Employment Law: When Solutions Make Problems Worse
Continuing this week’s theme of highlighting the role of the personal in business.
I was at a reception the other day, and ended up at a table with doctors and an employment lawyer. The lawyer specialized in advising corporate clients about equal opportunity employment law.
This partly means advising clients who have been sued. I asked him whether clients also invited him to make themselves lawsuit-proof, or whether the bulk of his practice was after-the-lawsuit defense. "Once they’ve been sued, they get religion and invite me in to design policies," he said.
"And it’s a helluva business. I worried at first that it would die out, but it turns out it’s the law practice that keeps on giving."
Maybe I was being a little feisty, I don’t know. But that’s where the fun started.
Managing People, or Managing Process
"It would seem to me," I ventured, "that the best way to prevent EEOC lawsuits is to be really good at basic people management: telling people the truth, face to face, about the role they are expected to play, getting great at giving and receiving feedback about how well they are or are not doing it."
"Oh, no no NO NO NO!" the lawyer responded. "That’ll get you killed in court. You have to have processes, document those processes, train on them, document that you’re training on them, and do everything short of tape-recording every conversation with every employee you have to make sure that no one’s saying something that could be interpreted wrongly.
"I tell all my clients a simple story–a small off-color joke. They laugh at it and it helps them bond with me in my presentation. Then I tell them how that joke could cost them a million bucks. It puts the fear of God in them. Employment law is the gift that keeps on giving."
When to Talk, and When to Blog
I am gradually, over my many years of experience, learning when to pick fights, and when to walk away from them. There was no point in arguing with someone I’ll never meet again over an issue I’ll never convince them about. (I was reminded of this wisdom by Judy kicking me under the table).
On the other hand, it’s a great topic to blog about, and I hope it’ll stimulate some conversation. So let me be very blunt about my point of view.
That lawyer is the kind of pompous bureaucrat who gives bureaucracy a bad name. His intentions are not bad; not at all. But he is a highly paid content-expert who is sowing discontent, alienating people, and creating inefficiency, all the while believing he’s contributing to our great system of private enterprise.
Harsh? Well, here’s a few caveats. First, not all lawyers agree with him. Second, this is an issue hardly unique to employment law. Third, there’s nothing wrong with processes per se.
But still: what I said.
Why Good Management Mitigates the Need for Process Management
I worked for two consulting firms. One had detailed employee contracts outlining things like intellectual property and non-competes; it got sued a couple times per year. The other had no such clauses and its employment contracts were 20% the length of those of the first firm. It had no employee lawsuits in 20 years.
The reason is simple: one managed by process and contract, the other by people. The latter obviates much of the need for the former.
If you treat people as objects to be controlled, they will oblige by meeting your (low) expectations. If you tell entire industries that they’ll be managed by regulation and laws, they will stop behaving ethically and do what they please until you make it illegal.
If you start making process compliance the guts of employment law, you lose the very human relationship that makes employment work. The problem lies not so much in the law as in ignorance of how human relations work.
Lawyers have no training in management. No fault there, neither do doctors or rabbis or engineers. But managers do. They are supposed to manage. When they default their management tasks to lawyers, they get what they deserve–employees who are suspicious of the motives behind their communications. And the employees are not wrong to feel that way.
Managers abdicate personal management at their own risk. The cost of running bureaucratic compliance operations to compensate for a failure in basic supervision is massive.
The answer is not more bureaucracy–it’s more truth and honesty, transparency, and responsibility-taking. Don’t treat people like caustic assets who might sue you unless you insulate yourself with processes. Instead, treat them like human beings who can be developed through good management, and who will serve you well in return.
Charles,
As usual I resonate with your insight here. When we provide a set of rules to behave by vs. prinicples, individuals can then determine how to get what they want, within the confines defined by the rules. How many "leaders" when questioned about the financial meltdown, said, "it wasn’t illegal."
When we decide that principles matter (people in your post) we approach solutions from a whole different way. We consider the consequences of our actions, as opposed to "does it fit the rules". And your observation with the conulting companies is right on. A study I read a while ago, believe by an insurance company, demonstrated that when physicians apologized (communicated with transparency and trust) lawsuits declined by something like 40 plus percent.
