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Don't let your practice be held hostage

March 1, 2010
Implement effective employment policies to protect your practice from the results of disastrous employee relations problems.
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Implement effective employment policies to protect your practice from the results of disastrous employee relations problems.

by Michael Moore Human Resources Director McKenzie Management

For more on this topic, go to and search using the following key words: employment policies, employee relations, right–to–work/at–will employment, punitive.

When it comes to employment relations, dental practitioners are no different than other small business owners. Creating and managing employment–relation policies and procedures seem costly and time–consuming. Hence, this area of practice is the last — if at all — to receive attention. Frighteningly, many doctors mistakenly believe that if they are in a “right–to–work”/“at–will employment” state, they can fire employees with impunity.

This understandable attitude has been disastrous for too many practices, as the reported employment law cases reveal. Consider for a moment the unhappy case of Dr. Jordan — a dentist in Ohio. Ohio is one of those “right–to–work” states. As reported in the appellate opinion, in February 2005, Dr. Jordan hired a young woman, Teresa, as a chairside assistant. Six days later, she quit. Two months later, Dr. Jordan was served with a charge of discrimination — filed by Teresa —with the Ohio Civil Rights Commission. She charged both sexual harassment and retaliation.

Teresa testified in an OCRC hearing that the doctor made sexually explicit comments to her, and once grabbed her. She also claimed that after she asked him to stop, his attitude and behavior changed — he ignored her, would not greet her in the morning, changed procedure on her, yelled at her in front of patients, slammed instruments into her hands, and caused a patient's blood to be spattered on her.

The commission found in Teresa's favor on both the harassment and retaliation claims, and ruled that Dr. Jordan had “constructively discharged” her, making her eligible for compensation in the form of back pay (lost income to the time of trial) and front pay (lost income in the future).

Dr. Jordan appealed first to the common pleas court, and losing there, he filed an appeal with the court of appeals. That court upheld the commission's finding of liability.

The end result is that Dr. Jordan paid tens of thousands of dollars in attorney fees, back pay, and front pay, all for six days of employment. Dr. Jordan was lucky. If Teresa had filed suit separately from the commission charge, she would have been entitled to an award for emotional distress, as well as one for punitive damages. If she had won the punitive damages claim, Dr. Jordan would have been ordered to pay Teresa's attorney fees as well.

It may be that having an effective human resources policy would not have saved Dr. Jordan. If he did what the commission found he had done, there would be no excuse. But it is also true that there are cases in which the employer neither harassed nor discriminated against an employee, but was still hit with a judgment simply because the doctor had no effective policy or failed to properly follow it.

Moreover, it is sometimes the case that harassment claims are brought against the practice's associates rather than the owner. Under those circumstances, even if the associate did engage in unlawful harassment, having an effective policy is a complete defense to the practice when sued for harassment.

But it is not just these types of cases that are sources of liability for the unprepared doctor. Exposure to unemployment claims, workers' compensation claims, claims for unpaid overtime, or equal pay claims is much greater in the practice that lacks effective employment policies.

Changing the employer–employee dynamic

What doctors need is a revolutionary system that fundamentally changes the employer–employee dynamic. Current policies foster a paternalistic, punitive relationship between doctor and staff. They implicitly denigrate the employee's value and take away dignity. This dynamic allows resentment to simmer ... resentment that may one day blow up in the doctor's face.

This policy has three key components:

  1. It is affirmative rather than punitive.
  2. It fosters dignity by allowing — even requiring — each staff member to take responsibility for his or her own behavior and performance.
  3. It is unencumbered by unnecessary and confusing provisions that make it difficult for a nonprofessional to administer the policy.

The first component requires a robust employee concerns reporting procedure. Mere statements that the practice has an “open door” policy do not engender confidence in employees.

In fact, surveys of employee satisfaction have consistently shown that those whose employers have a solid grievance process are much more confident in their jobs. This means, of course, much less turnover and many thousands of dollars saved in hiring and training costs.

Use carrots, not sticks

Second, the employee–responsibility component of the policy means use only carrots, not sticks. Thus, there should be no “progressive discipline,” no “warnings” nor “notices,” and no “disciplinary suspensions.”

Nothing causes employees to see red like a “final written warning” being shoved across the boss's desk at them. Experienced trial lawyers will confirm that the great preponderance of clients first come to them because they have been sideswiped with such a “warning.” But whether or not an employee starts calling lawyers when he or she is shown a final warning, the employer–employee relationship is forever changed once the document is delivered.

We know that human resources professionals counsel delivery of a final written warning not because they hope to salvage the relationship, but because the boss has decided it cannot be salvaged.

The warning is thus a fraud — its real, unstated purpose is to paper the personnel file so that the subsequent termination can (hopefully) be justified. The employee can see this in the document, and thus the whole situation becomes a charade. In case after case, experienced trial lawyers have exacted millions of dollars from employers by showing to juries that the process was a sham.

The employee buy–in process

The better way is to document the file with the employee's “buy–in” to the process. The revolutionary process accomplishes this by use of:

  1. Informal Counseling
  2. Decision Day
  3. Final Affirmative Agreement
  4. Exit Evaluation

While informal, counseling must be documented by notes in the employee's file. If the counseling does not result in satisfactory progress, the doctor offers a “Decision Day” — a paid shift in which the employee does not report to work, but spends the time considering his or her personal goals, commitment to the practice, and the possibility of a mutually agreed–upon separation.

