As more companies embrace the idea of working "lean," some observers see an uptick in frivolous lawsuits and other actions by employees who believe they're being overworked, underpaid and underappreciated.
"I'm seeing this across the board," said one accountant and business advisor who works in the Mid-Atlantic region. (He asked not to be identified in order to respect his clients' confidentiality.) "Everyone's anticipating a recession, so they're focused on maintaining revenue at current levels and cutting expenses to increase their margins."
If figures from the Equal Employment Opportunity Commission (EEOC) are any indication, the idea that "doing more with less" is provoking a backlash may be right. In 2016, the commission reported a 6 percent increase in retaliation-based charges. However, nearly 65 percent of last year's resolved retaliation actions were found to have "no reasonable cause," making it the seventh straight year such findings accounted for more than 60 percent of resolutions.
A story told by our accountant may explain what's going on. One of his clients, a large regional retailer, laid off one of its top salespeople as it shifted its focus from in-store to online sales. Although handling Internet transactions had become a job requirement for the sales force, this particular employee was nearly 70, had never learned to use a computer and readily admitted that selling online was beyond his skill set. Still, after being laid off, he sued his employer for age discrimination. Ultimately, the suit was settled out of court for six months' salary and an equivalent amount for personal damages.
Hints, but Not a Trend
"I wouldn't say lawsuits on the whole are up, but I have seen more retaliation lawsuits in the last several years," said Leah Lively, a partner in the Portland, Ore., office of law firm Davis Wright Tremaine. "I don't have any data, but I can say my experience is as companies start to run lean, there's a shift toward their wanting higher standards and employees don't always understand the change."
For example, employees who were previously reviewed as "meeting expectations" are now hearing they need improvement. "So there's a changing situation and impact, with no explanation," Lively said. "That makes employees feel underappreciated."
Dawn Barker, SHRM-SCP, is vice president of HR at RiverWoods, a retirement community in Exeter, N.H. She said employees are feeling increased pressure to perform and, if the company doesn't communicate clearly about its goals and the contributions it expects from the workforce, HR can find itself facing a range of challenges, including legal actions.
While RiverWoods hasn't been sued, Barker said the company did get pushback from employees when management began stressing the concept of "be better." Workers assumed that meant they were expected to put in more hours for the same pay. Only when the company began holding monthly "all-hands" meetings to explain it wanted to focus on improving its overall performance—not forcing people to "work 110 percent"—did things settle down.
More often than not, the issue isn't about running lean in and of itself, Lively said. "It's about not explaining it. Executives may decide to run lean for any number of reasons, from lower sales to expansion plans. They set themselves up for tension with the workforce when they don't tell people the bigger picture."
The results of failing to communicate can be significant, according to Karl James Ahlrichs, senior consultant at risk management advisory Gregory & Appel Insurance in Indianapolis.
Indeed, even if an employee's charge is settled early on, Lively observed, a company should still expect to pay legal fees, which can run up to $10,000 or more depending on where the business is located and the particulars involved. If a firm plans to defend itself in court, "they're going to pay north of $50,000," she said.
Then there's the time needed to address such situations. According to the 2015 report Employee Charge Trends Across the United States by New York City-based business insurer Hiscox, the average case takes 275 days to resolve. Even though its claims data show that 81 percent of charges result in no payment being made, "the nuisance potential of employment charges" is clear, the report noted.
Listen to People, and Always Be Clear
Molly Lukes, SHRM-CP, human resources director at Precision BioSciences in Durham, N.C., said avoiding legal entanglements can often be a simple matter of keeping your ear to the ground, listening to employee concerns and being clear about what your company is trying to accomplish. "It's so simple," she said. "If you treat your employees like the investment they are, they will feel heard and seen, even if they don't get what they want."
RiverWoods holds regular all-hands and separate managers meetings to keep everyone informed. "We put everything in the context of our core values," Barker said. "We want employees to have professional growth and development, and we have managers make their expectations clear from the beginning about how their employees will be held accountable." Such clarity, she said, "makes everything very defendable."
In addition, Barker believes that many employee actions are the result of feeling underappreciated. "So show people they matter by demonstrating it," she said.
Precisely how you do that depends on your company's dynamics, Lively pointed out. Small things, like recognition programs, can help, but it's also important for HR to make clear to employees that their complaints are being taken seriously, she said. "Work with management to make sure training happens on how to communicate, how to give honest feedback and how to spot problematic employees," she recommended.
This last point, about problematic employees, hints at how granular an approach HR must take to monitoring the workforce's mindset. For instance, some employees "complain about everything—from the office temperature on up," to the point where it becomes natural to tune them out. Don't. At some point, Lively noted, they may have a legitimate complaint that you'll want to act on.
Then there are workers who are resistant to feedback or who won't use the tools provided to make their lives easier. Those people tend to cast the company's efforts in a negative, and sometimes retaliatory, way, Lively warned.
Supporting Managers on the Ground
Obviously, how managers do their job is an important part of the equation, so bear their role in mind if you suspect some kind of employee action may be on the horizon. "I always provide counseling when issues arise," Lukes said. "It's about getting people to stop and think and not just react."
[SHRM members-only platform: SHRM Connect]
"It starts at the top," Barker added. She believes managers need the same clarity about roles and expectations as do the rank and file. To achieve that, RiverWoods holds quarterly all-management meetings to explain why certain decisions are being made and strategies pursued.
Ahlrichs, too, is convinced that effective communication is the key to avoiding problems. He works with managers to help them align their communications efforts to the ways of the modern workforce. With a little prompting, he said, "most managers can offer a recent case study or story where poor communication caused a poor result."
One exercise Ahlrichs suggested is having managers create three columns on a page and label them "What," "How" and "Result." Then have the managers write a summary in each column of what they're trying to communicate. They often discover that their approach isn't as effective as it could be. "I point out that they spend their communication time on the first two columns, and the result is at the tail end, long after anyone is really paying attention," he said. "They get it, and understand the power of leading communication with the result."
Ahlrichs said many managers need constant reminders that today's workforce is younger, increasingly adept at conversing through multiple channels and possesses shorter attention spans. "Simply put," he said, "managers need to say the punch line first."
Keep the Action Separate from the Job
Addressing legal actions is always expensive, which is why most HR experts and attorneys stress using communications as a way to head them off. But even the best communications efforts won't always work. That leads to the question of what to do—besides consulting a lawyer—when an employee files a retaliation claim.
It's not uncommon for employees to remain with their company even after they've filed a suit or made a complaint to the EEOC, Lively observed. In those situations, it's critical for both HR and management to treat the employees as if they'd never taken the action. That means walking a fine line. "Managers have to know that they can't retaliate, but they can't give the employee a free pass, either," Lively said. "Filing suit is not a 'get out of jail free card.' "
Lively said it's better to discuss the issue with the employee as soon as possible. "It's better to tell the worker outright that they've got the right to file a complaint, but they're still employed here and are going to be held accountable for their performance. While you never want to discourage employees from filing a complaint, they need to understand that standards about performance and conduct still apply."
So, for example, if company policy mandates some kind of warning be issued if an employee misses certain production goals, the company should respond just as it would with any other employee, even to the point of delivering a negative performance review. Under the circumstances, "that can be scary, but that's what's got to happen," Lively said.
How you weather the situation depends largely on how thoroughly your company documents employee activities—not just for the worker in question, but for everyone. Not only should you document the worker's behavior, but you should be able to demonstrate that you're responding in the same manner you would with any other employee. "Consistency is important," Lively said.
Mark Feffer is a freelance business writer based in Philadelphia.
Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter.