Category Archives: Management

Favorite Firing: Discharge for Dishonesty Is Not FMLA Retaliation


FMLA DOL.pngWhen the Family and Medical Leave Act became law in 1993, it immediately changed the relationship between managers and employees. It became much harder to discipline employees for attendance, if their absences were even arguably covered by the FMLA. But a recent case demonstrates that if an employee lies about his or her need for FMLA leave, then discharge for the dishonesty is appropriate. See Sharif v. United Airlines, Inc., No. 15-1747 (4th Cir. Oct. 31, 2016).

The Facts: Masoud Sharif, an employee of United Airlines in the U.S., had suffered from a diagnosed anxiety disorder for several years, and he was frequently absent from work due to panic attacks. For many years, United Airlines approved his requests for FMLA leave. In fact, in the two years prior to his discharge, Mr. Sharif took 56 days of approved FMLA leave.

Mr. Sharif and his wife (also a United employee) went on a three-week vacation to South Africa in 2014. He used time-off days for most of the time, but not for two days in the middle of the scheduled absence. He tried to swap shifts for those two days within United’s swap policy. He found someone to cover one shift, but not the other. While still in South Africa on the day that his absence was not covered, he called to request FMLA leave for that shift. (He did not call to request the leave until it was too late to fly back to the U.S. from South Africa, and he had no airline reservation back to the U.S.)

The Sharifs returned to the U.S. in time for Mrs. Sharif’s first scheduled shift after the irvacation. United then noticed that Mr. Sharif had only requested FMLA leave for the one shift he was scheduled to work during his vacation. Mr. Sharif had similarly taken FMLA leave during a planned absence in 2013. Therefore, United decided to investigate.

When United managers questioned him, Mr. Sharif first claimed he was not scheduled to work on the day in question, but he did not explain why he requested FMLA leave for that day. He gave inconsistent and implausible statements about trying to fly home from South Africa, then claimed he suffered a panic attack over his inability to return home, which is why he requested FMLA leave.

United determined that Mr. Sharif had been dishonest in his request for leave and during their investigation. Dishonesty was a violation of the United “Working Together Guidelines.” The airline suspended him without pay. United was prepared to discharge him for fraudulently taking FMLA leave and for making false representations during the investigation. On the recommendation of his union, Mr. Sharif retired, so he would not be terminated.

Mr. Sharif later filed suit alleging the threat of termination constituted retaliation for taking FMLA leave. The district court granted United’s motion for summary judgment, and the Fourth Circuit affirmed. The Fourth Circuit held that termination of employment for abusing FMLA leave and for lying during an investigation into the FMLA abuse is not retaliation under the FMLA.

The Moral: This is another case where an observer wonders what the employee was thinking. Several of Mr. Sharif’s statements were easy to refute based on airline schedules. The whole situation—leaving one day uncovered in the middle of an international vacation, then requesting FMLA leave on that day—would raise the specter of employee dishonesty in any objective mind. Common sense should prevail in a case like this, and fortunately it did.

As the Fourth Circuit held,

“Sharif has failed to create an issue of triable fact that the explanation United Airlines provided for his discharge was a pretext for retaliation for taking FMLA leave. To hold otherwise would disable companies from attaching any sanction or consequence to the fraudulent abuse of a statute designed to enable workers to take leave for legitimate family needs and medical reasons.” [emphasis added]

In its decision, the Fourth Circuit provided guidance for determining whether FMLA retaliation has occurred, when the circumstances surrounding the request for leave or the leave itself triggers an investigation and adverse action. The Fourth Circuit stated that an employer’s retaliatory intent “can be established either by direct evidence of retaliation or through the familiar burden-shifting framework articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 800–06 (1973).”

The well-known McDonnell Douglas analysis requires the employee to establish a prima facie case of retaliation. If the employer then rebuts the prima facie case with a legitimate, nondiscriminatory reason for the adverse action, the employee then has the burden to prove that the proffered explanation is pretextual.

The Fourth Circuit explained that both pretext and employer intent can be demonstrating by considering

“ ‘among other things, the historical background of the . . . decision; [t]he specific sequence of events leading up to the challenged decision; [d]epartures from the normal procedural sequence; and . . . [any] contemporary statements by members of the decisionmaking body.’ See Reno v. Bossier Parish Sch. Bd., 520 U.S. 471, 489 (1997) (quoting Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 267-68 (1977)).”

