Of Mergers and Politics

We’re well into the silly season of politics, as any glance at the headlines will confirm. Politics is also an inevitable part of just about any organizational merger or acquisition and, just as in Washington, can be downright silly. I gleaned this from a recent interview with Shari Yocum and Niki Lee, two managing partners at San Francisco-based Tasman Consulting.

Yocum and Lee know mergers: Prior to forming Tasman Consulting, they served on the HR mergers-and-acquisition team at Cisco Systems. Cisco’s acquired a lot of companies during its time on this planet, including WebEx and Scientific-Atlanta, not to mention a boatload of much-smaller startup firms. As people familiar with the process know, one of the biggest M&A risks is losing the very talent you’re trying to obtain by buying the company. That includes the CEOs and founders, who–especially in smaller firms–have gotten used to calling the shots and setting the pace.

This can extend to things like whether or not they’ll continue to be able to fly first-class on official business once the deal is sealed. ” ‘I fly first class and so does my team,’ ” says Lee, relating a typical statement from these executives during her time at Cisco, “and then on Monday, they’re flying to India on coach.” Personally, I do think that would be a bit tough to swallow. But Cisco had its own cultural norms that needed to be adhered to, she said, and one of them was consistency: Everyone is expected to fly coach.

“Dealing with the executives at the company being acquired can be very difficult,” says Lee. “A lot of times, you’ll see the true colors of these executives” during this very delicate process.

Other sensitive areas included post-merger span of control, integration and marketing strategy–all areas that, as company founders, are of particular concern to them. While it may be tempting at times to simply buy these folks out and say “See ya,” the inconvenient truth is that their knowledge and insight is often extremely valuable, say Lee and Yocum, and ways must be found to keep them reasonably happy and engaged–for the short term, at the very least.

Politics is practiced on both sides of a deal–including at the acquiring organization, they say. Managers and executives will often jostle to be included in key decisions, hoping to make their mark and expand their own portfolios. Dealing with this vast array of hungry egos while attending to the hundred other details involved in a merger will test you like few other corporate experiences will, say Yocum and Lee. It’s why they believe HR leaders need to plan now for the eventuality of an M&A at their own companies, regardless of whether one is on the horizon or not.

Part of this is ensuring that you have a good working relationship with each of the key players in your organization, says Yocum. That way, you’ll have their trust and will be more likely to respect and adhere to the advice you have to give on crucial matters pertaining to talent. This also requires you to have a deep understanding of the business: its challenges, market conditions, opportunities, etc. Another piece of advice: If you’ve been involved in a merger before, go back and create a playbook, a repeatable process so everyone on the merger team will understand what their responsibilities are, she says, and create some online training that captures the critical knowledge you’ve gained so others can view it.

You can learn more about Yocum and Lee’s insights by reading the Q&A with them that will appear in the August issue of Human Resource Executive, our first-ever digital issue.

The Dangers of Shift Work

Adding to the research that’s already out there on the subject, new research from north of the border finds people working evening shifts, irregular shifts, night shifts and rotating  shifts are at an increased risk for heart attack and stroke.

Based on the results of 34 studies on more than two million people, the story notes, lead author Dr. Daniel Hackam, a clinical pharmacologist at the Stroke Prevention & Atherosclerosis Research Centre in London, Ontario, Canada, and his co-authors concluded that shift work was associated with increased rates of vascular events such as heart attacks and ischemic strokes caused by lack of blood to the brain.

“Shift workers need to be vigilant about their cardiovascular health and get their cardiovascular risk factors checked on an annual basis through their primary care provider (e.g. cholesterol, blood pressure, glucose, waist circumference),” Hackam advised in an email.

“They should do everything they can to minimize their risks including smoking cessation, adopting a healthy diet, taking care to include physical exercise when they are not working, and recognizing the cardinal symptoms of cardiovascular disease (stroke and heart attacks).”

The research appears in the latest British Medical Journal and was funded by the Canadian Institutes for Health Research, according to the CBC story.

And, while the story notes that employers would be wise to encourage shift workers to take frequent breaks and offer health screenings to their second- and third-shift workers on-site, it goes on to say that “working night shifts was associated with the steepest increase in risk for coronary events, 1.41 times, compared with working day shifts or the general population.”

