Job Security Secret:

If you hear “At Will,” think “Unless Otherwise Agreed” (“U.O.A.”)

Whenever an employee talks about having no Job Security, they almost always mention that they are only an “at will” employee.” The discussion should not end there.

Most people know that “at will” employment means that either the employer or the employee may end their work relation at any time. It is a kind of harsh freedom for each party to end the work relation. But each side can also, when it wishes, seek to place a limit on the harshness of the other’s freedom by “agreeing otherwise.”

Here’s the best example: most employers want employees to “agree otherwise” by giving two or four weeks notice before they depart, so the employer might make necessary transition arrangements. This is an agreement to limit “at will” by “agreeing otherwise.”

Well, you can also seek to limit the harshness of being told you are no longer needed by asking your employer – when you may have the leverage – to “agree otherwise.”

As examples, (1) asking for at least four weeks’ notice before your last day on the job, (2) asking for at least two months’ severance if you are asked to leave, and (3) asking that your employer will give you a pro-rata bonus and/or vest you in any unvested cash or stock awards, when you are asked to leave.

Here’s another valuable one: If you are asked to relocate to another state or country, as a condition to the relocation you might ask your employer to “agree otherwise” that, if you are going to be terminated, you will not be terminated until the end of your kids’ school semester, to avoid unexpected disruption in their schooling.

These are all “agreed otherwise” limits on the harshness of “at will” employment. The examples cited above are only a few of many, each a kind of “medicine” that eases the pain of “at will” employment, and represents the functional equivalent of a kind of Job Security. This is what a good employment attorney should do for you, but here’s the real secret: you can do it by yourself!

Don’t be bashful about asking for “agreed otherwise” measures to soften the blow of your employer’s decision to end the relation.

So, if you are confronted with an offer letter or employment contract, don’t be bashful, be proactive. Don’t be reticent to say, in effect, “I understand your concern about employees departing without prior notice. Do you understand my concern about being asked to leave the same way?”

You can also ask for such an “agreed otherwise” limitation on “at will’s” harshness at a time you may feel extra “leverage,” such as when (a) you are being asked to sign an offer letter, (b) you have just closed a big sale, (c) you have achieved a great victory, or (d) your employer is asking you to sign a Retention Agreement in fears you might leave.

So, remember: if you ever hear or see the phrase “At Will” always think “Unless Otherwise Agreed,” what we call “U.O.A.” It will be a great step forward in your sophistication of thinking about “Navigating and Negotiating for Yourself at Work.”™

Need a model memo or letter to transmit a request or complaint? A good checklist or form agreement? For a complete list of our Model Letters, Memos, Checklists and Sample Agreements, Just [click here.]

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Need a private telephone consultation? Just [click here.] Evenings and weekends can usually be accommodated.

© 2019 Alan L. Sklover. All Rights Reserved and Strictly Enforced.

Wall Street Journal Analysis: “Companies Game Glassdoor Rankings”

According to a recently published report by The Wall Street Journal, there’s good reason to doubt the credibility of Glassdoor employer rankings that so many employees use to decide which employers to work for.

“Glassdoor’s company ratings,” including their annual ‘Best Places to Work’ awards, “are a powerful weapon in job recruiting, giving companies an incentive to inflate them.”

Some employers admit pressuring their employees to post rave reviews; some employers admit only “suggesting” they do so.

While Glassdoor claims that it tries hard to limit companies from “ballot stuffing” their Glassdoor reviews, it remains an undeniable fact that the “real” customers of Glassdoor are employers, who advertise on the site, and who can even, for an additional fee, have Glassdoor refuse to place ads for job openings from their competitors. Glassdoor also charges employers to customize their pages and promote their open positions.

Like other “ratings” websites, like Yelp and TripAdvisor, Glassdoor suffers from the gross conflict of interest at the very heart of its business model: the rated employers are Glassdoor’s best clients. As the old saying goes, “No one bites the hand that feeds them.” Some employers pay Glassdoor as much as tens of thousands of dollars each and every month.

