How Outplacement Prevents Lawsuits
by William S. Frank, President/CEO of CareerLab®

Outplacement on Keyoard
According to San Francisco attorney, Victor Schachter, "There were 51 reported wrongful discharge verdicts in California last year. Remarkably, 78% of these cases resulted in verdicts for the employee. Equally disconcerting is that the average wrongful discharge verdict was $424,527."

Nearly thirty years as an outplacement consultant has taught me that when terminated executives are in a shocked, upset state, they think about suing their former employers. When they are feeling productive, hopeful, and directed toward the future, they don't.

Usually there is some element of unfairness about a termination. It comes at the "wrong time:" six months before vesting in the pension plan, during a divorce, or when a close family member is sick or dying. There's seldom a "right time" to be let go.

Or the dismissal is handled badly. Dick Sullivan, an oilfield executive with a 22 year tenure, was fired one Friday afternoon by a total stranger. He was told to "pack up and get out." And he never forgot this callous treatment, even though he is now happily re-employed.

The exact moment of termination is a crisis point. Either it's handled well and everything thereafter goes smoothly, or it is handled poorly with negative consequences.

Ellen Sampson, age 62, was a loyal, trusted employee of a bank holding company. She had worked there more than 20 years. The day I arrived, she was called to the coffee shop at a Holiday Inn and fired by three people at once: the personnel director, the branch manager and the regional sales manager. They told her to go home, not to go back to the office. She felt humiliated and victimized, and she sued. Can you blame her?

At the moment of termination, people naturally tend to think the very worst:

  • "I won't find another job."
  • "We'll have to sell the house."
  • "My child won't get the surgery she so desperately needs."
  • "We'll have to relocate and sever the connections with our family and friends."
  • "I'll lose everything I've worked for."
  • "Our marriage is on shaky ground, and this might be the end of it."
Without a strong, forceful intervention, the fearful and destructive side of their mind takes over—and pretty soon everything looks hopeless.

When people feel that the future is bleak, that it is going to be discouraging, disappointing or painful, they often want to blame someone for their bad luck. And that someone is generally you, their former employer.

One way outplacement prevents lawsuits is by keeping people focused on a positive, productive future, a future that is better than the past—or at least equally as good. How is this accomplished? I think my approach is fairly typical.

In the first meeting with a client, I let them express their surprise and uncertainty and vent their anger. I let them know I've been through this before—they're in good hands—and that the outcome will be positive. I don't promise anything specific, but I do lead them to believe I know what I'm talking about. When people feel assured by an expert, they relax. Their mind stops creating fearful pictures of the future, and they feel more at ease. This keeps them from taking a serious psychological fall.

In counseling I let clients express their feelings, but I don't let them dwell on too many of the bad things that might happen. I point out that equally good things could happen also.

Early on, I encourage participants to express negative feelings about the company:

  • "The company was too bureaucratic, too impersonal."
  • "I wasn't given enough notice."
  • "I've given them the best years of my life."
  • "I was totally loyal to them."
  • "Everyone thought the world of me."
  • "Some of the people who are left are much worse performers than I was."
But later, it's my job to show outplacement candidates how they helped to bring on their own demise—if they did. This requires skill. You can't say something like, "You were partly to blame for this, too." You have to frame it in the form of a question, such as, "Do you think you might have brought some of this on yourself?" Asking indirectly allows the client to admit that, yes, they probably were partly to blame.

One of my favorite tactics is to draw a bell-shaped curve on a piece of paper and then explain that things run in cycles. They have a beginning, a middle, and an end. Jobs do too. They start out exciting and challenging and then gradually begin to plateau. At some point, they take a downward turn and deteriorate.

I ask my clients to plot themselves on this curve. Very often they point to the far end of the downhill side. That tells them something. For one thing, it tells them they haven't been as happy as they thought. That really, truthfully, they haven't liked their jobs very much. They have over-stayed their welcome, often by several years. They have let themselves get into a negative growth situation and haven't contributed much. Once people see this, they begin to understand why they were moved out of the organization.

Since this is a self-analysis, they accept it easily. I then ask why they stayed so long if they weren't happy. They often reply that they wanted to leave the organization years ago, but didn't know how. They were afraid to leave. They didn't know where to go. Many times, they have stayed because of inertia, not because of commitment, and this becomes painfully obvious.

We analyze their situation and I try to help them see they weren't fully alert. Usually they ignored some obvious signs and signals. They did not read the handwriting on the wall. Often, they were not paying attention to their own inner signals. They weren't listening to their guts.

By ignoring very real warning signs, by hoping things would "just go away," they hid from the truth. They ignored reality and waited for the ax to fall—and it did.

