Cabot Employment Alert

I. Featured Employment Case

Supreme Court Will Not Disturb Finding of Transsexual Discrimination

The United States Supreme Court on November 7, 2005, declined to review a decision of the federal court of appeals in Ohio, which found that the City of Cincinnati discriminated against a transsexual police officer, and awarded the officer $874,236.00. This case was originally brought under Title VII of the Civil Rights Act of 1964 which prohibits sex discrimination, and protects individuals from “sex stereotyping” because they do not conform to his or her gender in the way he or she looks and behaves.

Phillip (now Philecia) Barnes was a 17-year veteran of the Cincinnati police force, who was taking female hormones in preparation for surgery to change him from a male to a female when he took and passed a sergeants exam, but then failed the probationary period required to become a police sergeant, and was demoted from the position. Based on the results of a rigorous training and evaluation program during the probationary period, and a special form created to evaluate Barnes, the City felt that Barnes lacked “command presence,” did not appear to be masculine, and had “grooming deficiencies.” In fact at the time of his promotion to sergeant, Barnes usually reported for duty as a male, though sometimes wearing make-up, but was generally living as a female in his off-duty time: wearing women’s clothing, a French manicure, and arched eyebrows. Barnes sued the City of Cincinnati claiming that he failed the probationary period because of the City’s unlawful sex discrimination under federal law, based on his failure to conform to sex stereotypes.

II. Featured Labor Decision

Give Me Your Strike-Tired, Your Pictures of Closed Plants, and Your Personal, Factual Union Experiences…

The National Labor Relations Board recently determined that the Stanadyne Automotive Corporation did not violate the Labor Management Relations Act when it held meetings with employees during a United Auto Workers organizing campaign, when it discussed with employees: potential strike consequences including plant closures, violence, loss of pay and health insurance contributions; the contrast of experiences at union and non-union facilities; incidents of intimidation and sabotage with this union just before a collective-bargaining agreement was due to expire; and even the violent death of a guard during a strike at another Stanadyne plant. At the conclusion of the question and answer portion of the meetings, Stanadyne displayed seven photographs of closed Stanadyne plants with the word “CLOSED” across each photograph in red block letters, and a heading indicating that these plants are where the UAW “used to” represent employees. When the election was held 8 days after the series of meetings, the unit of about 650 production and maintenance employees voted against union representation with 219 for the Union, 412 against and 7 challenged ballots.

According to the Board, the above employer activities did not violate the LMRA because the Stanadyne meetings speakers conveyed events that had already occurred, supplied the perspective of employees who experienced some of the events, and informed the employees of the potential impact of their impending votes while making expressly clear that these were not threats or predictions about the future. The statements made and topics covered in these meetings fell into the permissible “general views about unionism” or “specific views about a particular union” categories of protected, free employer speech as defined by statute and Supreme Court ruling.

III. Featured Employer Tips

Employers at Risk: Hand-Held Devices

Technology keeps producing smaller and smaller hand-held devices, with memory capacities that get increasingly bigger. As convenient, and often indispensable as these devices have become to our workforces, the risk increases for employers every time technology chisels out a smaller, more useful hand-held device. Whether the risk is borne of a camera phone’s capability to photograph drawings at relatively high resolution for to-be-patented products, or a pocket PCs ability to download sensitive, legally privileged or protected files from an office computer, employers face a great risk of exposure to legal trouble and financial loss from workforce abuse of these devices. There are a number of things employers can do to prevent or lessen the security leak that could result from evolving hand-held technology:

  • Ensure that a technologically informed “information systems” person or staff is in place to implement available security feature modifications (both for theft and loss) on all office-based computer equipment as well as all company-issued hand-held devices;
  • Restrict physical and/or computer based access to sensitive company information, files and plans;
  • Include in employee handbooks, and prominently post up-to-date company policies on security issues and prohibitions, information confidentiality and the technological solutions the company has implemented to reduce or prevent information theft;
  • Hold mandatory training for all employees in the above-policies, and require employees to sign an acknowledgment of the training; and,
  • Determine whether the workplace lends itself to an absolute prohibition on employees bringing personal hand-held devices, including camera phones, to work, and if so, issue a policy to that effect.

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How to Avoid (or Decertify) a Union

As you may have noticed, organized labor has taken a new interest in attempting to unionize nursing homes. What's more, the National Labor Relations Board has been certifying union elections in nursing homes at a rate unprecedented in recent years. This unwelcome news comes at a time when nursing homes face increasing regulation, decreasing public resources and growing competition for staff and residents. In short, it's another headache that nursing homes don't need at this point. What can be done to relieve it?

First of all, let's address why this is happening. Nursing home staffs have, of course, always been a fertile field for union organizing due to their typically low pay and demanding workloads. The advent' of John Sweeney as President of the AFL-CIO stimulated new interest by the Service Employees International Union and the National Union of Hospital and Health Care Employees (1199) in organizing these and other health care workers. Sweeney, a former president of the SEIU, has had long experience in this arena. He put that experience to use this past summer by fielding hundreds of college-based volunteers to spread the union word among nursing homes and other employers throughout the coun-try. He has also supported training of organizers to "infiltrate" facilities by having them seek employment as staffers and working from within.

This is one reason (though not the only one) that the NLRB has received and approved the largest number of organizing petitions from nursing home staffs since 1991. Further, under new NLRB guidelines, the time between the filing of an election petition and the actual elec-tion has been reduced radically, from months to weeks -- an average of about 42 days, in fact. This is barely enough time for nursing home management to react and go through the early stages of panic before the election date hits. It's not a pretty picture for the unwary.

This is especially unfortunate, since there are several ways nursing homes can avoid this scenario before it ever becomes a threat. In fact, these methods can be applied by nursing homes that have already been organized, and help lead them toward the "promised land" of union decertification. It boils down to today's labor-management version of the three R's: Recognition. Repetition, Reinforcement.

Before explaining this, I'd like to lay out the context in which this is occurring. In the labor environment of the 1990s, the issues are not as focused as they once were on such tangibles as wages and benefits. Today it's more a matter of "Does the employer care?" Is the em-ployer treating its employees with re-spect and dignity? Can you trust the employer? These concepts are very dif-ficult to pin down but, believe me, today's trained organizer understands them thoroughly and knows how to put them to very effective use.

In short, trust -- or lake of same -- has become the major issue. Very simply, if management can retain employees' trust, it has reasonably little to fear from today's organizing activity. Once it begins to lose that trust, however, that is another story-and owe trust is lost, it is very, very difficult to get it back. Rebuilding employee trust takes about a year in a non-unionized facility, and two-to-three years in a unionized facility, according to rules of thumb I have developed over the years. Patience is very much in order -- but that patience will be rewarded.

The three R's, as I mentioned, are recognition, repetition and reinforcement. Let's start with recognition, which is the first step in any program designed to inspire employee trust. It is the corner-stone of what I call your labor relations action plan -- a formalized plan similar to any financial or marketing plan you might routinely devise. Like these other plans, it covers a fixed period -- say, one year. Recognition can begin with an employee survey every nine months or so on such issues as pay (in non-unionized facilities only; unionized ones have a problem which I'll explain later), staff-ing, performance improvement and other is sues. These surveys genuinely seek employees' opinions and give them feed-back within about one month.

Another component of recognition would be an awards program -- "Em-ployee of the Month" or "Best Sugges-tion," for example. The program would be overseen by a five-to-seven-member committee with employees forming the majority. Winners are publicized, re-ceive thanks and get a cash award large enough to be meaningful (but not so large as to be interpreted as a bride).

This process should be conducted on a regular, routine basis-repetition. Employees will, over time, begin to at least understand why lee-than-satisfactory situations-concerning pay or staffing, for example-exist. They may not look or even agree with the reasons, but they'll understand. Beyond this some genuine improvements may occur, with employees' responsibility for this being directly acknowledged-and that?s reinforcement.

Consistent adherence to this approach will build and strengthen the employee trust that is the crucial issue in today?s labor relations. It can, and often does, lead to their questioning the necessity for a union (and for paying union dues).

What about the facility that has a union in place, where trust as presumably been eradicated? What works then? I submit that the exact same approach works; it just takes longer.

