“He who speaks the truth must have one foot in the stirrup.”
– Armenian Proverb
ACTUAL CASE HISTORY: Stacey was a retired New York City police detective. At 44, she’d given 20 years to “The Force,” as she called it, and was now considering attending law school. There were, though, two young mouths to feed, and a monthly mortgage payment to contend with. With her background in the security field, she put out feelers among friends, placement agencies, and security firms, looking for something in the security field that was “9 to 5.”
Through a friend in the Police Commissioner’s office she landed an interview with one of the city’s largest jewelry manufacturers. The company, owned by private investors, was looking for a second-in-command to the Director of Security, a former FBI agent named Mr. Turnbull. The company had grown considerably in recent years, and the value of their shipments of precious metals, raw gemstones, and expensive, finished product sometimes reached into the millions of dollars. Recently, their primary insurance carrier was pressuring them to hire a larger security staff, and in particular, a Deputy Director for Mr. Turnbull. Turnbull didn’t like the idea one bit, and was open about his view. Nonetheless, a month later Stacey was hired as the company’s new Deputy Director of Security.
As things turned out, there was a reason Mr. Turnbull didn’t want to hire Stacey – or any other Deputy Director for that matter – and it wasn’t a good one. Eight months into the job Stacey began to suspect something she eventually confirmed: Turnbull used outside armored-car services to make large shipments of metals, gems and finished goods at almost double the shipping rates other jewelry companies paid. Sometimes he billed the company, sometimes he billed the customer, at times he even billed them both. Turnbull also insisted on using certain armored-car services, despite their poor performance records. Worst of all, Turnbull’s favorite armored-car service turned out to be neither bonded nor insured, which made their use a serious violation of the company’s insurance policy.
Confidentially, in a closed-door meeting, Stacey presented her findings to the company’s Chief Operating Officer. Her presentation was detailed, thorough and methodical, leaving little doubt that overpayments were epidemic, unqualified services abounded, and double-billing had taken place. She expressed, too, her deep suspicions that Mr. Turnbull might be taking kickbacks of some sort. The Chief Operating Officer asked her to keep the matter confidential until he hired outside auditors to “dig deeper,” to use his words. For three months, Stacey heard nothing, although Mr. Turnbull seemed, at first, to grow distant, then hostile, and finally abusive, towards her. She requested a second meeting with the Chief Operating Officer through an email to his secretary.
The meeting, held a week later, was brief: after pleasantries, Stacey was told a decision had been made to eliminate the Deputy Director position, and that she would receive two weeks of severance, provided she kept everything – without exception – confidential. She was then asked for her company ID, her security passkey, and was accompanied to the employee exit. Yes, that brief.
When Stacey came to us for help, we had difficulty figuring out how to approach the situation. Like most people, Stacey didn’t have an employment contract we could claim was breached. Since she was an “at-will” employee, she could be let go at any time. Though Turnbull had been unpleasant to her, what happened to her didn’t constitute illegal discrimination or harassment. The company wasn’t a publicly-owned company, so the new Federal “Whistleblower” law, called Sarbanes-Oxley, wasn’t applicable. Nor were there any other federal or state “whistleblower” laws that we thought were applicable. The answer we decided upon – and it proved to be the right answer – was based on the company’s “speak out” policy.
It was surprisingly simple: after sharing the facts and our knowledge of the law with the company’s General Counsel, who claimed “ignorance” with good reason, and with a little back-and-forth negotiating, we obtained for Stacey a very generous severance package: over two years of salary, bonus and benefits. Incidentally, Turnbull soon resigned.
LESSON TO LEARN: “Speak out” refers to a certain kind of company policy, often found in a company’s employee handbook, sometimes on the company’s website. It can even be an “unspoken policy,” that is, an espoused company practice. Regardless of what it is called, where you find it, and the words used to express it, a “speak out” policy says, in essence, the following: “Employees should report wrongdoing or inappropriate conduct, and should not fear retaliation for doing so.” These days, almost every company has a “speak out” policy, and in publicly-owned companies, that is, companies whose shares are traded in the “stock market,” they have become universal, because they are now considered a critical part of good corporate governance.
Perhaps in response to recent corporate financial scandals at several public corporations including Enron, Worldcom, Hollister, Tyco and others, courts have increasingly held that “speak out” policies are like mini-employment contracts, in that they offer employees who “speak out” a kind of implied-contractual protection from being fired for doing so. The courts reason this way: “if a company has a ‘speak out’ policy, it is a kind of promise, and a failure to honor that promise is a breach of contract.” That gives employees in Stacey’s situation a very strong basis to sue for breach of contract, in a way that is particularly attractive to juries, and risky for senior executives who turn “speak out” into “you’re out.” While not all courts have ruled that “speak out” policies constitute an implied contract not to retaliate, the clear trend is in that direction, and more courts can be expected to follow suit.
