Acme's penny-wise and pound-foolish when it comes to cherished employees

A new company policy's legality is questioned at Acme by a cherished employee. When management refuses to compromise on the policy, it is faced with a lawsuit. How can this situation be avoided at your plant?

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Like many innovative manufacturers, Acme occasionally needs a custom-built machine that’s suited to a specific need. The company had been using outside contractors to build them until they noticed that Bailey Whire, a maintenance mechanic with almost two decades of service to the company, demonstrated a talent for adapting existing machines to new uses. As a test of his abilities, Acme asked him to design and build a small, noncritical, special-purpose machine that would normally have been obtained from a contractor. In exchange, he was given a budget based on quotes Acme had received for the device, and for the next month he was relieved of his regular duties so he could work on the project full-time.

After working three 12-hour days, Bailey printed his final set of Autocad drawings and ordered parts. One week later, he brought his collection of materials to Acme’s fully equipped machining center in the maintenance shop to begin assembling his grand vision. Two weeks later, the maintenance department installed the widget-maker on the plant floor. Bailey spent two more days debugging and adjusting it before finally turning it over to production 28 days after he first sat down to design it.

When the dust settled, Bailey’s project worked as promised and Acme management learned that he brought it in under budget and in half the time a contractor would have required. The kicker was that Bailey used commercial, off-the-shelf components as much as possible to minimize maintenance inventory. Production liked the fact that workers could move from one machine to another with less training.

Although he’s still listed on the payroll as a maintenance mechanic, Bailey’s role evolved into that of a de facto one-man mechanical R&D department. Suddenly, all his time was devoted to customizing, designing and building production machinery, a situation he found quite to his liking. And Acme’s front office was thrilled to have an in-house resource such as Bailey saving significant money and time, both of which were reinvested in enhanced production efforts and profits.

Meanwhile, huddled in a corner office at the front of the building was Hugh Dunnett, the human resources manager, and Mona Torr, the controller. They were discussing their own plan for enhancing Acme’s bottom line even more – eliminating what they called shrinkage.

Acme issued to each new production-floor hire a set of basic hand tools – a pair of sturdy gloves, a screwdriver, an adjustable wrench and a 12-ft. measuring tape. The problem that irked Hugh and Mona so much was new hires who quit after working only a few days. When that happened, Acme mailed a check for the hours worked, but was out the cost of the tools. The plan Hugh and Mona hatched to solve the problem was simple: They drafted a new company policy. It read:

“I authorize Acme to deduct from my paycheck an amount to pay for goods, tools, equipment or other items furnished to me by the company if they are not returned with normal wear and tear upon termination of employment or if lost while in my possession. I understand that it is my responsibility to protect company assets and I agree to compensate the company for the cost to repair damage to any company vehicle, equipment or property that is a direct result of negligence on my part.”

Copies of the document were included in every pay envelope the following Friday, along with instructions to sign it, date it and return it within a week. Most complied, but those who objected were told that signing it was now a condition of employment. Interpreting that statement as a threat of dismissal, more employees signed. Some still maintained it wasn't fair and even questioned its legality. Hugh told them it was legal because it wasn’t a contract, but a new company policy. Those who didn't sign it were told they could be subject to the disciplinary policy for insubordination. More workers signed, but there were still some holdouts. One of them was Bailey.

He understood what the company was trying to achieve, but he had experience with the management style of several Acme administrations, some of which would have used such authorization to dip into employees’ paychecks on a regular basis. He didn’t think current management would abuse the power. But, he knew from experience that changing only one or two people in the front office would alter the company’s management style. When he refused to sign on principle, he was called to Hugh’s office to discuss the matter.

At that meeting, Bailey explained that the policy was too broad in that it could be invoked without any proof or evidence. A worker could have his paycheck raided on a simple accusation. In fact, a worker could be accused, tried, convicted and punished and not even realize it until the next payday. Because the policy had no appeal process of any type, it almost begged to be abused. Bailey mentioned some slight modifications that would guarantee some protection for the workers, but Hugh wasn’t interested in hearing them. Bailey said it was blatantly unfair.

Hugh insisted it was all perfectly legal under state law and if Bailey didn't sign it, he would be suspended without pay until he returned the signed policy. If he didn’t respond within 30 days, he would be terminated. It was his choice – he could sign it now or leave the building. Bailey left, to find a lawyer.

Upon hearing this news, the remaining holdouts began turning in their signed policy statements.

How could this situation have been avoided? Would it have been possible to turn the Hugh/Bailey win/lose situation and the Acme/Bailey lose/lose situation into some win/win situation? Was Bailey given a choice or an ultimatum? Should legalities be the only consideration guiding a corporate change? How much attention should a company give to the very subjective concept of fairness?

Note: This scenario was contributed by Grant D. Beck, West Jordan, Utah.

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