 33 months ago with a post criticizing Radio Shack for firing employees by email ("Radio Shack Deletes 400 Workers, Common Sense"). A couple of days ago, our 122nd post castigated a law firm who fired people by voicemail ("Please leave your layoff message after the beep"). How far we've come.

During those 33 months, many people have visited the blog. Today, we enjoyed our 100,000th visit. To be sure, there are blogs out there who get 100,000 visits a day. Nevertheless, I just wanted to take a moment to thank everyone for reading and for contributing to the discussion, both here and at our sister blog on client value and service, The Client Revolution.

Thank you.

— Jay