Question: I was a sales rep for a welding supply distributor. I quit my old job and I came to this new job. I never signed any non-compete agreement. A customer of my old job contacted me asking for a quote on argon, something both my old employer and my new employer sell. That quote went well, and now we have their argon business.

Then my former employer sued me and my new employer for a breach of contract for $50,000. Since then, to settle the suit, my new employer and my old employer agreed – without me being involved – that I would not work for my new employer for 24 months.

Now I am unemployed. Can I sue my old employer for interference?

Dan
Mundelin, Illinois

Answer: Dear Dan: Your situation is becoming more and more common. Here is the relevant analysis to follow to get the answer to your question:                

1. If you did not sign a non-compete agreement, you are entirely free to go to work for a competitor of your former employer. The freedom to work for whom you want to is a very basic and fundamental freedom, and an important part of the free-market, free enterprise system. If you did not sign a non-compete agreement, then you cannot be “legally” sued for violating it. That said, some employers use threats of litigation, and actual litigation, as improper “weapons” to get what they want. And, sadly, sometimes it works.  

2. However, your former employer may have alleged that you violated a different kind of “agreement” that is implied in the law: the implied agreement (i) not to be disloyal while still employed there, (ii) not to steal customer lists, and/or (iii) not to steal pricing information. While you may not have signed an agreement not to compete after you left, the law says that every employee must honor an “implied” contract not to (i) tell customers to come along with you before you leave the old employer, (ii) take client lists with you, or (iii) take pricing information with you. It is possible you violated one or more of these “implied” agreements, or that your former employer believes you did.

3. If you did not violate either (a) a written non-compete agreement, or (b) one of the “implied” agreements noted above, then you may just have a good case of “interference” to sue for. A growing area of employment law is what employment lawyers call “unjustified interference,” or “tortious interference” by a former employer with an employee’s new work relation. It is just what it sounds like: interfering with someone’s employment without a justifiable reason. Sadly, more and more employers seem to be engaging in such wrongful behavior in an attempt to hold on to their business when their employees leave them.

4. In order to win such a “tortious interference” case in most states, you would need to establish the four elements: (i) an existing employment (or business) relation, (ii) interference with that employment (or business) relation, (iii) for the sole purpose of harming  that employment (or business) relation, and (iv) harm to the relation. As lawyers, we try to make sure that we can establish the necessary “elements” of a case before we start the case. In your facts, it seems clear that (i) you began a new business relation (that is, employment) with your new employer, (ii) your former employer interfered, and (iii) your employment was damaged, that is, you were fired. There is one element I’m not sure about, and it is the most important element in any of these cases: Did your former employer have any good, proper and justifiable reason to do what they did, or did they act simply to hurt you and your new job? That is almost always the “missing element.”

If your former employer can show that they had some reasonable information that (a) while you worked for your former employer, you told their customers to leave with you, or (b) you took with you and used their secret customer lists, or (c) you took with you and used their secret pricing information, then they have a good, proper and justifiable reason to take steps to protect themselves. On the other hand, if they did not have such a good reason, then they can be sued successfully for “tortious interference with business relations.”

Dan, you know the facts here. If you seem to have the four necessary elements of a lawsuit for tortious interference, I suggest you consider consulting with an experienced employment attorney in your area.

If you would like a list of experienced employment attorneys in your area, which seems close to Chicago, simply [click here].

Thanks for writing in. I hope this is helpful. Good luck in your upcoming job search.  

Best,
Al Sklover

PS: If this was helpful, how about a return favor: Next time you need Business Cards, Stationery, Invitations or Photo Books, consider clicking from our homepage display ad for VISTAPRINT.COM. Doing so helps us continue to publish and help others.    

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2012 Alan L. Sklover, All Rights Reserved.

“A boat doesn’t go forward if everyone is rowing his own way.”

- African Proverb

At work, no matter what our organizations does, or what role we play in those efforts, we all must “move forward” together, in one direction, to survive and thrive. That takes channeling the multiple and diverse perspectives, experiences, thoughts, efforts, and energies of all in one general direction. Not an easy thing to do. But, if you become a person who recognizes this, who permits this, who encourages this, and who engages in this, you will represent, and be recognized for, enhanced value to all. Row together, or go nowhere.

