Human Side of Engineering – 2002-05-13

Company takeover: Are employees entitled to severance pay?

In this era of mergers and acquisitions employee fears range from job termination to loss of benefits.

When a manufacturing company lost its bid to a major supplier, it agreed to sell out to the competitor. The departing owner agreed to stay on six months as a consultant. He distributed termination checks containing wages and sick benefits due, along with vacation pay entitlements. Employee fears of job loss were quickly eliminated by the news that the new owner would take over with the workforce intact, and that the labor agreement long in existence would be honored.

Human nature being what it is, however, people want as much as they can get. A committee of three shop lawyers approached their old boss and called his attention to a clause in the contract that called for severance pay based on length of service should job termination result.

The former employer’s surprise was tinged by undisguised annoyance. “You got everything you’re entitled to,” he replied.

“Except for the severance pay in the contract.”

“The purpose of severance pay is to provide a measure of financial security in the event of job loss.”

“We got termination checks. We were terminated.”

“For how long? One day? That isn’t termination as intended by the contract clause. You still have your jobs.”

“Termination is termination,” the spokesperson persisted. “That we were re-employed afterward is besides the point.”

Question: Are this company’s employees entitled to severance pay?

Expert’s opinion: “They’re thrusting at windmills,” Corporate Attorney Anita Hillman replied. “The workforce was fortunate to make out as well as it did. No wages or other income was lost. No seniority was sacrificed. They should thank their stars that the change of ownership didn’t affect them adversely.”

Can you disallow earrings and long hair for male employees?

Customers were frequent showroom visitors at a New England plant that manufactured ladies’ undergarments. The plant was located in a rural and conservative part of the state, and corporate image was important to George Matson, the company’s president.

Maintenance utility workers Harold Michelson and Joe Truscott couldn’t have cared less. Both men sported a single earring in the current vogue and persisted in wearing their hair almost down to their shoulders.

Michelson and Truscott were in and out of the showroom on a variety of assignments. Mr. Matson winced when he passed through and saw them. Occasionally he was called on to field comments from prospects and customers.

One day he broached the subject to Maintenance Supervisor Donald Crawford. “Can’t you get those guys to conform to the civilized dress standards?”

Crawford sighed. “I tried to do so more than once without much luck. They felt their independence and civil rights were being challenged.”

Matson tightened his lips. “Well, maybe you’ll have better luck with an ultimatum. Tell them to conform or else.”

Question: Can an either/or ultimatum succeed in this case?

Expert’s opinion: The question was posed to Valerie Rubin, the company’s labor attorney. “We are within our rights insisting that the utility workers conform to the company’s dress code if they want to keep their jobs. For one thing, we are simply requesting that they adhere to the social norm as it applies to this plant and this area. For another, our intent is not to be discriminatory since there is a practical business reason behind our request.”

Must you rehire a worker guilty of anti-company conduct?

When a large contract was lost, Maintenance Department Electrician George Padgett was laid off, along with several other employees. For reasons known only to Padgett he felt he should have been kept on and transferred to another job. This request was denied.

During the layoff period Padgett became increasingly bitter. He wrote threatening letters to the president, made obscene telephone calls to Maintenance Supervisor Henry Lee, and accosted plant visitors and complained about his unfair treatment.

He even went so far as to call the local newspaper and report management’s callous insensitivity to a wage earner with three small children.

Seven weeks later the company’s fortunes improved somewhat, and most of the laid off workers were rehired. Most, but not all, Padgett being one exception.

When the electrician got wind of his omission, to understate the case, he was livid. He telephoned Lee and made all kinds of threats.

“Sorry, buddy, you brought it on yourself. No way are we going to rehire a troublemaker who militates against his own company.”

“That’s not fair. I’m only standing up for my civil rights.”

“Tough luck. They’re too uncivil for this company’s taste.”

Padgett threatened to sue.

Question: In your opinion does the electrician have a viable case?

Maynard’s verdict: “This guy is out and good riddance,” Plant Engineer Frank Maynard ruled. “Padgett’s behavior went far beyond reasonable actions of peaceful protest. It’s tough enough these days for a plant to show a profit with employees who do the job they are paid for . Rehiring people who vilify the organization and threaten its executives is a bit much to expect.”

Can an employee put off taking maternity leave?

Stockroom Attendant Peggy Berman was summoned to Maintenance Supervisor Joe Kagle’s desk. She was about to go into her seventh month of pregnancy, but showed as if she were in her eighth.

“Isn’t it time you put in for maternity leave?” Kagle asked.

Peggy countered angrily, “If it was I would have put in for it.”