A mathematical probability analysis performed for the Wall Street Journal by statisticians at Columbia University and the University of Washington found it nearly impossible to explain significant “spikes” of votes and ratings changes at Glassdoor over short periods of time . . . especially in October of each year, just before Glassdoor calculates its annual rankings.

In the summer of 2018, one employer, Guaranteed Rate, Inc., had a poor rating of 2.6 stars out of 5.0. After its CEO, Victor Ciardelli, instructed his team to tell his employees to flood Glassdoor with positive reviews, its Glassdoor ranking jumped from a dismal 2.6 to a delightful 4.1.

Employers LinkedIn and Anthem Health have admitted they “encourage” their employees to submit positive rankings. Five star reviews of employers have almost doubled over the past five years.

A message to all working people who consider Glassdoor’s rankings when making employment and career decisions: consider other ways to make those decisions, and consider any Glassdoor ranking suspect, at best.

Bad data “in” leads only to bad decisions “out.” Know the Difference. That’s part of both our job and our joy at SkloverWorkingWisdom.com™

Need a model memo or letter to transmit a request or complaint? A good checklist or form agreement? For a complete list of our Model Letters, Memos, Checklists and Sample Agreements, Just [click here.]

Interested in Membership? It’s free, and has advantages, including discounts on our products. Just [click here.]

Need a private telephone consultation? Just [click here.] Evenings and weekends can usually be accommodated.

“Your Path to Dignity at Work”™

© 2019 Alan L. Sklover All Rights Reserved and Strictly Enforced.

 
“I am no longer afraid of the storms for I am learning how to sail my ship.”

– Louisa May Alcott

ACTUAL CASE HISTORIES: Kalisha, 44, had worked for six years as the Financial Controller of a St. Louis-based, family-owned lighting distributor. After three generations of family ownership, during which the staff grew from two to 150, the grandchildren-owners received an inquiry from a Private Equity firm about their interest in possibly purchasing the company. With assurances that each grandchild would likely make many millions of dollars when, three to five years later, the “re-invigorated” company was to be sold. It didn’t take long: they decided to “cash out.”

Pretty soon, the Private Equity firm, their lawyers and their accountants began reviewing the company’s financial records, bank statements, leases, employment agreements, all as part of their “due diligence,” upon which their formal “offer” would be based.

It did not surprise anyone when the company’s owners called for a meeting of the company’s executive team to announce what was happening. At that meeting, the overall message was clear: “This is a great opportunity for everyone. There will be bonuses, there will be stock ownership, and this will be a golden opportunity for everyone . . . So long as you stay on board, work hard, help make the company a greater success, we might just make enough money to never work again.” Wow.

Then, four months later, without warning, the management team were called into a conference room, given documents to review, and told they needed to be signed by the next morning. Each executive received six documents, some one page long, some tens of pages long, each nearly impossible to understand due to their dense legal wording, multiple definitions, and confusing cross references. When some people asked for a chance to have their attorneys look them over, they were sternly warned, “What are you going to do? Don’t you trust us? Don’t ruin this for everyone.” To make a long story short, everyone signed, and no one ended up happy.

As Private Equity investors increasingly assemble “private equity” – meaning investments from college endowments, individual investors, pension funds, and religious organizations – this scenario is playing itself out scores of family-owned companies each day.

LESSONS TO LEARN: The commonplace understanding of employment agreement negotiation is a rather simple, three-step process: (i) first, the employer provides the employee with a draft document; (ii) then, the employee and his/her lawyer look it over, (iii) finally, the employee’s lawyer and the employer’s lawyer discuss, and negotiate, mutual concerns. With few exceptions, that is not how Private Equity investors and owners operate today with companies they purchase in order to sell.

With few exceptions, Private Equity investors (a) buy, (b) change, and (c) resell companies over three to five years. They are not long-term investors. They seek the best possible return for their investors and themselves, and do anything and everything they can think of to do just that.