And that’s enough to give nightmares to anyone concerned with the wellness of their late-night workers.

A Difficult Interview

As a journalist who has worked for both a glossy monthly national magazine and a stain-your-fingers daily local newspaper, I’ve had my share of difficult interviews, either with a source who was wary of going on the record with an inconvenient truth — to borrow a phrase — or else with someone whose inconvenient truth may have already gotten out.

But, Glassdoor just released its own take on the idea of a difficult interview: The firm dug through more than 80,000 of its interview ratings and reviews shared throughout the past year to uncover the companies which applicants said gave the most difficult interviews.

According to Glassdoor, the toughest interview processes are conducted by consulting firms: McKinsey & Company (Interview difficulty: 3.9), followed by Boston Consulting Group (Interview difficulty: 3.8) and Oliver Wyman (Interview difficulty: 3.7), with interview-difficulty ratings based on a 5-point scale; 1.0=very easy, 5.0=very difficult.

Did your company make the list? Find out below:

There was some discussion around the office this morning as to whether companies on this list will view their inclusion as either a badge of courage or a mark of scorn by applicants.

Personally, I’m of the opinion that the hiring function of any company on this list — and there are some big names here — would be proud to know that applicants who have gone through the process say afterward that it should not be taken lightly.

Otherwise, how else would those organizations be able to separate the talented wheat from the also-ran chaff?

Full information from the study can be found on the Glassdoor blog Friday morning.

Speak Up Now on EEOC’s Strategic Enforcement Plan

Just a brief note to inform or remind anyone in need of either that the U.S. Equal Employment Opportunity Commission is open to your thoughts on its Strategic Enforcement Plan. But that open window is fast closing.

A public meeting was held last Wednesday — July 18 — in Washington to take in comments from academicians, civil-rights representatives, business and federal-sector communities, as well as former EEOC leaders and current employees about the agency’s SEP, which — by terms of the agency’s overriding Strategic Plan — must be in place by Oct. 1.

In its release about the public meeting, the EEOC states that it will “hold open the … meeting record for 15 days [by my calculation of business days, that’s through Aug. 8, but I’ll let you know if that needs revising], and invites audience members, as well as other members of the public, to submit written comments on any issues or matters discussed at the meeting.” (Here are the minutes and testimonials from that meeting.)

According to the release, “participants noted the importance of the EEOC continuing to use systemic investigations and litigation to target specific issues and practices where government enforcement will have the greatest impact.”

In the words of EEOC Chair Jacqualine Berrien, “We welcome the views of interested members of the public as we consider how to better leverage the EEOC’s resources to improve enforcement, outreach and customer service. An open strategic planning process ensures that the commission is prepared for 21st-century challenges and also honors the spirit of open government.”

You can send your comments to Commission Meeting, EEOC Executive Officer, 131 M Street, N.W., Washington, DC, 20507, or email them to Commissionmeetingcomments@eeoc.gov.

Speak now or forever hold your peace.


Is the EEOC vs. The Picture People Ruling Part of Something Bigger?

I’m getting interesting feedback from attorneys close to the recently-decided EEOC vs. The Picture People case, suggesting the 10th Circuit Court of Appeals’ decision in favor of the national retail portrait studio chain marks a new wind blowing in from the federal courts — one that is increasingly critical of the U.S. Equal Employment Opportunity Commission.

The ruling, issued July 10, denies the EEOC’s appeal of a 2011 ruling by the U.S. District Court for the District of Colorado. That ruling granted summary judgment for Picture People on the grounds that its requirement that studio “performers” be strong in verbal-communication skills did not discriminate against a deaf worker.

In a nutshell, Picture People hired Jessica Chrysler in 2007 to work as a photographer in one of the company’s Littleton, Colo., studios, knowing she was deaf. Although she performed a number of her duties, she was later moved into the lab because of the difficulties she had communicating with customers by writing notes. (Though the company initially tried her out this way, it found the note writing was cumbersome and awkward given the 20-minute duration of each portrait sitting.) Picture People eventually cut her hours and she eventually left her job.

The EEOC sued, claiming the company did not do enough to accommodate her and the District Court sided with the company, holding that oral communication was an essential function of the performer job. The appeals court upheld that. For a whole lot more on this case than I could possibly blog about, here is a piece written for HREOnline by Merrily S. Archer of EEO Solutions in Denver, the attorney representing Picture People, and here is a summary of the District Court decision  as well as a summary of this latest Appeals Court ruling from a blog by Seyfarth Shaw partner Gerald L. Maatman Jr.

Although the EEOC press release announcing its lawsuit in October, 2009, was recently taken down from the agency’s website, my printed copy offers a much different account, saying “managers picked on Chrysler, forced her to work in the back of the store away from the public, and ultimately, eliminated her work hours entirely.” It also claims she was retaliated against for complaining. “Employers all too frequently underestimate the ability of deaf employees to serve in a customer-service capacity,” EEOC Phoenix Regional Attorney Mary Jo O’Neill says in that release.

On the contrary, Archer says, “this case is huge, because it demonstrates just how far the EEOC will go to substitute its judgment for our employers’ regarding what constitutes minimally effective job performance. As I laid out in my response brief,” she says, “Congress was very clear when it passed the Americans with Disabilities Act that an employer would never be required to fundamentally alter the essential functions of a job to accommodate a disabled employee.

“When Bush (41) signed the ADA into law on July 26, 1990, he talked about the careful balances that Congress struck between the disabled and employer communities,” says Archer. “This decision helps restore that balance from the weight of the EEOC’s aggressive ADA interpretations and enforcement.”

What’s even more interesting, says Maatman, chair of his firm’s class-action defense group, is that this decision is actually “one in a series of cases in which federal judges have, in essence, rejected the EEOC lawsuits for having [little to no] evidence to back them up.” He lists these other recent decisions against the EEOC on his blog as illustration:

* EEOC vs. Cintas Corp., 2011 U.S. Dist. LEXIS 86228 (E.D. Mich. Aug. 4, 2011) (ordering the EEOC to pay defendant $2,638,443.93 in attorneys’ fees and costs),
* EEOC vs. Tricore Ref. Labs., 2011 U.S. Dist. LEXIS 151417 (D. N.M. Oct. 26, 2011) (ordering the EEOC to pay defendant $140,571.62 in attorneys’’ fees),
EEOC vs. CRST Van Expedited Inc., 2010 U.S. Dist. LEXIS 11125 (N.D. Iowa Feb. 9, 2010) (ordering the EEOC to pay defendant $4,467,442.90 in attorneys’ fees),
EEOC vs. CRST Van Expedited Inc., 679 F.3d 657, 698 (8th Cir. Iowa 2012) (reversing and remanding the district court’s award of $4,467,442.90 in attorneys’ fees).

He’s telling his CHRO clients to make sure they discuss this new atmosphere in the judiciary with their legal counsel. “Knowing the EEOC has been sanctioned around the nation is one of a number of factors upon which you should [plot your defense, should you be the subject of an EEOC lawsuit].”

For the record, P. David Lopez, general counsel for the EEOC, says his agency “does not file unsubstantiated claims [and] we do not think there is a new trend in the federal judicial system finding against the EEOC due to lack of evidence.”

Like I said back at the top of this monolithic blog post, interesting feedback.

Hackett Study: Business Clients Highly Dissatisfied with HR

Years of across-the-board cuts during the recession and its aftermath have left companies’ business-services departments–such as IT, finance and procurement–badly weakened in terms of talent and skills, says the latest “HR Book of Numbers” report from the Hackett Group. Even HR itself has not been spared in this regard, according to the report.

The report, which is titled Cracks in the Foundation: Closing the Critical Skills Gap Undermining Business Capabilities and is based on data gleaned from information provided by nearly 150 large companies in a recent Hackett performance study, lays much of the blame for this on HR, which it says is failing to deliver adequate levels of talent-management support. As a result, the report finds, department leaders at these support functions are “highly dissatisfied” with the level of support they receive from HR on talent issues.

The report finds that the department leaders say they’re getting talent-management support from HR less than 35 percent of the time, on average, while the percentage of companies saying HR provides them with a full range of services is at 12 percent or less. Companies in the study said they were either dissatisfied or very dissatisfied with HR support for business services an average of over 70 percent of the time. Companies were the most unhappy with the HR support they receive for collaborationa and knowledge-sharing (79 percent dissatisfied/very dissatisfied) and retention (70 percent dissatisfied/very dissatisfied).