The Fourth Circuit went through these factors and found that United’s past acceptance of Mr. Sharif’s FMLA claims, Mr. Sharif’s inconsistent explanations, the timing of his and his wife’s vacations, and the lack of any attempts to make return reservations so he could work the shift, all demonstrated that United did not retaliate.

Mr. Sharif also claimed that he should have received lesser discipline for not working the shift. However, the Fourth Circuit cited the frequently quoted words supporting court decisions in support of employers:

“courts are not ‘a kind of super-personnel department weighing the prudence of employment decisions.’ DeJarnette v. Corning, Inc., 133 F.3d 293, 299 (4th Cir. 1998).”

Because Mr. Sharif’s offense amounted to “misrepresentation and fraud,” the Fourth Circuit found that discharge was appropriate, thus establishing that there are at least some occasions in which an employer can still manage attendance.

Have you ever dealt with suspected FMLA misrepresentations? What was the outcome?

Leave a comment

Filed under Human Resources, Law, Management, Workplace

Manage Yourself Before You Can Lead Others


executive-1668932_640I’ve been following the folks at Contented Cows for many years now. Bill Catlette and Richard Hadden call themselves employee engagement experts. The name of their business comes from their first book, Contented Cows Give Better Milk: The Plain Truth About Employee Relations and Your Bottom Line. Although they say they are employee engagement experts, their website states, “We develop leaders, period.” They write about employee engagement, but mostly in the context of how leaders create the kinds of focused and enthusiastic employees who give the “better milk” that all businesses want.

Recently, Bill Catlette wrote a post entitled “Leadership . . . It’s Not a Position,” which really struck home with me. I’ve read a lot about what a new leader needs to do in his or her first 100 days in the job. But in this post, Mr. Catlette goes beyond the “whats” of a new leader’s role to get at the “hows.” He says:

1. First, you manage yourself.
2. You lead others.
3. You manage the system.

If leaders reflected on these three points, I think they’d get to the “whats” of any new role a lot more easily—and to the “whats” of their existing roles also.

Manage Yourself. We have only to look at President Trump to understand the importance of managing yourself. Now, none of us can know how much President Trump manages himself, but from the outside his tweets seem undisciplined and contrary to the message of control and focus that most Americans want from their President.

As Mr. Catlette states,

“No one is going to follow you for very long or very far if you don’t have your own act together. You summon appropriate doses of optimism and humility, and keep your ego very much in check.”

This is the behavior of a leader. If this first step is not done well, then steps two and three may not get the job done.

Lead Others. Most leadership articles focus on this aspect of leadership. We are instructed that leaders should communicate the mission of the organization and how each individual’s work fits into it. They should listen with empathy to those they manage, as well as to their external stakeholders. They should encourage and persuade their followers toward a shared goal.

We’re all taught to do these things. Some of us do them better than others. But none of it matters if we—as leaders—do not model the behavior and performance needed from others in the organization.

Manage the System. Again, as leaders we are taught to examine the technology, decision rights, workflows, and other tools and processes that make up the organization we lead. We’re told to find the weak points and figure out how to improve them. We’re expected to shape the culture to get the job done—to create engaged employees.

But once more, we must recognize that we cannot shape the culture to something different than what we display ourselves.

The primary reason many leaders fail is because of cultural fit. These leaders often do not fit because they do not shape their behavior to the requirements of their role. I’m not arguing for a cookie-cutter look to all senior executives in an organization. But I am suggesting that leaders be conscious of how their behavior is viewed by those they lead and that they adapt themselves to their environment before they expect others to adapt to them.

When have you observed leaders who failed because they didn’t manage themselves first?

1 Comment

Filed under Leadership, Management, Uncategorized

When Your CEO Dies


man-76202_640I’ve been interested in succession planning since my early years in Human Resources—and particularly in succession planning at the top of the house. Perhaps that’s why my novel, Playing the Game, begins with a CEO near death and the impact that has on the corporation. So I read with interest a recent article that dealt with how to cope with the death of a key executive. Of course, the most important point is to be prepared.

“What Would Happen If Your CEO Died?”, by Branigan Robertson and Sean Reis, published on February 2, 2017, on the always excellent TLNT.com, asks what HR should do to minimize the impact of the death of a key executive.