The problem is this: to do so, they often promise the sky, and make sure the “papers” provide little or nothing of that. Instead, they tend to (a) reduce employee overhead (meaning salary and benefits), (b) manage to avoid paying out “suggested” promised bonuses and stock or other forms of equity, and (c) make sure that the agreements that they require employees to sign provide them the right to do just those things. Generally speaking, over time, they will bring in their own executives whose job is to sell the company, not to run it. They have no loyalties; they have only greed, and the legal help to get them what they want. Unless wisely resisted.

Do they want anyone to know or understand what they are signing? No. And they are good at it. Remember: (a) Buy, (b) change, (c) sell, within three to five years. And to do so they engage in what I call “hurricane tactics.”

“Hurricane Tactics” are what I call the use of seemingly overwhelming force, in an atmosphere of near-blindness, by among other things a “blizzard of papers,” so that the course of events proceeds this way: (1) rather vague assurances are made to employees of great opportunity and fortune, provided the employee agrees to remain and work hard for several years, however (2) without any solid commitments being made to ensure the employer fulfills those vague assurances. Instead (3) the agreements are chock full of provisions by which the employer is enabled to avoid and evade any commitments, of any kind, to the employee.

A. What are these “Hurricane Tactics?”

1. Lack of Clarity: The use of words, phrases, definitions and dense, complicated language an experienced employment attorney has a devil of a time understanding. There is simply no good reason to draft legal documents no one can understand; only bad reasons. (See the next section: The documents almost always say, one way or another, that if there is anything unclear in the documents, the “Management” has full and final say about what it means);

2. “Unlimited Leeway”: Provisions in the agreements that give to employers the sole, final and unreviewable decisions – like “sole and unreviewable discretion” – as to what a document means, or what constitutes “reasonable,” “promptly,” “bad faith,” “adequate performance,” “cause” and “misconduct,” to name just a few, making those words and phrases essentially meaningless;

3. “Subject-To” Provisions: Phrases that make the employment-related agreements “subject to” other documents that are not provided for review, such as the Limited Liability, LLC Operating, or Shareholders’ Agreement. Others, such as the “Award Agreement” for stock or options are often not even drafted yet. “Subject to” means that this document is subservient to other documents, and that those other documents govern and control in the event of any inconsistency, conflict or dispute. But it is almost always the case that you have no right to change those other documents, and they do, without telling you. (See the next section.)

4. “Incorporation by Reference” of Other Documents that are Changeable Unilaterally: As examples, the three agreements noted in the preceding agreement are controlling, and each of them provide that they can be modified at any time, without notice. So, if an employee is provided 2% of the company’s shares, these documents can permit 10 million new shares to be sold, making the employee’s ownership not 2% of the company, but 0.00002 percent. So these “incorporated by reference” documents can make the one you are signing essentially meaningless.

5. Coercion by Last-Minute Lateness (“Don’t be the one who spoils this for everyone.”) Perhaps most cynical of all, the practice of providing the employees only a day or even just hours, to review several documents consisting of hundreds of pages, and no real opportunity to even find or retain an attorney, to request changes or otherwise negotiate.

In one instance, my client was given only 30 minutes to sign several documents, and only the signature pages of the agreements were given to her to sign; the substance of the agreements were not provided, so she had no idea what she had agreed to. For Private Equity investors, that means “Mission Accomplished.”

So, those are the fundamental elements of the “wind-in-your-face, rain-in-your-eyes” hurricane tactics. Is it possible to successfully negotiate against these “Hurricane Tactics?” Yes, it is, and I’ve found the best way is to use what I call “Umbrella Negotiating.”

B. So, What is this “Umbrella Negotiation?” Simply, focus on two things: (i) Firm Footing (what I call “Positional Leverage”) and (ii) one Document that Covers Everything (an “Umbrella Memo”). By those phrases, I mean the use of two concurrent strategies, (i) “positional leverage” before the hurricane arrives, and you are exposed to its unsettling and disorienting “elements” and (ii) preparation of one single – and rather simple – document that covers you regarding all other documents, in all events, just as a strong umbrella does in a hurricane.