© 2012 Alan L. Sklover. All Rights Reserved

Question 1: Can the clients of an independent contractor use the subcontractor that was used by the independent contractor after the subcontractor has ended the independent contactor/subcontractor relationship? 

Chrystal
Clinton Township, Michigan

The Very Short Answer is “Yes.” With one possible exception: if they agreed (with anyone) that they would not do so.

Freedom is so sweet,
Al Sklover

We now offer a
185-Step Guide and Checklist to Succeeding
in Non-Compete Disputes. If interested, just click here.

Question 2: Can my employer change a supposed “mistake” in our new compensation plan? I was presented with a new 2012 compensation plan during the last week of December. During this meeting my boss and I both signed the acknowledgements of the change, and I was told the plan would go into effect starting January 2, 2012. Yesterday – January 6, 2012 – my boss informed me that there was an error in my compensation plan, and that the President of the Company wanted to change the terms of one of my bonuses because he felt it was too easy to reach. The comp plan was approved by both the VP and President, and supposedly it was an oversight by both of them. Is this something my employer has the right to do?

Kristin
Irvine, California

The Short Answer is “Yes, probably.”  As a general rule, an employer can change the terms of employment – and that is what a compensation plan is a kind of – with two exceptions. Exception No. 1: If the comp plan says “Once this plan goes into effect, it can’t be changed for a full year.” So, read your comp plan over carefully. My expectation, based on my experience, is that it is either silent on the point, which means you’re out of luck, or more likely it says that the employer can change it at any time. Exception No. 2: Your employer cannot change the comp plan retroactively, that is, change the rules after you’ve worked all or most of the year. Since you’ve worked just 4 days under that plan, I’d say the employer could probably change it. But, then again, you need to read the terms of the comp plan itself.

Sorry, but mistakes do happen,
Al Sklover

Our Most Popular Model Letter is entitled
“Response to Receiving a Performane Improvement Plan.”
If interested in obtaining a copy, just click here.

Question 3: How can I protect myself after being given a written warning? I was given a written warning by my employer, after never receiving a verbal warning first. How can I protect myself for being fired, especially when I believe I am being watched closely?

Patrice
Brooklyn, New York

The Short Answer is “The best I can say is: You’ve got to read our blog articles, and watch our blog videos.” Patrice, you haven’t provided much in the way of facts, especially what you believe is the reason this has taken place. Is it retaliation for something you have filed a complaint about? Is it perhaps a matter of discrimination? Is the performance review false and fraudulent? All situations are different, and each situation – and many others – are presented in different parts of our blog articles and blog videos. You’ve got to do some reading.

We’ve made it easy for you,
Al Sklover

We offer a Model Letter entitled
“Model Response to Job Offer Letter.”
To obtain a copy, just click here.

Question 4: After receiving severance, can I go back and sue? Alan I was laid off in November, 2011. I was given six months severance which is more than most people; 10 weeks was the norm. My situation is unique, however, in that I lead the start up of a new business that required 200-250 days a year travel. In the last four years I spent over 250 weekend days overseas. I delayed a divorce for three years and the company knew this. We negotiated for over two years on what compensation would be for this extraordinary sacrifice, and they just kept leading me on. Do I have any viable grounds to sue?

Tim
Portland, Maine

The Short Answer is “No, unless you are prepared to give back your severance monies.” Tim, I suggest you review our severance blog section. You’ll see that severance is not a reward for past accomplishments, but a payment to acquire from you a release of claims. Your dedication is extraordinary, but severance is not payment for dedication; instead, it is payment in return for your agreement not to take certain actions in the future, including (i) not to sue, (ii) not to disparage, (iii) not to hold on to company property, (iv) not to divulge company secrets, etc.

If you have already signed your severance agreement, you have already given up any rights to sue. The only way you can sue now is to claim you were tricked into signing the severance agreement, but in that case you would have to return the severance monies you received. Also, while you may well have been “lead on,” the absence of any agreement on how much you were due suggest not much basis for a lawsuit. My strong suggestion for you for the future: negotiate compensation and severance before you do extraordinary work, not afterwards.

Sorry for the bad news,
Al Sklover

To view our free YouTube Video entitled
“The 7 Timeless Truths about HR,” just click here.

Question 5: I have several different workplace concerns. Any ideas? My employer is involuntarily reducing my hourly rate ($20 to $14). I am concerned this will have a negative impact on my Unemployment Compensation weekly benefit rate since I will be listed as a part-time employee at $14 per hour. I am losing all of my accrued vacation/holiday/profit sharing, 4 weeks of Paid Time Off, (PTO), and most importantly my health care benefit. No COBRA as my employer opted out of our small 2-person group plan when he signed up for medicare. I tried to negotiate for some severance and was told I would be given two months health care reimbursement. My boss is also in the habit of not providing my retirement account statements of which I believe I fully vest as of 12/31/11. Any ideas?

Deborah
Salford, Pennsylvania

The Short Answer is “You seem to have so many possible legal claims, you really need to meet with an attorney. Deborah, it seems to me that you may have several valid legal claims regarding the loss of accrued vacation days, profit sharing, COBRA, and related to retirement account vesting. However, from the limited facts you’ve presented, I can’t say for sure. I strongly suggest you consult with an experienced employment attorney your area.

We can provide you with a list of five or more experienced employment attorneys in the Philadelphia area. If interested, simply [ click here ].

Hope all goes well,
Al Sklover

If We offer a Model Letter entitled
“Model Request for More Severance.”
If interested, just click here.

Question 6: Are your Model Letters meant to be sent to the Employer, the Labor Department, or both? Hello! I love the information on your website! My question is about the Model Letters: Are they mainly targeted toward HR and Management, or can they be used to file a complaint with the Labor Department? I believe my employer violated FMLA, and I want to file a formal complaint. Or should I send a letter to both parties? Thank you.

Angela
(City and State Not Provided)

The Short Answer is “HR and Management, primarily.” Angela, our Model Letters are designed to “say the right thing in the right way” to HR and Management. Most State and Federal agencies have their own forms that they require you fill out when filing a complaint. However, two things come to mind: (a) First, you might get what you want by first sending a letter to HR and Management, without having to file a Complaint with a State or Federal agency, and (b) Second, you can always attach your memo to HR and Management to your State or Federal agency to better illustrate your issues and concerns, and that you have first tried to resolve them on your own. That could only help.

Thanks for giving me the opportunity to clarify that.

Good luck to you!!
Al Sklover

We offer a Model Memo entitled
“Anonymous Complaint about BULLY BOSS.”
To obtain a copy, just click here.

Question 7: If your employer has a 401k matching benefit, are they required to match your contributions up to the point that you left, even if their contributions usually happen a couple of months later?

Tom
(City and State Not Provided)

The Short Answer is “It all depends on the terms of the particular 401k Benefit Plan.” Tom, in my experience, every time an employer establishes a 401k program, they set out the “rules and regulations” of how it works, that is, who is entitled to what and when. Those “rules and regulations” are usually put together into what we call a Plan, or sometimes they are summarized in a “Summary Plan Description,” or “SPD.” You must review the Plan of your employer to determine your rights.

I must say this: many 401k plans say the following: “The employer will match the employee’s contributions [in a certain way, to a certain maximum amount] and the payments are made at the end of each calendar quarter, provided the employee is still then employed.” If your 401k Plan says this, and you left before the end of the calendar quarter, then you would not be entitled to 401k matching benefits for the last few weeks or months of your employment during that “un-completed” calendar quarter. My hunch is this may very well be what has happened to you.

Ask HR for a copy of the Plan,
Al Sklover

To view our free YouTube Video entitled
“Unemployment Benefits – The 12 Basics to Know,”
Just click here.

Got a question? Feel free to submit it for Alan to answer. But please keep it brief and to the point. Questions of over 100 words will not be reviewed. And only one question at a time. If you do submit a question, you agree that Alan’s answers are not legal advice, but only suggestions to consider. Please understand that not all questions can be answered, due to limitations on time and space. Still, we “do our best to do our best.”

Note: Brief Questions are given Priority in Answering

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2012 Alan L. Sklover, All Rights Reserved. Commercial Use Prohibited.

Question: I have been asked to keep quiet regarding my employer’s knowingly overcharging a customer on a contract price component while my company pockets the extra profit.

I am ready to resign but want to settle regarding keeping this quiet in exchange for a cash settlement. Can this be done?    

Dean
Camas, Washington

Answer: Dear Dean: I am glad you wrote in. If you try to do what you seem to be considering doing, you could possibly go to prison for a long time for committing a very serious crime: extortion.                

1. It is a serious crime – extortion – to say, in one way or another, “I will tell people something about you unless you pay me money.” Or, “I won’t tell people something about you unless you give me money.” And, in the law, it doesn’t make a difference whether what you are threatening to tell people is true or false. In fact, it is often the true things that people do that they are most frightened will become public knowledge.   

2. Extortion is just like armed robbery, but without being armed with a weapon. Most states define extortion as the gaining of property or money by almost any kind of threat, including threat of violence (“I will break your leg if you don’t give me $1,000.”), unfavorable government action (“I won’t approve your zoning application unless you give me sexual favors.”), or harm to reputation (“Unless you give me $100, I will tell people you are a child molester.”)

If, however, you have a gun in your hand when you say these words, and thus make the other person feel a threat of imminent physical danger, you are then committing armed robbery. Incidentally, extortion commonly carries just as long a prison sentence as does armed robbery.  

3. In requesting severance or a settlement, if you have a valid legal claim – such as if you were sexually molested by a boss, or if you were fired because you refused to go along with theft from a client – you can say “I will go to court, and raise these issues in Court, unless I get a settlement for my damages.” Isn’t saying that the same thing as extortion? No, not at all, because you can only go to Court if you have a valid legal claim, and not a made up one. In fact, if you made up a claim without basis in fact, and then went to Court, you could in fact be accused of, and possibly convicted of, extortion. Court is a public place, that is true, but a threat to go to Court with a valid legal claim is not extortion, though many people feel that way.

4. Many lawyers who help people gain better severance packages are called “extortionists.” Dean, I can’t count the number of times I have heard people call me that name. However, I know that I must believe my client is telling me the truth about a legal claim, I must believe he or she has a valid legal claim, and I am very careful not to threaten “You’ll be exposed,” but rather “You’ll be sued.” Being a lawyer, you tend to get used to people calling you vile things.

5. Here’s a real illustration of a demand for a settlement or severance package that was not extortion: A few years ago, the then-Governor of New Jersey got a telephone call from a lawyer who said, in effect, “My client is a man, and he says you told him he could have a state job only if he had sex with you. He has a valid sexual harassment claim. Unless you settle for $5 million, we will bring you to Court.” The Governor called the FBI and said, in effect, “I am being extorted.” The FBI said, “No, you are not. A threat to go to Court with a valid legal claim is not extortion.” That is really what happened. Oh, yes: that Governor did admit what the lawyer claimed was true, and then resigned.

I believe that, if the same lawyer said “If you don’t settle for $5 million, I will go to the newspapers,” then that lawyer would probably be in prison today. I hope you see the difference. 

If you feel you do have a valid legal claim against your employer, you may be wise to consider requesting a severance package even before one is offered to you. We offer a Model Letter to Proactively Request a Pre-Termination Severance Package. If you’d like to obtain a copy, just [click here].

And, if you think you’d like to consult with an experienced employment attorney in the Seattle, Washington, area, we offer a list of them by simply [clicking here].

Dean, I hope this is clear to you. If not, I strongly suggest you speak with a local lawyer before doing what you seem to be considering doing. I know that this can sound a lot like “lawyer-talk,” but there is a real difference – in fact and in the law – between threatening exposure and threatening a lawsuit based on a valid legal claim.

Thanks for writing in. Good luck in your upcoming transition.

Best,
Al Sklover

P.S.: If this has been helpful to you, please consider making your next travel reservations through our blogsite’s EXPEDIA.COM advertisement. That is what supports our efforts. Please give it a thought; it costs no more, but it does help us help you.

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2012 Alan L. Sklover, All Rights Reserved.

Question: I was on an expatriated job assignment working overseas until January, 2011. I started a new expatriated job working overseas in February, 2011.

Which of my two employers is responsible for my 2010 tax returns and my 2010 tax equalization?

Jerrold
San Francisco, California

Answer: Dear Jerrold:                

1. We must start with the presumption that it is you who are solely responsible for your taxes and tax returns. I don’t mean to sound trite, but your tax returns, and equalization of your tax liabilities between one country and another is, in the end, your responsibility. It is for this reason that we encourage our clients to make sure, if accepting an expatriate assignment, that they have a firm, WRITTEN commitment from their employer to be responsible for expatriate tax returns and expatriate tax equalization

[For those readers who do not know what we mean by “tax equalization,” it is as follows: Suppose you live in the U.S. and your income tax rate is 35%. Suppose, too, that you work in another country where the local tax authorities claim you must file a tax return with them, and pay an income tax to that country, of 47% of your income. In fact, it is a real possibility that you may have to pay BOTH countries the taxes they demand. Ouch! By “tax equalization,” we mean someone preparing both countries’ tax returns for you, and paying you enough additional income so that, in the end, no matter who you pay how much tax to, how much you “take home” comes out “equal” as if you had remained working solely in the U.S. It is a complicated area of tax, and only a few large accounting firms do this kind of work. And it is very expensive. Tax equalization is an important benefit to request if asked to work in country other than your country of residence.]