There is also, for these facilities, a legal consideration that must be taken into account. On the basis of a relatively recent decision, E. I. DuPont DeNemours and Co., 311 NLRB 983(1993) ("DuPont") [also see a related case, Electromation, Inc., 309 NLRB 990(1992) ("Electromation")], the NLRB has ruled that it is illegal for a unionized employer to establish an employee committee to deal with issues pertaining to wages, hours or working conditions; these issues are considered by the NLRB to be mandatory subjects of collective bargaining.

This does not necessarily rule out the use of surveys or the committees that I have described, however. Issues that still be addressed include such matters as employer/management communications, quality of care and productivity. Even on this more-restricted basis, the three R's can, and will, work.

There is also the psychological con-cern that unionized employers will be reluctant to reach out to employees in any way, whether for fear of upsetting the union or simply because they've given up and automatically refer employee concerns to the union. It only strengthens the union, of course, when employees see it as their only recourse. It is crucial that front-line supervisors be trained to be responsive to employee concerns. They must show that they are open to hearing employee concerns on all matters other than those defined as subjects of bargaining.

Recognition, repetition and reinforcement come into play again. Recognizing the need for concern, repeatedly address-ing those concerns and reinforcing the positive results will re-establish trust and again, increase questioning of the need for a union. And in the "real world," I can attest, nursing home union decertifications do occur.

The bottom line is that today's em-ployer must be proactive with respect to employees' concerns. Ideally, that should always be the case. In today's labor-management environment, employers really have no choice.

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New Unionizing Troubles

The first half of 1994 saw more than 3,000 strikes and 2,405 union representation petitions -- dramatic evidence of the new union activism that we first warned of in the July 15. 1993 issue of Boardroom, and then expanded on in the March 1, 1994 issue.

The unions are now using an increasing number of young, well-educated minority organizers who are prepared to assist workers in all aspects of life, nor just workplace issues.

Whether your company is union-free...facing an organizing attempt...or trying to deal with a union that is already in place, it's important to recognize that the increasing level of employee frustration and insecurity today is creating a very real threat to efficiency and workplace morale. Latest challenges for business:

  • The National Labor Relations

    Board under the Clinton administration, is now more supportive of union/employee rights than has been the case for the past 12 years under Reagan and Bush.

  • There have even been recent cases of unions pushing for recognition without an election. Thiswas a popular tactic before Reagan replaced the air traffic controllers...and it is now reemerging.


  • Prepare now to head off union activity. If there is a sudden push for elections you won't have much time to correct the company's image in the eyes of employees. Start by trying to understand the real frustration felt by workers. There are problems, of course, with workers who have seen many of their peers laid off in down-sizing and restructuring efforts. Those efforts are still in progress in many US companies.

  • Take the initiative. Don't wait for an outbreak of trouble. Take an aggressive stance now toward more effective and timely communications with employees.

  • Bring in outside lawyers or consultants to train the company's employees in better communications and to help them solve real-life problems.

  • Example: We are now working with companies to educate employees on how to deal with issues of violence.

  • Use new tools, such as Alternate Dispute Resolution (ADR), to remove the contention that can arise between bosses and subordinates.

  • Set up a complaint resolution system with an appeals process. This can be done either inside the company, where there might be a provision for peer review and/or a hearing by the CEO, or outside the company, using impartial arbitration and mediation services such as the American Arbitration Association or the Federal Mediation and Conciliation Service. There also are a number of private mediation services.

    Important: Make it clear whether these services have only mediation powers -- or final decision powers. A landmark Supreme Court case (Gilmer vs. Interstate/Johnson Corp., 111SC 1647, 1991) has established that an ADR providing for binding arbitration of an employer/employee dispute was final and could even preclude the employee from bringing other court actions if the employee had previously agreed, in writing, to be bound by the decision.


    Many companies are having success using work teams of various kinds to improve quality and productivity.

    These can be particularly effective in nonunion companies to reduce the incentive to organize. Even in unionized companies they are fine, as long as they avoid getting into questions of hours, wages or working conditions -- legally the province of unions. In some companies, there is a union representa-tive on every team who can convey such problems back to the union for resolution.

    Recognize that there is a lot more ag-gravation in the workplace than ever be-fore, and be sure that teams are per-ceived as parts of the same wheel. You want the employees to feel that a team is their team, not just the company's team. This may require special education to bridge various aspects of the company's labor program, such as team-building, training or suggestion awards, and ex-plain how they relate to each other.

    In all cases be sure to assign accountability and responsibility, along with time frames for completion. Ask for feedback from employees to get reinforcement and commitment to team goals. Make use of employee surveys to find out how sentiment is running.


    It is official policy at the AFL-CIO today to give at least lip service to a more cooperative stance, to help US companies become more globally competitive.

    In reality, much depends on the local union leaders, many of whom still espouse the adversarial thinking of the 1930s and the 1960s. Some-times these local officials -- who want to be reelected (just like members of Congress) -- must adopt a more mili-tant stance in response to their frus-trated constituency.

    Defensive strategy: As with any re-lationship, it is useful to develop an ongoing dialogue with the union. Both parties need to be openly involved in the process for mutual advantage. This doesn't mean management must invite the union into the boardroom, but the company should make a com-mitment to provide enough information to the union so that it can educate and control its members.

    Aim: To build respect and credibility between the two sides. Be prepared to be challenged on what you do, if it turns out to be different from what you say.

    Important: The two sides don't always have to agree. You can agree to disagree, preferably without being disagreeable, handling disputes in as po-litely a way as possible.

    Example: Making off-the-record con-versations public after a negotiation is a good way to kill off any trust that has been built in the relationship.

    Bottom line: Be reasonable and willing to listen, but never turn over the reins to the union. Do what you have to do to run the business.

    Important: Come up with a plan as to how you could continue to operate the business during a strike.

    Don't turn down union demands without due consideration. Wherever possible, try to seek acceptable middle ground. But when you have to say no-out of conviction that you are doing what is right for the long-term interests of the company and its em-ployees-stand tall and do it.

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  • Supplanting the Role of Unions

    In order to maintain a productive non-union workforce, manufacturers need to supplant the role of unions. Unfortunately, there are not many managers trained to do so. That lack of training can be a detriment to a company's success.

    In the past, the foremost role for unions was dealing with employee grievances/complaints. Where there is no union, management must create an "asking strategy" that comprises listening to needs, concerns, fears, and grievances/complaints of employees and be prepared to resolve them without discord. An "asking strategy" is an effective means for creating a policy that promotes employee inclusion.


    It is essential that HR executives be expert in administering alternative dispute resolution (ADR) programs ADR programs are generally welcomed by management and employees they are cost-effective and swiftly arrive at fair resolutions.

    While there are many ADR programs, the three most common varieties are the following:

    • Arbitration, an adjudication process during which a third party hears both sides of a dispute; and weighing the evidence, renders a decision;
    • Mediation, involving a third party who facilitates open and ongoing communication that is designed to lead to a settlement that both sides will accept;
    • Peer review, an adjudication process that relies upon a selected panel of managers and employees, a majority of whom render a binding decision.

    So that employees are aware of ADR process, management should structure the use of various types of communications, such as newsletters, brochures, e-mails, company announcements on bulletin boards, direct mail pieces in pay envelopes or mailed to homes.

    ADR programs are important for defusing and resolving employee grievances/complaints before they can grow and have negative effects on morale and productivity.


    When management successfully supplants the role of unions, it also undertakes to perform a traditional role of unions: asking and then listening to what employees say about their jobs, futures, companies and policies.

    One of the best means of doing that is focus groups, which afford management important opportunities to obtain reliable information about workforce and attitudes.

    A focus group, for example, might be formed so that management can impart new policy information about health care benefits, while learning about employee attitudes to the new policy. A focus group should be run by a person who has the interpersonal skills to ask the right questions and get specific information.

    Focus groups examine issues in a flexible manner that is part of an overall strategic plan; they are an effective means for collecting valuable data.


    Focus groups lead to team building. While the former are exploratory, teams are instruments for implementing strategic plans.

    Teams serve to enhance communications and resolve conflicts, but are most effective for increasing productivity and enhancing employee morale. When it comes to meeting certain productivity criteria, for example, the entire team is mutually responsible for reaching those goals (TEAM is an acronym for "Together, everybody accomplishes more," which helps to dissolve adversarial relationships.)

    When teams of workers are formed, they can be banded together to accomplish specific tasks, then reformed to accomplish other tasks. Management can reconstitute teams to solve different problems and to achieve higher goals of productivity.