“Positional Leverage” and “Umbrella Memos” are explained in greater detail below. Simply put, for now, it is being on your firmest footing, and projecting your points in the negotiation as soon and as clearly as you can.

“Umbrella Negotiation” serves to hold back the strong wind, protect against the furious rain, and permit you to both see what is going on around you, and to stand up to it, not getting overwhelmed, drenched or “hosed.” The elements of “Umbrella Negotiation” are explained below.

Is it easy? No, but with a little effort and energy, it’s not impossible, either. Is it effective? Yes, it can be very effective, and I truly believe it is the most effective way to address Private Equity “Hurricane Tactics.” Just as David defeated the more-powerful Goliath with a firm footing and a single, simple weapon, so too can you prevail in employment negotiations with Private Equity investors or owners.

WHAT YOU CAN DO: These are the “Umbrella Negotiating” steps that I employ in these circumstances and they are in my experience the most effective way to negotiate employment agreements of nearly every kind:
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“Create with the heart; build with the mind.”

– Criss Jami

ACTUAL CASE HISTORIES: Adelisa, 38, had a rock-solid resume as an Analytics Design Specialist, having been employed by a list of impressive hedge fund employers. She was an expert in assisting Quantitative Analysts design software and algorithms to better predict investment performance. Her experience, skills and industry relations were such that she received recruitment inquiries almost weekly. For a few years, she was on her own as an independent contractor, but was now a mother of two young girls, and had become far more interested in the comfort afforded by a weekly paycheck.

One inquiry she received from a large hedge fund intrigued her so much that she entered into serious talks with them for a senior executive position that included very substantial compensation, great working flexibility and significant job security.

I had worked with Adelisa several times before, each time she climbed the “career ladder.” When she contacted me this time, she had already received a “standard” employment contract from her potential employer. I noticed right away that it was heavily laden with many detailed provisions intended to protect the employer from employees “stealing” creations, inventions, proprietary information and trade secrets. The entire employment agreement consisted of 8 pages, 4 of which were devoted to the subject of protecting the employer’s intellectual property.

Adelisa had the “mirror image” concern. That is, over the course of several years, on her own time she had developed what she referred to as her “Golden Goose,” which was a computer program she had created entirely by herself, years ago, while working as an independent contractor. As best I can explain it (they didn’t teach this stuff in law school), it was “an algorithmic-based platform that could ‘carry’ various data packages to test predictive capacities.” Adelisa said it was actually based on “digital intuition,” and was a type of artificial intelligence.

Her “mirror image” concern was how she could use her “Golden Goose” on the job, yet not lose any of her rights in and to it. The draft employment agreement, like most, provided that anything and everything she might use to do her work for this employer would automatically be deemed the employer’s sole property. She asked if we could help her respond to that language, in order to protect her “Golden Goose.”

It was an interesting project, and the results were well worth it. First, her new job went very well, and her compensation was very significant. And, when, years later, she eventually departed from the company for “greener pastures,” there were no disputes, no claims, and no threats regarding her “Golden Goose,” which was precisely her goal. Mission accomplished.

LESSON TO LEARN: With few exceptions, everything in life – and that includes work life – can be “navigated and negotiated” in wise ways. Taking care, when entering into new work relations, to try to prevent problems from arising in the future, is the wisest of wise ways, and always worth the effort.

In two ways, employees often lose their rights in their pre-existing creations: (1) law (the “Work for Hire” rule), and (2) by agreements they are asked to sign (often called “Assignment Agreements). In this blog post, we address both, and the ways prospective employees can and should protect their “pre-existing creations” in the context of interviewing and job offers.

As a few examples, they include software, works of art, written materials, musical compositions, visual and audio presentations, and inventions. By law, they are materials that can be (a) copyrighted, (b) trademarked and/or (c) patented. By means of self-help – our favorite topic for employees – they can take steps that can protect themselves, and might be just as good, or better.

