More Woes for Whistleblowers

Even a CEO’s authority has its limits.

James Staley, the U.S. chief executive of British banking heavyweight Barclays was recently reminded of this fact, and offered other executives a case study in how not to handle a whistleblower complaint in the process.

As the New York Times reported this week, Staley finds himself being investigated by British authorities after he called on Barclays’ internal security team to try to uncover the identity of a whistleblower in an “‘honestly held’ but ‘mistaken’ belief that he had clearance to do so.” According to the Times, the Barclays security team even received assistance with the search from a United States law enforcement agency.

Staley’s effort did not sit well with the bank’s leadership, including Chairman John McFarlane, who the paper reports had “personally chastised” Staley, and had expressed his disappointment in the CEO’s actions directly to him.

The roots of McFarlane’s frustration trace back to last summer, when Stanley brought on Tim Main—a friend and former colleague of Staley’s at JPMorgan Chase—to chair Barclays’ global financial institutions group.

“Mr. Main, who was known for his team-building skills at JPMorgan, seemed like a great hire” for Staley, the Times wrote.

In order to join Staley at Barclays, Main left New York-based investment banking advisory firm Evercore Partners, where he had been “a star,” according to Roger Altman, the firm’s founder and chairman.

Just a month after Main’s hiring, however, Barclays officials received letters sent by an anonymous whistleblower who claimed that Main had “acted erratically” while at JPMorgan; a claim later supported by two JPMorgan employees who reported to Main during his time there.

Barclays did not disclose the details of the letter, but Staley reportedly took offense to the whistleblower’s allegations leveled against Main, which “related to personal issues from many years ago,” Staley wrote in an email to employees. “The intent of the correspondents in airing all of this,” he told workers, “was, in my view, to maliciously smear this person.”

In response to these claims, Staley twice asked Barclays’ internal security team to find the letter’s author. The inquiry didn’t reveal the whistleblower’s identity, and the bank ultimately disregarded his or her assertions.

While both Main and Staley have declined to comment on the situation, Staley did release a statement saying he has apologized to the Barclays board and “will accept whatever sanction it deems appropriate,” which will include a “very significant compensation adjustment,” according to the bank.

An independent law firm was commissioned to investigate Staley’s attempts to unmask Main’s anonymous former colleague, and determined that Staley “erred in seeking out the … whistleblower, but that his belief that he had clearance to do so was an honest mistake,” according to the Times.

That could very well be. But the Barclays brouhaha serves as just the latest example of the hostile treatment that whistleblowers continue to face.

Jeffrey Pfeffer, a professor of organizational behavior at Stanford University’s Graduate School of Business, told the Times as much.

“Whistleblowers are typically treated horribly, even in the government, let alone in the private sector,” said Pfeffer. “People don’t like to have problems pointed out.”

Wells Fargo Shows Its Claws

Months after the revelations that Wells Fargo had engaged in highly questionable (some say illegal) practices, including creating fraudulent accounts, its board of directors has taken action to recoup some of the compensation from the bank’s leaders during the time the nefarious schemes were ongoing.

According to the New York Times, an additional $75 million in compensation will be “clawed back” from the two executives the company’s says bear the majority of the blame for the scandal over fraudulent accounts: the bank’s former chief executive, John G. Stumpf, and its former head of community banking, Carrie L. Tolstedt:

The clawbacks — or forced return of pay and stock grants — are the largest in banking history and among the largest in corporate America. A four-person committee of Wells Fargo’s directors investigated the extensive fraud.

The Times says that while the amount of money customers lost was relatively small — the company has refunded $3.2 million — the scope of the fraud was huge: 5,300 bankers were fired for creating as many as two million unwanted bank and credit card accounts:

In one detail revealed by the board’s report, a branch manager had a teenage daughter with 24 accounts and a husband with 21.

According to Time magazine, Wells has instituted several corporate and business changes since the problems became known nationwide. Wells has changed its sales practices, and called tens of millions of customers to check on whether they truly opened the accounts in question.

