PARTNERS IN PROGRESS Lunch & Learn · Lunch & Learn. Human Resources Policies and Procedures: What is Legal May Not Be Ethical . ... •Defining performance and social expectations

Lunch & LearnHuman Resources Policies and Procedures:

What is Legal May Not Be Ethical or Even Advisable!

Larry Cassil, Jr.

Annual Meeting OKLAHOMA DENTAL ASSOCIATION

PARTNERS IN PROGRESS

“Clients do not come first.Employees come first. If youtake care of your employees,they will take care of theclients.”

Sir Richard Branson

Oklahoma’s “At-Will” Employment Doctrine:

“Employers can discharge at-willemployees without recourse, in goodfaith or bad faith, with or without cause.There is no covenant of good faith andfair dealing that protects an at-willemployment relationship fromtermination.”

Gilmore v. Enogex, Inc., 1994 OK 76, ¶6, 878 P.2d 360,362-363.

An “at-will” employee is one who workswithout a contract of definite durationand is not a member of a labor unionsubject to a collective bargainingagreement. In short, most employees inthe State of Oklahoma.See, e.g., Burk v. K-Mart Corp., 1989 OK 22, ¶1, 770 P.2d 24,25.

What is an “At-Will” Employee?

Exceptions to “At-Will” EmploymentHow many persons does your business employee?

If more than 15, then your employees who are members of aprotected class are subject to the protections of Title VII, thePregnancy Discrimination Act, and the Americans with DisabilitiesAct. If more than 20, they are also protected the Age Discriminationin Employment Act. Employees are also protected from retaliation forexercising their rights under these statutes, as well as under theFMLA.

The protected classes subject to protection under Title VII includerace, color, religion, sex and national origin. “Sex” includes sexualharassment, both hostile work environment and quid pro quo.

State Law Exceptions to “At-Will” Employment

Under Oklahoma law, an “employer” is defined to mean a“legal entity, institution or organization that pays one ormore individuals a salary or wages for workperformance.” 25 O.S. §1301(1).

Protected classes include race, color, religion, sex,national origin, age, disability, genetic information withrespect to the employee or retaliation. Pregnancy isincluded in “sex.” 25 O.S. §§1301(6) and 1350.

So, if you employ at least one person in your practice,you are subject to Oklahoma’s anti-discriminationstatute.

Average Size of U.S.Dental Practices

Per the American Dental Association, Health Policy Institute, 2014Survey of Dental Practice:

•In 2013, the average solo practitioner of general dentistry employs 4.8persons in his or her practice and the average nonsolo practitioneremploys 4.0 persons in his or her practice

•In 2013, the average solo dental specialist employs 5.5 persons in his orher practice and the average nonsolo dental specialist employs 4.3persons in his or her practice

•In 2013, of all dentists in the U.S., the average solo practitioner employs4.9 persons in his or her practice and the average nonsolo practitioneremploys 4.1 persons in his or her practice

What Does This Mean To A Typical Dental Practice?

Unless your employees are members of a protectedclass, are disabled, over 40 years old, or pregnant,you may discharge them without recourse, in goodfaith or bad faith, and with or without cause.

That’s what you can get away with under Oklahomalaw, but is it always ethical? And does it makegood business sense? Apparently Sir RichardBranson does not necessarily think so.

Your Dilemma as Employers:How can you reconcile the need forprofessionalism and organizational profitmaximization on the one hand, and theneed to promote positive values, adhereto ethical standards and enhance youremployees’ welfare, expectations, andgeneral engagement on the other?

What Ethical Considerations Govern the HR Function?

•The health and safety of your employees and yourself.

•Deciding what is right and wrong in hiring, maintaining and discharging employees.

•Defining performance and social expectations at the outset.

•Creating reasonable and accessible channels of communication.

•Honesty in the employer/employee relationship.

•Fairness on both sides of the equation.

•Mutual respect between employer and employee.

•Ethical decisions matter because they affect the lives of others and they affect your practice.

Who Handles the HR Function?

•Does your office have an HR professional on staff?

•Given the average size of dental practices in the UnitedStates (at least as of 2013), it is unlikely that many of youhave a trained HR professional on staff.

