Just this week here in California, two prominent human resources executives were in legal hot water over actions they took as part of their executive teams. The result may be jail time for them, and maybe even a longing for the days when they were doing something a little less strategic than fiddling around with stock options.
The first is Stephanie Jensen, the former vice president for human resources at San Jose-based Brocade Communications Systems. Jensen went on trial Monday on stock-option backdating charges. In opening arguments, a federal prosecutor said Jensen colluded with her boss to conceal employees’ salary packages from company auditors, shareholders and federal regulators.
Former HR chief Jensen “was initially charged with eight felonies, including fraud against the government in Brocade’s SEC filings,” the Chronicle said. “But prosecutors, without explanation, dropped six of the charges earlier this month, leaving one count of falsifying company records and one count of conspiracy to falsify the records. Jensen is not accused of personally profiting from her actions.”
The second HR executive caught up in a legal drama is Nancy Tullos, the former vice president for human resources at Irvine-based Broadcom Corp. She reportedly has agreed to plead guilty to obstruction of justice in connection with a federal probe into the manipulation of stock option grants at the California chip maker.
A story in the Los Angeles Times said that “Tullos has agreed to cooperate with investigators examining allegations that top Broadcom executives backdated stock options to secretly benefit employees, according to three people with knowledge of the probe.” According to a 10-K form the company filed with the Securities and Exchange Commission, Tullos “was heavily involved in the flawed option granting process.” She might not have assigned dates herself, but she “was fully aware of what was occurring, and encouraged, assisted in, and enabled it,” the 10-K says. The stock option charges have been costly; in January, Broadcom took a $2.259 billion charge in non-cash expenses for the years the alleged manipulation took place.
Beyond the legal implications and personal tragedy in these cases, there is a sobering lesson here for any HR executive, and it’s this: The power that comes with having a seat at the table carries with it some heavyweight ethical and legal responsibilities. It’s not that HR has the stark choice of being either a low-level paper-pusher or an executive felon—both Jensen and Tullos presumably had a moment in which they could have said, “This is wrong; we have to stop.” But these examples do show that being at the table sometimes means putting your business and personal life on the line.
Add this to your collection of business truisms: Bad judgment knows no rank. It’s not just people in the trenches or middle managers or subordinates who are guilty of missteps that reflect badly on the larger organization. All too often, the bad choices and dumb decisions are made in the executive ranks, too.
The most recent example is American Red Cross president Mark Everson, who resigned after admitting that he had engaged in a “personal relationship” with a subordinate. Everson had joined the Red Cross in May “as the charity sought to restructure itself after sharp criticism of its response to Hurricane Katrina,” according to an Associated Press report.
He is married and has two children, and joined the Red Cross after serving four years as IRS commissioner. Earlier, he chaired the President’s Management Council, which is composed of Cabinet department and major agency chief operating officers, while also serving as deputy director for management for the Office of Management and Budget. Everson also worked as a business executive and previously held several positions in President Reagan’s administration.
With a CV like that, you can see that this is a seasoned business executive, and that’s even more reason why Everson should have known that an office romance is almost always a bad idea … especially when you are already married with children. As I said here last month (see “Love in the Office: A Hot Trend, but Still a Bad Idea”), “anyone who values their job knows better than to get involved romantically with someone at work. It can be a career-killer if handled badly (as so many office romances are) and takes the focus off the job at hand: the work.”
Like Caesar’s wife, senior executives must be above reproach. Whether they like it or not, they set an example for everyone else in the company for how to act, how to work and how to deal with the business of life. If they are casual and risky in their personal relationships, what does that say about how they will act in their business relationships?
Everson’s resignation is just the latest problem for the American Red Cross, an organization that has struggled with the very real perception that it was frequently too bureaucratic and unaccountable. Unfortunately for the organization, Everson had taken steps to overhaul the charity organization and improve its response and governance, and that work had begun to show up in the agency’s response to the recent Southern California fires. It was a promising start that, sad to say, will soon be forgotten as people focus on what he did wrong personally, instead of what he did right professionally.
This morning my e-mail contained a well-meaning press release from a recruiting Web site touting “several tips to help find a job during the holidays.”
Sounds like a good idea, no?
Well the problem is that the “tips to help find a job” weren’t really focused on actually landing a job during the holidays, but rather, suggestions to keep job seekers engaged in the job-finding process during the Thanksgiving and Christmas season.
The “tips,” which were focused entirely toward job seekers and not on hiring managers, included things like:
• “After Thanksgiving, Give Thanks. Send an e-mail or holiday card to those people who have helped with your job search.”
• “Invest in Yourself. Take a professional development class. Check out blogs your friend or colleagues have mentioned. Learn some new industry buzzwords.”
• “Spread the Love. Get involved in volunteering and you may meet people who will make great contacts for a future job.”
• “Take Advantage of Holiday Parties” to network and let people know you’re still job hunting.
This is all fine advice, albeit somewhat insipid and overly generic, for keeping your mind on the goal of new job. But if you’re one of today’s job seekers, it is unlikely these “tips” will help you find that new position right now.
The reason for this is simple: Very little real hiring goes on between mid-November and mid-January. Yes, there are always exceptions, like the desperate art director character played by Dustin Hoffman in Kramer vs. Kramer, but my longtime experience as both a hiring manager and a job seeker is that nothing related to job-seeking (and, for that matter, little related to jobs in general) happens from Thanksgiving to about Martin Luther King Jr. Day.
You know all the reasons—you’re living them right now. People are shopping, stressing out about shopping and using up vacation days, in the case of those companies in the use-it-or-lose-it states. Recruiters and hiring managers are in and out of the office. It’s the end of the budget year, and probably most important, no one is in the frame of mind necessary for either end of the hiring process. There’s no serious recruiting or hiring happening until after New Year’s.
My advice is to take a break and recharge your batteries during the holidays so that you’ll be ready to hire or be hired when the real action begins again in mid-January. You’ll be rested, relaxed and well past silly holiday hiring tips that might make somebody feel good, but do nothing to help get good people into jobs.
Most people would probably say no, and that’s what makes a story in today’s Seattle Post-Intelligencer titled “Boeing bosses spy on workers” so frightening. “The tactics used by [the state of] Washington’s largest employer raise questions about where an employee’s rights begin and the employer’s end,” the story says, “and how much leeway any corporation has in investigating an employee if it suspects wrongdoing.”
Boeing, America’s premier plane builder, refused to discuss its surveillance policies with the Post-Intelligencer, except to say, “Issues that necessitate investigation in order to protect the company’s interests and those of its employees and other stakeholders are handled consistent with all applicable laws.”
Clearly, Boeing has a great deal of sensitive proprietary information that the company has a duty to protect. I don’t think that anyone would question that, but as the P-I story points out, some of the company’s actions seem more designed to intimidate employees and keep them from talking to the media. “Recently, a Boeing investigator told a Puget Sound-area employee that he was followed off company property to a lunch spot, that investigators had footage of him ‘coming and going’ and that investigators had accessed his personal Gmail account,” the newspaper said. “The primary reason for the 2007 investigation, the employee said, was Boeing’s suspicion that he had spoken with a member of the media.”
The employee–who was talking with the Post-Intelligencer for a story about Boeing’s struggles complying with a 2002 corporate reform law–was eventually confronted by company investigators who “laid out some of their findings. He has since been fired,” the newspaper reported.
“ ‘I wasn’t surprised, but more just disappointed in them,’ ” the fired employee told the newspaper. “ ‘Instead of looking at the problems, instead of investigating that, they investigated the people that were complaining and got rid of them,’ said the employee, who had been an auditor in the company’s Office of Internal Governance and asked that he not be named.”
This is a sobering story, and it raises two questions in my mind: how far should companies be able to go to protect their business secrets? And, how much should an employer be required to tell employees about the methods and manner in which they will be monitored to ensure that business secrets stay secret?
I’d love to hear what some of you have to say about this, either in a comment at the bottom of this item or in an e-mail to me at jhollon@workforce.com.
Ever wonder why businesses are so afraid of lawsuits, especially ones that involve the workforce? It’s because we live in an ultra-litigious society where anybody can sue over anything, and even the silliest lawsuit can become a workforce nightmare in the hands of the wrong judge.
Case in point: a recent ruling by the 5th U.S. Circuit Court of Appeals in New Orleans earlier this month that now puts into question whether government employees can clean out the office refrigerator and toss that bad sandwich or moldy yogurt. According to a story in the Houston Chronicle, “Thanks to the 5th U.S. Circuit Court of Appeals, which includes Texas, government employees must receive adequate notice before their personal belongings can be tossed out … [and] a simple notice posted on the offending refrigerator or even an e-mail blast about an upcoming purge may not be enough.”
Silly as it may sound, the case revolves around due process and whether a tenured chemistry professor at the University of Texas at San Antonio was given adequate notice that some of his belongings—belongings that the university administration felt created “an extreme fire hazard”—would be discarded if he failed to remove them. Although the case primarily revolves around belongings in the professor’s lab and office, the university also tossed items in his refrigerator. This has led to a lot of speculation over how this high-level legal ruling might be applied to the workplace.
“The 5th Circuit, a federal appellate court that ordinarily devotes its time to more august matters like death penalty appeals and cutting-edge civil appeals,” Brian Wice, a criminal defense attorney who specializes in criminal appeals, told the Chronicle, “has … put all of those Felix Unger types on notice: Thou shall not toss out our stuff unless you have first given us a ‘reasonable’ form of notice.” Or, as Candy Aldridge, the acting director of human resources for the city of Houston, put it: “What do you do when the fridge quits working and it’s full of lunches?”
Good question. It is just another example of the type of activities many managers and HR people have to deal with that have absolutely nothing to do with business strategy or creating value. No wonder HR has such a hard time getting a seat at the table. They’re too busy worrying about due process for that bad tuna sandwich that has been festering for months in the back of the office fridge.
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