October 2014 HR Brain Teaser

Brain Teaser Courtesy of EPLI Pro™

Play Nice!

You have two management level employees that are constantly bickering. They would each like to see the other terminated. 

You heard a rumor that these two managers went to blows about a scheduling issue. Their screaming match was witnessed by other employees and customers. You plan to bring them both into your office and discuss their behavior. Likely, both managers will be disciplined for their respective unprofessional behavior.

Before you get a chance to talk to them, one of the managers (a woman) comes to your office complaining that two former employees abruptly quit because the other manager (a male) had created a hostile working environment. In particular, she claims that he sexually harassed these employees; allegedly, he propositioned one of the former employees (who was only 15 years old) in exchange for a raise.

What should you do?

A.  Do nothing about the sexual harassment complaint since the complaint is hearsay about former employees, and continue with the planned meeting regarding the managers’ unprofessional behavior.

B.  Do nothing about the sexual harassment complaint since the complaining manager is not credible, and discipline them both for their unprofessional behavior.

C.  Investigate the sexual harassment, and continue with the planned meeting with both managers about their behavior. Regardless of the outcome of the meeting with the managers, you cannot discipline the female manager because she brought a sexual harassment complaint to your attention.

D.  Investigate the sexual harassment complaint, and address the unprofessional behavior of both managers. Upon completion of the meeting with the managers, take whatever disciplinary action is appropriate.

Answer:  D     You should take every complaint of sexual harassment seriously, and investigate. Do your best to interview every witness, including the former employees. You should not reject the complaint, out of hand, because you predetermine the complainant is not credible. Once the investigation is completed, take any necessary and appropriate remedial action.

You should also meet with the managers and discuss their unprofessional behavior. If they do not admit screaming at each other in front of other employees and customers, further investigate this incident. If the verbal altercation is confirmed, you should discipline both individuals involved.

However, be aware that the female manager may contend that she was retaliated against because she participated in a sexual harassment investigation. The U.S. Supreme Court held that witnesses in sexual harassment investigations are protected from retaliation. While retaliation may be a viable claim, the circumstances would not seem to support her possible retaliation claim provided the unprofessional behavior relates to something other than sexual harassment, and is clearly documented by several witnesses including unbiased customers.

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We Have All Your Employment Answers

How Employment Agreements Work and Work For You

Let’s talk about employment agreements. Hello? Have you fallen asleep already? They may be a little dry and boring, but important, as they are tools that increase the value of your relationships and help your company manage risk.

Do you need them? Please do not get advice from your buddy on the golf course on this question – unless he is an HR professional – as it could cost you $20K in a wrongful termination lawsuit. The advice usually takes the form of, “less is more,” meaning do not put the agreement in writing at all. We disagree. The first thing an attorney will ask is, “Where is the employee handbook?” Without one, there are no rules and if you get sued you will lose. Our recommendation is that you have agreements in place to set up expectations ahead of time and use what works best for your situation in accordance with the law.

Noncompetes – Not everyone needs one. The types of employees that are relevant are sales people (access to client lists), people who influence strategy like high level C suite, and engineers or others who write proprietary code and create intellectual property. The non-compete may not impede future employment, outlines what is and is not allowed, gives a timeframe, and sets the stage for legal recourse if you can quantify damages, i.e., loss of clients.

Confidentiality Agreements – These agreements overlap to protect sensitive technical or commercial information from disclosure to others. If the information is revealed to another individual or company, the employer has cause to claim a breach of contract and can seek damages. They also prevent the forfeiture of valuable patent rights, which happens often and is usually unintentional.

Severance agreements – With many moving parts and legal requirements, these focus on one key word – exchange. Typically, the agreement outlines the consideration (money) in exchange for language that implies “you (employee) will not sue me.” Severance agreements are appropriate in situations where an employee may feel the need to talk negatively about the employer in the marketplace. You cannot waive all rights, go beyond the legal boundaries, or ignore other laws regarding age discrimination or WARN Act (over 50 employees) requirements for mass layoffs.

Equipment agreements – Company provided cell phones, tools, hard hats, calculators, laptops, etc. are covered. For most companies, equipment is not addressed upfront and an employee may see a related deduction from their final check. That is not legal; however, you can pursue other means of compensation.

Bottom line: You are better off with employment agreements versus without them so that you can set expectations ahead of time and quantify your risk exposure.

Written by Jim Annis President/CEO of The Applied Companies, which provide HR solutions for today’s workplace. Celeste Johnson and Tom Miller, Applied’s division directors, contributed to this article.

Good News About Health Insurance!

If you have between 10 and 200 employees and you offer an employer sponsored health plan for your employees, you probably “early renewed” in the fall of last year.  This “early renewal” was an opportunity for you to delay the inevitable, significant “small group” health insurance premium increases resultant from a provision in Obamacare called “adjusted community rating”.  Well, the “crows have now come home to roost”, as we are hearing small group premium increases range from a seemingly benign 38% to a whopping 147%....yes, folks, 147% !!!

Did you know a PEO (Professional Employer Organization) is the ONLY legal way to aggregate risk for health insurance under the Affordable Care Act?  Did you know Applied Business Solutions, our PEO, has also received our renewal notice?  Good news for you, our health insurance premiums over the past 24 months have risen…are you ready for this…only 2%...yes, that is correct, two percent, in 24 months.  How much has your health insurance gone up in the past two years?

Our program is working wonders for our clients in managing their healthcare costs.  As a bonus to our clients, we also handle their payroll, workers compensation insurance and human resources, so that they can focus on their “core” business.


Please e-mail me at jim.annis@theappliedcompanies.com or Tom Miller at tom.miller@theappliedcompanies.com to set up a totally “low key” informational meeting.  We will show you how a locally owned Professional Employer Organization can help your company GROW faster, reduce your LIABILITY, lessen TURNOVER, and allow you to make more MONEY!

Written by Jim Annis, President/CEO of The Applied Companies, which provide HR solutions for today’s workplace.