This defense system is offensive

Acme proves warped logic is highly undesirable

The plant is located in an unmarked building in a non-descript industrial area and can be found only by knowing where the street address should be. It is closed to outsiders and every employee, including the uniformed security force, uses key cards for access to their work station. Visitors to Acme only see a corporate marketing and sales office located in another part of the Bigtown metropolitan area. Although a large company by any financial measure, Acme management keeps the small business atmosphere through hiring many relatives and friends of managers.

Ferly Neidy was one such employee. He was a junior electrician and the nephew of the vice-president of Plant Operations, Bill Neidy. Ferly had a million-dollar wish list. He always talked about how many things he would acquire when he got a well-deserved promotion to instrument electrician. He told everyone that if his next acquisition wasn't a new fishing boat, it would be a new motorcycle. Or, was it a new pickup? One day he arrived at work with a new $800 custom-made pool cue. Ferly told all who would listen about how his promotion was already in the side pocket.

However, long-time electrical maintenance supervisor, Harold Schlubb, had different thoughts about Ferly's future. Ferly worked for Harold, and Harold knew that Ferly would never have what Acme needed in an instrument electrician. In Harold's opinion, Ferly was only able to read and interpret only the simplest wiring diagrams and was in no way capable of handling instrument work.

Harold had spoken in the past with his boss, Engineering Manager Barry Poutt, about Ferly. Harold and Barry had known each other for years but never became more than acquaintances. Barry Poutt told Harold that he should be happy to have such loyal employees and that promoting Ferly would not be a problem. All Harold had to do would be to keep him occupied and out of trouble somewhere in the back of the plant.

Barry continued by telling Harold that baby-sitting Ferly wouldn't be that bad and he could always blow some dope and mellow out like he used to do back in his hippie days before he became a working man. Also, Barry told Harold that it was highly probable that Bill Neidy was expecting to see his nephew promoted and that Big Bill didn't like disappointments. Harold, like other employees, knew about Bill Neidy--he was vindictive. Neidy didn't care if what he wanted would work or not, people did whatever it was his way or they were not working at Acme.

After several uneventful days while Harold had Ferly busy in the back of the plant, Barry Poutt and Bill Neidy walked into his office. Bill Neidy went straight to the point and told Harold that he had heard rumors about an electrical supervisor who used drugs. It was common knowledge at Acme that using drugs meant loss of security clearances and was cause for termination. Drug use was specifically called out in Acme's policy manual as a cause for immediate termination.

Barry suggested to Bill Neidy that a polygraph examination would certainly be the thing to clear the air about any rumors of drug use by an electrical supervisor. Bill Neidy smiled at Pout, then suggested that Harold Schlubb be in the personnel and security office first thing in the morning to take a polygraph test.

Harold did as he was told and arrived at the personnel office for his polygraph test the next morning. Barry Pout walked into the office as the test began. A security guard began the testing. During the testing, the guard asked Harold about his use of drugs, the amount of liquor he consumed, the number of parties he attended, and his finances. Harold admitted that he had used drugs years before during the late seventies.

When the test was complete, Harold was asked to wait for his results. A few minutes later, Bill Neidy and Barry Poutt entered the office and informed Harold that he was no longer an employee of Acme D-Systems. Further, he was being terminated as a drug user and potential security risk and poor performance as a supervisor.

Later that day, Bill Neidy and Barry Poutt discussed Acme's possible defense should Harold Schlubb attempt any legal retribution. Both agreed that Acme would have a good argument to support the firing of Harold Schlubb. They reasoned that no one could deny that Acme's personnel manual prohibited drug use by employees. Nor could anyone deny that Harold--as a part of Acme management--had an obligation to uphold the tenets and policies of the personnel manual. Therefore, Harold gave permission--albeit tacitly--to Acme to conduct whatever investigation it deemed necessary--including polygraph testing--to identify drug users and those who had the potential to compromise corporate security.

How would you have avoided this situation?

An attorney's comments:
Poor old Schlubb probably had a claim against Acme which he never raised. Ever since the Employee Polygraph Protection Act of 1988, employer mandated polygraph examinations of employees, as well as discharging employees because of the results of a polygraph exam, have been illegal. Although there are some limited exceptions to this general rule for the government and contractors with the FBI, it is not apparent that any of these exceptions apply to Acme.

Apart from that issue, however, Acme could have solved its problem very easily with a weapon employers sometimes forget about--the truth. Acme could have told Schlubb he was required to promote Ferly Neidy. If he refused, Acme could have fired him.

Would this be fair? Or "right?" Of course not. But it would not be illegal. Employees sometimes forget that there is no law that requires an employer to be fair or to do the right thing. Our laws prohibit specific acts toward employees, such as terminating an employee because of his race or religion. But no law says an employer must be fair.

An individual who is an employee at will, that is, one who is hired for an indefinite period of time, can leave the company at any time and likewise be terminated by the employer at any time and for any reason which is not illegal. We have no reason to believe that Schlubb was anything other than an employee at will, and Acme could have terminated him for the perfectly frivolous reason that he refused to promote the vice president's incompetent nephew.

Acme's downfall resulted from its deviousness. By man dating a polygraph and inquiring into matters, such as Schlubb's finances and the number of parties he attended, which were of no concern to Acme, the company crossed the line and invaded Schlubb's privacy.