HR is not entirely to blame for these high levels of dissatisfaction, the report’s authors note. HR departments at many companies have taken hits of their own in staffing and budget cuts while struggling to adjust to their changing mission of “enabling business performance.” Few organizations have a “dedicated business partner role” responsible for figuring out the talent-management needs of functions such as IT and procurement, according to the report.

Moving towards a solution requires HR and business-support leaders to work together, writes Michel Janssen, Hackett’s chief research officer:

Business-services managers must take the lead in specifying their needs, and taking accountability for results for talent management. HR must provide comprehensive process and administrative support, methods and tools, training and guidance to function leaders.


Man-Cession to Man-Covery: The Update

Updated: 3:54 p.m.

A spot of good news — for men, at least — coming from Challenger, Gray & Christmas today.

According to the Chicago-based provider of executive outplacement services, the man-cession, as it has been called by those who like to use mash-ups as words, saw employment among men plummet by more than 5.2 million between November 2007 and December 2009, mostly due to massive job losses in male-dominated industries such as construction, manufacturing and financial services.

In contrast, the number of employed women fell by 1.9 million during the same period.

Now, with the economy on the slow road to recovery, men’s fortunes appear to be improving.  Of the net 2.4 million newly created jobs since the June 2009, men have landed 74.7 percent of those, including 61 percent in the last year.

Unfortunately, the same cannot be said for women, the firm adds.

Since the recovery started in July 2009, women have lost 268,000 jobs and seen unemployment rise from 8.3 percent to 8.5 percent. Industries heavily dominated by women are continuing to cut jobs, such as government, where women represent 57 percent of the 22.1 million Americans employed in the government sector.  At the local government level, where downsizing in the education area has been the heaviest, women account for nearly 62 percent of the workforce.

But it’s not all gloom and doom for women workers:  Women have gained 1.58 million jobs since June 2011, while men have gained 1.49 million in the last year.

Worker’s Coffee-Making Injury Not Compensable

Here’s an interesting one from Missouri. The Missouri Supreme Court ruled recently that a worker who fell while making coffee in the workplace is not covered under workers’ compensation because she could have incurred the same injury outside of work.

The decision reversed an earlier ruling by the state’s Labor and Industrial Commission on the grounds that the injury would only be compensable if it was shown to have resulted from a risk or hazard that couldn’t have occurred elsewhere.

The case, Johme vs. St. John’s Mercy Healthcare, is pretty well-laid out in this summary by Christopher D. Vanderbeek, an attorney with Danna McKitrick specializing in workers’ comp. In essence, Sandy Johme, a billing representative for St. John’s, was clocked in and making coffee in the workplace kitchen when she turned to dump some grounds in the trash and fell off her shoe, landing on the floor and fracturing her hip and pelvis.

The Supreme Court judges upheld an administrative law judge’s initial denial of Johme’s claim for workers’ compensation benefits (reversed by the LIC) on the grounds that “she was not performing her [work] duties at the time of her fall at work,” and she “just fell and … would have been exposed to the same hazard or risk” outside of work.

What does this case mean for Missouri employers, and potentially as precedent for non-Missouri employers? Here’s what Vanderbeek has to say:

In gathering details, employers need to repeatedly ask themselves, ‘Did the risk that caused this injury arise out of the employee’s employment?’ If the employer believes there is any possibility that the answer is ‘No,’ the employer needs to gather all facts that could be even remotely supportive of the ‘No’ answer.

In Johme’s case, relevant facts included that there was nothing on the floor where [she] fell and [her] shoe appeared to play a role in the fall. Johme’s supervisor completed an injury report, on which he stated that [she] was ‘… making coffee in the kitchen, turned to put [coffee] grounds in [the] trash, twisted [her] ankle and fell off [her] shoe… .’ This factual account was noted by the court in its decision, and the court emphasized the fact that Johme fell off her shoe in determining whether the cause of Johme’s injury was causally related to her work activities.

This shows just how important it can be for an employer to proactively gather information when confronted with an alleged accidental injury and how much of an impact that information can have.”