Wells Fargo board Chairman Stephen Sanger also acknowledged in a Monday conference call with reporters that board members “could have pushed more forcefully to change leadership at the community bank,” according to USA Today.

While conceding he could not “promise perfection” in the efforts to regain trust from customers and regulators, Sloan said, “I’m very confident we’re on the right track.”

 

Report: HR is ‘Behind the Curve’

New research from the Hackett Group finds that many HR departments are lagging when it comes to helping their organizations deal with talent shortages in key areas, and — due to a lack of resources — sufficient progress likely won’t be made anytime soon.

The report, The CHRO Agenda: An Urgent Need to Close Large Gaps in Talent and Technology Capabilities (registration required), is based on survey results from executives at 180 large U.S. and foreign companies, most with annual revenue of $1 billion or more. It finds that HR at many organizations lacks the ability to fully support key enterprise goals such as adapting talent-management strategies and processes to deal with changing business needs, address talent shortages in critical areas, manage change more effectively and develop agile executives fully capable of leading in a volatile business environment.

HR leaders at these companies don’t suffer from a lack of ambition: The report finds that they’re planning to address issues such as talent-related change and strengthening their organizations’ HR tech and information capabilities and organizational structure and processes. However, their departments are held back by limited resources, with the number of full-time equivalent HR employees expected to decline by 1.4 percent this year on top of a decline of 1.3 percent last year and budgets that are projected to decrease by an average of 1.6 percent, compared to a reduction of 0.3 percent in 2016.

“The consistent finding here is that most HR organizations are simply too busy fighting fires to get out in front on strategic issues,” says Harry Osle, Hackett’s global HR advisory leader. “In many cases, they are in reactive mode, with too much on their plates and an inability to say no to work that does not allow HR to become more strategic.”

HR must change this mindset if it’s ever going to deliver strategic value, he says. “To build a true leadership position within the organization, it is essential that HR find ways to more effectively manage and prioritize its service portfolio, adopt proactive demand management techniques from IT and make headway on transformation and improvement in key talent areas.”

Hackett finds that HR organizations are planning to “dramatically increase” their mainstream adoption efforts in several digital technology areas, including cloud applications and Software-as-a-Service, social media and collaboration technologies and advanced analytics.

Limiting Subpoena Power

As you might have heard, the Supreme Court issued a ruling this week in the case of McLane Co. Inc. v. Equal Employment Opportunity Commission.

Monday’s ruling addressed the standard of review for a district court in determining whether to enforce or quash an EEOC-issued subpoena, with the Court reversing the Ninth Circuit’s judgment and holding that federal appellate courts must review a district court’s decision whether to enforce an EEOC subpoena for abuse of discretion, and not de novo.

The case centered on a former McLane Co. employee’s claim that the Temple, Texas-based supply chain services provider discriminated against her on the basis of her gender.

In 2007, Damiana Ochoa took three months of maternity leave from her job at McLane, which requires new employees and workers returning from medical leave to undergo a physical evaluation if their job is physically demanding—which Ochoa’s was, according to court documents. Ochoa attempted the evaluation on three separate occasions, and failed to pass each time. She was subsequently fired, which led to her filing a charge of gender discrimination with the EEOC.

As part of its investigation, the EEOC issued subpoenas to McLane, requesting the names, Social Security numbers and contact information for other employees that had been required to take the same evaluation. The EEOC filed actions to enforce the subpoenas after McLane refused to comply with that request.

Finding that the aforementioned information was not relevant to the charges, a federal district court refused to enforce the subpoenas. The Ninth Circuit reversed that decision, determining that the district court had erred in characterizing the information as irrelevant.

The Supreme Court’s decision to overturn that Ninth Circuit ruling offers “a good reminder that there are limits to the EEOC’s subpoena power,” says Melissa Raphan, a Minneapolis-based partner at Dorsey & Whitney.

“The practical effect of this decision for employers is twofold,” says Raphan, who is also chair of the firm’s labor and employment group. “First, it is a good reminder that the EEOC does not enjoy unfettered discretion to obtain information about other current and former employees. Second, the battleground to push back on the EEOC’s subpoena is in the district court.”

The EEOC’s subpoena power “does not allow the agency to bypass the burden of showing that the material is relevant, and, even if relevant, the employer can still show that the request is unduly burdensome.”

Ultimately, the decision’s impact on employers figures to be “somewhat limited in scope,” says John Alan Doran, a Scottsdale, Ariz.-based partner at Sherman & Howard.

Noting that only the Ninth Circuit took the position that it could review these trial court decisions “from scratch,” Doran adds that “every other jurisdiction has held that a trial court’s decision to quash or modify the scope of an EEOC opinion is subject to searching review by the appellate courts.”

As such, the decision directly affects only those employers doing business within the Ninth Circuit, continues Doran.

That said, “there is useful language for all courts to consider with respect to the scope of the EEOC’s subpoena power that employers will likely use in future run-ins with the EEOC throughout the country.”

The case is “largely about whose ox is getting gored, so it is hard to describe the decision as pro- or anti-employer,” says Doran. “In cases where an employer fails to convince a trial court to modify or quash an EEOC subpoena, this decision makes it that much harder to reverse the trial court’s decision on appeal. But where an employer successfully convinces a trial court to modify or quash a subpoena, its likelihood of success on appeal of that issue is considerably better.”

Using Data To Defend H-1B Visas

As the federal government this week began accepting H-1B visa applications for 2017, Trump administration officials sent new signals that they will more carefully scrutinize employer use of the popular tool for recruiting skilled workers.

Meanwhile, a new study disputes the idea — espoused by the president himself –that employers use H-1B visas to hire “cheap labor” from overseas, undercutting Americans who would like the jobs.

The study, by the job site Glassdoor, concluded that foreign workers with H-1B visas on average earn nearly 3 percent more than Americans holding comparable jobs. Overseen by Glassdoor chief economist Andrew Chamberlain, the analysis compared salaries reported on H-1B applications with those reported by Glassdor users for comparable jobs.

While a study in the 1990s suggested that wages for computer scientists were hurt by an influx of H-1B workers at the time, the current data show “there’s no evidence that H-1B workers are paid any less” than America counterparts today, Chamberlain writes.

Overall, the foreign workers earn 2.8 percent more, the study found.The pay gap varied by job title and location; for example,H-1B workers were more likely to earn less than their American counterparts in Washington, D.C. than in other major U.S job hubs.

But the program remains a target for critics, including many in the Trump administration, who say it hurts native-born workers by creating a back door for foreign applicants.UnderTrump, the federal government has begun to tighten regulations that govern the program. Last week, for example, officials said computer programming jobs, long a popular use forH-1B visas, would no longer automatically qualify.

It’s unclear what further restrictions may follow. But just this week immigration officials vowed to redouble enforcement efforts against employers that skirt the rules. “Too many American workers who are qualified, willing and deserving to work in these fields have been ignored or unfairly disadvantaged,”said a statement issued Monday by the U.S. Citizenship and Immigration Services.

Getting Under Employees’ Skin

No, this story isn’t about a new and unpopular workplace policy sweeping through the nation’s workplaces.

At least not yet.

The Associated Press is reporting today on a Swedish company that turns its willing employees into “cyborgs” by inserting microchips into them:

What could pass for a dystopian vision of the workplace is almost routine at the Swedish startup hub Epicenter. The company offers to implant its workers and startup members with microchips the size of grains of rice that function as swipe cards: to open doors, operate printers, or buy smoothies with a wave of the hand.

Epicenter’s co-founder and CEO Patrick Mesterton told the AP the move will bring a heightened sense of ease for workers:

“The biggest benefit I think is convenience,” he said. “It basically replaces a lot of things you have, other communication devices, whether it be credit cards or keys.”