    To create effective teams, management should clearly determine what problems a team should solve. It is important that teams have a selection of the right kind of people to get a job done. The most effective teams are composed of idea people, detail people, and facilitators.

    Once teams are established, it is important that they meet regularly, review their progress, keep records, and provide management with tracking tools. One individual should report to management.


    As unions have shop stewards, non-unionized companies can have what is known as an Employee Advocate Representative (EAR). The EAR position is usually a trial assignment aimed at improving morale. The EAR is proactive, asking and listening, then imparting employee concerns to management. The EAR deals with workplace issues and the personal concerns of employees. The EAR position may or may not be salaried and is for a limited period of time.

    The responsibilities of the EAR include providing input about employee issues and suggesting solutions at regular department meetings. In addition, the EAR may assist in promoting company communications. 

    If management implements these activities, it will successfully supplant the role that unions had played in the past, and it will do so without the negative aspects of unionization.

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    The UPS Strike

    The two-week strike in August by the Teamsters union against UPS caused nervousness throughout much of the business community -- about the possibility of a new era of labor militancy.

    While unionized workers represent only 15% of the US workforce -- down from 35% as recently as 1987 -- some analysts suggest that the UPS strike represented a turning point from which organized labor will begin a major resurgence.

    For a clear and authoritative perspective on the new labor situation, Bottom Line/Business interviewed two of our experts -- management-employment lawyer Stephen J. Cabot and labor economist Audrey Freed man.

    The UPS settlement is certainly the biggest that organized labor has had in many years. But the benefits will be short-lived.

    Thanks to organized labor's very effective public relations effort, the strikers were able to obtain favorable attention from the media and general support from the public.

    But the public's perception will change over time as controversy about Teamsters' president Ron. Carey heats up.

    Questions about the legitimacy of Carey's election and campaign financing were obviously known to the union but were kept quiet until after the strike. In six months or so, people will again be talking about mob connections, etc.

    As to the strike itself, the great union victory that was pronounced in the press was not great at all. Carey had promised he would never commit his union for more than a three-year contract, yet he gave UPS a five-year deal.

    only an average of 3% a year -- a minimum figure in the current negotiating climate in which many companies arc willing to go to 3.5% or even 4% to get long-term contracts.

    Key: UPS was never going to give in on the central issue of hiring increasing numbers of part-time workers -- and it didn't. Its industry is growing so fast that it can easily turn some workers into full-timers. It will still hire more part-timers and may even have a larger percentage of them in five years.

    Even if there were no union, the company was destined to pay part -- market is very tight in today's strong economy, and UPS needs the kind of quality people who generally work longer hours than the typical part-timer.

    Bottom line: Most companies use part-timers. Most labor con-tracts allow for the hiring of part-timers. And many people today are looking for decent part-time jobs. Nobody's putting a gun to anybody's head to work pan-time for UPS or any other firm.

    My guess: If those part-timers were offered the chance to become full-time workers, as many as half-men and women -- would turn it down for a wide variety of reasons. It is a personal issue, not a legal issue or a humanitarian.

    So-the union took a red herring and created a populist appeal.

    Short term: I think that unions will get a short-term benefit out of the strike. I've seen it already in more active union organizing during August and early September, which is normally die slow season for labor activity.

    So-I'm urging clients to be prepared. Expect unions to be more assertive and aggressive in both organizing and negotiations. Make sure you dot the is and cross the t's in union contracts...communicate effectively with employees...and treat employees as they deserve 10 be treated -- as valuable assets -- so they don't feel the need to join a union to get a better deal.


    The biggest impact really has nothing to do with the union. Shippers will now be wary of dealing exclusively with UPS. That wariness creates opportunities for other delivery companies to begin to nibble at the edges of UPS's very large apple.

    On the labor issues, this is always the time of year when a great bragging noise comes from the AFL-CIO.

    Of course, the AFL-CIO's John Sweeney has a more aggressive mind-set than his predecessor, Lane Kirkland, and he's putting more money into revitalizing labor. But we've been hearing for years about organizing the farm industry, etc.

    As for labor's recent success in organizing Las Vegas hotel workers, the union's trust funds -- along with the Mafia-have owned many of the major casinos in Las Vegas for a long time. That's like claiming great success for organizing AFL-CIO headquarters.

    As for the issue of part-timers, UPS has about 100,000 of them, and when management agreed to convert 10,000 to full-time positions over five years, it was really not making much of a concession-assuming that UPS continues to grow at a healthy pace. What we're talking about really is UPS's ability to use and schedule its workers with total flexibility.

    Part-time is almost a misnomer here. Essential to UPS's success is having the flexibility to have workers do different tasks at different times. UPS has preserved that flexibility.

    The union was very effective at putting its own spin on the strike story. We all fell for the term '"pan-time employees," although quite a few of them work more than just part-time.

    Important: In a tight labor market, such as the one we have currently, any company that is smart enough to devise a schedule that will attract students, retired people and those who have other jobs has an advantage.

    Question: How much flexibility did UPS lose in the settlement? Answer: Not very much.

    Concerning the long-term impact on the future of labor, most businesses can relax.

    The AFL-CIO, under its forceful leader, John Sweeney, succeeded in signing up some government workers and small numbers in related areas where organizing has recently been somewhat successful, such as at public hospitals and HMOs.

    But -- the loss of union members is extremely heavy in the private sector and has been for some time. So I think organized labor probably either will continue to stagnate or begin to decline.

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    Employment Practices Liability

    Considering the Insurance Option

    Over the past decade employment related litigation has burgeoned. New federal statutes such as the Americans with Disabilities Act and the Family and Medical Leave Act, the enlargement of remedies like compen-satory and punitive damages, and new and ever expanding ton theories advanced by the plaintiffs bar, have led many corporate executives to feel under a stare of siege.

    Damage awards, particularly when punitives are involved, can run into the multimillions. Even a successful defendant may end up spending over $50,000 to defend a protracted litigation. In some cases employment suits have forced employers into bankruptcy or even dissolution.

    It is therefore of the utmost importance for employers to be well versed on all potential measures they can take to reduce employment-related risk. One such measure is insurance.

    Traditional Policies

    Under certain circumstances companies and managers have been successful in obtaining coverage for employment claims under traditional insurance policies. These include Comprehensive General Liability Insurance (CGL); Director's and Officer's (D&O); Errors and Omissions (E&O); Fiduciary Responsibility Insurance (FRI); Workers' Compensation; Homeowners (for individuals); and excess insurance policies.

    These forms of insurance are not typically offered by the insurance industry with employment practices litigation coverage in mind. Nonetheless, some courts have interpreted coverage terms very broadly. For example in Solo Cup Co. v. Federal Insurance Co., the Seventh Circuit held that a carrier had the obligation to defend allegations of discrimination under an excess Liability umbrella policy. While purely intentional acts were not encompassed within the policy definition of "occurrence," the court reasoned that claims of disparate impact discrimination were covered because that theory does not demand proof of discriminatory intent. Similarly, in Interco Inc. v. Mission Ins. Co., the Eighth Circuit determined that an insurer had a duty to defend alleged "intentional and/or reckless" act because recklessness could fall within the policy definition of occurrence. In other cases courts have allowed coverage of employee claims for emotional distress and mental anguish under "bodily injury" or "personal injury" endorsement language. Indeed, some plaintiffs' attorneys have had the acumen to recite the physical manifestations of alleged injuries in their complaints in the hope of accessing the deep pocket of an insurance company.

    To counteract what the insurance industry views as overly broad judicial construal of standard insurance policies, many such policies now contain employment practices exclusion provisions that expressly disclaim coverage of employment related claims. Even policies which allow some employment claim coverage now virtually always restrict it to exclude many of the most frequently asserted causes of action.

    Employment Practices Liability Insurance

    However, in recognition of the need for protection in these employment litigation fraught times, in the early 1990s, insurance companies began to devise a new insurance product specifically designed to provide coverage for employment discrimination, sex harassment, wrongful discharge, negligent supervision, and work related defamation claims. Pioneers of this new product, known as Employment Practices Liability Insurance (EPLI) included Reliance Insurance Company of Illinois, Lloyd's of London. Chubb & Sons Inc. and Lexington Insurance Co. Today over 50 carriers offer some sort of EPLI product.

    Since EPLI is relatively new, the policy is far from uniform. Insurers offer widely ranging kinds of coverage at vastly different rates, making comparison and selection difficult for the consumer.