The facts do not reflect that Acme communicated to anyone beyond those in company management that Schlubb allegedly was a drug user. Employers have a legal privilege within certain bounds to communicate personnel matters to those in the company who have a need to know the information. For example, Barry Poutt, as Schlubb's supervisor, had a privilege to communicate information to his superior, Bill Neidy, about Schlubb's job performance. Only when an individual conveys allegedly defamatory information to those who do not have a common interest in the subject matter can a claim for defamation arise. The prudent course of action concerning all personnel matters, of course, is to restrict information to those in the company who truly need to know.
Julie Badel, Partner
McDermott, Will & Emery
Chicago, Illinois
jbadel@mwe.com

A plant engineer's comments:
Harold Schlubb, the electrical maintenance supervisor, was stuck between a rock and a hard place at Acme D-Systems. If he promoted the Vice President's nephew, Ferly Neidy, then he faced continuing problems trying to conduct proper maintenance because he was convinced that Ferly was not capable of performing in the instrument electrician's position. Alternately, if he refused to promote Ferly, he faced the real chance of losing his own job due to the vindictiveness of Bill Neidy, the vice president of Plant Operations.

Harold presented his arguments to his boss, engineering manager Barry Poutt and ended up losing his job when he didn't capitulate to the vice president's desire to have his nephew promoted. In the end, however, justice was served, and Harold won the suit against Acme D-Systems.

This is especially true with a defense contractor that produces highly sophisticated radar and security systems and equipment for governmental agencies. Bill Neidy's style and attitudes permeated the company as exhibited by his engineering manager's comments to Harold regarding baby-sitting Ferly and blow some dope and mellow out.

If Acme did have hiring and promotion policies in place, they were not followed. If they did not have policies then Acme D-Systems should have had them in place. For example, a testing program for applicants applying especially for technical positions would have weeded out those unqualified.

A structured hiring process would provide a much better basis for hiring the appropriate people for positions. The process should include a statement of minimal job qualifications; performance-testing of applicants; a probation and review period for new hires or newly promoted people; and a multiple interview process. Multiple interviewing includes additional interviewers such as the applicant's peers among others. This process would also go a long way toward overriding the nepotism fostered by the Vice-President.

Harold was set up for termination by his boss, the engineering manager, and the vice president of Plant Operations, on a trumped up security risk reason. The loss of the suit should have forced Acme D-Systems to review their top management and subsequently make appropriate changes in the management ranks, coupled with the development and implementation of hiring and promotion procedures to prevent anything similar to this happening in the future.
Robert L. Steibly, C.P.E.
Angles Unlimited
Rutland, Vermont
steibly@earthlink.net

A corporate advisor's comments:
Where is the human resource professional in this case? Where is corporate policy in this case? Where's the CEO? And is the CEO doing anything to reign in the eidy--Neanderthal--behavior of Acme managers??? Is ANYBODY home in the leadership ranks at Acme???

If reading these cases has taught me nothing else, it has taught me the importance of using assessment mechanisms. Competence and confidence can cloak a host of behavioral ills--and I for one would rather know as much as I can about such tendencies BEFORE I would promote anyone into management.

The main opportunity to have avoided this case was to have a corporate policy requiring the use of assessment mechanisms prior to promoting or hiring people into management positions.

These tools help identify behavioral tendencies that may suggest the need for training, education, coaching, or some other form of intervention targeted toward professional development. Any of these can be useful in PREVENTING rather than REMEDIATING the damaging impact of poor management.

Certainly, there are other actions that could have been taken that may have helped to prevent this situation. Perhaps management development initiatives would have helped, but they would have had to have begun long ago to have an impact on the current situation at Acme. Seminars on current legal issues relative to personnel could have been hosted within Acme. However, in my opinion, this case is replete with instances of inappropriate conduct--behavioral issues--leading to pervasively poor management at Acme.

Generic workshops will not uncover these behaviors. The proper use of sophisticated assessment mechanisms will. Then, workshops can be deliberately constructed to be responsive to the identified needs of potential managers--equipping organizations to prevent cases like this one.
Francie Dalton
Dalton Alliances
Pasadena, Maryland
fmdalton@primenet.com

An editor's comments:
This trench reeks of irresponsibility from the nephew on up to the vice president. Disaster was eminent, the only question being that of when. Yet there were some ways Harold might have avoided the agony.

Clearly, Acme D-Systems does not appear ready to change their procedures as long as there is no reason--like impending doom--to do so. The company policy manual appears to be an
instrument that management warps to suit its purpose in whatever situation arises. Acme's argument against change becomes that of: "Why should we?"

The best of possibilities allows Harold to use a delaying action--perhaps as a devil's advocate--while he seeks employment elsewhere. So, the onus is on Harold Schlubb to identify probable and expensive failures that can be directly attributed to improper maintenance by unqualified electricians.

That might translate into a list of equipment and instrumentation that Ferly Neidy would not be allowed to work on to include the probable failures with their associated costs of poor service. If effect, Harold must show the costs of Ferly's appointment to instrument electrician and its negative effects on his manager, Barry Poutt.The alternative for Harold Schlubb is waiting till he is placed in another untennable position, as in this case, and accepting one of the inevitible outcomes of mismanagement--collusion or termination.

This trench illustrates that there are some companies that do not value their employees. When this fact becomes common knowledge among the staff, the best employees will find employment elsewhere with the final outcome being that the company will no longer be able to fulfill its contracts.
Charles M. Boyles, C.P.E.
Editor-in-Chief