•If not, who handles the HR function?

•You may outsource the HR function, you may entrust it toan office manager, if you have one, or, as in most cases:

•You must handle it yourself. This is a huge distractionfrom practicing dentistry and running your business.

Remember: HR Decision Making Matters From the Outset

•Title VII, the ADA, the ADEA, the Pregnancy Discrimination Act and the OklahomaDiscrimination in Employment Act all apply to the hiring process as well as duringthe employment relationship.

•But, so do ethical and business considerations. Your employees watch what youdo in hiring and firing and they have a reasonable expectation that you will treatboth candidates and employees fairly and consistently.

•While it is true that Oklahoma’s employment-at-will doctrine allows you to hireyour completely unqualified and untrainable nephew for a position on your officestaff, does that make sense? Not only will your nephew likely end up being a bademployee, but you will also alienate your other staff members who are required totrain, care for and make up for the nephew’s incompetence. Furthermore, it willcost money in wasted hours spent training him, as well as the likely passiveaggressive behavior of your other employees in retaliation.


•Is nepotism or hiring other unqualified employees ethical? No doubt many of you dream ofthe day your son or daughter will join your practice. That is one thing, because presumablyhe or she will be a well-trained and licensed dentist. However, your golfing buddy’sdaughter who needs a job because she was thrown out of community college is a differentstory altogether.

•Would hiring either of these examples be fair to the prospective employee, fair to yourextant employees and most importantly, would it make sense from an ethical and businessstandpoint?

•My comments today are premised on the idea that each of you wants to create a collegialand professional environment in which you can maximize patient care and profits.

•Frankly, hiring an unqualified and untrainable friend or relative simply because “you can” isnot only unfair to you, to your business and your employees, it is unfair to the hiree in thelong run because you will one day be fed up with the problems he or she creates anddischarge the person. Or, as likely, you and your staff will drive them away.


•Not only does this create dissension among the ranks and lead to unnecessarydrama in the workplace, BUT:

•IT COSTS LOTS OF MONEY TO HIRE, TRAIN (AND POTENTIALLY FIRE)EMPLOYEES, QUALIFIED OR OTHERWISE!

•Direct costs of the hiring process include posting a position on line ($50-$500),reference and background check fees, OSBI report fees, pre-employment drugscreening, the need to repay federal and state unemployment taxes, cost oftraining manuals, and temporary placement fees to cover the position while thehiring process unfolds.

•Indirect costs that may not appear on the balance sheet include low motivation inyour other employees caused by high turnover, salaries of those involved in therecruiting process who are not being productive during that time, decreasedproductivity in your dental practice, and decreased productivity in the new hireeduring the “ramp-up” process.


•It has been estimated that the direct cost of replacing a $15 per hour positionin a dental practice ranges from $2,200 to $5,400 per employee! DentalCompliance Specialists, July 24, 2017, The True Cost of Employee Turnover inDental Practice.

•Other hidden costs include interview no-shows, qualified candidates decliningthe position offered, many unqualified candidates applying but no qualifiedcandidates doing so, and most importantly, YOU must waste time interviewingcandidates, both qualified and unqualified for the open position.


Bottom Line:

•You as business owners in Oklahoma may hire and fire whomever you chooseunder the employment-at-will doctrine, provided you do not run afoul of thefederal and state laws prohibiting employment discrimination forcandidates/employees who are members of protected classes.

•However, as I hope to have demonstrated, in the hiring process, you mustalways look at the long game. In the case of recruitment, the long gameclearly indicates that just because your hiring decision may be legal that doesnot mean it is ethical, and it certainly does not mean it is smart.

•Simple common sense, coupled with an ability to empathize with your currentstaff, will go a long way toward making responsible and intelligent hires, whichin the long run, creates harmony, efficiency and profitability in your practice.

