As more companies embrace the
idea of working “lean,” some observers see an uptick in frivolous
lawsuits and other actions by employees who believe they’re being overworked,
underpaid and underappreciated.
“I’m seeing this across the
board,” said one accountant and business advisor who works in the
Mid-Atlantic region. “Everyone’s anticipating a recession, so they’re
focused on maintaining revenue at current levels and cutting expenses to
increase their margins.”
If figures from the Equal Employment
Opportunity Commission (EEOC) are any indication, the idea that “doing
more with less” is provoking a backlash may be right. In 2016, the
commission reported a
6 percent increase in retaliation-based charges. However, nearly 65 percent of
last year’s resolved retaliation actions were found to have “no reasonable
cause,” making it the seventh straight year such findings accounted for
more than 60 percent of resolutions.
A story told by our accountant may
explain what’s going on. One of his clients, a large regional retailer, laid off
one of its top salespeople as it shifted its focus from in-store to online
sales. Although handling Internet transactions had become a job requirement for
the sales force, this particular employee was nearly 70, had never learned to
use a computer and readily admitted that selling online was beyond his skill
set. Still, after being laid off, he sued his employer for age discrimination.
Ultimately, the suit was settled out of court for six months’ salary and an
equivalent amount for personal damages.
Hints, but Not a Trend
“I wouldn’t say lawsuits on the
whole are up, but I have seen more retaliation lawsuits in the last several
years,” said Leah Lively, a partner in the Portland, Ore., office of law
firm Davis Wright Tremaine. “I don’t have any data, but I can say my
experience is as companies start to run lean, there’s a shift toward their
wanting higher standards and employees don’t always understand the
For example, employees who were
previously reviewed as “meeting expectations” are now hearing they
need improvement. “So there’s a changing situation and impact, with no
explanation,” Lively said. “That makes employees feel
Dawn Barker, SHRM-SCP, is vice
president of HR at RiverWoods, a retirement community in Exeter, N.H. She said
employees are feeling increased pressure to perform and, if the company doesn’t
communicate clearly about its goals and the contributions it expects from the
workforce, HR can find itself facing a range of challenges, including legal
While RiverWoods hasn’t been sued,
Barker said the company did get pushback from employees when management began
stressing the concept of “be better.” Workers assumed that meant they
were expected to put in more hours for the same pay. Only when the company
began holding monthly “all-hands” meetings to explain it wanted to
focus on improving its overall performance—not forcing people to “work 110
percent"—did things settle down.
More often than not, the issue isn’t
about running lean in and of itself, Lively said. "It’s about not
explaining it. Executives may decide to run lean for any number of reasons,
from lower sales to expansion plans. They set themselves up for tension with
the workforce when they don’t tell people the bigger picture.”
The results of failing to communicate
can be significant, according to Karl James Ahlrichs, senior consultant at risk
management advisory Gregory & Appel Insurance in Indianapolis.
Indeed, even if an employee’s charge
is settled early on, Lively observed, a company should still expect to pay
legal fees, which can run up to $10,000 or more depending on where the business
is located and the particulars involved. If a firm plans to defend itself in
court, “they’re going to pay north of $50,000,” she said.
Then there’s the time needed to
address such situations. According to the 2015 report Employee Charge Trends Across the United States by New York City-based business
insurer Hiscox, the average case takes 275 days to resolve. Even though its
claims data show that 81 percent of charges result in no payment being made,
“the nuisance potential of employment charges” is clear, the report
Listen to People, and Always Be Clear
Molly Lukes, SHRM-CP, human resources
director at Precision BioSciences in Durham, N.C., said avoiding legal
entanglements can often be a simple matter of keeping your ear to the ground,
listening to employee concerns and being clear about what your company is
trying to accomplish. “It’s so simple,” she said. “If you treat
your employees like the investment they are, they will feel heard and seen,
even if they don’t get what they want.”