While each employee’s “pre-existing creations” are unique, and each employment dynamic is unique, there are some generalized observations we can share to assist in the process of protecting employees’ “pre-existing creations.”

As the quote above reminds us, “Create with the heart; build with the mind.” I would simply add, “And then protect what you create as best you can.”

WHAT YOU CAN DO: Here are 12 pointers for employees in Adelisa’s “shoes.” This list is not exhaustive, but it does cover most of the critical points most employees need to understand:
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“It’s not hard to make decisions
when you know what your values are.”

– Roy E. Disney

NOTE: This is Part 2 of 2 of this Newsletter. We have divided it in half due to its considerable length, befitting its importance to so many employees. Last week we presented Elements of Job Opportunity Comparison 1 through 9; This week we present Elements of Job Opportunity Comparison 10 through 18. (Click here if you want to review our First Installment before reviewing this one.)

ACTUAL CASE HISTORY: Danielle, a senior marketing executive, was quite unhappy in her job. Her employer’s management was extremely dysfunctional. Sales were soft for many reasons, and, of course, much of it was blamed on her and her team. With 21 years experience, she knew her team was running on all cylinders, but even great marketing can’t undo an outdated product, an insufficient marketing budget, and almost daily interference with marketing decisions imposed by the CEO’s wife.

Without her reaching out, she was contacted by a recruiter with a very intriguing opportunity, with (a) better salary, (b) but lower bonus opportunity, (c) greater retirement benefits, but (d) later retirement age, (e) a new, exciting product line to market, but (f) a small marketing budget that gave her limited discretion. The position also came with a three year contract, but it required relocation to a city she’d never before even visited. A confusing list of advantages and disadvantages, positives and negatives.

To say it was a hard choice to make would be an understatement. Danielle knew the positives and negatives of her “bird in the hand,” but didn’t know what she would experience with the “two in the bush.”

Working with Danielle was one of my favorite client experiences. It involved first identifying, and then weighing, her personal values, career planning, life goals and difficult choices.

In the end, she made the move to the new job, and fortunately has never looked back. In hindsight, it was surely the better choice, but as they say, “Hindsight is 20-20 vision; the harder ‘sight’ is ‘insight.’”

These days many people face this dilemma, as company after company seeks to improve its human capital, expand, or just “see what is out there.” If you are in this situation, or if you receive two job offers, the decision between or among your available job opportunities might be a difficult one. Even if you find the decision an easy one to make . . . are you sure you considered all of the factors that are wise to take into account?

LESSON TO LEARN: Depending on your personal preferences, brand and skillset, as well as whether we are in “good” or “bad” economic times, it may seem that job opportunities are depressingly scarce or wonderfully abundant. Whether job opportunities are scarce or abundant, employees often have occasion to decide between (i) leaving their jobs for other offered positions, or (ii) making a choice between two or more new positions offered to them at one time. It is common that comparison of two jobs, or two job offers, can be a difficult thing to do. It is often an “apples vs. oranges” comparison, and can get quite confusing. And, so, we offer you the same list that we offer our clients to make these difficult “apples vs. oranges” comparisons.

The list we offer below has another, somewhat unintended, advantage: It may remind you of one or more job opportunity components of comparison that you had simply not even thought about. Like a checklist of sorts, it may bring to the surface of your consciousness something that had been lurking in your mind, heart and soul, that had not yet come to the surface of your awareness.

For those facing the need to make a choice between “take this job or take that one,” below is what our clients have found to be the most important elements needed to compare, and a simple way of doing so. It is not scientific, it is not foolproof, but most of my clients who have used it reported back to me that it was extremely helpful. Hopefully, it will be for you, as well.

WHAT YOU CAN DO: When you need to compare two or more employment opportunities – whether it’s a choice between two different offers, or remaining in your present job, or accepting a new offer – you need to make your decision wisely, prudently and carefully. For that reason below we present these common elements of job opportunity comparison as a “tried-and-true” method of doing so.
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