Anyone Crying for Conan?

Feeling the rain pour down on the Golden Globes’ red carpet, Tina Fey commented “It’s not rain, it’s just God crying for NBC.” Though few are rushing to defend the network, not many human resource professionals or their employees these days are crying for Conan either. It seems that in this current economic climate, the conditions under which Conan is losing his job as host of The Tonight Show are not relatable for many employees.

As the harbinger of corporate change, HR professionals know all too well that, unlike Conan, employees do not have the expectation of job security anymore. Whether it was promised at the onset or not, no one outside of Team Conan, still relies on promises made in “happier times” from their employer. Economic circumstances have drastically changed. Corporate America has been forced to accommodate the strife. Layoffs are a grim reality. Gone are the days when one complained about one’s job or employer. No one can afford to be caught kvetching at the water cooler or, in the case of Conan, to an audience that one's employer “is headed downhill faster than a fat guy chasing a runaway cheese-wheel.” If a non-celebrity employee similarly disparaged his current employer, he or she would find themselves jobless without hope for new employment from another company sans positive references.

Moreover, HR knows that recently laid off employees are sadly grateful for the modest severance and COBRA benefits they receive upon losing their job. “Golden parachutes” are virtually extinct in corporate America these days. The $30-40 million that Conan will reap when negotiations are over do not resonate with the jobless. Certainly, no one is feeling bad for the person who stands to be financially rewarded as a multimillionaire from NBC’s misjudgment. Conan may know what time it is, but he doesn’t know that it is 2010. Times are tough for workers and the unemployed now. No one seems too invested in Conan’s plight.

Sorry he did not get to go on at 11:35 on NBC. The rest of the job market is not shedding a tear for Conan, especially since it will probably be laughing with him at 11:35 on another network soon.

Direct From the PIHRA Legal Update 2010

As a Breakout session speaker for the 23rd Annual PIHRA Legal Update, I am smack in the middle of Day 2 in what is a three day marathon conference designed to educate and update the human resource professionals of Southern California on recent laws and trends. Today I walked into the Ontario Hilton with my head full of the case law and statutes pertaining to my own presentation: “How HR Can Protect the Company Assets” - an update on unfair competition cases. Suddenly, I was struck by a sense of déjà vu. I realized that I had been in this exact hotel, in this exact foyer thirteen years prior for the exact same conference, at the very beginning of my career but I was younger, less experienced and my business, Katz Consulting & Associates, was in its fledging state. I was brand new to PIHRA and only just meeting the HR professionals that have since become my most faithful clients.

Well, aside from recognizing that my business mission to teach Proactive Lawsuit Prevention Strategies has come to fruition in the past decade, I grasped how much I owed to the PIHRA organization for providing me the access to clientele who (in exchange for one hour legal updates) have enabled me to build a viable, rewarding career as an outsourced investigator, seminar leader and HR consultant. Certainly, I am one of the lucky California attorneys who get to use her law degree in a unique manner.

So, what else has changed in the decade since I last spoke at a PIHRA Legal Update? When I began Katz Consulting & Associates, very few employers advocated sexual harassment prevention training to their employees. AB1825 required training was unfathomable. The common perception was that it would be a huge mistake - telling employees that they had a right to sue their companies or managers. This was to remain a secret -something they would not know intuitively from being groped in a private conference room (or watching “Ally McBeal”.) Employers did not want to risk teaching the employees about harassment and discrimination laws. It was difficult for me to convince potential clients to be proactive about harassment prevention and to train their employees about their grievance procedures in order to prevent revenge litigation. In fact, my “Unlawful Harassment Prevention” seminar was the first “Proactive Strategy” that I recommended to clients – and a tough sell it was. Now, sexual harassment prevention training is mandatory for managers and introducing clients to other awareness raising seminars is welcomed.

Another change that has occurred in the last ten years is that I have competition in the marketplace. When I began my “niche” business to educate and train employers about lawsuit prevention, very few attorneys did the same. Law firms did not want their partners and associates counseling their clients in a way that undermined the likelihood of employment litigation – their bread and butter. Now, almost every employment law firm in the city incorporates some aspect of lawsuit prevention counseling into their client services, especially in the past year when the economy has forced employers to reduce legal fees and law firms are looking to provide alternative services to their clients. Albeit, few lawyers have the “flair” for entertaining while educating that I bring to my programs. (I also do my own PR.) Did I mention that prizes are given out in my training programs too?

The last major upheaval that I have noticed in my own business is the “flip-flop” that has occurred as a result of the recessionary economy. For the majority of the decade, my business was primarily a training company and occasionally, I conducted investigations. Or more often, I taught HR professionals how to do so themselves, in-house. Now, the training budgets and training departments of companies are diminished, but the occasion for an impartial investigator has risen. Terminations are more frequent, terminating for cause requires an investigation (see Blog Post, Dec. 31, 2009) and more executives and contract employees are being held accountable for their misconduct. Moreover, HR has been downsized so the few who remain are overworked and without the time to conduct consuming investigations. My business flip-flopped and now I am focusing primarily on building up the investigations arm of it. I’m not complaining -refocusing my own business strategy has been revitalizing. Certainly, instantly updating my website and blog is far easier than redesigning, reprinting and redistributing a laminated brochure. Times have changed.

