Posted on Thu, Jun 10, 2010 @ 01:49 PM
It's a natural occurrence in today's economy. Companies downsize and employees are let go. As a parting gesture, the supervisor or manager offers to write a recommendation on LinkedIn, Monster or another social media site. While this may seem harmless, does it make the company vulnerable to a possible wrongful termination suit? Or perhaps another kind of lawsuit (e.g. age, gender, reverse discrimination).
It's quite possible.
"When companies downsize, it's natural to want to help former employees out to find a new position," said Kerry Ryan, a member at Boston-based Tarlow Breed Hart & Rodgers, P.C. "What happens in many situations is the former employee's job search goes on for a while and they start to wonder why they were let go and so-and-so was not. Having a glowing recommendation from their supervisor only feeds the fire that they were wrongly terminated and that's where lawsuits arise."
So what should a company do?
"There are some basic steps that can help protect a company," says Ryan. "You need to balance the desire to help out a former employee with the realities of potential litigation."
For starters, companies could:
- Require any online recommendations to be reviewed and signed off on by a point person (e.g. director of human resources, company executive). All requests by telephone for a recommendation should be referred to the same point person.
- Adopt a company-wide policy barring employees from giving written recommendations for either current or former employees on a non-company Web site. This will give the supervisor a legitimate reason to tell the departing employee that the supervisor can't give the requested recommendation. The policy may help the supervisor out of a difficult situation.
- Provide additional career counseling and other outplacement services in lieu of online recommendations.
- A supervisor could call other people in the industry suggesting that they interview the departing employee. These introductions may be more valuable than a written reference on a networking site.
"It used to be 'if you can't say anything nice, don't say anything at all.' When it comes to recommending one of your former employees on LinkedIn or other social media sites, saying something nice could open the door to litigation," said Ryan.
Related content: "How Facebook Ruined My Career," Forbes.com, April 13, 2010
Posted on Thu, Jun 10, 2010 @ 01:48 PM
A business dispute is a business dispute, at least until it becomes an intra-family dispute. As owners of family-owned businesses know, a business dispute between owners or shareholders can spill over into family relationships. Conversely, the breakdown of family relationships can precipitate disputes on the business side.
For advisors to family-owned businesses - lawyers, accountants, business consultants, etc. - the emotional overlay to what may otherwise be a garden-variety business dispute within a privately-owned company presents unique challenges requiring advisors to analyze the issues from both a professional standpoint and a human perspective. While it is important for advisors to be empathetic, it is critical that they provide their clients with objective, reasoned legal and business advice and judgment, unclouded by the emotions that are bound to arise where business partners are also family members.
The legal framework for assessing, litigating, and resolving disputes within a family-owned business is the same as that applied to a dispute between shareholders in any closely held business. Among other things, shareholders in any closely held business, including a family-owned business, owe each other a duty of "utmost good faith and loyalty."
When a dispute between shareholders in a family-owned business arises, the need to avoid further damaging the relationship between shareholders, who also happen to be family members, is particularly critical given a recent line of cases regarding the remedy available in such situations. The long and short of these recent cases is that shareholders may not be able to force a "business divorce." Instead, they will have to learn how to live together within the family business because a court's ability to order the majority to buy back the shares of the minority is limited. Rather, a remedy will be crafted that comports with the shareholder's reasonable expectations and which puts the shareholder in the same place she would have been but for the majority's breach of fiduciary duty.
While always an important dispute resolution technique, mediation is often particularly well suited to resolving disputes involving family-owned businesses, particularly in light of these recent cases. The advantages of mediation include:
- Mediation often can be faster and less expensive than litigation.
- Mediation can be more flexible, in terms of the process and also the remedy that can be crafted by the parties with the help of the mediator.
- Meditation can potentially provide a "win-win" resolution.
- The flexibility of mediation allows professionals other than lawyers (e.g., a psychologist who can help address some of the underlying family issues) to be brought into the process.
Notwithstanding the benefits of mediation, the better course for a family-owned business is to adopt strategies to avoid disputes escalating to the point where mediation and/or litigation become necessary. Recommendations for family-owned businesses include:
- Planning: The current generation of ownership needs to engage in estate planning and succession planning. Consideration should be given to engaging the next generation (i.e., the contemplated successors) in that planning process.