2. It is possible, but highly unlikely, that the employer who began to employ you in February 2011 would have agreed to preparation of tax returns and tax equalization for 2010. While it is possible to negotiate anything, I have never seen an employer agree to be responsible for tax return preparation and tax equalization for a time period when you were not their employee. It just doesn’t make sense, unless you have presented some special reason why it may.

3. It is more likely, and hopefully the case, that your former employer has agreed to attend to these matters and pay the bills for the tax-related services you need. If you worked for your former employer for the entire year of 2010, it is quite likely that they have agreed to attend to tax preparation and tax equalization for that calendar year. However, that is not automatic, or to be presumed, unless you and they agreed on that point before you went on your expat assignment. I have seen many, many instances in which my clients have forgotten to ask for tax return preparation and/or tax equalization, but presumed it was to be provided for them. Or, sometimes they have accepted a spoken assurance that it would be provided, but have no written confirmation of that.

I’ve written a newsletter entitled “Expatriate Assignments: The 18 Mandatory Requests” that lists and explains the most important services and benefits to request if you are considering an expatriate work assignment. To read it, simply [click here].

Jerrold, thanks for writing in. We have helped many people who have taken expatriation assignments over the years, and we hope this helped you, too.

If you should have difficulties while on your expatriates assignment, we offer a Model Letter for an Expat in Dire Circumstances. To obtain a copy, just [click here]. 

Best,
Al Sklover

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2012 Alan L. Sklover, All Rights Reserved.

“Ask the experienced rather than the learned.”

- Arabian Proverb

At work, perhaps even more than in other endeavors, there is simply no substitute for experience. While experience can torment us, it also serves to teach and test us. Perhaps of greatest significance, only the trials and tribulations of experience can infuse within us sound judgment. It’s good to be smart, but it’s better to be street smart. And there is no way to become street smart, but to experience the street. Embrace new experience, and value those who are experienced like no others.

© 2012 Alan L. Sklover. All Rights Reserved

“In great straits, when hope is small,
the boldest counsels are the safest.”

 - Livy (Roman Historian, 59 BC – AD 17)

ACTUAL CASE HISTORY*: Morgan, 44, had worked in the office furnishings business for over 19 years. From his first, entry-level job as an office assistant shortly after college, over time Morgan had risen to become a leading wholesale distribution agent for a top-tier manufacturer. 

Like many other industries, the office furnishings industry had gone through a considerable consolidation in recent years. Due primarily to repeated mergers and acquisitions, the industry came to be dominated by four large manufacturers. Morgan’s employer, one of those four major players, prided itself on its retention of top “talent.” By means of paying employees well – and by aggressively using and enforcing non-compete agreements – they had suffered few defections to competitors.  

This last year had been a difficult year in the industry. Not only had large corporations cut back on refurbishing their offices, but layoffs and bankruptcies in many industries had resulted in corporate employers occupying diminished office space. Bonus expectations, industry-wide, were low. Unsolicited, Morgan received an invitation to interview with Private Equity investors interested in hiring an aggressive veteran to head up a mid-tier firm they hoped to one day take public. Particularly enticing to Morgan was a potential 10% ownership of the company. He was intrigued, and felt ready to make such a move – but for his non-compete.

Morgan’s non-compete agreement prohibited him from “directly or indirectly providing services to any company that was engaged in the office furnishings industry for 24 months after cessation of employment, regardless of the reason for departure.” He shared it with the Private Equity investors. There didn’t seem much way around it. To Morgan, and to his prospective employers, the non-compete seemed “air-tight,” and insurmountable. And, so, he contacted us for a consultation to consider the question “Any way around this?”

