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.