National Clothesline

Every now and again, I am asked to give a seminar or speech on business trends, especially A lawyer who gives advice strictly based on the law is doing his client a disservice. Many times, a legally correct decision is not the correct business decision.

For example, last week a client called to

discuss an employee out on a two-week suspension. During her absence, the company decided it would rather terminate her employment than bring her back. Because that decision was not based on any illegal considerations, the decision was legally correct. As a practical matter, however, it would be awful.

I explained to the client that unless they had uncovered further misconduct during the suspension period, they would appear to be reneging on an “agreement” by converting the suspension to a termination.

If the employee were to allege improper reasons for the termination, she might garner some sympathy with the jury because of the mid-suspension change of heart.

In another example, let’s suppose that you close the store early because of a snow storm. You are not required to pay your employees for the rest of the day, but you might consider it to be a good business decision.

Taking this example one step further, if you decide to pay employees for the lost time, what do you do in the case of an employee who came in two hours earlier than the other employees? Would you pay that employee for two extra hours, even though not legally required to do so?

Again, this becomes a matter of what is good business judgment.

In fact, much of my practice these days involves risk assessment as opposed to classic questions of legal right and wrong. Labor and employment law is so complicated these days that many employers refrain from taking actions for fear of being sued. While the employer will certainly save the cost of litigation, the long-term cost to the company may be worse. Consequently, I frequently assist my clients in deciding whether a decision needs to be made to fire someone, even though the company will most certainly be sued.

Almost every aspect of business involves risk assessment. Will your customers follow you if you move across town? Should you give a discount on Tuesdays if your gut tells you it will not increase business? Do you pay to paint the storefront because you are certain most of your customers do not care about the peeling paint? Successful companies take risk. Unsuccessful companies either take no risk or, ironically, take the wrong risk.

The purpose of this article is to encourage you to question legal advice, while at the same time taking into account the legal consequences of your actions. Some lawyers have never made a single business decision in their lives. They have no idea how to interview employees, dryclean a garment, or meet a payroll. Unless they do understand all the various issues presented by a seemingly innocent employment decision, they can frequently give bad advice.

Many years ago, I obtained a new client by directly challenging the advice given by its corporate lawyer in a labor and employment matter.

Two employees, who also happen to be the president and vice president of the union representing this company’s employees, were caught selling valuable scrap metal stolen from their employer.

For some reason, the corporate attorney was concerned that these individuals, by virtue of their union status, could not be terminated until the criminal proceedings brought against them were resolved.

I told the client, “I can’t believe you let some corporate lawyer talk you into keeping two thieves working for your company.”

Initially angry at my comment, he subsequently said that I was right and asked me what to do.

Nobody knows your company better than you do. Nobody knows the employees that work for you better than you do. Make sure that your attorney, accountant, or other professional expert understands the subjective and emotional aspects of your business. The advice you ultimately get will be better.