Thanks for your work,
John
Wonderful post! I could not agree more. My company has an ethics policy statement that all employees must read and sign, it was a little less than half a page long and not unwarranted considering the service we provide. Recently, one of our offices needed a minor tweek to reflect a change in their local building department’s regulations. Easy enough one might suppose. However, our attorney turned that change into a new two page document that no one else any longer understood. The one good thing our attorney did do was ask a few of us to review the new document. We whittled it back to half a page, in plain english, and gave it back. Our attorney agreed that it would work just fine. It is imperative that those of us who are not of a bureacratic bent push back at every opportunity and not blindly accept this kind of treatment or relentless push towards the more complex, less transparent and trustlessness.
Hi Charlie,
Your headline – "Managing People, or Managing Process" hits exactly on the depth of the problem. And, I think it is a very difficult problem with a broad-based solution a long way off (not that we should stop trying).
Your attorney dinner companion was 1000% correct in his approach to defending his clients. Where he misses the boat is in his being blind to a more positive, proactive approach. An absolute defense to many federal regulations is having the correct process in place – regardless of the alledged injury/harm/loss of the plaintiff. Having been involved in a number of Employee Retirement Income Security Act (ERISA) law suits, I know that having a good process in place is always the most important consideration. Attorney’s harp on their clients to have good process coupled with solid documentation (both as defined by the attorney for a fee). What both attorney and client fail to understand is what you pointed out – treating people as people can preclude law suits that need to be defended.
The same idea applies to business – client relationships. In my world, if I tell my clients often enough that I love them, and really mean it , they will forgive me everything short of embezzelment.
Make it a great day.
Jim.
that- maybe y a relation in placebecause ERISA is a proces driven statute. outcome of the are perfectly defemded
Charlie, in general, I couldn’t agree more. However, you said something that I question. You say that managers are trained to manage…I couldn’t disagree more. Most managers are not trained to manage employees (people), they are trained to manage technical work of some kind. Then at some point they are senior enough to be promoted to manager of that work. Mgr today are expected to perform technical work and manage people as an aside. Needless to say, the technical/functional component is the priority. To add insult to injury, most of the supervisory & mgmt dev training programs, in most organizations, have been consistently reduced and/or cut out over the past 10 years. Is it no wonder then that the employment lawyers are fat & happy???
You meet the coolest people on this blog: thanks John, Jim, Bruce, Barbara, great stuff all.
I wanted to first acknowledge that Barbara’s absolutely right; I winced when I wrote that line but didn’t think to check my wincing.
And Jim’s comment sparked an analogy for me, with insurance companies.
An insurance company that focuses solely on selling you insurance–outlining all the risks and offering to cover them for a fee–is behaving like the lawyer I mentioned. And that is necessary, and ERISA-like legislation focuses solely on this part of the business.
But an insurance company that also has programs for reducing your risk–even though it may mean lower premiums for them–that is an insurance company that’s doing what we all say we need more of. If it’s P&C insurance that tells you how to safeguard your house for water damage, or flood insurance that tells you how to shore up shaky water routes (or an electric company that tells you how to cut electricity usage), that is what we’re talking about.
It’s one thing to comply with ERISA, and indeed it’s costly not to be in compliance; and there’s nothing wrong with being in a compliance business. But to think it starts and ends there, that is what I think we’re all decrying.
Thanks all, Charlie
Charlie’s advice and outlook is definitely the direction we as a society should be heading! Unfortunately, we currently live in a litigious society. This means 99% of the population has to act and prepare for the other 1%. It also means that that form trumps substance (document training versus provide quality training).
The comments above remind me of when I was in Paris a few years ago. I was walking down the street and I almost stepped in a hole. As I pulled my foot back, I looked down to see that the 2′ by 3′ hole was about 10 feet deep. There was nothing around the hole. I just had to pay attention to avoid falling in. If that hole were in the US, there would have been orange cones, flashing lights, and maybe even a guy with a flag waving you around it. And somehow, somebody would have still fallen in that hole and would have sued.
Keep battling Charlie, because someone needs to bring common sense and decency to the forefront!
John, I agree wholeheartedly w/your thinking & comments re; our litigious society – it’s the butt of jokes worldwide, and rightfully so. To play the Devil’s Advocate however, it should be noted that the employment laws in the rest of the world (and in particular certain countries in EU) make it almost impossible to lay off and/or fire somebody, no matter how incompetent or egregious their conduct! Obviously, we (the US) have taken matters to one extreme & other countries, the opposite. This example is another illustration of the degree to which the polarized extremes ("right" or "left"; black or white; good or evil ) reign supreme today…and apparently, there’s no room, tolerance and acceptance for a middle ground anywhere and for anything, including common sense.