Ethics
How communication can prevent lawsuits
Denver Business Journal - by Marshall Colt
Shortly after 3 a.m., June 3, 1969, the USS Frank E. Evans was cut in half by the Australian aircraft carrier, HMAS Melbourne, in the South China Sea.
The destroyer had inexplicably turned in front of the Melbourne. The forward half of the Evans sank in three minutes with heavy loss of life. The commanding officer woke up in the water.
His written night orders to the officer of the deck specified he was to be awakened if the Evans changed course. Tragically, Lt. Rodger Ramsey failed to do so, reportedly because he was afraid to make the call.
Scores of men died, the Evans was gravely wounded and the career of her "CEO," Commander Albert S. McLemore, was over. All because an "employee" didn't feel safe enough to communicate vital information to "management."
Ship drivers have an old saying: "A collision at sea can ruin your entire day." An employee's lawsuit can do that and much more. To avoid a "collision" between employee and employer, well-written "night orders" alone won't suffice. Extra steps are necessary to ensure policies and procedures are faithfully executed, lest one wake up in the water.
Yet, how does a CEO ensure this? For many employees feel, accurately or not, that they cannot trust their employer. By reporting "bad" news of fraud or other abusive behavior, they fear retaliation in its many forms. For example, the National Association of Working Women reports receiving thousands of calls each year from anguished workers who say they are being sexually harassed at work but are afraid to complain.
A wise and caring CEO seeks to eradicate such fear. A prudent CEO knows hearing the truth from employees is crucial to ethical business success and can also avert traumatic and expensive lawsuits.
Regarding sexual harassment, two recent Supreme Court rulings (Burlington Industries Inc. vs. Ellerth and Faragher vs. City of Boca Raton) put companies at risk for litigation now more than ever. Notably, neither Ellerth nor Faragher complained to management before they sued.
The court made clear that employers are responsible for the sexual misconduct of their employees, even if the employer knew nothing of the improper behavior. Employers must now anticipate misconduct and take proactive steps to prevent it. If you're a CEO, here are ways prevent a lawsuit from ruining your entire day:
• Review policies. Arrange for an outside audit of your current policies and procedures regarding waste, fraud and abusive behavior. An objective review will impartially address the sufficiency of your existing policies and practices regarding both prevention and employee reporting.
• Spread the word. Widely promulgate your policies. Conduct frequent "rights and responsibilities" training. Employees should be individually counseled on the company's policies concerning improper behavior and what they should do if they learn of any.
• Walk the talk. Make clear by personal example that you will not tolerate waste, fraud or abusive behavior anywhere in the company. Emphatically reiterate your ethics often.
• Seek feedback. Frequently ask employees, at all levels, if everything is OK. Ensure all understand you sincerely want to know if anything improper is going on.
• Document everything. Keep records concerning issuance of company policies, promulgation of procedures, preemptive counseling, training and requests for feedback.
• Contract for ombudsman services -- outside the company -- allowing employees to confidentially report alleged waste, fraud or abuse, without fear of retaliation. Charges may then be objectively investigated by an ethical, experienced professional, unbiased by issues influencing those within the company. The ombudsman will impartially report any substantiated wrongdoing to management, without identifying the reporting employee. Corrective, preemptive action may then be taken, benefiting both employee and the company. For mere pennies a day per employee, an outside ombudsman is also an invaluable "insurance policy" against employee lawsuits, which even the best internal mechanisms and employee assistance programs can't provide.
Twenty-nine years ago, 74 men died in calm seas on a moonlit night in June -- all because an "employee" didn't feel safe enough to communicate vital information to "management." It was completely avoidable.
Every day, employee lawsuits cost companies millions and some CEOs their jobs. -- many because an employee didn't feel safe enough to communicate vital information to management. They, too, are completely avoidable.
Marshall Colt, Ph.D., runs Corporate Psychological Management LLC, a litigation and management consulting firm. Contact him at http://www.corp-psych-mgmt.com.
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