    The starting point for a cost-benefit analysis is usually cost. In the current mar-ketplace, premiums for EPLI start in the neighborhood of $4, 000 but are more typ-ically in the range of $10, 000 for a medium size concern. Available deductibles can be as low as $I, 000 to $2, 000 or as high as $20, 000 to $25, 000 per claim. (Price and deductible levels are in a stale of some flux as carriers are just beginning to garner adequate actuarial data to appropriately cost this new product.)

    Benefit analysis is a highly individu-alistic and involved affair. It is a vast oversimplification to say that the most expensive policies are the best, since the degree and nature of protection needed by every organization differ markedly.

    Notably, while your insurance bro-ker may with the best of intentions endeavor to find an EPLI policy that fills the gaps in your firm's insurance portfolio, agents rarely have the legal know-how to guide you towards policies that will provide effective projection in the rapidly transmuting terrain of employment law.

    For one thing, the precise language used to define terms such as "the insured," "an insured event," "claimant," "claims," "loss," and "damages" on the policy will be of critical consequence in the context of employment litigation. To illustrate, should comprehensive protection of indi-viduals be desired, the definition of "the insured" should include not only the corporate entity, but current, former and prospective officers, directors, managers, nonmanagerial personnel and perhaps independent contractors.

    If the company wishes to pass along the risk of costs for all kinds of claims, the definition of claim must cover not only lawsuits instituted in courts of laws, but charges filed with the Equal Employment Opportunity Commission and counterpart state and local agencies.

    To ensure extensive loss indemnification, the "loss" and "damage" definitions should encompass sums paid in settlement, attorneys' fees awarded to plaintiffs, pre-judgment and post judgment interest, defense costs including expert and witness fees, front pay, pack pay, compensatory damages, and (if possible) liquidated and punitive damages. The extent of policy limits is also of key importance. The broadest possible definition of employment prac-tices violations may additionally be advisable. Employment counsel should be consulted to ensure that the kinds of claims to which your company is vulnerable are comprehensively covered.

    Indeed at such point as your firm is seriously looking into the EPLI, it is imperative that it seek the advice of counsel with employment law expertise. Your attorney will be able to scrutinize the policy with an eye towards issues which, as noted earlier, agents are likely to be unaware of and even the most knowledge human resource and risk managers may not consider.

    Customize Your Policy

    The EPLI policies on the market are rarely offered on a take-it-or-leave-it basis. Terms can -- and should -- be negotiated.

    One provision that is frequently a subject of negotiation relates to defense counsel. A major benefit of insurance is the duty of the provider to defend, which is broader than the duty to indemnify. In exchange for this benefit, policies virtually always provide that the insurer will select counsel and maintain control of the litigation.

    Many employees are just as happy to let their carrier choose counsel. (Presumably, the insurance company will retain reputable and skilled attorneys.) Other employees may not have a preference for a specific law firm, but do want to at least participate in selection of counsel. Still others feel very strongly about using attorneys whom they know and trust. Whatever the case, negotiation of the selection of counsel provision to make it more flexible may be worthwhile. For instance, the policyholder might be able to get approval of its own lawyer if it agrees to pay any portion of the fees which may be higher than the rate charged by the insurer's attorney.

    Evaluating the Employment Practices Liability Insurance Option

    Ultimately, whether employment practices liability coverage is worth the cost is a highly individualized analysis which each enterprise must make for itself. However, any decision should include consideration of the following four factors.

    Risk Vulnerability: Can your company afford to gamble? To what extent does it have the financial resources to weather several protracted litigations or a sizable loss? If a company can afford the expense of EPLI coverage but could not sustain a large damage award, insurance may be the product alternative.

    Past Claim History: Have employment claims previously been filed against the company? How often? What monetary awards or settlement sums have been paid? Importantly, what is the trend of claims? A company which had numerous claims filed against it in the 1980s, but which received only a few in the early 1990s, and none for several years, probably has less of a liability concern than a firm that has received far fewer total complaints but which has witnessed a claim increase over the past five years.

    Workforce Composition: What is the constitution of the workplace? Anyone can assert a contract or tort claim but discrimination laws largely protect specified classifications of employee. How have individuals in those protected classes fared at the company? Have a disproportionate number of older workers been paid off in recent years? What is the company's promotional record? Do women and minorities compose a large percentage of the rank and file, but only a small percentage of management? Such circumstances may not in fact result from discrimination but they present a picture that they will help plaintiffs establish a prima facie case.

    Personnel Policy and Procedure: Does the firm undergo regu-lar personnel policy and procedure audits? Does it have a strong human resource department, an up-to-date employee handbook, well publicized antidiscrimina-tion and antiharassment policies and a fair and effective internal grievance system? To the degree good human resource practices exist, litigation risk is lessened. But the reverse is also 1.

    After careful evaluation of the above four factors, a company may determine that the cost of EPLI is a worthwhile investment. Alternatively, the employer may choose to channel its resources towards risk preventive measures such as the reassessment of dismissal and promotional criteria, careful monitoring of internal employee complaints, and the overall strengthening of personnel policies. Most important, the employer must ensure that its human resource department has the sufficient expertise, authority, and funding to be a truly effective agent of risk reduction.

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    Labor-Management Cooperation Essential for American Business

    American workers have always sought better wages and job security. Years ago they were just "employees at-will," subject to the whims of their employers. They toiled in difficult working conditions and feared the day when their employers might fire them.

    Workers eventually turned to unions for job security and improved conditions. Bolstered by the National Labor Relations Act, which prevented discrimination against employees because of union activity, unions became the bargaining agents for millions of workers. By the end of World War II, it looked as if we would become a nation of unionized employees.

    But the promises of unionism were never fulfilled. In the name of job security, unions compelled employers to accept inflexible, unproductive work rules. Unions spoke angrily and carried a big "strike" stick.

    They drove employers to pay ever-higher wages and contributed to an adversarial management-labor relationship, but they did not assist in improving productivity.

    Unions gradually became anachronistic institutions, preaching the same 1930s message while the nature of work and the work force changed. Unions came to be perceived as self-serving institutions tainted by criminal indictments and prosecutions.

    Unions also became less relevant as an increasing number of state and federal laws were enacted to protect workers. Various laws now regulate minimum wages, overtime, pension plans, work-place safety, Social Security and the like. Many of those regulations contain provisions making it unlawful for employers to terminate employees who report violations.

    While those laws made work safer and more secure, state court decisions have built a new bulwark around individual employees over the last 15 years. Those courts have further limited the "at-will" concept of employment by allowing terminated employees to file suits against their former employers for "wrongful discharge."

    Some employees have succeeded in these lawsuits by alleging that employers violated public policy because they fired them for serving on a jury, taking time off to vote, or -- blowing the whistle on a health violation.

    Many courts also have recognized implied contractual theories of wrongful discharge. In such cases employers were found to have made and subsequently broken binding, written or oral "promises" of employment.

    Still, wrongful discharge actions, because they are undertaken by individuals, can give only the most limited job security to the masses of working people.

    Indeed, neither union bullying, statutes nor state court actions will provide American workers the job security for which we all struggle. Such security will be achieved only after both employers and employees deal successfully with two of the most vital economic issues of our times: international competition and productivity.

    We all know that international competition has put American industry on the spot. Our nation is swamped with imports in almost every field of production.

    Japan is one of our fiercest competitors, producing top quality products, while paying its employees lower wages than comparable American workers receive. Yet labor relations in Japan are excellent compared with those in America. Japanese workers have a high degree of company loyalty, and Japanese management regards its obligations to them as a top priority.

    It is the very need to compete with Japan and other productive, energetic nations that ultimately will force American industry to protect its employees and provide better job security.

    American industry will become a competitive leader in the international marketplace only when it builds cooperative partnerships of labor, supervisors and management. Employers who see the "writing on the wall" will realize that they have to treat their employees fairly and work with them to harness their energies to meet the competition.

    American managers must re-examine their methods. Management must communicate effectively with employees, encourage suggestions and participation, adequately train supervisors in interpersonal relations and introduce problem-solving mechanisms in which employees have confidence. Under such circumstances, employers would find that their employees are eager to solve problems in the workplace.

    The American-managed Nissan plant in Smyrna, Tenn., is an example of a company that has built a working partnership of labor and management. The company trains its workers to do a number of jobs, involves them in decisions and gives them responsibility for the quality of the product at every level. The Nissan employees have shown no interest in unionizing, and labor relations are harmonious.