As is our custom, we asked Morgan lots and lots of questions about himself, about his work, about his employer, and about their business practices. In the process, we learned two things that interested us. For one, the company had recently lowered all executives’ salaries, including  Morgan’s, even though his employment contract, which set his salary, still had one full year to run. Also, Morgan was aware that his superiors, on numerous occasions, engaged in an industry practice euphemistically called “gifting,” more commonly known as bribing clients’ representatives to get new business.

With that information in mind, we did three things for Morgan. First, we assisted Morgan in negotiating his new employment terms with the Private Equity investors. As part of those terms, we had them acknowledge his non-compete, and agree to pay his legal fees to fight it. Second, we prepared Court papers to file in Court just in case his employer found out what was in the works. Those Court papers cited both (a) the violation  of Morgan’s employment contract, and (b) Morgan’s discomfort with the  company’s practice of “gifting” that was deceptive and apparently fraudulent, to say the least. Third, we contacted Morgan’s employers, and showed them our drafted Court papers.

Their decision? Not to fight the matter, but rather to “walk away.” Though their non-compete seemed air tight and insurmountable, we found both (a) a legal defense, and (b) a practical defense, one or both of which surely worked to “Defeat the Non-Compete.”

LESSON TO LEARN: Non-compete agreements (and non-compete provisions found inside employment or other agreements) often appear to be impenetrable barriers to moving forward to a positive career opportunity. However, those of us who regularly go to battle over non-compete’s know that – more often than not – there exist good legal and practical defenses to them, and effective ways to negotiate to limit them, or get around them.

In fact, my experience over 30 years in this field has convinced me that most employers and their lawyers secretly worry that their employees may come to understand that very empowering truth: non-compete’s are defeatable. And, too, most Judges have no desire whatsoever to keep a person out of work without a darn good reason to do so. Though non-compete’s may seem to be impenetrable, the fact is often they turn out to be rather flimsy in their power over you.   

Remember: If your employer is forced to back down, or your employer loses in Court, and its other employees find out, your employers’ non-compete agreements may frighten far fewer present employees into remaining with the company . . . Your former employer fears this, because this might just require your former employer to treat its employees better!  

Remember: If your former employer’s clients, customers, suppliers, investors or prospective employees then find out – by pubic documents in a non-compete Court battle*** – that your employer engages in deceptive, dishonest, illegal, harassing, discriminatory or retaliatory behavior, those clients, customers, suppliers, investors and prospective employees may not want to affiliate with your former employer. Your former employer fears this, because this might just require your former employer to treat its clients, customers, suppliers, investors and prospective employees in more open, honest, legal and respectful ways.   

Remember: If your former employer’s tax authorities or regulators find out – by public documents in a non-compete Court battle*** – that it engages in illegal activities, does not fulfill its legal obligations, or engages in tax evasion or other illegal practices, it may end up costing your former employer far more in the long run than it is worth to enforce your non-compete. Your former employer fears this, because it might just require it to make sure it acts in full compliance with all legal requirements. 

But, first, you need to be aware of the most common defenses to non-competes, and how and when to raise those defenses. As you will see, some are factual, some are contractual, and some are otherwise legal in nature.

And, second, if you find one or two good defenses available to you, it is often best to be proactive and aggressive in using them by showing your employer they will likely lose such a battle, or if they do “win” the battle, they will more than likely “lose the larger war.” Said differently, there are good ways to convince your former employer that it is not in its best interests to try to enforce your non-compete.

WHAT YOU CAN DO: Consider whether one or more of these ten most common (a) factual, (b) contractual, and (c) legal defenses to a non-compete may be available to you. If so, your proactive presentation of them to your employer will likely be an effective way to defeat your non-compete, preferably without even getting to a Court battle: 

Continue Reading. . .

Question: My employment contract mentions “You will receive a sign-on bonus of $3,000, subject to all deductions and withholdings required by law. Should you voluntarily leave less then 12 months after you begin employment, you will have to repay a prorated portion of your sign-on bonus.”

My question is “Should I pay back the $3,000 ‘before taxes’ or ‘after taxes?”

Rose
Springfield, Illinois

Answer: Dear Rose: The answer is “Almost definitely, before taxes.” Here’s why:        

1. Contracts are to be interpreted, first, by their words. Your employment contract, like all contracts, must first be examined for what, if anything, it says about the “before taxes” or “after taxes” issue. Every paragraph, every sentence and every word must be read very carefully.