According to the AP, the small implants use Near Field Communication technology, the same as in contactless credit cards or mobile payments: “When activated by a reader a few centimeters (inches) away, a small amount of data flows between the two devices via electromagnetic waves. The implants are ‘passive,’ meaning they contain information that other devices can read, but cannot read information themselves.”

The technology is not new, of course, but it has never been used to tag employees on a broad scale before, and the AP says Epicenter and a handful of other companies “are the first to make chip implants broadly available.”
Way back in 2006, however, colleague Mark McGraw tackled the topic of tagging workers:

Cincinnati-based private video-surveillance company CityWatcher.com recently embedded silicon chips in four of its employees, as the company tested the technology in an effort to control access to a room where it holds security video footage for government agencies and police.

The dime-sized chips, manufactured by Delray Beach, Fla.-based VeriChip Corp., were implanted into the employees’ arms, says Sean Darks, CityWatcher CEO, after the company explored various types of biometric applications such as fingerprint and handprint identification systems. CityWatcher turned to radio-frequency identification chips, a less costly alternative to typical biometric systems, to “make security improvements,” he says, and eliminate the possibility of employees losing or misplacing proximity cards or other forms of identification.

RFID chips are inexpensive radio transmitters that emit a unique identifying signal. The chips are commonly used for tracking merchandise in transit, but they can also be implanted in pets to identify them in the event they’re separated from their owners and can be used in humans for medical purposes — to link patients to their medical records in emergency situations, for instance.

However, CityWatcher’s implementation of RFID is the first known case in which U.S. workers have been “tagged” electronically as a way of identifying them, and is likely to add to a growing controversy surrounding RFID , predicted as one of the next big growth industries.

Not everyone McGraw talked to for the piece was excited at the prospect of having more workers walking around with chips inserted under their skin.

“Whether or not implanting  … chips in humans becomes a common workplace security measure remains to be seen,” said Liz McIntyre, a critic of the technology and the communications director of Consumers Against Supermarket Privacy Invasion and Numbering, a nonprofit group focused on consumer privacy issues.  “This is just the beginning,” says McIntyre.
Eleven years later, though, that trend is apparently still in its beginning stages, as the only progress seems to be in the chip’s size shrinking from a dime to a grain of rice, not in expanding the number of companies using such technology.

 

Taking On Banks Over Gender Pay

Figured the day before Equal Pay Day (that’s right, that’s tomorrow!) would be a perfect time to tell you about a pretty interesting teleconference I sat in on recently.

The topic, you guessed it, was gender-pay equity. Two women — Natasha Lamb, managing director and lead filer of gender-pay resolutions for Arjuna Capital, and Former Lt. Gov. of Massachusetts Evelyn Murphy, founder and president of The WAGE Project Inc. (an activist group dedicated to gender-pay equity) — were filling listeners in on Arjuna’s next bold move: making the banks come clean on what it sees as their backward pay practices when it comes to women.

See, Arjuna was the activist investment firm (with U.S. headquarters in Boston) that took the lead last year in getting seven of nine targeted tech companies (eBay, Intel, Apple, Amazon, Expedia, Microsoft and Adobe) to include data on their pay practices in their proxy statements.

Now, said Lamb in the teleconference, her firm is going after six top banks and credit-card companies that it has financial stakes in — Wells Fargo, Citigroup, Bank of America, JP Morgan, MasterCard and American Express — to pressure them to do the same by officially considering its proposal in this year’s annual proxy statement.

Unfortunately, she pointed out, all but MasterCard are opposing Arjuna’s proposal requesting reports from the banks on the percentage pay gap between male and female employees across race and ethnicity (including base, bonus and equity compensation; policies to address that gap; the methodology used; and quantitative reduction targets).

