Bad Times, Worse Managers

As the world grapples with recession, here’s a look at how company managers have (mis)behaved during a time of high unemployment and off-the-charts human suffering.

1. Job-Seeker Mistreatment. With the tables turned, employers have enjoyed having the upper-hand on desperate job seekers. (US News: “How The Recession Has Changed Hiring”). Unfortunately, some have been classier about it than others. US News took a look at 5 Ways Companies Mistreat Job Seekers and found the following usual suspects: disrespecting the candidate’s time with last-minute cancellations and such, not letting the candidate know what to expect next or when, not stating the salary range and lowballing the candidate, misrepresenting job duties, and not bothering to tell the candidate they’ve been nixed.
2. Employee Abuse. As a labor and employment law lawyer, I’ve been getting a high volume of complaints about employers abusing their employees or violating the law. Things like not paying employees on time or at all, not giving promised pay raises or promotions, not giving breaks, withdrawing job offers after the candidate has already quit their old job and relocated, etc. Unfortunately, not all of this is the basis for a lawsuit, but it’s demoralizing to the employee to say the least. One researcher has determined that a poisonous work environment can actually increase the sick rate of employees. Consultant Krogh Larsen has termed it “pathogenic management”. (““Bad management makes you ill”“). Of course, at times like this, employees who get sick and take medical leave often become targets for retaliatory (and illegal) demotions, paycuts and wrongful terminations by their employers. By this way, if any of this has happened to you, you need to talk to a lawyer.
3. Executive Greed. As people cling desperately to their jobs or lose them and everything else, including their homes and marriages, executives are taking this opportunity to rake in obscene amounts of money. In “CEO salaries pay no heed to recession”, DailyFinance.com reports on the packages underperforming American companies rewarded their executives with in 2008. At no. 3, Ray R. Irani, CEO of Occidental Petroleum Corp., got $222 mil. (remember those high gas prices during the depths of the recession?). At no. 2, Larry Ellison, co-founder of software maker Oracle Corp., got $557 mil. And coming in at no. 1, Stephen A. Schwarzman, founder of private equity fund Blackstone Group, got $702 mil. That’s G-R-E-E-D writ large.

In an era where capitalist companies have shown breathtakingly bad judgment and had the temerity to ask for government handouts to bail themselves out, a conservative Supreme Court continues to give employers a free pass. In “The Supreme Court moves to the right, perhaps sharply to the right”, renowned constitutional scholar Erwin Chemerinsky explains the anti-employee and anti-plaintiff direction the Supremes have recently taken. Perhaps the most underreported development is the Supreme Court’s decision to make it tougher for plaintiffs, particularly those with discrimination claims, to bring a lawsuit in federal court. In Iqbal v. Ashcroft, the Supreme Court effectively overturned more than 50 years of precedent and dramatically changed the rules of the game by now requiring plaintiffs to make “plausible” fact-supported allegations in their complaints. That’s a tall order for plaintiffs considering lawsuits usually start out with the employers having all the witnesses, documents and information. Nowhere is this more true than in discrimination cases where employee suspicions of disparate treatment or impact are often based on nothing more than differences in compensation or position over time.

Income Distribution

If you still have any doubt about who the big winners and losers were in this latest recession, take a look at this sobering chart from UC Berkeley economist Emmanuel Saez. It says it all. The top 10% of earners in the US went from taking 35% of all compensation in 1982 to 50% in 2007, with the last big surge starting in 2002 and continuing through the recession. It’s a safe bet that the US worker was nowhere to be seen in that cushy 10%.

Let’s hope the coming recovery brings with it a more employee-friendly environment.