It's usually possible to determine exactly what went wrong. Sometimes the fatal mistake occurred years earlier during the job interview when the candidate didn't like the prospective boss but took the job anyway.

I try to show clients that they are partly responsible for what happened. I don't want them to beat themselves up, but I do want them to be mad enough at themselves so they never allow this sort of thing to happen again. If I can get them to see their part in the situation, I can defuse their anger toward the company.

There are cases, though, where the employee was productive and really was victimized by the organization. This is a much more difficult case because it is less understandable and less fair, and unfairness tends to provoke extreme anger. Several of my clients have been so seriously harmed by their companies that they should have filed suit. I felt for them, but it was my job to protect the company, and I did.

I never tell clients, "Don't sue the company." But, I do reason with them. I suggest that we can spend our time in more productive ways. I talk about the negative consequences of suing. For one thing, it turns off other employers. I listen and sympathize a great deal. I let them talk about the issue from all angles. It often takes weeks for them to drain off all their bitter feelings.

Then I talk to them about career responsibility—about the fact that no one owes us anything. The truth is that we can't expect anyone to take care of us. We have to take care of ourselves.

Part of the role of outplacement is to help discharged executives separate out all their confusing, contradictory feelings. They are sad, angry, and afraid, all at the same time. I have to help them see what they're really sad about, what they're really afraid of, and what they're honestly angry about. Once these feelings are separated, they begin to get some clarity.

When I asked Bernie Siebert, an attorney in the Denver office of Sherman & Howard, why employees sue their former companies, he said, "If you're 25 or 35 years old, you can bounce back and find something else if you're diligent. That's not the case with older workers. You can pass all the legislation you want. The fact is employers are generally reluctant to hire people over 55."

"Those fired in their 50's often haven't planned well for retirement," Siebert said. "They are angry at having been terminated and frustrated when they can't find another job. The combination of those two leads to litigation. It's basic economic pressure."

Consider the 12-part challenge these job-seekers face:

  1. Many companies are downsizing and consciously eliminating older workers.
  2. The market is flooded with mid- to senior-level executives in the
  3. These managers are earning more than their younger counterparts and are therefore less marketable.
  4. Many have never had to "look for a job" since college. They are hopelessly out of touch with the realities of today's marketplace.
  5. Their job-hunting skills are virtually non-existent.
  6. They are often very highly specialized (geologists, for example).
  7. Many friends in their network, or circle of friends, are out of work too.
  8. Their professional skills are not easily transferable, at least on the surface.
  9. They can't conceive of doing anything other than what they have been doing.
  10. They don't think about themselves in creative, innovative ways.
  11. They grew up with the myth of working for one company until retirement.
  12. They were raised to be loyal, so the idea of courting another company, especially a competitor, smacks of infidelity.
Put yourself in their place and imagine the confusion of:
  • Facing dozens of new industries
  • Choosing self-employment versus another corporate job
  • Deciding whether or not to relocate
  • Getting in the door when companies aren't hiring
  • Battling newspaper headlines of layoffs
  • Evaluating companies that are being merged, acquired, going bankrupt overnight.
That wouldn't be easy, would it? Some executives sue their former companies simply because they are failing in their job search. They don't know "what to do." They are like a pro football team with only three plays. They (1) answer want ads and online job postings, (2) talk to a few friends ("Let me know if you hear of anything."), and (3) post their resumes on a few company websites. In today's marketplace, a campaign that's weak spells "unemployment."

There are hundreds of very helpful job-search books for sale, but separated executives are often too demoralized and too isolated to put this advice into practice. They need a coach, just like pro teams with complicated playbooks need a coach. Someone to help prioritize, to motivate, to assess progress, to set goals. Outplacement is the coach for the terminated executive. It expands a client's repertoire of "plays," and keeps their mind focused on winning the game rather than on seeking revenge.

Outplacement is a Win/Win strategy for both management and departing employees, because outplacement:

  • Counsels against lawauits
  • Stops the psychological fall into depression
  • Gives clients hope
  • Raises their self-esteem
  • Keeps them focused on the future
  • Makes the future look as good as the past—sometimes even better
  • Allows departing employees to vent their angry feelings in a consultant's office rather than in a court of law
  • Supplies job-hunting and small business start-up expertise that candidates lack
  • Replaces the structure the former job provided, and
  • Helps people to see the part they played in their own downfall.
How effectively does outplacement minimize the risk of a lawsuit? Last year we provided outplacement assistance to 35 executives from an oilfield service company. Although several seriously threatened to sue, none did. Ten executives from the same company were not given outplacement. Five of them filed suit, and the first case settled for $60,000. That's far more than outplacement services would have cost.

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