Maintaining a Harmonious and Productive Workforce Pays Off

•Has anyone ever heard of Adam Grant? (I highly recommend his Ted Talks)

•He is a professor of organizational psychology at the Wharton School ofBusiness, University of Pennsylvania. He is revolutionizing business thoughtaway from Gordon Gekko’s “greed is good” maxim from the movie “WallStreet” to a business culture of giving rather than taking

•Importantly, he focuses on ethical business practices as a means ofmaximizing worker participation and happiness, with an eye towardefficiency and increased profits

•Professor Grant emphasizes “reciprocity” of management and employees asan indicator of a business’s (or other entity’s) success

Maintaining a Harmonious and Productive Workforce Pays OffAccording to Professor Grant, people in any organization fall into one of 3 groups for their stance on reciprocity:

•TAKERS like to get more than they give. They feel the world is a zero-sumgame, for them to win means others must lose. They self-promote andmake sure they get credit. They help others strategically, when thebenefits to them outweigh their personal costs.

•GIVERS like to give more than they get. They help others when thebenefits to others exceeds their personal costs.

•MATHCERS like to balance taking and giving exactly, practicing quid pro quo.

So, which of these groups do you fall into and which of these groups do you want your employees to fall into? Why?


•The common sense answer to these questions appears, at first blush, that youwant “matchers” in your organization, that is, people who are givers but whoare still self-interested enough not to be doormats.

•Interestingly, in his book Give and Take, Professor Grant finds that both theworst and the best performers in a firm tend to be givers. The givers at thebottom tend to give away too much time to get their work done, or were toonice to customers. But givers also fill out the top ranks.

•Professor Grant provides the following example, which should resonate in thisroom: In the first year of medical school, givers earned lower grades. Here,helping other students meant necessarily that they earned lower on the scoringcurve. But in later clinical years, where teamwork is necessary, the giversperform better with their peers and patients.


•You want ambitious, hard-working people on your team, right? But at what point does that ambition become selfish and ultimately, counter-productive?

•Professor Grant posits that, despite his ambition, Gordon Gekko is not adesirable team member because most of life is not a zero-sumproposition. Givers may take some time to build goodwill, but eventuallytheir reputations, trustworthiness, and network build their success in avirtuous cycle way.

•Not so takers and matchers: Takers and matchers will ultimately takeadvantage of the reciprocity tendency. They offer favors to people whosehelp they want in the future. But there are two downsides. First, therecipients often feel like they’re being manipulated. This ends up feeling likea transaction more than a meaningful gesture. Second, matchers tend tobuild smaller networks than givers or takers, because they help only peoplefor whom there is an immediate benefit. Thus, matchers tend to have asmaller network of quid pro quo ties.


•Moreover, Professor Grant’s research indicates that takers tend to build connectionsonly to gain favors, without caring about reciprocating.

•To avoid rejection, takers become good fakers. How do you tell a false taker in the recruiting and employment process?

•They kiss up to superiors but treat peers and subordinates poorly (as they believe these people have nothing to contribute).

•They tend to speak in a self-absorbed way, using singular pronouns like “I” vs pluralpronouns like “we.” In a study of CEOs, takers used 39% singular pronouns, where theaverage was 21%.

•In the hiring process, check social media, which I recommend in all cases. Grant findsthat with public Facebook profiles, it’s easier to research fake takers. Takers tend topost more self-promoting information, feature arrogant quotes, rack up more Facebookfriends to get favors, and post vainer pictures of themselves.


•So, where does Professor Grant lead us in our analysis of “sure it’s legal, butis it ethical, or is it even smart” in the context of you day-to-day humanresources decision making?

•We have established that legally in Oklahoma, you can hire and fire staff fora good reason, a bad reason or no reason at all, provided your decisionmaking accords with the relevant employment discrimination statutes, sowhy not just do that? You’re in charge, right?

•Yes, but not entirely. After decades of counseling my clients on the HRfunction, appearing at countless mediation proceedings before the EEOC,handling unemployment matters before the OESC, addressing wage and hourdisputes at the U.S. and Oklahoma Departments of Labor, and representingclients in employment discrimination lawsuits, I believe that Sir RichardBranson is right. While it is true that there are simply some bad employees,by and large, if you take care of your employees, they will take care of theclients and the business will prosper.


Let’s look back at the ethical considerations weestablished at the outset that govern the HR function andsee how they contribute to a harmonious and productiveworkforce.