    This cooperative approach may have been born out of necessity, but it will be cooperation, rather than wrongful discharge actions, government regulations or union muscle, that will be the source of employee protections in the future.

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    How to Increase Productivity and Reduce Labor Unrest

    Abstract By altering an organization's hierarchical structure and making its employees feel as if they are participating in management, a company can decrease labor strife, increase productivity, and reduce personnel turnover. The Author presents the employee involvement matrix which can aid a management team in implementing employee involvement programs that will be successful at different levels of sophistication. The matrix utilizes two continuums: the employee involvement continuum, which contains the various types of participation; and the learning continuum, which specifies the skills that are required in order to implement a given level of involvement.

    Keywords Employee involvement, Staff turnover, Productivity, Participation

    Many old-line companies have a hierarchical structure in which directives are issued from top to bottom. It is not unusual for such companies to experience periodic labor strife, which brings with it a concomitant reduction in productivity and revenue. Labor is what companies want to prevent, but it is an integral part of a hierarchical corporate culture.

    My experience with numerous clients over the last two decades has shown me that by altering its hierarchical structure and making its employees feel as if they participating in management, a company can decrease labor strife, increase productivity, and reduce personnel turnover.

    Prior to changing a corporate culture, supervisors -- who reflect the views of senior management -- must learn new modes of behavior. Invariably in an authoritarian hierarchy, supervisors are expected to achieve certain rigidly sanctioned goals. Their roles may consist of checking off the names of morning latecomers, keeping close tabs on daily production quotas, and inspiring workers by instilling fear and insecurity.

    After participating in training program aimed at team building and increased employee involvement, however, supervisors can be transformed into team leaders who coach and mentor workers, giving them a sense of pride in their accomplishments, Where supervisors and workers once followed rigid formulae, now they can be encouraged to be flexible and creative, to use their own best judgment, and to pitch in and help colleagues. Management and employees work together which a common mission: to make the company a better place to work. The end result goes beyond increased productivity and profitability to produce enhancements of company products.

    Such successes, however, cannot occur without first changing the corporate culture. Experience has taught us that a number of initiatives are essential for improving workforce morale:

    • Developing a written, one-year plan for improving workforce morale.
    • Creating flexible task forces to handle every workplace issue.
    • Evaluating employee opinions on new ideas, tactics, and strategies.
    • Defining the existing corporate culture, through the use of contemporary surveys, so that the views of employees mesh with the company's financial goals.
    • Deciding how much to budget for training so this initiative can be an integral part of all future budgets.
    • Establishing a system for evaluating the success of both existing and future proactive endeavors.

    Instilling enterprise-wide change

    Three factors must be in place if the enterprise-wide change initiative is to succeed: a methodology for successful communications, an understanding of the various employee involvement activities, and senior management's commitment to cultural change.

    A methodology for successful communication is essential if a corporate culture is to become flexible and open to change. A sophisticated method of workforce communication can help change the corporate culture and maintain those changes over time. Without back-and-forth flow of communications, a clearly defined corporate identity and purpose will become blurred, resulting in ambiguous expectations. It is essential that all workers feel they understand where their company I headed and how it plans to get there. There is a direct an axiomatic link between good communication and significant increases in productivity.

    All businesses, regardless of size, have two distinct cultures: a management culture and an employee culture. For the most part, companies tend to operate under management's agenda, unaware of the employees' agenda.

    Communications should serve to unite these cultures. The unification of divergent agendas is the key to any successful, long-term human resources strategy. Thus, communication is critical in any effort to achieve productivity gains while enhancing morale, which usually run on parallel tracks.

    To create a truly effective change initiative, communication strategies must be blended with employee involvement initiatives. The employee involvement matrix can aid a management team in understanding employee needs and goals. (See Exhibit 1.) The matrix helps company leaders focus on what they must do to implement employee involvement programs that will be successful at different levels of sophistication. The matrix takes in to account organizational conditions, management commitments, and workforce skills; and it provides a guideline for the realistic and appropriate degree of employee involvement.

    The basic concept underlying the matrix is that increased levels of employee involvement cannot be accomplished unless adequate employee and management sills exist. Increasing employee involvement can be attained as company-wide training levels and organizational conditions improve and become more sophisticated.

    The matrix (See Exhibit 1.) utilizes two continuums to project an appropriate level of employee involvement for a particular company. The horizontal continuum, labeled "Employee involvement," contains the various types of programs. The first program, cooperative goal setting, is the least complicated and requires the least "cultural commitment" on the part of the company. The continuum progresses to program No. 10, which is employee ownership and control.

    "[If real cultural change is to occur] there must be a genuine commitment by management to a meaningful level of employee involvement as part of its ongoing business strategy."

    The vertical continuum on the matrix is the learning continuum. It specifies the type of knowledge and skills that will be required throughout the company in order to implement a desired level of employee involvement. The learning continuum has five general areas, ranging from interpersonal relations to business process.

    To determine the reasonable level of employee involvement in a given company setting, management should begin at program No.1 on the employee involvement continuum and work upward.

    If employees are already involved at given level -- cooperative goal setting or an employee idea system -- and wish to do more such as convene focused task forces, the group process and problem-solving skills shown in the next section of the learning continuum would have to be in place before that new activity could be attempted.

    The basic premise of the matrix is that successful implementation of employee involvement at any level must be preceded by requisite workforce skills and managerial commitment.

    The final factor in the success of the cultural change process is commitment by management. Simply instituting training on the skills in the learning continuum will not be sufficient. There must be a genuine commitment by management to a meaningful level of employee involvement as part of its ongoing business strategy. A constant re-evaluation of the level of cultural commitment by management is essential to moving further along the employee involvement continuum.

    Employee involvement continuum

    • The employee involvement continuum progresses through ten steps of increased involvement.
    • Cooperative goal setting -- the joint establishment of goals b each individual and his or her supervisor after mutual discussion. Goals are set and reviewed on a work-cycle basic.
    • Employee idea system -- a managed and funded program, which provides formalized feedback and includes a reward system. The program results must be highly visible for maximum success.
    • Focused task forces -- the convening of a group to work on a specific issue of set of issues and to recommend alternative solutions within a given time period.
    • Problem-solving teams -- work-unit teams that spend a specified amount of time each week trying to solve identified work-related problems.
    • Cross-functional groups -- problem-solving at interdepartment level with representation from various group functions within the work environment.
    • Union management committees -- can be considered if the employees are represented by a labor union. Joint union-management involvement will help to maximize union participation in all phases of employee involvement.
    • Process improvement groups -- selected groups to solve macro-level problems and improve key enterprise processes, such as product development, quality control, marketing, and distribution.
    • Self-managed work teams -- unsupervised teams of individuals working together for the purpose of improving skills, rotating jobs, and making work-related decisions that affect the total team.
    • Entrepreneurship -- creating opportunities for employee to implement innovative ideas, including designating a special team to pursue an idea, accepting the risks, and appointing a champion to execute the idea within the organization.
    • Employee ownership and control -- employee ownership of all or part of an organization or subsidiary within that organization. Increasing degrees of ownership can improve a business's profitability.

    The Learning Continuum

    The Learning Continuum denotes the skills and processes necessary for each level of employee involvement.

    A. Interpersonal relations involves five skills:

    • Team building -- creating and sustaining high-performance oriented teams.
    • Effective meetings -- conducting purposeful and productive meeting and methods of meeting planning, leadership, participation, and follow-up.
    • Leadership styles -- understanding and practicing leadership styles and straits and the factors that make certain styles more effective.
    • Motivation theory -- knowledge of what motivates individual human behavior, e.g. personality, needs, expectations, dependency/maturity theories.
    • Communications skills -- understanding and practicing effective, two-way communication, e.g. listening, writing, speaking, and giving and receiving feedback.

    B. Group process involves four skills

    • Presentation skills -- techniques for preparing and giving a persuasive and effective presentation.
    • Data gathering/organization -- methods of collecting data such as surveying and interviewing, and methods of organizing and presenting information.
    • Group problem solving -- utilizing group problem-solving techniques as compared to the individual-solving process.
    • Group leadership -- analyzing how people behave in groups, what constitutes a group, and the roles of a group's leaders and participants.

