Billionaires Are Different: Employment Handbooks, Litigation Risks
Very few of our clients are billionaires. Actually, to our knowledge none of our clients are billionaires. We are not billionaires. It was not because of an immediate sense of identification, then, that a short piece in the Wall Street Journal Law Blog piqued our interest so much that our commentary far exceeds the length of the piece. “Not Your Father’s Employee Handbook” involves Sam Zell, identified as the billionaire owner of the company that publishes the LA Times.
It seems that under Mr. Zell’s “auspices” (an ambiguous characterization by the Journal that could mean anything from “he was personally responsible” all the way to “he was barely aware of it but he owns the company and dropping the name of a known billionaire makes for a great hook”), the LA Times created a new Employee Handbook. This Handbook, according to the Journal, was of an unusual nature. It was one about which an (unidentified) recruiter said “I don’t think a lawyer got their hands on it and that’s fantastic.” It was a Handbook “laced with humor” and written in plain language but with “mistakes.”
My first reaction was that the root of “fantastic” is that same as that of “fantasy.” What would be truly fantastic, in any sense of the word, would be if that recruiter’s appendix had been removed and no doctors got their hands on it. Without any way of actually knowing, I’m betting lawyers did get their hands on the Handbook but there were other goals (that is, other than a strict defensive avoidance of liability) that shaped the final product. The succinct, breezy style of the Journal’s blog leaves a lot to be filled-n by our own reflections and thoughts.
Through the hazy recollection of my past association with large corporate organizations, I thought about the article a little more seriously. Mr. Zell, or his management, may have subordinated the legal purpose of their Handbook in order to emphasize motivational issues endemic to large, bureaucratic organizations. The writing style, laced with humor, served higher priorities and their “mistakes” might very well have been “tradeoffs.”
And, backed by billions, they could afford to risk the potential liabilities, perhaps merely a few million dollar settlements. They can also afford the legal defense to minimize their losses. Thus, they can afford to downplay the potential legal liabilities while emphasizing other aspects of the employment experience at the LA Times.
This is pure speculation. We have not seen the Handbook. Nor do we have any knowledge of the nature of the LA Times organization or their actual thinking in shaping their Handbook.
But, somewhat like an ink blot test, the Journal’s story allows us to project into it our own concepts and ideas. Our blog covers developments in business litigation but with a focus on helping clients stay out litigation, if we can and manage it better, if we can’t. Towards that end, we try to derive from the litigation world recommended “best” or at least “better” practices suited to the small and growing businesses, real estate investors and non-profits (as well as professionals who serve them) that make up our intended readership.
It is tempting to emulate the practices of billionaires with the thought of following their paths to success. But smaller to mid-sized businesses are not backed by billions, nor is it likely that they have passed through the stages of organizational growth that would engender the problems of organizational inertia and bureaucracy to which a larger, older organization may be exposed. We, and our readers, do deal with larger, unresponsive organizations, but for this article we are tending to our own gardens.
In summary, then, the LA Times may have had good reasons to give priority to factors other than avoidance of employment litigation in developing their Handbook. But, the best, or at least better, practice for the principals of smaller, growing organizations is to focus on their own real-world situation. As they grow and have a need to structure and systematize their employment practices, they are better off giving a high priority to avoidance of the potential liabilities of employment litigation. And, it follows that they are better off taking a more serious, straight and narrow approach to their Employment Handbooks.
More specific comments about how much an organization needs to grow before needing one, what an Employment Handbook should contain and just what are the potential liabilities it addresses must await future postings. This one is long enough.