Here are the recommendations the authors make, along with my commentary:

1. Purchasing life insurance on high-ranking managerial employees

For most companies, this is a matter of balancing cost against risk. In my opinion, insurance will only make sense for some companies—typically larger companies, or those in which an executive’s passing could end the organization’s existence. For other companies, particularly where a successor is in place, insurance may not be necessary.

2. Knowing who is next in command for each critical position, including the CEO, to fill immediate leadership gaps

This is critical. Everyone should have a back-up, just as stage actors have stand-ins. In some cases, this will be a deputy or assistant to the executive. In other cases, power will devolve up the corporate ladder, and the deceased executive’s boss may need to act in an emergency. In still other situations, a former executive might be called back into the role. And in the case of the CEO, a Board of Directors member may need to fill in, if there is no executive the Board trusts.

The important point is that stakeholders need to know immediately who acts in place of the deceased (or incapacitated or otherwise unavailable) executive.

3. Having access to all critical information

Arranging for ongoing access to critical information is part of any good crisis management plan—and the loss of a key executive is certainly a crisis. Part of the issue is making sure someone has access to corporate information, such as server passwords, financial records, tax returns and payments, bank account and payroll information, debt instruments, shareholder and Board member information, key contracts and insurance policies, critical vendor and consultant contact information—the list goes on.

And each business will also have critical systems of its own, and all of these need a crisis management plan. What systems in your organization have only one key person with access to the data?

In addition to critical corporate information and documents, it is important to know how to access contact information for employees’ family members—at least one next-of-kin or emergency contact for every employee.

4. Dealing with emotions

The loss of a key employee will impact the morale of the entire organization—the more respected and liked the individual, the more the rest of the employees will grieve. And the more critical the person was to the organization, the more employees will worry about their future.

Other leaders need to recognize, validate, and overcome employees’ sense of loss—often when these leaders knew the deceased the best and are most devastated by the death. It is probably a good idea to bring in grief counselors (usually from the company’s Employee Assistance Program, if one is in place), to help the organization mourn the loss and move on.

5. Having a succession plan in place to speed filling the position on a long-term basis

Beyond the immediate need to deal with the crisis and keep the business running, it is important to get back to “business as usual” as quickly as possible. The only way to do that is if the position is filled or the duties of the deceased executive are otherwise distributed. The more planning done in advance, the easier this will be.

Is your organization prepared to lose a top executive?

2 Comments

Filed under Human Resources, Leadership, Management, Playing the Game, Workplace

Pay Transparency: Where Is Your Organization on the Spectrum?


In August 2015, I wrote a post that took a decidedly guarded position on the benefits of pay transparency. That post was written in the context of the SEC’s pay ratio disclosure rules, requiring the disclosure of executive pay as compared to the average worker’s pay. I’ve been mulling the topic of pay transparency ever since then, wondering if I was too conservative. I recently attended a webinar on pay transparency sponsored by PayScale and BambooHR which caused me to adjust my thinking. This post deals with the merits of pay transparency as a management philosophy, rather than as a response to a government mandate.

The thrust of the PayScale/BambooHR webinar was that pay transparency is really a continuum of pay strategies. Each organization must decide where on the continuum to place its pay philosophy, based on the organization’s goals and desired culture.

If an employer decides to migrate further along the pay transparency continuum, then management and Human Resources in that organization need to be more disciplined in setting pay and in discussing pay with employees. Making pay transparency work requires good market data and an understanding of what skills and performance the organization needs from its employees.

The PayScale Pay Transparency Spectrum

pay-transparency-spectrum

As depicted in the webinar, there are five stages on the “PayScale Pay Transparency Spectrum.” The remainder of this post describes the five steps as outlined by Payscale and Bamboo HR, but many of the attitudes expressed regarding the pros and cons of each step are my own, and not necessarily those of the presenters.

1. What — Employees understand what they get paid — how much, when pay day is, etc. This is a bare minimum, and certainly all employers should at least be willing to tell their employees this much.

Even conservatives like me would not object to this step on the spectrum. If this is part of pay transparency, then I can easily support any company getting to this first level.

