It’s a big deal for companies and HR people everywhere, of course, but the law is particularly tough to deal with out here in California (where the Workforce Management world headquarters is located), given some recent court decisions and an epidemic of wage and hour class-action lawsuits that get into the misclassification of employees as exempt.
Well, here’s another class-action lawsuit from the Left Coast, and this one involves a technical writer at Sun Microsystems who says she was denied overtime despite spending “more than 60 hours a week at her computer when the company was preparing a new product release,” according to a story in the San Jose Mercury News.
Here’s what caught my eye: “Sun’s technical writers may earn salaries of $100,000 a year, but they don’t get overtime pay for the extra hours, according to [technical writer Dani] Hoenemier’s attorney, who is challenging the company’s practice of treating Hoenemier and about 300 other writers as exempt from state labor laws governing overtime,” the Mercury News reports. If the company loses, it could owe “well over $20 million” in back pay, according to Hoenemier’s attorney, Aaron Kaufmann of Walnut Creek, California.
The issue here, according to the Mercury News story, is that “California enacted controversial legislation in 2000 that exempted ‘computer professionals’ such as software developers from rules requiring overtime for working more than 40 hours a week or eight hours a day.”
Federal wage and hour law has such an exemption as well. But in an interview with Workforce Management, Kaufmann said that when California adopted the federal standard, it specifically carved out technical writers from the exemption for computer professionals. (The thinking, perhaps, was that while writing can require some skill, it’s not on a par with computer programming.) According to the Mercury News, “Sun says the writers’ duties fall under provisions that exempt administrative, professional or computer professional workers.”
Getting this wrong can be an expensive lesson for a business to learn. I once worked at a company that claimed that everyone with a specific title was exempt and not eligible for overtime even though not a single person with that title came anywhere close to meeting the classic test for an exempt employee. It all unraveled when a disgruntled employee quit for a new job and called the California Division of Labor Standards Enforcement. The result? An investigation by the state of California that led to my former employer getting socked with a $100,000 fine.
There is a lot of controversy in Silicon Valley surrounding the legislation exempting computer professionals, especially since it goes against the grain to suggest that professionals making $100,000 a year should get OT to boot. My guess is that the lawsuit against Sun is just the tip of the iceberg on this issue, and that whatever happens out here will send ripples through wage and hour policies everywhere.
I know people spend a lot of time working, and that relationships in the office often become stronger and more meaningful than many relationships in our personal lives. Still, I was surprised to see this survey touted in The Miami Herald that found that “as women and men have become peers in the workplace, many now share a marriage-like relationship on the job with a co-worker of the opposite sex.”
The story, headlined “Office spouses on the rise, survey says,” points to a survey by Vault.com that found that “32 percent of employees acknowledge having an office husband or wife—a platonic opposite-sex friendship at work. The number jumped from 23 percent just a year ago.”
And just how does an “office spouse” relationship manifest itself? The Herald story asked financial commentator Lucy Kellaway, who says she has been through six work spouses during her two-and-a-half decades in the workplace. “They are your default position for a sandwich at lunch, your colleague of choice for gossip, for confidences and for laughing at the corporate video,” she said. “They are someone to ask for advice and give it to in return.”
These aren’t office affairs we’re talking about—the overhyped workforce “trend” that generates a flood of press releases around Valentine’s Day—but, the Herald reports, “similar to having a best friend at work, although the dynamic is different because you have to watch out for perception, says workplace expert Tina Louise Chadwick. She says that you can manage the perception by making sure you shoot down any jokes, avoid the appearance of a two-person clique, stay professional, and be comfortable hanging out with your office spouse in front of your real one.”
I’m not surprised that the notion of an “office spouse” is growing, given all the time people spend at work. Add in the huge stresses of the modern workplace and you can see why people are fostering platonic, semi-intimate professional workplace relationships that mirror some of the aspects of their real-life personal situations.
I’ve joked about this to one of my editors here at Workforce Management—I referred to her once as my “office wife”—but little did I know that I was on to a larger workplace trend. It sounds like a good idea, but as the male member of one office “couple” told The Herald, there are some downsides with an office spouse that you don’t have with a real spouse. “If you argue with your spouse you can walk out of the room,” says Miami TV anchor Jorge Estevez. “We still have to sit next to each other and work together for eight hours a day.”
There’s also the very real issue of an “office spouse” relationship turning into something much more threatening to a person’s real relationships. And that’s the irony in this survey by Vault.com: The question about platonic office spouses came at the end of long list of questions focused on romance, affairs and unwanted sexual advances in the workplace. Clearly even in the Vault.com survey, the discussion of an above-board platonic office relationship pales in comparison to the titillating chatter about inappropriate office romances that I’m so tired of hearing about.
Cuban is the billionaire owner of the NBA’s Dallas Mavericks, and an entrepreneur who made a huge chunk of money when he sold Broadcast.com to Yahoo for $5.9 billion in 1999 at the height of the dot-com boom.
“There is a game played by CEOs with the corporate issuance of lottery tickets, otherwise known as stock,” he says. “No matter what you call it, every CEO asks for equity, knowing that the only goal is to hit the jackpot. [And] every CEO hired looks to grab as much equity equivalents as he can and do everything he can to get that stock price up while periodically liquidating the stock and stuffing the cash in his bank account.”
