In the Trenches: Acme's employee fraternization problem rooted in poor leadership

In this case, Acme learns about dancing on employees’ mating habits. Remember, only the names are changed to protect the innocent.

The Acme operation under consideration here is a 100-person manufacturing plant, part of a much larger, privately held, London-based organization owned and operated by Sir Buford Nashua Conklin Acme III, one of the most socially conservative tycoons in the history of capitalistic enterprise. Sir Buford had no formal education and, deep down, was always insecure about his station in life.

Dan Saband was hired as a production engineer five years ago by Les Wallz, the director of the small manufacturing plant.

By virtue of three years of dedicated hard work and his charismatic personality, but mainly because of some fortuitous retirements, Dan found himself promoted to production manager. His duties now included production planning, equipment purchasing and generally supervising the day-shift production crew.

About a year ago, Sir Buford became so displeased with the lack of revenue from this production facility, he threatened to close the plant. Les contracted Sara Bond, a part-time, self-employed marketing consultant, hoping that Sara would be able to jump-start the sales needed to quiet the old man down a bit.

With such a small staff, it was inevitable that Dan and Sara would meet sooner or later. Meet they did, and began dating a few weeks later. A small plant is like a small town — everyone knows everyone else’s business. The buzz around the facility was that Sara was pregnant.

Les approached Dan to ask if the rumor was true. Dan told Les that Sara wasn’t pregnant. Les replied that an out-of-wedlock pregnancy would be a problem for everyone at the plant. Dan could make his assertion with a straight face because he knew that Sara had miscarried about a week earlier.

Over the course of the next couple of months, Les approached Dan and Sara several more times, complaining that their lack of discretion in their relationship was ruining the morale of the other employees. Each time, Les admonished them to be much more discreet in their relationship. Les said he feared that Sir Buford was already highly displeased — his underlying conservatism made that a certainty. Les reported that Sir Buford had already heard from suspicious neighbors complaining about the lunchtime Tai Chi lessons in the park adjacent to the plant, the prevalence of employees who commuted to work on “noisy” motorcycles, and the long-haired “hippie freaks” assigned to grounds work and building maintenance. He had already threatened to shut the plant down because of the plant’s continued marginal profitability.

Nevertheless, it was at Dan’s urging that Les hired Sara as a full-time employee, subject to a three-month trial period, to develop a new ad campaign designed to build revenue and keep Sir Buford happy. After Sara started her new assignment, she and Dan announced their engagement at the company picnic.

The tension between Dan and Les flared up again when two production workers complained about Dan’s management style and his treatment of those working under him. Quite agitated, they issued Les an ultimatum: Either Dan leaves or they leave. When Les couldn’t give them a straight answer immediately, they placed their ID cards on the desk, left the office area, emptied their lockers and walked out the door.

Les conferred with the plant’s executive team, who supported the decision to terminate Dan. When he was informed of his fate, he and Sara went to Les’s office to learn why he was being fired. Les claimed to be uncomfortable with Dan’s ability to supervise production workers effectively. Les also terminated Sara, saying they no longer needed her services. Sara then told Les that she had a miscarriage just three weeks ago and that she suffered another one the previous year.

Dan and Sara sued Acme, claiming that they’d been discriminated against because of their intimate relationship, and claimed a breach of contract and emotional distress, as well as discrimination based on an out-of-wedlock pregnancy.

How could this situation have been avoided? Should an absentee owner’s belief system have any bearing on the “morality” of some backwater operation? Does an employer have a right to control what an employee does with his personal life? Should interoffice romances be regulated by company guidelines? What is appropriate conduct in the workplace when it comes to coworkers who are dating? Is a miscarriage a pregnancy?

A corporate consultant says:

Let’s look at the real problem first, and then the obvious interpersonal relationship issue. The situation could have been avoided if Les Wallz was a better leader and manager. Les appears to be someone who chips away at the edges of a problem; much like an automotive technician who changes damaged components instead of diagnosing and repairing the cause. Because Les didn’t know how to manage organizational performance, or didn’t know where to find help to get it done, he was poking around at symptoms by hiring a marketing consultant. The buck stops with the top person. The top person must understand the business and have solid leadership and management skills to drive actions to establish and maintain high performance levels.

Dan was a production engineer for a short time and is now the production manager. It’s likely that he was lacking in either experience or knowledge in how to manage operations effectively, which resulted in poor revenue performance. Les, if he were a solid leader, would have assessed Dan’s performance and either helped him to develop, or found a more qualified production manager.

When Les hired Sara to shore up sagging sales, he did so without any apparent objective evidence that doing so would solve the problem. Hiring a marketing consultant was an insufficient action. It’s quite likely that Dan wasn’t controlling production costs, or perhaps critical production assets weren’t being maintained properly. When plant equipment isn’t maintained properly, it becomes unreliable. Unreliable equipment leads to missed deliveries and higher production costs that limit pricing flexibility.

There are five areas a leader needs to master: technical expert, coach, manager, architect and trailblazer. Technical expertise means having a thorough understanding of your areas of responsibility — not necessarily being the absolute expert. Coaching means having the ability to motivate and professionally develop your team members. Being a good manager means being a good coordinator, anticipating what is needed and getting resources for your people. Also, managing is ensuring policies and procedures are followed. Being an architect means constantly looking for ways to improve current policies and processes: supporting or leading continuous improvement efforts through Lean, process mapping, Root Cause Analysis, Failure Modes and Effects Analysis, and so forth. Trailblazing is looking beyond what is currently being done, growing your organization’s capabilities by step-changes in new methods, materials and technologies.