2. How — Employees are told how the organization uses data to make pay decisions. If the employer uses market pay data, then employees are told how market studies are conducted, or at least which companies are considered comparable. If jobs are graded on a point factor system, then the factors are described.

Opening up pay calculations to this level on the spectrum can be a big step in helping employees accept the fairness of pay scales and understanding the value of their job versus working at another company. But employees will ask questions about how jobs are defined and whether the benchmark companies are good comparators, so managers and HR do need to be educated in how to respond to such questions.

Again, I can readily support this step on the continuum for most companies. Assuming that an employer does have a pay structure with job grades and salary benchmarking, then the employer should be able to explain to employees how that system works. Not all companies will choose to pay to market, but if they don’t, they should be able to explain why (“we choose to be an entry-level employer, and we understand turnover will be higher,” for example). By contrast, when a company wants to be an employer of choice and to pay at or above market, then they should be happy to explain that philosophy.

3. Where — The third step on the spectrum is explaining to individual employees where they fall in the pay range. This goes beyond explaining what the salary range for a position is (Step 2) and requires telling individuals how their individual pay was set and what their future salary expectations are.

For certain (typically non-exempt) positions, salary increases are based on seniority or time-in-grade or the achievement of specific skill sets. In those instances, where pay increases are based on objective factors, it only makes sense to tell employees about the factors. In addition, when a company wants to focus on employee development and career opportunities, reaching this step on the transparency continuum can enrich the career planning and performance discussions.

The more subjective the criteria for offering pay increases, however, the more managers and HR need to be trained in how to discuss pay with employees. I think this was my hesitancy when I addressed the topic before. I’ve seen too many instances when managers handled these conversations poorly.

4. Why — The fourth step on the spectrum is explaining to employees why the organization pays the way it does. This requires a good understanding of the desired workplace culture and how pay fits with that culture. At this step, employers not only tell employees how they can increase their individual pay within the pay grades and ranges, but the organization also explains what is important for the future success of the organization.

At this level, management training is even more important than at Step 3. The questions about paying to market or not must be answered to deal with pay transparency at this level. Not all managers are able to talk effectively about workplace culture and employee engagement and retention. Particularly when managers themselves are not satisfied with their pay—or don’t understand how their own pay is set—they will not be effective communicators.

The webinar presenters stated that this level might be a good goal to reach on pay transparency, although they did not advocate it for all employers. They did emphasize the need for management training. I am not sure that many employers are ready for this level. Certainly many that I have worked with would need significant improvement in their management ranks before reaching full transparency about the links between pay philosophy and culture. But organizations with professional employees and highly skilled managers might well have this level as a goal.

5. Whoa! — Yes, this was the fifth level on the pay transparency continuum. This is the level that is often discussed in the media—where there are open discussions about which employee makes what salary, and everyone knows what everyone else gets paid.

The presenters indicated that this level might not be desirable for many organizations. And this is certainly where I balked when I wrote about pay transparency before. I’ve worked in departments where everyone had access to what everyone else made, and it was a difficult environment in which to manage. That may be in part because we were not as data-driven as we purported to be—subjective factors such as performance and prior job history played a role on where employees ended up within their salary ranges.

I’m still of the opinion that most organizations are not ready for this level of pay transparency. Some might be, but they had better be ready for a lot of difficult discussions with employees.

How to Reach the Desired Level

The last aspect of the webinar I’ll mention was the emphasis by the presenters on the need for the organization’s leaders to determine their pay philosophy and set a target for where on the pay transparency spectrum they want to be to suit their culture.

It’s likely that the organization will have to evolve a step at a time. An organization that currently does not even discuss pay ranges with employees is not going to get even to Step 4 without a few years of transition.

And the more transparent a system company leaders want to have, the more they need to invest in management training. Not all managers, and not all employees, will make the transition easily. Some turnover of those whose philosophy does not align with the desired culture will happen.

The webinar was a huge help to me in defining my personal perspective. I’m somewhere between Step 3 and Step 4 in what I would personally recommend. But I can now better articulate to clients what their options are and how they could develop from where they are at present on the continuum and why they might want to change.

Where is your organization currently on the pay transparency continuum?

Leave a comment

Filed under Human Resources, Leadership, Management, Workplace

The Gartner Hype Cycle


I recently learned of a concept called the Gartner Hype Cycle. I probably never ran into it before because it started as a technology concept, related to the impact of new technologies on an organization. The Hype Cycle is intended to explain the maturity, adoption and social application of new technology.