- Dealing with Conflict: Conflict avoidance - a common shortcoming of both families and businesses - is potentially even more destructive in the context of a family-owned business. The failure to address family conflicts can spill over into the business realm, just as the failure to address business conflicts can negatively impact family relations. Recognizing, addressing quickly and resolving conflict is critical for family-owned businesses. Indeed, the failure to plan often is the result of a conflict avoidance strategy.
- Communication: Keeping the lines of communication open between generations, within generations, and including spouses in such communications is another important strategy for family-owned businesses to adopt. Family members need to be made to feel that they are part of the process. There needs to be an understanding of what the different visions and goals for the business are. That is, there needs to be buy in and consensus among family members. Toward that end, those family members who actively participate in and control the operation of the business should not ask less active family members blindly to follow their instructions. By the same token, less active family members should not unquestioningly accede to the controlling family members' demands (e.g., signing documents without reading and understanding them).
- Mentoring: The current generation of ownership needs to be willing to invest in mentoring the next generation of leaders so that the business can be passed on, assuming that is the goal.
- Professionalism: While family-owned, a family-owned business is nonetheless a business and needs to be run as such. A family-owned business needs to create, maintain and observe corporate formalities and structures (e.g., governing documents, job descriptions, accountability, clear lines of authority, etc.) just as any company should.
Advisors to family-owned businesses can play a critical role in equipping their clients with the tools and structures that can help avoid the business and its transition to future generations from being derailed by intra-family disputes. Advising such businesses, however, presents its own set of challenges, which often include:
- Identifying who the client is.
- Appreciating that while there is a business problem to be resolved, additional dynamics are at work that are not ordinarily present in a "business" case.
- Developing an intimate understanding of the family relationships and dynamics at work, without becoming entangled in them.
- Developing solutions that make sense legally and from a business perspective, but which also maintain, or at least seek to minimize the damage to, family relationships.
Family-owned businesses have long been a critical part of and driving force behind the nation's economy. In these challenging economic times, it is even more vital that family-owned businesses adopt strategies that can help avoid the risk that intra-family disputes pose to their current and future success.
Emily C. Shanahan is an attorney with Tarlow, Breed, Hart & Rodgers, P.C., a Boston law firm, and concentrates her practice on business litigation.
Posted on Thu, Jun 10, 2010 @ 01:48 PM
The Legislature long ago established that government records must be preserved, maintained and made available to the public in accordance with state law (M.G.L. Ch. 66, Sect. 8). The state's Supervisor of Public Records, meanwhile, has required municipalities to implement policies governing the backup and archiving of electronic public records (SPR Bulletin No. 1-99). The supervisor has further required municipalities to make "reasonable" efforts to recover any electronic public records that are lost. What constitutes "reasonable" efforts in any given instance is at this point fact-specific. The supervisor, however, has not publicly addressed the financial costs involved in the recovery of public records.
With the explosion of electronic documents, most municipal public records are expected to be of an electronic variety within a few years. So the issue of managing and recovering electronic documents is of importance to every municipality. If not properly managed, "personal storage tables" (i.e., files) containing e-mail records may be lost when one simply replaces a hard drive or upgrades software. Given that all municipalities eventually upgrade their computers and software, all municipalities are at risk of losing electronic documents. Complicating matters is the fact that a municipality may not be aware of the loss of records for some time. Where a municipality has many employees, it is not always possible to know when documents are lost.
The effort to recover electronic public records may entail the retention of an outside computer forensic expert. Indeed, in one instance, the supervisor of public records required a municipality to retain an outside computer forensic firm. For the municipality, this cost could be a significant contingent liability that was not budgeted or anticipated. Like other professionals, a computer forensic expert frequently bills by the hour. The hourly cost may vary, depending on whether the expert is being asked to take down a system, obtain a mirror image of the hard drive, or locate specific files. In many cases, these activities must be conducted outside of business hours, and the forensic expert may charge a higher rate for work that must be done at night or in the early morning. It is important, where possible, to establish the expected cost of an activity up front.
Recovering Files
As of five years ago, the average corporate user was sending thirty-four e-mails per day and receiving ninety-nine, or a total of 133 e-mails, according to the Radicati Group's E-mail Archiving Corporate Survey. For 2010, the Radicati Group projects that each user will send and receive a total of 199 e-mails per day, with the number rising to 228 in 2011. Data retention, therefore, is no small task.