Citigroup specifically came out and said in its proxy statement that such gender-pay-gap reporting would be “costly and time-consuming.” In fact, here is Citigroup’s entire board recommendation from that statement:

“We remain committed to our ongoing efforts to promote diversity in the workplace and believe we are making demonstrable progress in building a diverse company and compensating our employees based on performance. [Arjuna’s proposal] calls for a report on the company’s policies and goals to reduce the gender-pay gap, which would be costly and time-consuming, and in light of our many efforts in this area, would not offer stockholders meaningful additional information. As such, the proposal would not enhance the company’s existing commitment to an inclusive culture or meaningfully further its goal and efforts in support of workplace diversity; therefore, the board recommends that you vote AGAINST this proposal.”

That said, however, Citigroup spokesman Mark Costiglio did tell me his company has “had productive discussions with Arjuna Capital on its proposal and looks forward to continued engagement on this issue.” So we’ll see.

During the teleconference, Lamb lit into the entire banking industry, with direct reference to Citigroup:

“You just can’t get around the fact that big banks are in the stone ages when it comes to gender-pay equity.  Big tech stepped up in 2016 and took real action to address the legitimate concerns of long-term shareholders and women.  Yet the banks are sticking their heads in the sand, which makes you wonder: What do they have to hide?

“It’s a continuation of the status quo where bank leadership paternalistically pats investors on the head and tells them to trust them.  Unfortunately, we already know that banks are among the worst offenders when it comes to how women are treated in the workplace.  How can we hold Amazon to one standard on gender equity while Citigroup pretends it’s 1957, not 2017?”

Last year, eBay, Google and Facebook were all opposed to the pay transparency and improvement campaign. But, “when peer group after peer group agreed to it,” Lamb said, “eBay actually switched to 51-percent approval.” Though Google and Facebook remain opposed, requests to them have been resubmitted, she added.

The business case for pay equity can’t be denied, Murphy chimed in. “In the last seven years, [it’s] been very strong,” she said.

One caller asked if the tech companies have actually done more than simply become more transparent. “Have they taken more steps to close the gender gap?” she asked. Lamb’s response:

“Yes, they have.”

But the banks are going to be a tougher nut to crack, since finance is a heavily male-dominated field with one of the highest disparities of all industries examined by Glassdoor, the release points out.

Apparently, Arjuna is up for the challenge.

Meanwhile, if you’re interested in a silghtly different take on this issue, you might want to tune into this roundtable discussion tomorrow at 11 a.m. PDT hosted by PayScale and moderated by its vice president, Lydia Frank.

The gist of that discussion, Gap Analysis: What Equal Pay Day Gets Wrong, will center on the premise that the oft-quoted “women earn 80 cents for every $1 earned by men” is actually an unfair representation of the gender-pay problem because it doesn’t reflect men’s and women’s pay for the same job (which PayScale claims is actually 98 cents on the dollar).

PayScale believes that the pay gap is, instead, an opportunity gap since women tend to find themselves in lower-paying jobs than men and are also left behind men when it comes to leadership roles or promotions in the workplace.

Wherever the truth lies in all of this, I say it certainly doesn’t hurt to get more employers, whatever their industry, to open their books and start tackling discrepancies.

Taking Well-being’s Pulse

If there’s a single item that runs through Aon Hewitt’s 7th Annual Consumer Health Mindset Study, released yesterday at the National Business Group on Health’s Business Health Agenda 2017 in Washington, it’s that well-being continues to be a work in progress. (You can pre-register here for the full report.)

The study of 2,503 consumers, mostly employees and their dependents, found that well-being is continuing to have a big impact, with all well-being dimensions (financial, physical, emotional and social) being viewed by employees as important.

The findings suggest that consumers are increasingly looking at well-being in a holistic way, certainly a good sign for employers as they attempt to expand their well-being footprints. In light of this, one of the recommendations offered by Aon Hewitt Partner Joann Hall Swenson at a general session on the survey’s key takeaways was for employers to build workplaces that can support well-being in its entirety.