But it seems to be to be broadly applicable beyond technological issues. To me, it explains why a lot of new management programs and other ideas crash and burn. Or at least, why they do not result in as much success as originally envisioned.

559px-gartner_hype_cycle

There are five stages to the Hype Cycle. It starts with a “trigger” — a new idea or technology comes on the scene and moves the organization out of stasis. Immediately, the technology is perceived as the greatest thing since sliced bread, the solution to all woes. This is the “inflated expectations” stage.

Expectations rise to a peak, and then the “trough of disillusionment” sets in. The organization realizes that the new technology does not solve all problems, and, in fact, creates issues of its own. Reactions to the technology plummet to depths lower than the stasis before the technology came on the scene.

Finally, the organization is able to sift through the benefits and detriments of the new technology as it moves up the “slope of enlightenment.” Only then does the organization reach a “plateau of productivity,” a new stasis, which is hopefully higher than the original stasis. Thus, there is benefit to the new idea, but not as much as originally anticipated.

How many times have we been through this cycle in our own organizations?

It might not be a new technology or product or service. In my own case, I think of countless business redesigns. Each one was intended to increase productivity. Each one would be the most effective way to bring creative new products to market. Each one would minimize inefficiencies and increase profitability.

And each time, the results of the corporate redesign were less than staggering.

I won’t say the redesigns were failures, but they were not panaceas. They did not magically transform the organization into a model of productivity.

And yet every few years, we tried it again. With the same results.

What examples of the hype cycle have you experienced?

1 Comment

Filed under Human Resources, Leadership, Management

Favorite Firing: Do Not Terminate a Disabled Employee Without a Reasonable Accommodation Dialogue


EEOC sealBack in May 2016, Lowe’s, the home improvement store giant, agreed to pay $8.6 million to settle a lawsuit brought by the EEOC over Lowe’s firing of many individuals with disabilities when they exceeded the maximum amount of disability leave Lowe’s provided. The problem, as the EEOC saw it, was that Lowe’s failed to engage in reasonable accommodations beyond the standard disability leave policy. See U.S. Equal Employment Opportunity Commission v Lowe’s Companies, Inc., et al., C.D. Ca., Case No. 2:16-CV-03041-AB-FFM.

The Facts: This lawsuit began with three charges of disability discrimination filed by three employees of Lowe’s back in 2007 and 2009. These three plaintiffs alleged that Lowe’s violated the Americans with Disabilities Act (ADA) by terminating their employment when their medical leave of absence exceeded Lowe’s 180-day (later extended to 240-day) maximum leave policy. The plaintiffs claimed that failure to engage in any discussion about further accommodations beyond the maximum leave violated the ADA. They wanted extended leaves of absence as a reasonable accommodation.

The EEOC agreed with the plaintiffs and also claimed that thousands of other Lowe’s employees were in the same situation. The EEOC ultimately filed a lawsuit in the Central District of California, the terminated Lowe’s employees were found to be a suitable class, and the case proceeded as a class action.

It was settled in May 2016, and the Court approved the settlement on May 12, 2016. (A copy of the Consent Decree can be found here.) Lowe’s admitted no wrongdoing, and the Consent Decree is not an admission. However, the company did agree to settle the lawsuit for $8.6 million and also consented to comply with a variety of non-monetary provisions. Lowe’s agreed to contact the terminated employees in the class and pay their damages out of the $8.6 million fund, as calculated by the EEOC, and to donate the remainder (if any) to non-profit organizations benefiting the disabled.

Lowe’s also agreed to amend its policies so that it would “engage in the interactive process with any employee with a disability who requests leave as a reasonable accommodation.” And the company agreed to retain Equal Employment Opportunity consultants approved by the EEOC for four years. These consultants will advise on policies, track all requests for accommodation, and educate managers on their duties under the ADA.

The Moral: There are few bright lines when it comes to working through disability situations. If an employee requests an accommodation, the employer ignores that request at its peril. A firm policy regarding leaves of absence is no longer a firm policy—exceptions must be at least considered if the employee claims to be disabled and to need more time away from work.