Health and Safety of Your Employees and Yourself

•This one is pure common sense. If you and your dental practice are concerned with thehealth and safety of everyone in the office, including providing options for affordable healthinsurance, if possible, you:

•Protect yourself, your employees, and your patients from exposure to illness,

•Reduce absenteeism due to illness, because employees have access to preventive andother healthcare, and

•You create goodwill with your employees because you are doing the right thing.

•How many of you use a system of PTO (“paid time off”) days, whereby each employee has anumber of days off each year he or she can use for illness, family emergency or vacation?This encourages sick employees to come to work, because they don’t want to use vacationdays for illness. The theory is good – allow the employee to manage his or her own time off -- but the reality is sick employees come to work, which is not good in the health careindustry in which you practice dentistry

Deciding What is Right and Wrong In Hiring, Maintaining and

Discharging Employees•We covered hiring earlier and we will discuss discharging employees later.

•Dr. Linda Gravitt, PhD, SPHR (Senior Professional in Human Resources) writes thatabout the importance of maintaining an organization “in which respect is ademonstrated value.” In such an organization, “employees and managers treat eachother with dignity and make it known that they care about the work they perform.”Leadership “fosters initiative and creativity.” Strategic HR, Inc., 2013, How HumanResources Can Help Build and Ethical Organization.”

•Sure, it is legal for you to fire an employee if you get pissed off, but is that thesmart decision for the long game? It is cheaper and more effective to listen,respect the value of the employee, attempt to understand the problem, and seek tocorrect a situation if possible, than to fire someone, terrify his or her co-workerswith an angry tirade, and go through the expense and pain of hiring someone new.

•Professor Grant states that “the art of advocacy is to lead you to my conclusion onyour terms.” Sure it may take some time, but in the long run isn’t everyone betteroff?

Defining Performance and Social Expectations at the Outset

•Although they may be unaware of it, people like and value limits and boundaries. Afterall, in large part, isn’t parenting children about setting limits and boundaries?

•One of the worst things you can do in the HR function is to have hidden expectations.

•How many of you provide written employment manuals to your staff? Do they include aprogressive discipline policy and if so, do you follow it? An well-prepared employmentmanual can, in most cases, eliminate hidden expectations and can foster increasedtrust in an organization.

•The manual should clearly state it does not alter the at-will employment relationshipand should be careful not to state a fixed period of time for the employmentrelationship, but by and large, I recommend providing one.

•NB: Some employment litigators on the defense side sometimes grumble that anemployment manual creates negative evidence at trial of what an employer wassupposed to have done, but if it is correctly prepared, that can be avoided. In myopinion, the good created by defined expectations outweighs that remote risk.

Creating Reasonable and Accessible Channels of Communication

•Time is money, right? Sure, but the HR cost of not providing effective channels ofcommunication with staff can be very high.

•Set that up from the beginning of the employment relationship. If possible, provide afixed time fifteen minute period of time, 1-2 days per week when your employees canapproach you to talk about HR issues. Or set up a confidential system of e-mail toaddress the issues. Obviously some situations require immediate intervention, butcreating reliable and consistent means of communicating with you creates trust andcohesion in the organization. Hopefully, if things are going smoothly, no one will need anappointment and you will receive no such e-mails.

•HR issues often sound petty and ridiculous to people in management, but remember onething: it takes a lot of guts to approach your boss to complain about an HR issue, whichis often of the boss’s doing. Take your staff seriously and be respectful.

•Finally, if you have questions or think one of your staff may have valuable insight into amatter affecting your practice, seek his or her advice. Professor Grant correctly statesthat “regardless of their reciprocity styles, people love to be asked for advice.”

Honesty in the Employer/Employee Relationship

•You expect your staff to be honest with you, so you need to be honest with your staff.Period.

•The primary concerns here are feedback and discipline. I mentioned a progressivediscipline policy above. If you have one, implement it. If you don’t have one, get one inplace.

•No one likes disciplining an employee or following through on a progressive discipline plan.It is simply no fun. The process intrudes into the work day and it hurts feelings. HOWEVER,if it is a written policy, it is acknowledged by the employee at the outset, and isimplemented consistently, ironically, a progressive discipline policy creates a sense ofsecurity and comfort in those who are subject to it. Most importantly, if consistentlyapplied, it demonstrates institutional honesty and consistency to your staff.