RiverWoods holds regular all-hands
and separate managers meetings to keep everyone informed. “We put
everything in the context of our core values,” Barker said. “We want
employees to have professional growth and development, and we have managers
make their expectations clear from the beginning about how their employees will
be held accountable.” Such clarity, she said, “makes everything very
In addition, Barker believes that
many employee actions are the result of feeling underappreciated. “So show
people they matter by demonstrating it,” she said.
Precisely how you do that depends on
your company’s dynamics, Lively pointed out. Small things, like recognition
programs, can help, but it’s also important for HR to make clear to employees
that their complaints are being taken seriously, she said. “Work with
management to make sure training happens on how to communicate, how to give
honest feedback and how to spot problematic employees,” she recommended.
This last point, about problematic
employees, hints at how granular an approach HR must take to monitoring the
workforce’s mindset. For instance, some employees “complain about
everything—from the office temperature on up,” to the point where it
becomes natural to tune them out. Don’t. At some point, Lively noted, they may
have a legitimate complaint that you’ll want to act on.
Then there are workers who are
resistant to feedback or who won’t use the tools provided to make their lives
easier. Those people tend to cast the company’s efforts in a negative, and
sometimes retaliatory, way, Lively warned.
Supporting Managers on the Ground
Obviously, how managers do their job is an important part of the
equation, so bear their role in mind if you suspect some kind of employee
action may be on the horizon. “I always provide counseling when issues
arise,” Lukes said. “It’s about getting people to stop and think and
not just react.”
“It starts at the top,”
Barker added. She believes managers need the same clarity about roles and
expectations as do the rank and file. To achieve that, RiverWoods holds
quarterly all-management meetings to explain why certain decisions are being made
and strategies pursued.
Ahlrichs, too, is convinced that
effective communication is the key to avoiding problems. He works with managers
to help them align their communications efforts to the ways of the modern
workforce. With a little prompting, he said, “most managers can offer a
recent case study or story where poor communication caused a poor result.”
Ahlrichs said many managers need
constant reminders that today’s workforce is younger, increasingly adept at
conversing through multiple channels and possesses shorter attention spans.
“Simply put,” he said, “managers need to say the punch line
Keep the Action Separate from the Job
Addressing legal actions is always
expensive, which is why most HR experts and attorneys stress using
communications as a way to head them off. But even the best communications
efforts won’t always work. That leads to the question of what to do—besides
consulting a lawyer—when an employee files a retaliation claim.
It’s not uncommon for employees to
remain with their company even after they’ve filed a suit or made a complaint
to the EEOC, Lively observed. In those situations, it’s critical for both HR
and management to treat the employees as if they’d never taken the action. That
means walking a fine line. “Managers have to know that they can’t
retaliate, but they can’t give the employee a free pass, either,” Lively
said. “Filing suit is not a ‘get out of jail free card.’ ”
Lively said it’s better to discuss
the issue with the employee as soon as possible. “It’s better to tell the
worker outright that they’ve got the right to file a complaint, but they’re
still employed here and are going to be held accountable for their performance.
While you never want to discourage employees from filing a complaint, they need
to understand that standards about performance and conduct still apply.”
So, for example, if company policy
mandates some kind of warning be issued if an employee misses certain
production goals, the company should respond just as it would with any other
employee, even to the point of delivering a negative performance review. Under
the circumstances, “that can be scary, but that’s what’s got to
happen,” Lively said.
How you weather the situation depends
largely on how thoroughly your company documents employee activities—not just
for the worker in question, but for everyone. Not only should you document the
worker’s behavior, but you should be able to demonstrate that you’re responding
in the same manner you would with any other employee. “Consistency is
important,” Lively said.
While employees are facing more pressure to perform, if the
company does not communicate clearly about their goals, they can run into other
HR challenges down the road such as legal actions. Without proper management
training, employees will find themselves struggling for the right guidance.
However, with the right training, managers and their employees mesh together on
projects, goals, and contributions. At Converge HR Solutions, we can provide proper
communication and management training to navigate performance and legal issues.
For more information, visit our website at https://convergehrsolutions.com/ or directly at firstname.lastname@example.org or 610-296-8550.