Because I don’t have your entire contract in front of me, I cannot be certain what else it might say besides the two sentences you’ve provided. For this reason, I use the phrase “almost definitely,” instead of “definitely” in my answer.

2. When the words of a contract do not provide an answer, only then do we look at other factors, such as (a) what is most reasonable to imply, (b) what is the custom or practice in the industry, and (c) what would make most sense in this context. For example, could “$3,000” mean (i) in Canadian dollars? (ii) in Tibetan dollars? (iii) in silver dollars? (iv) in Monopoly (the board game) dollars? Not at all likely, since you live and work in the United States, the reasonable, customary and sensible conclusion is that it means “in U.S. dollars.” In my experience, both as a lawyer and as a person, I believe quite firmly the reasonable, customary and sensible understanding would be that you must repay the sum “before taxes.”

3. Does that damage you, because you received “after tax” dollars and may have to repay in “before tax” dollars? No. All it means is that you paid tax dollars to the government on wages you had to return, and therefore did not really earn. You will recoup what you “overpaid” in taxes when you file your next tax return, either by paying a smaller amount due, or by getting back a larger tax refund. Is it an inconvenience? Sure. Damage? No.

4. Note that the use of the word “voluntarily” in your contract may save you from having to repay anything at all. Rose, as I noted above, you must look at the words of a contract to determine what your rights and obligations are. We have “invented” a useful concept called “Involuntary Resignation” which may just make it unnecessary for you to repay anything. The idea behind “Involuntary Resignation” is that there may be many reasons for you to cite, when you resign, that your resignation was not really “Voluntary,” but rather “Involuntary.” These reasons might include, among others, (a) your being harassed or treated with great hostility; (b) your belief that you were being discriminated against; (c) your belief that you were being urged to engage in improper or illegal conduct; or (d) your belief that you were being retaliated against for objecting to a wrongful practice or dishonest procedure. There are many, many other reasons, too, why your resignation may be “Involuntary,” and as your contract says, you only have to repay your sign-on bonus if your resignation is “Voluntary.”  

If you’re interested in reading more about this, review my newsletter on “Involuntary Resignation” by simply [clicking here].

You may also want to watch my free YouTube Video entitled “Involuntary Resignation – Standing Up, Not Giving Up, To An Intolerable Situation At Work.” If you do, just [click here].

And, too, if you’re interested in obtaining a Model Memo you can use to Involuntarily Resign, just [click here].   

Hopefully, Rose, you’ll stay at least the full 12 months. But, just in case you don’t, this information should help you. Thanks for writing in.  

P.S.: By clicking to our advertisers from our blogsite [including VistaPrint for printing, Expedia for travel, and GoDaddy for registering internet domain names], and using their services, you will be contributing to help support our blogsite. Give it a thought. Thanks!

Best,
Al Sklover

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2012 Alan L. Sklover, All Rights Reserved.

Question: Should I write my own response to a Performance Improvement Plan (“PIP”), or have a lawyer write it? Which would be more effective?  

Ken
East Bridgewater, Massachusetts

Answer: Dear Ken: Thanks for what I see as a truly fascinating question. I’ve probably worked with clients on more PIP’s than Santa has delivered toys, and my answer is unquestionably “Pushback from an employee is almost always better than from an attorney.” Here’s my Seven Reasons Why:           

1. Performance Reviews and PIP’s are still commonly considered “internal” in nature, and issues that many employers will not discuss with “outside” attorneys. Performance Reviews and PIP’s have historically been considered “internal” affairs, outside the usual scope of “outside attorneys.” Indeed, I have seen employers say, in different words, “Who are you to come in here in this matter? It is not a legal concern.” It’s only been a few years now that the worldwide “epidemic” of  PIP’s has appeared, and been used in cynical fashion to defeat employees’ rights, interests and earned compensation by intimidation, humiliation and insinuation. I’m certain that, in a few years, after PIP-related lawsuits have come into the Courts, attorneys being involved in these matters will be commonplace. But not yet.    

 2. Very few lawyers have any real experience with Performance Improvement Plans. I really can’t tell you all of the reasons why, but lawyers almost universally say, “Oh, PIP’s are nothing ‘legal,’ and there is nothing I can do about them.” As a lawyer, myself, I think it’s because lawyers are not taught anything about PIP’s in law school, so they don’t think there is anything “legal” they can do about them. Dealing with PIP’s takes creativity and ingenuity, something most lawyers don’t seem to exhibit in abundance. And because most lawyers don’t want to get involved in things that can’t make them a lot of money, most lawyers don’t even want to get involved with PIP’s. Most attorneys view PIP’s as “If I can’t sue, I don’t do.”        