The Final Affirmative Agreement, which follows the employee's acknowledged recommitment to the practice, is a joint agreement in which the employee acknowledges behavior or performance problems and commits to overcoming the deficits and improving peformance in a specific period of time.

The doctor commits to not terminating the employee so long as the bad conduct does not recur. Both acknowledge that if the behavior problems recur within that time period, it constitutes the employee's abandonment of the job and the employer's acceptance of the employee's resignation.

This process accomplishes that same goal as the current “final warning” in documenting behavior or performance failures, but without triggering the hostility and defensiveness of the warning process.

Finally, the Exit Evaluation process is of great importance. Each employee who separates, whether amicably or not, receives a letter with a form asking him or her to evaluate the practice. The employee is encouraged to report anything negative about the practice.

Why is this so critical? First, if an employee resigns — such as, Teresa, in our example of Dr. Jordan's case — she sometimes has complaints that have not been voiced despite the practice's Employee Concerns policy. If there is a possible claim, the doctor must know it sooner, rather than later.

In many states, an employee has up to two years following separation to file a lawsuit or administrative charge. In the absence of a notice of a claim around the time of separation, valuable evidence to defend a possible claim will be lost.

Second, if the employee fails to identify any concerns in the Exit Evaluation — or fails to return the form — the doctor has an extremely good defense that the allegations that are brought months or even years later are fraudulent.

Your new system and practice revenue

How can this system actually enhance practice revenue?

First, as noted, confident employees are not looking to jump ship. Practices are always looking to steal good employees from other doctors. When your employees are confident of being treated fairly, even an offer of higher pay is unlikely to sway them. It costs up to $20,000 and a great deal of time to replace a good member of your staff, and no one wants the anxiety and hassle surrounding changes in personnel. This system dramatically reduces these costs, providing an immediate tenfold return on investment.

Second, once the policy is implemented, the doctor can safely and humanely separate a really disruptive, obstructive employee from the practice. The doctor becomes a “super–CEO” and the management team can rely on the doctor to address bad performance.

This process is not limited to ongoing practices. A young doctor who had just bought her first practice recently consulted with me about this subject. Shortly after buying the practice, this doctor was confronted by a long–term, older female team leader who, from the start, was noncompliant and obstructionistic. It was indeed a tricky and potentially dangerous situation.

Our experience has been that many doctors, because of the lack of any introduction to effective human resources concepts — and a natural tendency to nonconfrontation — suffer bad employees far longer than they should ... often for years! We describe these scenarios as “hostage situations,” because the employee is holding not only the doctor — but the entire practice — hostage to his or her behavior.

What inevitably results from this is the exodus of good employees who see that their value is not recognized and who realize the practice is dysfunctional. Thus, the doctor's acquiescence costs thousands of dollars!

In one case, the doctor had finally decided — without the benefit of an effective policy — to get rid of a bad employee. After preparing a “final notice” that he found by surfing the Internet, he confronted the woman staff member. She immediately responded by threatening to sue him for 20 years' unpaid overtime if he fired her. The doctor folded up like a lawn chair, pulled the “final notice,” and suffered through many more months of this conduct before he consulted with me and she was finally separated from the practice.

Bad employees suppress practice revenue

Here is perhaps the most important point.

When these bad employees are finally separated from the practice, experience shows revenues immediately jump more than $25,000 per month on average! Why?

When an employee goes bad in a small service business, such as a dental office, the impact hits every aspect of the operation. Replacing staff members takes time and money. The atmosphere is negative, so employees do not perform optimally. The doctor is anxious, so he or she doesn't work as well.

Patients are not encouraged to return and practice–enhancing strategies go unfulfilled. In short, the revenue is dramatically suppressed. The separation of the offending employee almost miraculously releases the practice's potential. The resulting revenue jump can be truly astonishing.

With a policy that incorporates these revolutionary concepts, doctors will not wake up every night wondering how to get through the next day. Good employees will report concerns long before the doctor would otherwise have noticed.

This nonconfrontational system will allow bad behavior to be mediated long before the practice becomes “hostage.” If separation does happen, the practice will have the evidence necessary to justify the termination. All these consequences will lead to enhanced revenue and greater profit.

The growing danger of litigation

Dental practices suffer from a disproportionately high incidence of claims in three areas: pregnancy discrimination, age discrimination, and sexual harassment. These are all related to the demographics of employees in professional practices — most are women of child–bearing age or women approaching retirement.

The danger is only getting worse. In a recent report on “Family–Duty” litigation, it was noted that these suits are increasing with the average verdict approaching $100,000 and the highest verdict to date of $25 million. Doctors can no longer simply hope that lack of claims in the past will continue into the future.

If a doctor needs a policy, what is an effective one? In my 25–plus years representing employees in litigation, I have repeatedly turned human resources policies against the employers I have sued. The conventional human resources policies sold today to professionals simply do not protect — nor do they enhance revenue.

Now I am taking what I have learned representing employees in litigation against their employers and turning it into tools I can use to help custom–design human resources policies that will change the employee–employer dynamic and protect you from litigation. The balance of this article will describe that proccess.
—Michael Moore

Listed among the best lawyers in America and honored as Ohio's lawyer of the year in 2000, Michael Garth Moore has represented hundreds of employees in discrimination, harassment, and wrongful termination suits against the biggest corporations in the country. He now uses this wealth of knowledge to craft customized human resources policies. Reach Moore at [email protected], or call (877) 777–6151, ext. 30.

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