Her answer gave Kagle pause. “Peggy, I have your best interest in mind. At this point it would be to your advantage to take it easy and rest, do some shopping for the baby, and prepare for the big event.”

“My mom’s only too happy to do the shopping for me. I enjoy working. The job is no strain. And to be perfectly frank, we need the extra money.”

It was Kagle’s turn to feel ill at ease. “I don’t want to make a federal case of this. But women are expected to take maternity leave toward the end of their pregnancy. It’s company policy.”

“That may be,” Peggy said, “but my pregnancy doesn’t affect my job performance. Forcing me to take leave would be discriminatory.”

Kagle sighed. “I’ll check it out and get back to you.”

Question: Is Peggy correct that forcing her to take maternity leave would be discriminatory?

Bender’s opinion: When Kagle brought Plant Engineer John Sully up to date on his run-in with Peggy, he called Corporate Attorney Anne Bender for her opinion. “Ms. Berman is absolutely right,” the lawyer replied.

“The Equal Employment Opportunity Commission (EEOC) prohibits company policy that treats women as a class to their disadvantage. Making her take maternity leave when her pregnancy does not adversely affect her job performance would be discriminatory.”

Safety violation: Be sure to take a hard and firm line

Horseplay on the job falls into the following two categories:

1. Harmless kidding around, such as blowing a worker’s hat off his head with an air hose.

3. Reckless violation of safety standards, such as tossing heavy objects or mishandling safety equipment.

4. When the second one is the problem, management cannot afford to compromise or go easy. Depending on the degree of danger involved, a tough stance must be taken. In extreme cases, dismissal may be called for.

   In one plant where harmless “kidding around” was generally tolerated by management, Charley Elman, a utility worker, surreptitiously replaced a can of white paint Joe Mullen had been using with a can of green paint.

   When Mullen, without thinking, dipped his brush into the can and applied it to the wall, Elman and coworkers nearby broke into guffaws of laughter. Mullen, who missed the humor of it, didn’t enjoy being the butt of the joke.

   After a while, in retaliation, Mullen mindlessly dropped a lighted cigarette into Elman’s back pocket. Mindlessly, because highly combustible solvents, kerosene, lacquers, and other inflammable liquids were stored nearby.

   Five minutes later Maintenance Foreman Chet Minor, passing by, noticed smoke rising from Elman’s back pocket. He quickly yanked the worker to a water cooler nearby, and helped him soak out the hazard.

   When it was determined that Mullen was the perpetrator, Minor lost no time typing up a termination notice. Handed his copy of the notice, Mullen was stunned by the harshness of the discipline.

   “No way will this stand up,” he asserted. “I was just kidding around. A harmless joke.”

   Question: Is Mullen’s dismissal warranted?

   Cady’s verdict: “The termination stands,” Plant Engineer Mark Cady ruled. “For one thing, signs in plain view proclaimed it to be a hazardous area, where striking a match is prohibited.

   For another, combustible solvents were within hands reach of the numbskull jokester. Where employee safety and company assets are endangered, management cannot afford to be tolerant.”

   Emotionally disturbed employee? Be practical, firm, and compassionate

   An employee is acting irrationally. What to do? Discipline him, reprimand him, suspend him, or fire him? Or refer him for treatment. Two questions arise: 1. Irrational in whose judgment? 2. Is his job performance adversely affected? Take Maintenance Carpenter Grade II John Drummond.

   Drummond was described as an environmental ‘nut case.’ Global warming disturbed him. Lax standards for arsenic in drinking water disturbed him. Carbon dioxide emissions disturbed him. Plant effluents from smokestacks disturbed him. Deforestation disturbed him. The administration’s failure to deal with what he defined as its “environmental neglect” disturbed him. Disproportionately, coworkers thought.

   Drummond ranted and raved to anyone who would listen. “We can’t ignore what this company is doing to the environment.”

   He circulated petitions. He accosted a utility worker spraying pesticide on the lawn fronting the plant. “Do you realize what you’re doing to the environment?”

   “What do you want from me?” the man replied. “I’m only doing my job.”

   Drummond decided that a nearby stream was being polluted by discharges from the plant and wrote a letter to the company’s president griping about it. The president angrily called Maintenance Manager Tony Gennaro. “Didn’t you explain to that guy that the discharge was checked out by environmental experts. We’re within EPA standards. Tell him to tend to his job and keep his nose out of management’s business.”

   “I told him that, sir,” Gennaro replied. “But the guy’s a nut. I think what he needs is a shrink.”