If we examine these five leadership traits, we discover that Les and Dan are lacking in multiple areas. Both would benefit from a leadership self-assessment to identify strengths and weaknesses. Once weaknesses are identified, a plan for improvement can be put into action.

The issues surrounding the conservative tendencies of the owner and the appropriateness of the relationship between Dan and Sara would fade in importance if business results earned respect within the corporation. Yes, the owner can have a significant influence over the culture of an organization. However, people are free to take part in that culture in exchange for their compensation; two operations people confirmed this by voting with their feet. If Les and Dan had better leadership skills they probably would not have needed the marketing consultant and they might not be putting their jobs, and those of 100 other people, at risk.

Specific to the workplace romance, an effective leader would have addressed the noncompliant behavior with specific language that delineated consequences for future occurrences, and he would have acted on those consequences. Instead, Les engaged in repeated, ineffective “lines in the sand.”

As for Dan, he’s a senior member of the plant’s staff. How can he expect others to follow policies and procedures if he doesn’t? With regard to Sara, I learned a long time ago as a military service member that to preserve integrity, when faced with an ethical or moral choice, you must choose the path that eliminates the appearance of impropriety. Respect the client’s policies; don’t maneuver around them. Both Dan and Sara should have either discontinued the marketing services contract or immediately ended even the appearance of an inappropriate relationship.

Whether there was pregnancy, miscarriage or cross-dressing involved is immaterial. Have integrity and avoid the appearance of an impropriety.

Tom Moriarty, PE, CMRP
Organizational Reliability Professional Services Consultant
(321) 773-3356
tjmpe@alidade-mer.com

An academician says:

If you own a business, you have wide latitude in the rules you set for your employees. You can have your employees dress up like chickens as one restaurant owner has done, refuse to employ anyone who smokes (as we saw in a recent case), or even ban dating between your employees. These “no dating,” and “husband-wife” bans have a long history. Some companies have prohibited engaged or married couples from working for the same company, and other companies allowed married couples to work for the company but not in the same department. And still other companies said that working in the same department was permitted as long as one of the pair wasn’t supervising the other.

These bans aren’t that common anymore, but they were instituted with good reason. Regarding the “no dating” bans, many sexual harassment complaints are against (usually male) supervisors who ask for dates or sexual favors from (usually female) employees. This puts the employee in a difficult position in that employee thinks that she will be fired if she complains to the company and if she doesn’t comply with the supervisor’s wishes. Moreover, the employee might receive better job assignments or pay because of the relationship with the boss. This might have occurred in the Dan and Sara case, or at least other employees might have perceived it to have occurred. So, point one is that Acme’s owner is within his rights to prohibit dating between employees.

Point two is that Acme probably is located in a state that permits “firing at will.” That is, Acme doesn’t need to have a reason to fire either Dan or Sara (assuming they aren’t covered by a union contract that requires a specific cause and due process). The exception to this rule is that the firing can’t involve discrimination as covered by Title VII, and Title VII doesn’t cover being married, dating or miscarriages, or (in Dan’s case) having a lousy management style. Thus, Acme is within its legal right to terminate Dan and Sara, and it’s doubtful that either have any recourse in the courts, although I leave this up to my very competent attorney colleague.

How could this have been avoided? Perhaps if the “no dating” policy had been written out in a policy manual, and if Les had been more forceful in enforcing it (for example, hiring Sara full-time while knowing about the relationship was a mistake), this problem might not have occurred. However, love (or is it LOVE) is supposedly the most powerful force in the universe. I’m doubtful as to as to whether the outcome would have been any different regardless of what Les or Acme did or didn’t do.

Professor Homer H. Johnson, Ph.D.
Loyola University Chicago
(312) 915-6682
hjohnso@luc.edu

An attorney says:

Employers don’t have the right to intrude upon or dictate their employees’ personal lives. However, when employees’ personal lives interfere with the way in which they perform their job duties or negatively affect the company, an employer has the right to regulate workplace conduct and to discipline or discharge employees who don’t comport with expected standards.

Office romances present a host of workplace problems. When one member of the couple supervises other employees, those employees often feel that they have gotten short shrift over the supervisor’s beloved. Even too much handholding at the water cooler or smooching at the company picnic can lead to diminished morale. What happens when the romance goes bad? Sexual harassment claims sometimes follow.

There’s no law that precludes an employer from discriminating against employees on the basis of an intimate relationship, but employees have used a number of laws to challenge discharges on the basis of a romantic relationship. One California case made headlines some years ago when a female employee was terminated because her paramour worked for a competitor. She challenged the discharge on grounds that it violated the state’s right to privacy laws — and prevailed.

Federal and many state laws prohibit discrimination on the basis of both sex and pregnancy. Sara would have difficulty claiming her discharge constituted sex discrimination because Dan suffered the same fate. Whether she could claim pregnancy discrimination is questionable — at the time of her discharge she was not pregnant. The Americans with Disabilities Act protects employees with a history of a disability, but no similar wording can be found in pregnancy discrimination laws. From an evidentiary standpoint, Les terminated Sara before she told him she had twice miscarried, so she would find it difficult to prove that the miscarriage or the antecedent pregnancy was the cause of her termination.

When all is said and done, it appears that Dan’s relationship with the production workers was so poor that some quit rather than work with him. This is a lawful and legitimate reason for a termination. However, doesn’t Acme normally give warnings for this kind of performance problem before terminating an employee?

Julie Badel, partner
Epstein Becker & Green, P.C.
(312) 499-1418
jbadel@ebglaw.com

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