That’s why failing to train and educate managers may well be HR’s biggest mistake. I asked several experienced labor and employment attorneys to share their stories of costly management mistakes and the lessons HR professionals can learn from
them. While these examples are all derived from real cases, details have been changed
to protect confidentiality; any resemblance to real individuals should be considered
coincidental. Without further ado, here are the unlucky seven.
Failure to Document
The story is a familiar one. Jason, the 45-year-
old sales manager for a sporting goods man-
ufacturer, had a three-year employment
contract, which provided that he could be ter-
minated only “for cause.” That included, of
course, for failing to perform his duties—which is exactly what
his supervisor Bill believed was happening.
Bill became concerned about Jason’s performance dur-
ing the first year of the employment contract when he noticed
Jason was slacking off and not meeting his sales goals. But Bill
kept quiet about it and hoped it was a fluke. He even gave Jason
high marks in his first-year review. “Keep up the good work!”
In Jason’s second year, Bill didn’t notice any improvement.
Yet during that time, he sent an e-mail to the company’s executives describing the great work his whole sales team was doing.
He added a few lines of specific praise for Jason, pointing out
his “can-do attitude” and the role Jason played in driving dramatic sales growth in a particular area.
A month later, Bill fired Jason and told him it was because
he had failed to perform to standards. That was news to
Jason—who then sued for breach of contract and age discrimination, seeking six-figure damages for his salary and sales
commissions for the remainder of his contract term. A costly
legal battle ensued.
“Supervisors like Bill often try to be encouraging and
‘soften the blow’ of tough comments,” says Cecilia Romero, an
attorney at Holland & Hart LLP in Salt Lake City.
When Bill was asked during litigation why he had complimented Jason’s work in the e-mail to upper management, he
admitted that his comments were not accurate but claimed that
he didn’t want to “leave out” anyone on the team in his note.
While Bill’s intentions may have been good, inconsistent
documentation can lead to the perception that the company
terminated an employee for a more nefarious, and possibly discriminatory, reason, Romero says. “At a minimum, it means
there are conflicting stories, which may prevent a court from
dismissing a lawsuit early on,” she says.
Moral of the story: “Be honest and direct with employees,” Romero says—and make sure your managers know why
that’s so critical. “Also, properly document any performance
problems in reviews, in e-mails and in other performance-related materials.”
Neglecting to Pay Overtime
Jill’s position was nonexempt under the Fair
Labor Standards Act. Still, her boss described
her as the “consummate professional” and
never offered extra pay when Jill checked
her e-mail at all hours, made and took busi-
ness calls during her commute, and stayed late to make sure
she didn’t just meet expectations but exceeded them. Jill never
dreamed of asking for overtime pay for giving that “ 110 per-
cent”—it was just who she was.
Unfortunately for the company, Jill’s co-worker Sam felt differently about his own similar situation. He filed a class-action
suit alleging that the employer’s pay practices violated state
and federal law and recruited a few co-workers to join him. His
lawyer sought damages, back pay and attorney fees for a large
group—which included Jill, even though she never wanted to
be part of the case.
“Although employees like Jill are unlikely to sue their
employers, this won’t stop disgruntled co-workers,” says Robin
Shea, a partner at the law firm Constangy Brooks Smith &
Prophete LLP in Winston-Salem, N.C. “If a co-worker like
Sam files a class or collective action, then the employer could be
looking at substantial liability for unpaid overtime and off-the-clock work, including for employees like Jill,” she says.
Moral of the story: Although Jill’s dedication to her job
is laudable, the Fair Labor Standards Act and most state wage
and hour laws require that nonexempt employees be paid for
all hours worked. Make sure these workers—and their managers—understand the rules. If supervisors allow nonexempt
employees to take on extra duties, they must also ensure that
the workers track all their time and are compensated accordingly. “If you don’t want to pay overtime, then you need to
require them to quit at quitting time,” Shea says. In fact,
employees who fail to comply should be subject to discipline.
“It’s a shame to have to force good employees to be clock-watchers, but our wage and hour laws virtually require that.”
Misguided Paternalism (or
Denise was the chief operating officer for a
company with 300 employees. She prided
herself on supporting women in the workplace, including facilitating leave and flexibility options for the members of her largely female senior