“Speak out” related lawsuits also threaten to cause the company (a) morale problems internally, (b) relational risk with customers, (c) reputation-risk in terms of poor publicity, as well as career risk for the offending executives, all very strong leverage in negotiation intended to avoid lawsuits.
WHAT YOU CAN DO: Consider each of these five prudent steps:
1. Get to know your employer’s “Speak Out” policy: Take a minute or two to find out what your employer’s “Speak Out” policy is. Review the employee handbook, search the corporate website, make casual inquiry to Human Resources (you might tell them you read an article about the subject). Some “speak out” policies have specific procedures to follow if and when an employee “speaks out,” and some have specific forms to complete. Forewarned in detail is forearmed in detail.
2. If your company doesn’t seem to have a “Speak Out” policy, suggest one be adopted. The underlying rationale of “speak out” policies is to prevent waste, fraud, and corruption, and the financial scandals they so often yield. It’s hard to imagine anyone of good faith being against adopting a clear policy that encourages reporting of wrongdoing. In each of the infamous corporate scandals in recent years, “speaking out” would have prevented a great deal of harm to corporate treasuries, shareholders’ interests, employee pensions, employee morale and public confidence. Regardless of your position and title, you will be doing your employer a favor by suggesting that a “speak out” policy be adopted.
3. If you do “Speak Out,” make a simple record of your doing so. It is sometimes said that when words are spoken, they “go into the air.” What’s said in a meeting – even whether a meeting ever took place – can be forgotten, mischaracterized, even denied. It’s for this reason that we suggest that emails be used to (a) request a “speak out” meeting, (b) send a record to your files or your home email address of what transpired in the “speak out” meeting, in detail, and keep a copy in a safe place, and (c) thank the person you “spoke out” to for their time, thereby confirming that a meeting took place (but here, without mentioning in this email the substance of the discussion). Emails are essentially impossible to remove from a computer’s memory, and they effectively date- and time-stamp when things took place. They’re an invaluable tool to protect yourself, if used wisely.
Act pre-emptively! Avoid being retaliated against! Use our “Pre-emptive, Anti-Retaliation Letter (“PEARL”) to contact the Board Chairperson to let your tormentor know “You Are Being Watched!” “What to Say, and How to Say It,™ just [ click here. ] Delivered by Email – Instantly!
4. If someone “Speaks Out” to you, treat it very seriously. Not only might you be a person who “speaks out,” but you may also be someone who is “spoken out” to. Should this take place, you would be wise to take careful steps to ensure that you are acting in a way that is proper, prudent and beyond reproach. Whether you should first investigate the allegations, or bring them directly to the General Counsel’s office, or refer them to the Internal Auditor, or perhaps even to the Board of Directors, is a weighty consideration. Bear in mind that you can be criticized, fired, or even indicted for seeming to “turn a blind eye” to reports of malfeasance.
5. Whether you “Speak Out” or are “Spoken To,” consider independent legal counsel. It’s easy to be confused and bewildered by multiple concerns in these circumstances, yet it’s critical you maintain your “ethical compass.” For this reason, in matters of apparent, alleged or actual wrongdoing, and the reporting of such conduct, you may be well-advised to have independent legal counsel to help guide you in steps to you should take, and to steer you away from the steps you should not. As the potential consequences in these matters are significant, involving potential job loss, possible retaliatory measures against you, defamation, damage to reputation, even criminal prosecution, the cost of counsel may be a wise investment.
Increasingly, employees and employers are under ever greater pressures to boost sales, revenues, return on investment, stock price and other metrics of business success. The pressures to do so can lead to errors of judgment and lapses of moral conviction. “Speak out” policies are a sad reflection of the state of affairs in many corporate suites, but also a hopeful reminder that we can and do find measures to address the problem. In this case, that is strong support for those who have the courage to “speak out.” The need to carefully use “speak out” policies again illustrates that you always need to use your skills, ideas and knowledge to affect the decisions of your decision makers at work to make your employment secure and rewarding. That’s the essence of what we always talk about in SkloverWorkingWisdom™.
If you would like to obtain a “model” memo to help you object to retaliation on the job, [click here].
SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Avoiding unnecessary risks to your job, your finances and your reputation, is essential. But it takes more than luck to make that happen. It takes forethought, care and prudence, the essential ingredients in good negotiating.
Always be proactive. Always be creative. Always be persistent. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “reward” and eliminate or reduce employment “risk.” That’s what SkloverWorkingWisdom™ is all about: empowering individual employees to achieve their own value.
A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.