He adds: “The problem is that there is a huge disconnect between the CEO and shareholders doing well and those who work for the company doing well. … Yes, it’s true that CEOs [sometimes] see the value of their holdings shrink. But unlike lottery tickets, whose value goes to zero when you don’t hit the numbers, CEO equity positions retain their upside. History has shown that if they go far enough underwater, they will get repriced and/or reissued—all in the name of keeping the CEO happy. So while CEOs may get ‘less rich’ for a while, the game is stacked to get them happy really fast when the upturn comes.”
Cuban goes on to say that there is a disconnect in most companies because the employees—the workforce—generally get compensated in cash while the executives “live in the equity/lottery ticket zone.” When things go bad in a business, those in the cash zone always take the first hit. People, places and things that consume cash are the first things to go because cash expenses immediately reduce earnings. If you or anyone like you consumes cash, unless someone upstairs thinks you generate a straight-to-the-bottom-line return, you are about to become a corporate ghost. You’ll be memorialized as a cut to increase earnings and mentioned in a press release that Wall Street will cheer and use to push up the stock price.”
So, does Cuban have an answer to the excesses of executive pay? Yes, and it is surprisingly simple: “The only way to change this is to put CEOs in the cash zone. Make companies generate 100 percent of their compensation in cash that will be 100 percent expensable in the quarter paid.”
He goes on to say, “That’s not to say the CEOs can’t own stock. Hell, yes, they can own stock. But make them buy it on the open market or as part of a program that’s available to every company employee on the same terms. They are getting paid enough, and if they believe in their ability to run the company, they can put their money where their mouth is.”
Mark Cuban may be known as a bigmouth, but I can’t help but think that sometimes the most sensible solutions to a complex problem come from the most unexpected places.
Ever hear of a company having someone with the title “executive vice president of partner resources?”
That was a new one for me, but “partners” are what they call employees—aka, workers—at Starbucks. In English, that means the executive VP for partner resources is really the executive VP for human or employee resources. And, the new guy in that very HR-sounding position will “be paid a $400,000 salary plus $400,000 in stock options and eligibility for a bonus.”
This little bit of information comes from a story in the Seattle Post-Intelligencerabout a filing the company made with the Securities and Exchange Commission on Thursday. It details what Starbucks is paying some executives as well as what the company is giving to former company president Jim Donald to keep his mouth shut—a $1.25 million severance package as long as he doesn’t “utter negatives to the press or any individual or entity about Starbucks, its business, its activities, its shareholders, employees, agents or relationships.”
I always find SEC filings to be a fascinating read because of all the inside information you can glean about a company and its management team. For example, the Post-Intelligencer found that “Donald also agreed not to work for McDonald’s or Dunkin’ Donuts, because they are ‘companies that directly compete with Starbucks’ field of business,’ ” the filing said. “However, it notes, he is allowed to work for grocery chains, such as Pathmark, Albertsons and Safeway, and he also is allowed to work for other fast-food chains, including Wendy’s, Arby’s and Burger King.”
McDonald’s as a competitor to Starbucks? Although Starbucks CEO Howard Schultz has been dismissive of the new McDonald’s coffee strategy, he is clearly concerned enough to want to bar former Starbucks executives from going to work there and has vowed to “fight to the death” against his competitors for coffee dominance.
But it’s not all about the money. Launi Skinner, former president of Starbucks’ U.S. operations, not only got a nice severance package, but also “a lifetime of employee discounts on Starbucks products.” Given what they charge for a fancy coffee at Starbucks these days, Skinner’s discounts may turn out to be the best perk of all.
I try not to get too philosophical in this blog, but I found myself feeling that way when reading about the death this week of Irvine Robbins, one of the founders of the Baskin-Robbins chain of ice cream stores. He died in Rancho Mirage, California, at the ripe old age of 90.
The story of how he named the business he started with his brother-in-law, Burton Baskin, is uniquely American. As The New York Times recalled today in an obituary, “Although it was Mr. Robbins who opened the first store, at the intersection of Adams and Palmer Streets in Glendale, California, on December 7, 1945, and it was three years more before he and Mr. Baskin became partners, they took a carefully familial approach to deciding who would come first in the name of what eventually became a vast international enterprise. They flipped a coin.”
More important, in my book, is how the two brothers-in-law managed the company. “They worked closely on everything,” according to Robbins’ daughter, Marsha Veit. “They would come up with ideas for flavors based on what was happening at the time, like Cocoa a Go-Go, when go-go dancers were popular. They would sit in the kitchen tasting, making sure the best ingredients were used.”
Read enough of the obituaries of Irvine Robbins (such as this one in the Los Angeles Times), and you can’t help but come away with the feeling that his legacy will be about the great innovation and fun-loving spirit he brought to his work. I’m not sure Robbins ever spent a lot of time worrying about that, but it got me to thinking: Do any of us spend much time considering what we will leave behind when our days as managers or executives come to an end?
For example, I spend a lot of time here writing about memorable good, bad and crazy workforce management practices. But on a more personal level, what do I want people to remember about me as a manager?
I don’t have a glib answer for that. What I always say when people ask me about my management style is this: Ask the people I’ve worked with. In fact, I’ve done this in job interviews. I tell the interviewer to phone any company I’ve worked at and simply ask for someone who remembers working with me. I’m confident that whatever they say will be a good reflection on who I am and what I do. If that’s my legacy, it’s one I’m happy with.
So, what is your legacy as a manager? What would you like for people to say about you after you’re gone? I’d love to hear what you have to say—either as a comment at the end of this post or as an e-mail sent to me directly at jhollon@workforce.com. I’ll share the best in a future blog post.
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