    C. Employee relations consists of four types of learning:

    • Stakeholder analysis -- analyzing the goals, motives, and behaviors of all internal and external stakeholders of a given enterprise and determining how to maximize mutual benefits.
    • Conflict resolution -- understanding, mediating, and resolving conflicts between groups.
    • Negotiation -- methods and strategies for achieving win-win results in negotiations and avoiding the zero-sum game.
    • Collaboration -- comparison of cooperative versus competitive strategies and their relative impact on goal achievement.

    D. Organization analysis includes three processes:

    • Work and job design -- coordination of the interrelationship of jobs, workflow, and other factors in orders to improve quality, productivity, and employee commitment.
    • Organization structure -- design of organization structures to meet current and future economic and technological demands.
    • Systems/process analysis -- identifying and solving problems utilizing macro-level processes, which promotes the attainment of key business objectives.

    E. Business process contains four skills:

    • Risk analysis -- pinpointing and quantifying risks in given enterprise and determining acceptable risk levels and trade-offs.
    • Life-cycle analysis -- identifying the critical steps in the development of strategies, plans, markets, products, and technologies to ensure their ultimate success.
    • Cost/benefit analysis -- methods and techniques for determining cost factors and projecting real and probable benefits in implementing new business ventures and technologies.
    • Business systems -- analyzing the goals, inputs, processing requirements, outputs, constraints, and feedback mechanisms in a business operation in order to maximize. Efficiency and effectiveness.

    We have seen the implementation of this broad initiative effectively change the corporate culture of many companies, unifying the agendas of management and employees, Sustained through the proactive implementation of flexible communications programs, the resulting corporate cultures have achieved a significant increase in productivity, very low levels of personnel turnover, and an absence of labor unrest.

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    Bring Binding Arbitration to Airline Disputes

    As a labor-relations attorney who has regularly negotiated union contracts on behalf of employees throughout the U.S., I have witnessed how the inordinate growth of labor costs has had far-reaching negative consequences on the economic well-being of regional and national airlines.

    When President Jimmy Carter deregulated the airline industry in 1978, he also should have imposed regulations on airline unions that would have outlawed strikes and walkouts, while requiring binding arbitration as a means to settle labor disputes between airlines and their unions. Binding arbitration would have yielded a greater balance between labor and management so neither side could have engaged in debilitating confrontations.

    While the Carter administration forced airlines into price wars, it failed to ask Congress to pass legislation that would have simultaneously helped to lower and control labor costs. As a result, many airlines have been unable to support their ever-increasing operating costs as the price of tickets has fallen. In some cases, the cost of a plane ticket was less that bus fare. If the airlines could no longer set and maintain ticket prices, how could they support fuel and labor costs? With one eye closed, the government signed death notices for numerous carriers.

    Labor costs are some of the highest expenses that airlines face. When it comes to airlines, unions are so much a part of the operating system that they exert life and death control. Unions can keep airlines grounded by the extraordinary weight of their demands. For some airlines, bankruptcy is preferable to meeting unrealistic union demands.

    The unions representing pilots, mechanics, machinists and flight attendants at times seem more interested in grounding airlines than in ensuring job stability. One need only look at the post-Sept.11, 2001, situation: The terrorist attacks caused a rupture of red ink to spill over the balance sheets of numerous U.S. carries. The volume of passengers dropped precipitously as did the number of regularly scheduled flight.

    In such dire circumstances, one would have thought unions, being both patriotic and concerned about preserving jobs, would have made the necessary concessions to keep airlines profitable. Instead, United Airlines experienced a significant jump in labor costs. Northwest Airlines lost hundreds of millions of dollars as a result of higher fuel and labor costs. And a strike at Delta's subsidiary, Comair, cost $4 million a day. The operating deficits at airlines are, unfortunately, prefaces to their obituaries.

    Historically, none of this is surprising, for unions and corporations have always believed increased labor costs could be passed on to consumers. Such a scenario, of course, could no longer work in the airline industry after deregulation. Previously, airlines passed along increased costs to consumers in order to avoid strikes. After deregulation, airlines could no longer do this because of the cost-sensitive competition from low-priced carriers. Airlines could neither afford strikes nor pass along costs to consumers, so they simply absorbed the increases.

    While the spiral of increased wages and prices for manufactured goods spun out of control and consumers turned to cheaper foreign-made products, airlines -- being service providers -- could not turn to foreign countries to lower their labor costs as did so many manufacturers. In factories, some unions simply priced themselves out of existence. Their demands grew so unrealistic that strikes and slowdowns were their dances of death. Beginning in the Reagan era, union membership steadily declined. Manufacturers opened factories in Third World countries or in right-to-work states in the U.S. The trend has continued in virtually every industry, except aviation and government service.

    This scenario would have been far different had the Carter administration realized there are two sides to every equation: If airlines lower their prices, then they must be permitted to cut costs. The government could have created a more fairly balanced environment in which airlines and unions worked out their issues in a non-threatening, controlled environment -- one without rancor and debilitating tactics. Had the majors been permitted to institute balance on both sides, they would be in far better shape than they are today.

    While deregulation provided low-cost flights, it caused the bottom lines of large carriers to lose altitude. Labor costs now are the foremost obstacle to airline profitability. If they are to survive and be self-supporting, carriers must be given the opportunity to reach reasonable and balanced agreements with unions through binding arbitration. Airlines have an immense impact on the national economy and security, thus making binding arbitration absolutely essential to the national welfare.

    Soldiers, Police officers, Firefighters and air traffic controllers are forbidden to strike. Similarly, airline personnel, as part of an essential industry, should be in the same category. The government must act to treat the airline industry as an essential part of the nation's economy and security. No union should be permitted to clear the skies, keeping airlines grounded.

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    Hiring Pro-Management Employees and Laying Off Deadwood

    The key to business success in the 1980's and beyond, is productivity. The recipe for employee productivity is comprised of numerous ingredients; but the key ingredient is management. Efficient and effective management is a combination of various managerial styles, each designed to productivity among employees.

    No combination of management styles, no philosophy nor progressive labor relations program will be effective if employees do not complement and extend the goals of management. The major problem and objective then is to find those employees who are highly motivated, while appreciating and understanding their roles as team players. How do you find such employees?

    A technique that has proven successful for creating positive employee attitudes and productivity is the development of a profile that depicts the positive attributes of the optimum employee. A composite or profile of essential characteristics and attributes (which are not personality traits) can provide the simplest and most thorough technique for finding and keeping those employees who can establish the necessary leadership and initiative for high-level of productivity.

    The management-labor department of Pechner, Dorfinan, Wolffe, Rounick and Cabot, has developed a test for determining an employee profile, and it has been successfully utilized by a number of Fortune 500 companies. Attributes contained in the employee profile are not personality characteristics. The attributes represent a distillation of the prospective employees past work experience. The profile seeks to determine what the prospective employee has "learned" about work in general and employers in particular. Such learning experiences create propensities and attributes which will become evident through the selection process.

    The development of the employee profile begins with a thorough analysis of the employer's work force. In an ongoing facility, analyzing the existing work force must be approached from two perspectives. First, the necessary skills required by the employer must be determined; second, the profile must show how the existing work force can be categorized in regard to specific skills. In a company, such as a small automobile parts wholesaler, located in the Northeast, it was relatively easy to determine skill and ability levels of employees, since the company had been operating for more than 15 years.

    To determine skill levels, a series of interviews with employees, management, and line supervisors was undertaken. Next, a detailed (computerized) survey of employee attitudes towards their employer and work was undertaken. The results of that process were factored into the creation of the profile, which was then specifically tailored to the needs of the company. This small, but flourishing, business handily survived the recent recession.

    A different process had to be developed for use in a large plant. For instance, another program was called for in a large industrial plant, which was going to be located in the Southwestern portion of the United States. The analysis of workforce involved a projected employee complement based on the prior experiences of the company, utilizing similar facilities producing similar products. The company provided data, concerning the number and category of employees. A sophisticated workforce analysis was performed, mapping out when and how each type of employee would be needed.

    Once the necessary skill and ability levels have been determined and there has been an analysis of employee attitudes, the relevant labor market must be examined. (In both situations, the relevant labor market was considered to be the geographic area surrounding the facility). Demographic, general economic, socioeconomic, wage and other labor data for the relevant labor market were garnered.

    The data was analyzed with the assistance of a computer. The analysis enabled us to identify the likelihood of individuals possessing the desired skills and abilities. Having determined the existence and concentrations of individuals with the desired skills and abilities, we interviewed other companies within the relevant labor market to determine the attitude of their employees.