And they are still changing. Based on what I have seen and heard at this PIHRA Legal Update, the issue that most of the PIHRA professionals are still intrigued and stumped by is social media, internet policies, performance and misconduct concerns as a result of the misuse or abuse of technologies and usage. PIHRA members are once again paving the way for future “Proactive Lawsuit Prevention” seminars and topics. As I have done for the past decade plus, I will let the PIHRA members lead my business direction. Look for the next post on HR’s Proactive Strategies related to these issues. In the meantime, leave your comments on what changes you've experienced that altered your own perspective in the last decade.

Looking forward to another day at the PIHRA Legal Update in Universal City tomorrow!

How HR Can Protect the Company’s Assets at a Time When Unfair Competition is on the Rise.

“Every Battle Is Won Before it is Ever Fought. Think about it.” -
Gordon Gecko in Wall Street (quoting Sun Tzu)

When economic times are tough, when job security is undermined, when unemployment is on the rise, business behaves, for lack of a better term, “unfairly.” Perhaps it is because laid off employees who cannot find employment begin their own competing businesses and want to hit the ground running by soliciting their previous employer’s customers. Or, it is because businesses can not afford expensive and time consuming R&D so they “steal” it in the form of hiring away valuable and trained employees seeking the “secrets” they have access to or stored in their memories. That is to say, in these difficult economic times, corporations are experiencing unfair competition in the form of (a) unlawful pilfering and/or poaching employees, (b) misappropriation and destruction of trade secrets, and (c) fraudulent inducement of customers to leave. I know because in recent months, I have been asked to investigate these alleged activities -seeing firsthand the intense emotional backdrop that accompanies these conflicts.

Though there are laws that protect against this type of unethical, ultra competitive misconduct, the case law is riddled with the difficulty of proof and pleadings. Not to mention, the considerable expense. Consequently, in line with Katz Consulting & Associates’ mission to proactively prevent lawsuits, such as those of unfair competition or violations of the Uniform Trade Secrets Act, it is imperative that a company implement Proactive Strategies to prevent this type of behavior before it undermines a company’s financial prosperity or germinates into an ugly lawsuit. In the words of Gordon Gecko, “Every battle is won before it’s ever fought. Think about it.”

When one “thinks about it,” the realization occurs that the people within a company best positioned to prepare and prevent this unfair behavior are in human resources, working in conjunction with in-counsel. Why? First, human resources are invested in the employees. There is no one who works harder for a company to make sure they hire and train the right people for the job than the people in human resources. Often, the role of finding the “right” person, fairly compensating them, making sure they are trained, satisfied, recognized and rewarded falls on the human resource department. We all know the commonly quoted statistic that it costs a company one and half times an employee’s salary to replace him or her. But, that is more than a statistic to people in human resources, because it is often, your time, effort and expertise that go into “starting over” when a valuable employee leaves. Moreover, it’s not just the number of employees placed, but also the value they bring to the company in what they know, in what they learn on the job or how they contribute to the company. This information, knowledge or expertise, which is valuable to the company as trade secrets or confidential information, is often the result of training orchestrated or designed by human resources. Last, human resources are at the beginning, middle and end of the employee’s career with the company. When an employee is oriented they are given policies and handbooks (sometimes drafted by HR) and when many employees abruptly engage in an exodus, refusing to give notice, leave laptops, destroy files, or steal customer lists, the human resource personnel will know long before the damage shows on a spreadsheet.

The Proactive Lawsuit Prevention Strategies that HR can implement to protect employees, trade secrets and confidential information include reviewing the company Handbook to ensure it includes provisions that clearly spell out: the employee’s duty of loyalty to the employer, it’s duty to keep proprietary information confidential, categories of information which are deemed trade secrets or intellectual property and that the company is the owner of company property including tangible and intangible assets. HR should ensure that confidential information is demonstrably kept confidential with passwords restricting access, “confidential “stamps, and evidence of the cost of developing this information and keeping it from competitors.

Upon hiring the employee should be asked about contracts it had with a previous employer, and reminded not to use a previous employer’s secrets, including a customer list. Upon exit, the employee should be reminded that it is unlawful for her to solicit company customers from a confidential customer list or to take secret information with her, whether it is in the form of downloaded files, emails or memorized information. Also, upon exit, HR should be careful to document any misconduct on the behalf of the employee, including refusal to give notice, ringleading behavior, refusal to turn in equipment, destruction of files, and evidence of downloaded files to memory sticks or emails sent to offsite servers. In the event that the company will need to stop a competitor from stealing trade secrets or valuable employees, it is the “misconduct” that is key in seeking a TRO or injunctive relief when the company has to show the likelihood of success on the merits.