3. If a Pushback Letter to a Performance Improvement Plan comes from an employee’s attorney, it gets sidetracked to an employer’s attorney. A primary purpose of “pushing back” to a PIP is to create the thought in a supervisor or manager, “Oops – I just got caught in a scam. I’d better withdraw this PIP.” If the “pushback letter” is addressed BY an attorney, it will be forwarded TO an attorney, and will make the supervisor or manager feel “Great, I’m off the hook. This is now a problem for Legal, not me.”  

4. Very few lawyers understand negotiation; most try to prevail at what we call “testosterone tournaments.” Sadly, very few law schools offer courses in negotiation, and those law schools that do offer instruction in negotiation usually limit it to one elective course. PIP “navigation” and negotiation require intuitive and sensitive movements, and are better accomplished by people who know the facts, know the personalities, and have a sensitivity to the interpersonal dynamics at play. Attorneys are “outsiders” without “insiders’” sensitivity to these things. Lawyers almost always resort to “I can outsmart you,” “I can out-yell you” and “I can out-litigate you,” what we in our firm refer to as “testosterone tournaments,” which are  profession-specific, and gender-neutral. Ineptly, most attorneys seem to mistake their “testosterone tournaments” for the processes of navigation and negotiation.

5. There is something powerful and wonderful when an employee who has never before stood up for herself or himself now does so in a professional and effective fashion. I’ve seen it many times, and it is a life-changer: when an employer’s senior management and Human Resources Director say, in wonderment and hushed tones, “I didn’t think she had this ability in her.” It is the equivalent of thinking “This is someone I had better not mess with again.” That can happen if you do a good job standing up to a PIP; it won’t happen if you hire an attorney to do it for you. And the most magical thing is the employee feels “Hey – I can do this,” making him or her a newly inspired, confident and effective professional person on a going-forward basis.

6. If you do use an Attorney for a PIP, use him or her initially in a “Ghost” Capacity. Initially I suggest use of an attorney for a PIP only in a “ghost capacity.” By this, I mean as a counselor on truly legal matters, as a “sounding board,” as a drafter if they can keep “legal-sounding” words out of the picture, and perhaps as a “just in case” professional in case things don’t go the way you hope.

We offer either a Model Letter to Help You Push Back at a PIP, or our Ultimate Package of Model Letters, Memo’s and a detailed Checklist for Pushing Back at a PIP. If you’d like a copy, simply [click here.]

7. If your own efforts to stand up to a PIP don’t work, then you can “bring in the infantry.” Finally, use of an attorney in PIP disputes is better suited as a “second bite of the apple.” If your own efforts at defeating a PIP aren’t successful, well, that is the time to consider bringing in “the infantry.” Use a lawyer for counsel at first, and then only representation when truly necessary. It’s always better to try to help yourself, and doing so itself is a building process. As the old saying goes, “If you chop your own wood, it warms you twice.”  

Thanks for submitting your question, Ken. I truly hope these thoughts – and the other materials on our blogsite (including our free YouTube video) about dealing with PIP’s – are helpful to you. Thanks for writing in, and thanks, too, for watching our YouTube videos.  

P.S.: By clicking to our advertisers [including VistaPrint for printing, Expedia for travel, and GoDaddy for registering internet domain names], and using their services, you will be contributing to help support our blogsite. Give it a thought. Thanks! 

Best,
Al Sklover

Repairing the World –
One Empowered and Productive Employee at a Time ™

© 2012 Alan L. Sklover, All Rights Reserved.

“Gratitude is born in hearts that take time to count past mercies.”

- Charles E. Jefferson

As a child, there were times neighbors fed me dinner because my mother could not. Sometimes they were total strangers to me. To this day I simply cannot forget that, or them. Funny thing is, now, fifty years later, when I occasionally meet them or their children, many have no memory of these mercies. But I do, for even then I knew those kindnesses arrived without expectation of repayment. The free food got me through the day, but the greater blessing of gratitude I received has lasted a lifetime.

© 2012 Alan L. Sklover. All Rights Reserved