    To buttress the information we derived from the computer, we selected local "leaders" and interviewed them. They included guidance-counselors in local high schools, in vocational-technical training schools, and opinion leaders from the community. These individuals were able to give deeper insight into the types, attitudes, local mores, and tradition of employees within the labor market.

    In the plant in the Southwest, the analysis of the data indicated that within the relevant labor market, there existed a substantial pool of employees with the necessary skills and abilities. However, that analysis also indicated that these individuals were primarily employed within other large industrial concerns which were unionized. There did not appear to be a substantial surplus of individuals who possessed the higher-level skills necessary to operate the new facility.

    As we moved down the hierarchy of skills, the availability of individual increased. Nevertheless, the analysis of the demographic and labor data indicated that even at the lower end of the skills hierarchy, many of the prospective employers would have either direct or indirect experiences with unionized employers. Since one of the goals of the start-up facility was to maintain its pro-employee, management style, the existence of many individual: with prior union experience was of concern. Nevertheless, based on the information that was available, we would be able to screen out those individuals who would not work well within the company environment, regardless of prior union experience.

    The most effective means for ascertaining the profile attributes remained die interview process. Interviewers were instructed in how to review employment applications and supporting documents. Interview questions had been designed and tested in the early stages of hiring. Questions were refined as a result of feedback from the interviewers. As a result of the testing and feedback process, core of questions was developed. They determined attitudes, which were used in conjunction with typical job-skills questions to screen applicants.

    In the start-up situation, a group of core questions involved previous supervision. Interviewers asked die following group of questions: "Tell me about your last supervisor? What were his or her best points? What were his or her worst points? What role do you believe a supervisor should play in the work place? Have you ever been a supervisor? Are you interested in becoming a supervisor here?" Such questions were designed to elicit two of the major profile attributes.

    First, was the applicant willing to view his workplace situation from both sides? An applicant whose response indicated understanding and/or empathy for the position of supervisors was a positive trait.

    Second, the interviewers were instructed to find out if a prospective employee made any efforts to make his supervisor's job easier. Responses which indicated the applicant compromised toward a common good and made other efforts to work well with the supervisor were regarded as highly positive.

    The response to questions concerning the desire to be a supervisor was examined not from the prospective of whether the employee would make a good supervisor, but from how the employee viewed the supervisor's job. For instance, an applicant who indicated that he would never want to be a supervisor would most likely be indicating distrust for management.

    A similar analysis was performed for each of the core questions which formed the profile interview. The interviewers were provided with sample responses and an analysis of those responses was subsequently undertaken. The process clearly becomes more valuable as the interviewers gain experience using it.

    The experience in the start-up facility proved highly successful; it demonstrated that the initial cadre of employees exceeded all expectations for productivity and ability. In addition, they worked exceedingly well with their supervisors.

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    Keeping Labor Loyal

    As a labor-relations attorney who has represented management in its multifaceted relationships with labor with labor over the past 36 years, I have created numerous programs that help prevent labor problems from arising. While many people have the perception that it is difficult to creates and sustain such programs, it is not any more difficult in unionized companies than in non-unionized ones. In both instances, management must make an ongoing commitment to proactive, preventive programs.

    To begin, management must create an action plan. Most companies have a business plan but, unfortunately, most companies do not have a corollary labor relations plan, whether they are union or nonunion. The action plan must recognize that in order minimize the possibility of labor-relations problems, new leadership roles must be instituted that create dynamic workplace relationships. For example, too often management focuses on what it says, not no how it is said. Management must treat employees as it treats those with whom it has personal relationships. If employees perceive management as intimidating, an adversarial relationship will develop, along with concurrent resentments.

    Improving Communication

    It is far better for management to engage employees in an ongoing dialogue rather than a one-sided monologue of management directives. If there are workplace problems, management should open a dialogue with employees and engage in a process of brainstorming to fins mutually agreed-upon solutions. Having been consulted, employees thus feel that they matter, that their opinions count.

    If top management takes time daily to find out what's happening in the workplace and in employees' lives, and to be visible and available to employees, that will go a long way toward establishing a bond of respect. If a manager asks an employee, for example, now well his son is recovering from a broken arm, or if his daughter's piano recital was successful, it will pay off in heightened loyalty and increased productivity because it will show that management cares.

    An ongoing dialogue will lead to employees perceiving that management is listening to their concerns. In addition to listening, management can show concern by doing such things as having a financial expert offer free advice about retirement investments, by offering fitness and stress reduction classes at a nominal charge, by having a guidance counselor offer advice to parents about college admissions and costs, etc. As a result of such actions, management will be perceived as sincerely showing that it cares for the welfare of its employees.

    Employee perceptions are extremely important, because positive perceptions will significantly enhance employee relationships with management. There are seven essential perceptions that strongly influence the way employee will feel about their workplace and management:

    • Employees must perceive that there is effective communication between management and employees--and effective communication includes management asking, not telling.
    • Employees must perceive that the company's policies and practices meet the needs of the workplace and, in particular, satisfy the individual needs of employees.
    • Employees must perceive that they like where they work and enjoy going to work; this produces positive morale.
    • Employees must perceive that everyone is working to achieve shared goals, and that there is an effective commitment to teamwork.
    • Employees must perceive that management can be trusted to honor its promises.
    • Employees must perceive that wages and benefits are comparable to similar work in the geographic area.
    • Employees must perceive that the company provides training for employees not just to do their jobs, but to do their jobs well and to facilitate their opportunities for advancement.

    Two-way communication also gives management an opportunity to discuss its own concerns about ever-increasing operating costs, such as for healthcare coverage. If employees understand the onerous burden that management can face in paying a portion of healthcare costs, they will understand how those costs may affect wages and other benefits in the future. When such information is imparted many months prior to negotiations, it will more likely be believed, simply because it is not associated with the negotiation process.

    Effective communication results in management and employees sharing an understanding of how to improve efficiencies and increase productivity. Once goals are achieved, management can show its appreciation by establishing employee recognition programs, which are effective ways of saying thank you.

    Developing Consensus

    Employee surveys not only demonstrate that management is listening, but also provide an effective opportunity to build consensus. In most employee surveys, 30 to 40% of employees express a variety of negative feelings, which are often cries for help. Among the most common concerns voiced by employees are: confusion about work assignments, frustration over certain working conditions, feelings of being oppressed by management a feeling that management does not listen, and a feeling that management pays only lip service to employee concerns. If management wants to create an efficient and productive work environment, it can deal effectively with such concerns by listening to employees, demonstrating respect fro their concerns, brainstorming solutions with them, and making them feel that they are all in this together.

    A company wants its employees not merely to agree with management, but to accept management. To achieve acceptance, management needs to have a critical understanding of employees. It requires compromise, coalescence, and consensus. Without a consensus between management and employees, there will always be the possibility of a heated adversarial relationship blowing up the most carefully laid tracks that had been constructed to reach corporate goals. Surveys will detect areas of discontent that can often be ameliorated with cost effective programs that are responsive to employees' needs and concerns. If those areas of discontent are left to fester, they could ultimately furl strikes, slowdowns, and unionization.

    The consensus that management can create, following the results of a survey, is absolutely necessary in making employees feel as though they are stakeholders in the company. A consensus will make them feel as though they are an integral part of the corporate culture, contributors as well as beneficiaries. A consensus puts an end to the old, unnecessary parading of Us vs Them. When a 1 consensus is established, management and employees will be reading from the same page when dealing with key issues.

    Building Teamwork

    Once management and employees come to a mutual understanding on how to increase productivity and efficiency, they will share a clear understanding of the drivers that increase success. They will be part of the same team.

    One factor making teamwork successful is recognition. It is essential that management recognizes employees, repeats that recognition, and reinforces that recognition. One of my clients, in fact, developed a strategy built around those three Rs. He then implemented an employee of the month program, in which the stellar performance of a particular employee was recognized by posting the employee was recognized by posting the employee's photo on a wall. My client, however, miscalculated when he failed to realize that in many instances when the employee's picture came down and was replace with another, the first employee felt disappointed. I suggested to my client that he create a wall of Honor or a Room of Honor where all of the recognized employees would have their photos posted. My client's recognition program has worked, and his company remains nonunion in a highly unionized industry.