It’s also worth noting that, according to the study, some of the more traditional elements of physical wellness experienced a decline in importance over the past year. Diet, for example, decreased in importance by 7 percent, from 65 percent to 58 percent. Exercise, meanwhile, dropped 6 percent, from 59 percent to 53 percent.

Swenson suggested that employers might want to refresh their efforts in both those areas.

Employers, of course, would like nothing more than to see a greater percentage of employees become better consumers. Right? Better consumers make better decisions, after all.

Well, if the study’s findings are correct, employers still have more work to do on this front as well.

A takeaway from the study is that savvy consumerism continues to be a challenge as far as healthcare is concerned. Among the data points shared by Swenson: 77 percent of the respondents regretted a health decision they made, and only 40 percent said they know where to go to find out what a particular health service costs, down 7 percent over the past year.

“When you look at the number of people who bring a list of questions to their doctor and the number of people who are looking at costs before having a procedure, those numbers are down,” Swenson pointed out.

Then there’s the high level of frustration and confusion patients experience navigating the healthcare system, another key finding cited by Swenson. “Patients are losing their patience,” especially in the case of emerging millennials, she said.  “Many are giving up and throwing in the towel.”

To address this, she said, employers need to use technology to simplify the health-navigation process.

The survey also took a deeper dive into the area of mental health than in past years, finding that the issue continues to reside “in the shadows.” Not surprisingly, it found that stress continues to be on the rise, with the percentage of respondents reporting high stress levels at 54 percent, up 5 percent over the past year. Of those reporting high stress, 74 percent said they were experiencing more and more obstacles that stood in the way of receiving treatments.

Consumers, Swenson said, would like to see more one-on-one assistance from their employers, greater flexibility in terms of arranging for appointments and an expanded provider network from which to choose.

Finally, Swenson said, consumers want healthcare and well-being to be a multichannel experience, one that includes email, mobile and social. Messages and information, she added, need to be delivered when they’re needed, not when it’s convenient for the employer. (The topic of personalization was addressed at several other points during the NBGH event.)

Avoid Hiring the ‘Takers’

Are you a giver, a matcher or a taker? I came across a fascinating TED Talk the other day by Adam Grant, a management professor at Penn’s Wharton School and the author of two bestselling books, Originals and Give and Take. The latter book was about how helping others can fuel our own success, and was the focus of Grant’s talk, “Are You a Giver or a Taker?” which he delivered late last year at IBM.  There are three basic types of people in every workplace, he said: givers, takers and matchers.

Grant surveyed more than 30,000 people across industries and throughout the world, and found that most fall somewhere in the middle between givers and takers — he calls them “matchers.”

“If you’re a matcher, you try and keep an even balance of give and take: quid pro quo — ‘I’ll do something for you if you do something for me,'” he said. “And that seems like a safe way to live your life. But is it the most effective and productive way to live your life?”

The answer, said Grant, is ” a very definitive … maybe.”

Interestingly enough, although he found that givers display attributes that would seem to make them ideal employees, in the course of his research Grant found that they actually tended to be the worst performers in the various jobs that he studied. Givers tended to get the least work done, sell the least amount of products and, in medical schools, the students with the lowest grades tended to be the ones who most agreed with statements like “I love helping others.”

The givers are so giving, said Grant, that they tend to neglect their own work.

So, should you avoid hiring givers? Absolutely not, he said. In fact, givers tend to bring tremendous advantages to the organization as a whole, and HR and recruiting leaders should be screening out the takers instead.

“Givers make their organizations better,” said Grant. A huge body of evidence demonstrates that the more often people help others, share their knowledge and serve as mentors, the better organizations do on every success metric, from customer satisfaction to higher profits, he said. Givers spend a lot of time helping others but often end up suffering along the way, from a career perspective, said Grant. Interestingly enough, while many givers are bottom-dwellers in terms of job performance, they’re also disproportionately represented among top performers in terms of productivity, sales results and grades. Organizations should build cultures where givers actually get to succeed, he said.