Last, when an employee does abruptly resign, HR should consider it a 911 emergency if there is evidence of soliciting employees, multiple simultaneous employee resignations, any missing or destroyed files or equipment, sabotaged technology and any missing confidential information or leaked trade secrets. Once this occurs, HR should immediately seek legal counsel and discuss available options to protect the company. Moreover, HR should protect what will be evidence in the event of litigation. HR should secure the employee’s computer and protect it from overwriting or backups, and document the financial cost of replacing the employee or damage to the company of the loss.

Although this is a great deal of pressure to put on the professionals in human resources and even to put on in-house counsel , the ultimate satisfaction received for preventing this costly, emotional and extensive litigation should be a job well-done - or at least, a latte. Add a muffin, you are going to battle. Think about it.

Top Five 2009 Celebrity Employer Mistakes (that could have been prevented with Proactive Lawsuit Prevention Strategies)

“It is said that only a fool learns from his own mistakes, a wise man from the mistakes of others.” (Anonymous)

As the year comes to a close, it is always educational, if not entertaining, to look back at the past and see the mistakes made by famed employers and how we can learn from them. Hopefully, we can gain wisdom in the process and avoid these mistakes ourselves. So, in honor of David Letterman, (see mistake #1) let's countdown the top five mistakes made by famous employers in 2009.

#5 Terminating A Protected Employee Without A Fair, Impartial Investigation
Dodgers’ owner Frank McCourt fired his estranged wife Jamie McCourt as CEO of the team citing “insubordination” only 3 weeks after Jamie McCourt filed a workplace harassment complaint with the general counsel of the Dodgers. Despite the McCourt’s underlying divorce proceedings which taint the employment decisions, Frank’s terminating an employee without a fair investigation, while she was pursuing a workplace harassment complaint against the company, effectively also opened the door for a workplace retaliation claim. In California, that makes the Dodgers vulnerable to unlimited punitive damages should Jamie decide to pursue employment litigation in addition to her alimony requests.

#4 Allowing Emotional or Irrational Behavior to Dictate Business Decisions

Convinced that some employees stole from him, Guess cofounder, Georges Marciano initiated lawsuits that backfired when a judge instead ordered him to pay the accused employees $260 million dollars in damages. With alleged evidence of drug use and mental instability on the part of Marciano, the accused employees countersued for libel and intentional infliction of emotional distress. Then Los Angeles County Superior Court Judge Elizabeth White ruled that Marciano had refused to follow court orders concerning pretrial proceedings, threw out his case and barred him from presenting a defense against the countersuits. The only question before the judge and jury at trial was how much financial compensation the employees deserved.

#3 Post Termination Negative Comments about Former Employees

K2 Productions, which produces the Miss California USA Pageant, terminated Carrie Prejean's contract, citing "continued breach of contract issues." The termination spawned a lawsuit and countersuit by the parties which was eventually settled in a settlement agreement, approved by Donald Trump and K2 Executive Director, Keith Lewis. Post termination, Prejean had an interview with Larry King and walked off the set. Trump and Lewis made negative comments publicly about Prejean’s interview. Lewis stated, "The public is finally getting a glimpse of the real Carrie Prejean who lives in her own delusional world. The childish behavior, her negative attitude, the sarcasm and condescending tone, the disrespect and continual lying she is demonstrating now is only a fraction of what we endured during her reign and after." Commenting post-termination on an employee makes an employer vulnerable to a post termination claim of defamation, interference with future contract and also, presumably, a breach of the confidentiality agreement which accompanied their existing settlement agreement. Trump should have stopped talking after “You’re Fired.”

#2 Treating Your Employees as Your Confidantes
Tiger Woods' caddie Steve Williams response to Tiger Wood’s infidelity scandal is that he supports his boss. Williams has been Woods' caddie the last 10 years. He refused to discuss Woods' private life, although he said the golfer had confided in him. "That's what friends are for," he told the New Zealand Herald. "You support them through good and bad. It's like marriage, really." Albeit unintentional, by treating his caddie/employee as his confidante, Tiger Woods inserted Williams as a witness to Woods’ own misdeeds. Although Williams may want to support his boss, under penalty of perjury pending litigation, Williams will ultimately be in the awkward position of providing damaging testimony against his own employer/friend if Woods ends up in a legal battle with his wife or sponsors. Many people spend more time with coworkers than family members, but there are times in a professional career where there must be a clear demarcation of roles, especially between a supervisor and subordinate. For example, if an employee wants to “complain” about the inappropriate behavior of another coworker, the manager’s role is to report the complaint to the person in the company designated to intake complaints and ensure they are investigated. Keeping the conversation “confidential” is not an option. Blurring the relationship lines in the employment setting can lead to deeply unsettling conflicts and increased employer liability.

#1 Undermining Company Policies With Inappropriate Behavior

David Letterman went on the air during is “Late Night” talk show and made jokes about his adulterous affair with a Late Night staff employee. Although he did this in order to deflate an expected extortion plot, his juvenile attitude not only undermined his show’s policy to maintain a workplace free of harassment, but also made him a target for other sexual harassment claims and sexual favoritism claims from his current and previous employees.

Looking forward to the wisdom of 2010! Happy New Year!