    There is another important element in creating successful teamwork: an Employee Advocate Representative (EAR) program. A designated employee, one mutually agreed upon by management and employees, becomes the EAR. The purpose of the program is to have a peer available to assist employees with any of their problems. In establishing the program, management demonstrates its commitment to addressing its employees' concerns. This initiative has greatly improved workplace environments in various industries, and it isn't expensive. The return on such an investment, in fact, has been tremendous. I have seen companies get more mileage from an EAR program than they would have gotten from a modest pay increase.

    Being part of a team also makes employees feel that they are stakeholders in a company. Stakeholders believe that their economic well-being is directly tied to overall company performance. Stakeholders are excellent team players, who enjoy the benefits of increased profitability and accept responsibility for increased costs.


    In sum, there must be an effective communication between employers and employees. Management must learn to listen and express its concern for the well being of its employees. And it must encourage brainstorming to solve problems. Form effective communication will come a consensus of shared goals, integrating everyone into a successful corporate culture. From that culture, in which everyone is reading from the same page will emerge a sense of teamwork, of everyone being this together, of the elimination of the Us vs Them paradigm.

    Contract negotiations in the nursing home industry are underway, and more are scheduled in the coming months. Those that have proactive, non-adversarial action plans, such as the one that I have described, will do far better at the negotiating tables than those who either have no programs in place or those who waited to put them in place until shortly before contract negotiations began.

    The program that I have explained in this article is designed to ensure that all the companies in the nursing home field will enjoy increased productivity and profitability as a result of significantly reducing the likelihood of significantly reducing the likelihood of labor unrest not just in coming months, but also for many years ahead.

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    The Labor Factor

    By Stephen J. Cabot

    Manufacturers often hire labor-relations attorneys to maintain their status as union-free companies. The first thing I say to clients when they hire me is, "I understand that your goal is to be union-free and that's fine. But if that's the only thing you want, you're not going to make it." Companies whose only goal is to keep unions out will find that they will be successful at it for a time; then, however, complacency sets in and they'll drop the ball. That's when a union comes in.

    The difference between being a unionized manufacturer and a non-union company comes down to labor relations-not simply making an effort at labor relations, but elevating labor relations to the point in which it is part of the company's overall business plan. Most business plans are focused purely on the company's technical needs of producing more to be competitive. Until now, there has been an absolute, unadulterated failure by business to incorporate labor relations into their long-term plans. But a company's overall success depends on formally incorporating goals for the working environment into the business plan. The company needs to set labor-relations strategies for years down the road, as it does for its financial and marketing goals.

    Mission Statement: Possible

    To make the proper beginning for an effective human-resources plan, a company has to start with itself. What is its philosophy as a whole, its mission? The company must delineate its mission statement- and that statement has to distance itself from such archaic phrases as "employees are our biggest asset" First of all, this is a demeaning statement. Employees are not "assets;" they are nor bricks and mortar, or equipment that can be sold or depreciated on a tax return. They are people, and they have concerns and individual aspirations as other people do. Thus, the company's first goal in creating a strong labor-relations policy is respect for its employees-for their concerns and individual goals, in particular.

    Many entrepreneurs have built business empires by first realizing how little they know, and by then realizing that their employees need to feel good about the company. Those business owners soon learned that ASK is the most powerful word in the English language. An employee-relations action plan must be built on the "asking" strategy. Ask every employee, top to bottom, how they feel about the company. Ask about their perceived issues and concerns. And ask them these same questions as often as possible. This is where respect for employees begins. Eventually, the asking strategy should include asking the company's employees what they feel the company's mission ought to be.

    Asking in Action

    My work with these companies includes creating questionnaires for their employees. These cover the following points:

    • How do employees perceive communication between themselves and management? Is it effective? Is it one-way or two-way?
    • How do they perceive morale in the work place?
    • How do they perceive supervisory practices, policies and procedures? Are these applied consistently?
    • Do the employees trust upper management? Do they feel that the executives keep their promises?
    • Do the employees feel that they and management work together as a team?
    • Do the employees perceive that the training they get meets their needs? Dose the training include the handling of personal and family problems?

    The questions are phrased so that employees can circle their answers, showing whether they agree or disagree and to what extent. The weighted averages from these answers, when compared to other normative, statistical factors, are then used to show management the issues that employers should address in the labor-relations portion of the overall business plan. These averages can also determine the risk the company faces of a possible unionization.

    Up to now, company executives have done a wonderful job of telling their employees how important they are to the company's success. A labor-relations plan gives the company an opportunity to put its money where its mouth is. Such a plan builds a work-force environment that is consistent with the company's business plan and, at same time, builds morale. In other words, such a plan would make unions unnecessary by reducing labor strife, minimizing unnecessary litigation and building a cohesive environment in which employees like coming to work -- and feel they are stakeholders in the company.

    Companies need to both create a labor-relations plan, and then to put such a plan in practice. Until they do, labor lawyers like me will be busier and wealthier than we should be.

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    Obama's Big Labor Ethics Loophole

    Written by Michelle Malkin

    Everything you need to know about President Obama's fraudulent ethics pledge can be summed up in four words: SEIU lawyer Craig Becker.

    Becker is the left-wing lawyer Obama sneakily installed on the National Labor Relations Board. The U.S. Senate rejected Becker's nomination on a 52-33 cloture vote in February. Obama responded by flipping the bird and ramming through his recess appointment during the congressional spring break. (The New York Times approvingly dubbed it a "muscular show of his executive authority." When that authority was exercised by GOP President George W. Bush, of course, the Times editorial board called it a "constitutional gimmick.")

    Despite the White House's much-heralded policy of binding every executive appointee to strict conflict-of-interest guidelines, a defiant Becker now remains free to rule on cases involving his former Big Labor bosses. And the most ethical administration in U.S. history isn't doing a thing to stop him.

    While serving as an associate general counsel for both the SEIU and AFL-CIO in 2009, Becker generously lent his legal expertise to the White House. He served as an Obama transition team member for labor issues and helped draft several union-backed executive orders.

    These new rules essentially blackball non-union contractors targeted by labor organizers and blacklist non-union employees in the private sector from working on taxpayer-funded projects. Another union protectionist measure immediately adopted by Obama requires that when a government service contract runs out -- and there's a new contract to perform the same services at the same location -- the new contractor must retain the old workers. 

    Such regulatory favoritism limits freedom in the workplace and raises the cost of doing business. This suits Becker and his White House champions (who reaped $60 million in SEIU campaign donations and support in 2008) just fine.

    Becker's anti-business views date back to his days as a UCLA professor, when he argued that unions should not be subject to the same rules of democracy and fair elections as everyone else. He favors radical rewriting of union organizing rules and elimination of the secret ballot process by administrative fiat.

    It's no surprise that Becker now refuses to hold himself accountable for the ethics pledge he himself signed in April. As the past two years have taught us, Team Obama's operational slogan is: Rules are for fools. The contractual ethics commitment states: "I will not for a period of two years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former 

    employer or former clients, including regulations and contracts." Yet, Becker has participated in numerous NLRB cases involving the SEIU and its affiliates -- and is parsing the definition of "former employer" by arguing that local SEIU chapters are "separate and distinct legal entities" that don't fall under the ethics rules.

    The National Right to Work Foundation, which has fought both national and local SEIU officials in court on behalf of rank-and-file workers' rights, eviscerates Becker's lawyerly blather. SEIU's own constitution considers local affiliates "constituent subordinate bodies" of the national union, the foundation notes. "Moreover, in 2009 over 85 percent of the SEIU's receipts came from a per capita tax on the locals' membership dues and fees. The national union even has the power to assume control over its locals if they do not conform to International policies."

    In any case, Becker has also acknowledged playing a key role in providing "advice and counsel" to the powerful SEIU affiliate in Illinois "relating to proposed executive orders and proposed legislation giving homecare workers a right to organize and engage in collective bargaining under state law." Championed by Big Labor water-carrier and disgraced former Democratic Gov. Rod Blagojevich and current SEIU-endorsed Democratic Gov. Pat 

    Quinn, such measures effectively bust into private homes for the Purple Shirts of the SEIU and other union competitors hungry for new dues-paying members.

    Now, Becker is in the catbird seat -- adjudicating challenges to the power grab rules he helped author.

    Little did America know that when candidate Obama promised the SEIU he would "open up the doors of government" to them, he'd give them the keys to our living rooms, too.

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