Takers, by contrast, often rise rapidly within organizations — but they tend to fall rapidly, too, said Grant. Because takers tend to be “kiss-up, kick-down” types — currying favor with the higher-ups while dissing the people below them — they inevitably inspire revenge from the matchers, who make up the majority of most organizations, he said.

Matchers are positively influenced by the behavior of givers, however, and by building a culture in which asking for help from others is encouraged, organizations will not only inspire matchers to emulate givers but also make it easier for the givers themselves to thrive, said Grant. Fostering such an environment will encourage the givers themselves to seek assistance rather than risk burnout by helping everyone else to the detriment of their own well-being, he said.

Meanwhile, avoid the damage that even one taker on a team can wreak by filtering them out during the hiring process, said Grant.

“My favorite way to catch these people in the interview process is to ask them the question, ‘Can you give me the name of four people whose careers you have fundamentally improved?'” he said. “The takers will give you four names, and they will all be more influential than them, because takers are great at kissing up and then kicking down. Givers are more likely to name people who are below them in a hierarchy, who don’t have as much power, who can do them no good. And let’s face it, you all know you can learn a lot about character by watching how someone treats their restaurant server or their Uber driver.”

Of RIFs and FMLA Requests

Every HR professional knows that FMLA requests can get tricky, and that non-compliance can get costly. A recent court ruling shows there might be a price to pay even when an employee doesn’t explicitly make an FMLA request.

According to Crain v. Schlumberger Technology, Gregory Crain worked for 10 years as a regional sales manager for Schlumberger Technology Corp. and its predecessor company.

Terminated from his position as part of a reduction in force, Crain subsequently filed an FMLA interference claim, contending that the company violated his leave rights by letting him go just days after informing the organization that he needed to undergo surgery that would force him to take time off from work.

In October 2016, a jury agreed with Crain, awarding him $77,007; the amount of his severance. More recently, the United States District Court for the Eastern District of Louisiana affirmed that ruling, awarding Crain the original verdict award along with an additional, equal amount in liquidated damages. In other words, Schlumberger must now pay double the damages.

Why? The timing of Crain’s termination was certainly a factor, according to Tina Syring, a Minneapolis-based partner at Barnes & Thornburg and a member of the firm’s labor and employment law department.

As Syring points out, Crain’s name was included in the list of employees to be included in the RIF; a list that surfaced two days after his surgery.

“Prior to the formal notification, however, the plaintiff’s name was never included in any company RIF documents, even though the employer’s witnesses claimed that the decision to include him in the RIF was made weeks before such notice.”

In the end, she says, “the jury found the employer’s witnesses less credible than the company’s lack of documentation surrounding the decision to include the plaintiff in the reduction in force.”

Syring describes this decision as a “great reminder” that documentation matters when mapping out a reduction in force.

“According to the court, given the weight of the evidence (or lack thereof) and the temporal proximity of the termination, it was not an unreasonable decision by the jury to find in favor of the plaintiff.  Thus, when addressing RIFs, employers should take the time to carefully document which employees are being considered for the RIF and update this documentation throughout the decision-making process.”

Adding another wrinkle to this case is the fact that Crain didn’t specifically mention FMLA when he told the company that he would undergo surgery and would subsequently require time away from work. He did, however, inquire as to short-term disability leave, which ultimately compels the company to weigh the possibility of FMLA leave.

“As the Crain court noted, an employee is not required to use any sort of ‘magic words’ to provide notice of the need for FMLA leave,” says Syring.

“In this situation, the plaintiff made an inquiry to human resources about short-term disability. The Crain court found that to be sufficient notice to the employer to at least make an inquiry as to whether FMLA leave notice and adherence obligations were triggered,” she says, adding that testimony had also been given to confirm that the plaintiff told his former supervisor and two HR representatives that he was going to have surgery.

“Because the company could not demonstrate that it even considered the possible application of FMLA leave prior to [Crain’s] termination, the court found that the employer’s actions were neither in good faith or reasonable.  As a result, liquidated damages were awarded against the company.”