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January 27, 2010

Not Only Do I Quit—I’m Suing You

Blog cartoon 1-27-10

[Cartoon courtesy of Grantland Cartoons]

A beleaguered employee wishes he could sue his company more often than he’s able to. Take the horror of doing the same work (only more of it and of a higher quality) than the workmate sitting in the next cubicle over, and yet being paid $10 to $15 thousand dollars less annually. What if the one being paid more (while doing the lesser amount and lesser quality) of work is a man and the other (harder-working/lower-paid) is a woman? Sounds dicey for the company, but you’d be surprised. Most companies can get away with it, I suspect. A friend of mine in that very situation has decided to bide her time and make requests for promotion rather than seek legal action. One protection many of your companies enjoy is pure dumb luck—you pay your workers so little they can’t afford an attorney.
Another case I heard about also left the employee powerless. He suspected a manager at a former company had spread defamatory gossip about him at his new company. With none of his new colleagues willing to go on the record that they had spoken to his ex-manager in a non-job reference context, there was nothing he could do. But even, for the sake of argument, if at least one was willing to verify the defamed employee’s suspicions to human resources, what could the defamed one have done?  He likely would have had no recourse anyway.
Companies are told to be wary of employee lawsuits, but with all the employment-related horror stories I’ve heard (and occasionally experienced), I’ve never known anyone to feel they had the capacity to fight back by suing their company. Consider, for instance, the survival strategy of many companies during the Great Recession/Great Recovery. They’ve laid-off countless workers, which is fair (albeit cruel) game, but they’ve also doubled or tripled the workload of existing employees with no pay increases, not even a cost-of-living adjustment. They know they can get away with it because in this economic climate non-heiresses will do nearly whatever it takes to hold onto their jobs. I assumed it would be illegal to increase workload exponentially without increasing pay, but I believe what these companies did is perfectly legal.
Since, in reality, few, if any, of your employees will sue you, what would be a better focus for corporate paranoia?  One idea I have is employee engagement. Most legal concerns are much more of a threat to employee motivation than to your legal security. You can legally get away with doubling or tripling workload without increasing pay, but can you afford the toll it will take on the morale of your workforce? Think of the bitterness you’re engendering. You would be lucky if your bitterest looked for a new job when the economy recovers; unfortunately most of them will remain until their demoralized lack of productivity gets them fired, or worse yet, leaves them languishing on your payroll indefinitely. When coming up with strategies to survive the unstable economy, reflect on the burden you may be placing on workers. If it’s substantial, think about offering them compensation you can afford, whether it’s additional vacation time or enrollment into a development program that will reward them with a promotion down the line in exchange for sticking with you through unbearable times.
Be sure to note unfairness in your pay scale in work groups. Does the current pay structure reflect reality?  During the height of the recession, work groups were consolidated, with some work groups perhaps inheriting an employee with a higher title and salary than the employee(s) already in the work group. If enough time has passed to evaluate and compare work performance, ask the manager of the work group in question to spend time thinking about whether the pay structure needs rearrangement. You might find the fairest thing to do is swap salaries and titles between two workers if one is out-performing the other. After all, why should a low-performing employee keep a higher title and salary than a high-performing one just because that’s the package the manager received him in when he joined the work group?
Another thing that’s legal, but most employees probably would agree shouldn’t be, are staggering pay differentials between mid-level workers and the CEO and executive board. Curiously, there don’t seem to be any laws restricting corporate leaders from making more than a specified percentage of their average employee’s pay. But that’s no reason to assume workers won’t notice the poorly performing CEO made $20 million last year while their salary stayed stagnant at some $40,000 despite a tripled workload. You and/or your Board of Directors might want to think about putting executive salary parameters in place that rise and fall commensurate (or much closer to commensurate) with employee pay.
As one source told me her mother used to say, just because you can doesn’t mean you should. Not to liken your CEO to a three-year-old with his fingers knuckle-deep in chocolate cake batter, but sometimes it’s for the best if at least some of the corporate goodies are kept out of reach.

Is your company concerned with the potential for employee lawsuits?  Are you doing anything this year to safeguard yourself against workers happy to sue you, or do you feel the risk of employee lawsuit is overblown?


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