   Gennaro was teed off by the call. He called the carpenter and laid down the law. “You’ve gone too far,” he accused. “I already explained that experts confirm compliance with environmental standards on those discharges. Keep your nose out of management’s business. I won’t warn you again.”

   Drummond didn’t conceal his skepticism. “Experts hired by the company are paid to report what management wants to hear.”

   Gennaro held his temper in check as best he could. “Remember, Drummond, I warned you.”

   The carpenter wasn’t intimidated. Next day an OSHA inspector showed up in response to a complaint from Drummond. It took over an hour of lost time on a busy day for Gennaro to convince him that the plant was in compliance.

   When the inspector left, the red-faced manager pecked out a dismissal notice and brought it to Plant Engineer Wade Ruffing for approval.

   Question: Is Gennaro justified in seeking Drummond’s termination?

   Ruffing’s response: Reviewing the file, Ruffing said, “The evidence seems clear that this guy has been acting irrationally.”

   “That’s an understatement,” Gennaro replied. “Drummond’s a psycho; he’s emotionally disturbed.”

   “Maybe so,” his boss replied. “But it’s not your place to either diagnose his problem, or decide the consequence. So long as Drummond is doing his job, your responsibility, if you feel he’s disturbed, is to refer him to qualified professional help. My suggestion is that you send this man to the medical office for evaluation. Based on what the doctor reports, we can take it from there.”

   Insist on safety compliance to the letter

   Utility employee Jay Rodale was inexperienced at working with caustic material. Prior to assigning a job, Maintenance Foreman Henry Crowley issued instructions.

   “This stuff can be hazardous,” he said, “even when it’s frozen. You’ll have to add hot water to liquefy it.”

   “I know that,” Rodale said.

   “Okay, good. Before you start mixing, go to supply and get the safety equipment you need. Rubber gloves, face mask, safety helmet, goggles, hard hat, high boots and safety vest. Make sure you put on that stuff before you start.”

   The worker obtained the equipment and donned everything but the safety vest, which he intended to put on when the caustic material was thawed. But when he started to go through the procedure he lost momentary control of the hose, and scalded his neck and chest. He was then hospitalized.

   Following the employee’s return to work, Crowley called the utility man on the carpet. “Why didn’t you put on the safety vest like you were instructed?”

   The foreman had no patience with Rodale’s explanation.

   Crowley typed out a discharge notice and brought it to his boss for approval.

   Question: Is termination justified?

   Cochrane’s decision: Plant Engineer Todd Cochrane agreed with Crowley that Rodale’s failure to wear the safety vest was a clear violation. “But I don’t think the guy was intentionally insubordinate. Kill the termination and give him a 5-day suspension.”

   Employees refuse to work overtime. Can a supervisor fill in?

   Work rules can sometimes be disregarded in the case of emergency. Or so the labor agreement stated.

   When a big rush order came through late Friday afternoon from an A-rated customer, Plant Manager Tom Shorr was elated. Business had been sluggish of late. However, the worry lines reappeared when Production Supervisor Carl Klugman informed him that his crew couldn’t get the job under way because of electrical problems in Section B.

   “The grinders and chippers keep shorting out. We’re unable to track down the problem. If we can’t solve it over the weekend we won’t get rolling on time.”

   Klugman contacted Maintenance Foreman Harry Hirsh and brought him up to date on developments. Hirsh immediately assigned two electricians, Bill Hanson and Nick Bellini, to the job on an overtime basis. When no headway was made after four hours on Friday, Hirsh arranged for the men to put in overtime the next day.

   They clocked in Saturday at 8 a.m. and worked until 1 p.m. without finding the bug. At that point both men told Hirsh they had previous commitments and refused to stay longer. A couple of electricians were at work in Production, but the foreman had his own ideas about what was causing the problem. After Hanson and Bellini clocked out, he went to work checking his hunch. It took him two hours of trial and error and scrutiny to track down the problem.

   Monday morning Shop Steward Tony Mancuso appeared at Hirsh’s desk. “What’s this I hear about you taking over bargaining unit work on your own. The contract says…”

   “I know what the contract says,” Hirsh cut in, “but this was an emergency. The guys on overtime clocked out. Production had to be ready to roll Monday morning. I had no choice but to pitch in.”

   “I don’t buy that,” Mancuso snapped back. “Other men were available; you could have assigned them the job. I’m filing a request for two hours of overtime for two unit employees.”

   Question: Was the steward’s request justified?

   Kerner’s decision: “The demand isn’t justified,” Plant Engineer Ed Kerner informed Mancuso. “For one thing, the two guys clocking out created an emergency situation. For another, the unit employees available were already on overtime so they weren’t rooked out of any time.”

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