Microsoft Outlook is the most popular program for storing e-mail data locally. When one deletes an e-mail, it is sent to the "trash," also known as the "deleted items folder." When a user "empties" the deleted items folder, all the deleted messages ostensibly disappear. The "deleted" items may, however, still be in the user's computer. Depending upon the e-mail system used, the deleted e-mail data will either be in plain text in the unallocated space or may be stored in some binary fashion. If an e-mail repair utility such as Advanced Outlook Repair is used to recover e-mails, one may recover whole and fragmented messages from the unallocated areas of a computer.
Sometimes, it's important to establish that an effort was made to recover e-mails from an individual user's computer. If called upon to produce evidence that demonstrates that searches were made of a computer, it will be helpful that the computer forensic expert is able to confirm that the work was performed in an established manner. The Advanced Outlook Repair and "Encase" tools are commonly used. Indeed it may be helpful to ensure that the computer forensic expert has a facility in operating Encase, or another similar software tool such as FTK, F-Response or other e-discovery tools. In terms of computer forensic qualifications, one should discern whether the forensic professional is schooled in a protocol that provides a systematic manner to undertake the recovery. By way of example, the protocol may be that the hard drive of the computer be forensically imaged and write-blocked to preserve data. A backup copy is made and physically secured in an off-site safe. After the case preparation process (which may include mounting all compound files and recovering references to deleted files that may be missing their parent folders), the forensic expert may run an analysis that may aid in discerning whether document extensions were renamed in an attempt to hide vital evidence. One can also apply a comprehensive e-mail filter to locate any active mail files that reside on the computer.
Frequently, the project may involve working with the municipality to establish a series of searches to discern whether the document may be recovered from the hard drive's unallocated space. Key word searches are often used to locate missing e-mails. These are beneficial, but could also generate confusion to those reviewing the work being undertaken. For example, a key word search may generate a number of "hits" in the unallocated space, but these hits may include-and often do include-unintelligible sentence fragments. Some observers may confuse "hits" with actual readable e-mails, even though the number of readable e-mails may be substantially less than the number of "hits."
The limitations of key word searches to recovery are perhaps obvious. The searches require that the public entity undertaking the search recall generally the subject matter or person to whom the e-mail is addressed and identify the users with whom he or she may have communicated. This approach to the recovery of "lost" e-mails may only uncover a limited number of messages. It's also important to keep in mind that unallocated space is constantly being used and overwritten. Since one often cannot discern the full scope of the lost e-mails, the number of searches to be conducted is likewise within the discretion of the municipality. It should be noted that if e-mail has been "double-deleted," the number of hits will vary from the number of readable e-mails. The process of discerning what is readable and what is not readable is a time-intensive activity. As noted, even recoverable e-mails will frequently contain some sections of gibberish. Given the sheer volume of e-mails sent and received over many months, such key word searches can be daunting, and confirmation of full recovery based on e-mail searches is, in and of itself, difficult. It is therefore not entirely possible to say that all e-mails have been recovered. The reverse is also true: it is difficult to say that all e-mails have not been recovered. When combined with examination of the backup systems and examination of archived e-mails, however, the recovery can be more complete.
System Back-Ups
Most systems have some form of backup that can aid in the recovery of lost e-mails. Such back-up systems, however, are not as easily accessible as the name suggests. Recovering the back-up for a particular computer may be time-consuming and difficult. It seems counter-intuitive, but most back-up systems really are not readily accessible.
A more efficient form of recovery may be the use of an E-Discovery tool such as the auto archive system, if installed. Such an archiving system allows one to recover instantly the documents that were ostensibly lost. If there are internal e-mail archives, such as with an Enterprise Vault System, one can recover lost public records more easily. It will be helpful to use duplication tools, so that one may discern unique mail items from duplicates. The up-front costs of auto-archiving are not small, but given the panoply of public records requests often received by a municipality, this may be the most cost-effective way to go, long-term, to recover lost e-mails and to respond to public record requests.
An effective e-mail retention policy will go a long way toward avoiding the necessity for an extended public document recovery process. If the public records are archived on a periodic basis such may prove to reduce the necessity of an expensive recovery program. The new draft guidelines of the Secretary of State contemplate training for e-mail users, expanded identification of public records (i.e. Facebook and other social media) and a prohibition on automatic deletion of public records. With the avalanche of electronic documents, however, it is clear that recovery programs, when necessary, will become less costly and more sophisticated as time and technology progress. This is good news for municipalities seeking to preserve and recover public records.
Robert J. Kerwin is a former president of the City Solicitors and Town Counsel Association and a shareholder in the Boston firm Tarlow, Breed, Hart & Rodgers, P.C.