When the ADA was first enacted in 1990, I worked with managers to parse through how to simultaneously comply with disability leaves, worker’s compensation laws, absence policies, and the like. The situation grew even more complex with the passage of the Family and Medical Leave Act in 1993. I used to tell managers to stack up all the applicable laws and policies like slices of Swiss cheese. Only if an employee’s situation fit in gaps in every layer could the employee be discharged with minimal risk.

What the Lowe’s case shows is that some of the legal layers have no gaps—all employees requesting a reasonable accommodation should at least be given consideration, and an employer cannot have a blanket rule prohibiting certain accommodations. The EEOC will not accept any mandatory maximum leave policy.

The Lowe’s case is also interesting because of the broad relief granted pursuant to the Consent Decree. The provisions in the Lowe’s decree are the types of relief that the EEOC is likely to seek in every disability case it decides to take to court. Employers should consider whether and when accepting these types of interference in their business are worth disposing of a lawsuit, particularly a large class action case of the type that Lowe’s faced. It doesn’t take a loss in court to cause upheaval in the business; settlement can also be onerous.

It is best, therefore, to avoid as many lawsuits as possible. Therefore, engage in an interactive reasonable accommodation dialogue, document that engagement and all options considered, and be clear on why the employee’s requested accommodation is not reasonable and would constitute an undue hardship on the business.

When have you dealt with a difficult reasonable accommodation case?

Leave a comment

Filed under Diversity, Human Resources, Law, Management, Workplace

Book Review: The Last Days of Night, by Graham Moore


moore-coverI haven’t posted many book reviews on this blog. Most of the business books I read aren’t that compelling. Most of the fiction I read doesn’t pertain to the themes of this blog. But I recently finished a novel that provides a fascinating look at corporate and legal culture in the 1880s—The Last Days of Night, by Graham Moore.

The protagonist in Moore’s novel is Paul Cravath, a fictionalized version of the attorney who later founded the New York law firm Cravath, Swaine & Moore. Other major characters include Thomas Edison, George Westinghouse, J.P Morgan, and Nikola Tesla. None of these men comes across very positively. In this novel (and the author makes it clear that the book is fiction, though well-researched), Edison obtained his patent on the electric light bulb fraudulently, Westinghouse ordered a fire set in Tesla’s warehouse, J.P. Morgan switched his allegiance from Edison to Westinghouse for financial gain, and Tesla was a complete kook (albeit brilliant).

The book is engaging. There’s enough science in it for science lovers, but it’s easy enough for non-aficionados of science to gloss over it and still enjoy the story. Cravath’s character clearly is representing Westinghouse without really understanding direct current and alternating current, giving readers permission to do the same.

What I enjoyed the most was the look into early corporations—the forerunner of General Electric owned by Thomas Edison, Westinghouse owned by George Westinghouse, and even Morgan’s banking firm—as well as the development of the modern law firm associate structure created by Paul Cravath. There were plenty of corporate and financial shenanigans depicted in the novel, as well as one-up-man-ship between Cravath and his partners. The story could easily have taken place today in the internet world. In fact, many of the chapters open with quotes from Steve Jobs and Bill Gates that are eerily relevant to the electrical industry of more than a century ago.

What I didn’t like was wondering what was true and what wasn’t as I read. Moore confesses in his author’s note,

“This book is a Gordian knot of verifiable truth, educated supposition, dramatic rendering, and total guesswork.”

He offers a chronology of the actual events on his website. However, his changes to the true chronology and the unverifiable actions attributed to the primary characters ultimately caused me to be more skeptical of the book than I wanted to be. Had it been a novel not using real people as primary characters, I could have accepted it much better.

I’ve had some experience at incorporating historical characters into novels (though not in Playing the Game; I’ve written books under another name as well), but I have never depicted true personages as murderers, thieves, frauds, and corporate moles. And when I’ve written historical fiction, I’ve kept my description of events as close to their true chronology as I can.

Still, the author’s note gives me some satisfaction that Moore has accurately described the flavor (if not the chronology) of the invention of the light bulb, the “battle of the currents” between direct current and alternating current, the development of the modern law firm, as well as the implementation of the electric chair for the death penalty. I do recommend the book. But take it with a grain of salt.

What books depicting corporate intrigue have you enjoyed?

Leave a comment

Filed under Law, Management, Playing the Game, Writing