I also ran this case by Merrily Archer, of EEO Legal Solutions in Denver. She says the case “does part with tradition regarding our state courts’ treatment of ‘idiopathic injuries,’ which arise from unknown causes or cases unique to the individual (e.g., congenital birth defect, pulmonary embolism) and not necessarily because of incidents of employment.” She also offered some additional perspective and a word of concern:

Several states, and Missouri may be among them, have — through legislation — made it more difficult for claimants who have some kind of idiopathic injury or other health crisis (e.g., heart attack) at work to establish the ‘compensable’ nature of their workers’ compensation claim, absent some nexus to the work duties.

“And, maybe here’s why: In Colorado, the joke is that folks kill themselves on the slopes, drag themselves into work, and then suffer some kind of ‘accident’ that no one witnessed so that comp will pay.  Historically, as long as the alleged injury occurred at work, it was compensable—i.e., the slip and fall on ice on the employer’s premises, the clumsy person who trips over a paperclip … .

“What also troubles me about this decision is that I see it as introducing the concept of fault into the analysis, which has no place in most states’ ‘no fault’ workers’ compensation system.  Must claimants now introduce evidence at a workers’ compensation hearing that, because of the work environment or their work duties, the employee was more likely to get hurt at work than at home?

“If we go down that road, we’ve compromised a system set up to care for workers without regarding to fault or principles of negligence.  And, what will carriers do with this decision, but increasingly deny claims on this basis and again, muck up a no-fault compensation system with negligence principles?  As public policy, this precedent presents a danger to workers (no pun intended).”

Federal Judge ‘Fry’ed Over Retailer’s Behavior

I don’t personally know U.S. District Court Judge Robert Lasnik, of course, but I can make a pretty reasonable guess that when he decides to make his next home-electronics purchase, it won’t be at Fry’s Electronics.

The San Jose, Calif.-based retail chain is being sued by the EEOC, which alleges an assistant store manager at one of its locations sexually harassed a store employee  and that a supervisor was fired in retaliation after he complained to upper management about the store manager’s behavior. The trial is set for November, but in the meantime Fry’s has been sanctioned twice by Judge Lasnik for what appears to be some pretty outrageous behavior.

In the latest sanction, announced earlier this month, Lasnik ordered the retailer to pay a $100,000 penalty for intentionally withholding evidence, raising a “fallacious” argument and demonstrating a “disturbing lack of candor to the tribunal.” “The Court finds that defendant’s conduct in this respect was unfair, unwarranted, unprincipled and unacceptable,” Lasnik said in announcing the sanctions. “Defendant has deliberately engaged in deceptive practices that undermine the integrity and orderly administration of these proceedings.”

In May, the court sanctioned Fry’s for willfully destroying the hard drives where relevant information would have been stored and ordered that the jury be instructed to make an “adverse inference” on one of Fry’s defenses.

In the latest sanction, the court found that the retailer withheld evidence of similar allegations of sexual harassment against the same assistant store manager by a different employee in 2001. Although this evidence had been requested by the plaintiffs, Fry’s withheld it until the end of May, just a few weeks before a related arbitration hearing held on this matter last month.

“As trial attorneys, we all expect zealous advocacy from the other side, but we also expect all parties to a lawsuit to play fair,” said EEOC Supervisory Trial Attorney John Stanley in an EEOC statement announcing the sanction. “Violating discovery rules and orders of the court drags our profession down and does nothing to further the cause of justice.”

Fry’s Electronics is being represented by the Jackson Lewis law firm, which did not respond to requests for comment.

Mayor Cuts Workers’ Pay to Minimum Wage

News this morning coming out of Scranton, Pa. — the home of the long-running workplace sitcom The Office — isn’t getting many laughs, especially where the unions are concerned, courtesty of the Associated Press:

Unions representing workers in the northeastern Pennsylvania city of Scranton expect to file a federal lawsuit against the city after the mayor abruptly cut their pay to minimum wage.

The attorney for three unions, including firefighters and police, tells The Times-Tribune of Scranton he expects to file several legal actions, including a motion to hold Mayor Chris Doherty in contempt of court for violating a judge’s order to pay full wages.

Doherty last week cut the pay for about 400 employees to the federal minimum wage of $7.25 per hour. He says it was the only way for the cash-strapped city to pay bills, and promises to restore pay once finances are stabilized.

Doherty is locked in a dispute with Scranton’s city council over a financial recovery plan as it faces a $16.8 million budget deficit.

The full Times-Tribune of Scranton story can be read here.