•Furthermore, it creates stability and security for the employer. I cannot tell you how manytimes a client has called because a discharged employee has filed an EEOC charge and theclient assures me the person was discharged for cause. I request an employment file,expecting to see written compliance with the progressive discipline policy, and the file isempty. As counsel for the employer, I am hamstrung. What could have been a winnableevidentiary battle turns into a “he said, she said” situation. Not good.

Fairness on BothSides of the Equation

•I know we are talking about employment relationships that affect the operation of yourbusiness and, hence, your income, -- and not a garden party -- but simple fairness and empathygo a long way toward fostering harmony and productivity in the workplace.

•I would assume most everyone in this room has been an employee at one time or another. Doyour recall times when your boss or employer made decisions that appeared arbitrary or unfairor ridiculous or just plain mean? To be sure, you cannot always provide an explanation for thedecisions you make, but some insight into the big decisions that affect your employees in theworkplace just makes sense. Put yourself in their shoes.

•Fairness also requires feedback. If you have an employee who is underperforming, let theperson know. Further, annual or semi-annual employee chats to discuss constructively both theemployee’s performance and your performance can go along away toward creating anatmosphere of trust and respect.

•An organization’s core values are manifested by its culture; that is, in the basic ways thatbusiness is handled, such as how decisions are made. If you do not explain how big decisionsare made – which is certainly your choice -- your staff will make up their own explanations,which creates workplace insecurity and takes away from productivity. Neither side of thisequation is fair to the other.

Mutual Respect Between Employer and Employee

•Employees look to the leadership in the organization as role models to guide their own behavior.

•Ethics, either in a written code or mission statement, or simply an unstatedcommitment to creating an ethical workplace, cannot be institutionalized unless leadersshow their respect for individuals and the organization by engaging in ethical and honestbehaviors, themselves.

•In turn, employees learn to trust and respect each other and leadership if they observecharacteristics that merit that trust and respect.

•This is equally true in life away from the office. Just because an employer can ruleemployees with an iron fist, does not mean it should do so.

•As always, just because an act or omission is legal does not mean it is always ethicalor advisable. Would you not rather have employees who are trusted and trusting, honestand believing, and respected and respectful, than a staff comprised of unhappy peopledoing their jobs only out of fear? That is the workplace created by Professor Grant’s“Taker.”

Ethical Decisions Matter Because TheyAffect the Lives of Others And They

Affect Your Dental Practice•As (I hope) you can see, ethical HR policies are not just the right thing to do, but theyalso make good business sense.

•Ethics in hiring and maintaining the staff of your dental practice will promote aworkplace atmosphere that fosters trust, respect, and open communication, which inturn, (unless I am sorely mistaken) will create a prosperous business.

•Ethical HR practices will also cut down on employee turnover, which is expensive,disruptive, and often leads to expensive EEOC or OHRC charges and litigation.

•Finally, do you want to practice dentistry, your chosen profession, in an unhappyworkplace where no one trusts each other and everyone dreads coming to work? I’mnot a dentist, but I’ll take a hard pass on that.

•In short, strive to be Professor Grant’s “Giver,” the one who focuses on achieving thegoals of the group and sees collaboration as harnessing the best of the staff you havecarefully hired and trained. In turn, your staff will assume tasks that are in the bestinterest of the group and not necessarily of themselves. This isn’t necessarily purelyaltruistic – givers understand that the best thing for themselves is for their group toperform as well as possible. Win-Win.

Ethical Decision Making in Ending the Employment Relationship

•Let’s face it. Firing people sucks. It is unpleasant, unpredictable and oftenvery expensive. (Try doing a business-wide reduction in force some time, ifyou don’t believe me).

•The first step toward minimizing the pain on both sides of that equation, ofcourse, is to have implemented ethical HR practices during the hiring andemployment processes.

•If you have created a well-documented employment file, followed through onyour progressive discipline process, and conducted annual or semi-annualfeedback sessions, terminating the employee just became easier. When theemployee looks at you and asks “why?,” you can provide reasons.

•Further, because you have behaved ethically by providing warnings,counseling the employee, and have attempted to correct unacceptablebehavior, you have done your job in creating an environment of trust andrespect, so you will not be the party breaching trust and respect within theorganization.


•So, if you have done your job as an employer, then each employee hasunderstood his or her appointed job tasks, as well as the culture of thepractice, and termination of the employment relationship in the event of theemployee’s breach should come as no surprise to anyone.

•Further, you have modeled ethical behavior and social interaction for themembers of your staff who remain behind, so the mutual trust and respectcreated in the office continues unabated.

•I assure you that by the time you, as a busy professional and employer, figureout the problem with an employee and implement the progressive disciplineprocess, the offending staff member’s co-workers have know for a long timethere was a problem and have discussed your inaction with their colleagues.


•If you are terminating an employee for cause, you might think there is littleincentive to enter into a severance agreement or to provide severance pay.Understood.

•However, you can probably buy a lot of peace for as little as two weeks’salary and benefits. How?

•It is perfectly legal, and in my opinion, perfectly ethical to provide aterminated employee with an agreement whereby he or she waives the rightto file a charge with the EEOC or the OHRC, agrees not to disparage you oryour business, and agrees that all wages and bonuses have been properlypaid, in exchange for a severance package.

•Please note you cannot under any circumstances attempt to have aterminated employee waive rights under workers’ compensation. That isillegal.

Tying Up a Few Loose Ends•I hope this talk has helped clarify the “dilemma” facing you as employers Ithrew out at the outset: reconciling the need for professionalism andorganizational profit with the need to adhere to ethical standards to enhanceyour employees’ welfare, expectations and general engagement.

•I have practiced in this area for a long time, both as a private attorney and in-house handling employment lawsuits for an insurance company. While it is truethat I have seen plenty of unscrupulous employees trying to make a buck or tomake their ex-boss miserable, I have seen as many employers who had a hand increating an untenable situation, who were negligent in their HR process, or whohad to pay the price for unethical and illegal practices.

•A fairly recent article on Linked-In quoted a 2015 “Guide to EmploymentLawsuits” published by the insurer, Hiscox, revealing that: “A representativestudy of 446 closed claims reported by small- to medium-sized enterprises withfewer than 500 employees showed that 19% of employment charges resulted indefense and settlement costs averaging a total of $125,000. On average, thosematters took 275 days to resolve.”

Tying Up a Few Loose Ends•That is not only a lot of money, but the figure does not even include the intrusion intoyour lives, time you and your staff members must spend away from the office meetingwith pesky lawyers, giving depositions, helping with discovery responses, andperhaps even testifying at trial. It is a giant pain.

•Purchasing an employment practices liability (EPL) insurance policy can help defraythe litigation and settlement costs, but will not compensate you for time lostpracticing dentistry or time lost while your staff gives testimony or otherwise assistsin the lawsuit. You might ask your insurance agent about it if you have not already.

•While I cannot promise you that maintaining ethical HR practices will stave off allproblems with employees, they help a ton. It is a simple fact that happy employeesare more productive and don’t sue their employers for no reason. Moreover, shouldyou apply for EPL coverage, the proposed carrier will want to see your HR policiesand procedures, claim history and litigation history as part of the underwritingprocess, so correct practices help there as well.

Tying Up a Few Loose Ends

•So in closing, I would just remind you that even when your first impulse is (a)to throttle an employee who is making bad choices or (b) to hire thecharming kid with no experience and no possibility of learning the job forwhich he or she has applied, or (c) to play “King of the Hill” because youknow you can under the employment-at-will doctrine, please stop, breathe,and answer these 3 questions:

1. Is it legal?

2. Is it ethical?

3. Does it make good business sense?

Once you’ve answered the first two in the “affirmative,” I think you’ll find theanswer to the third is likewise “yes.”

Good luck!

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PARTNERS IN PROGRESS Lunch & Learn · Lunch & Learn. Human Resources Policies and Procedures: What is Legal May Not Be Ethical . ... •Defining performance and social expectations