Posts tagged ‘HR’

Four Things You Need To Know To Start Your Credit Union Day

For the first time in a while, I am overflowing with news you need to know to start your credit union day. As long time readers know, what follows is a series of quick hits, any one of which would be worthy of its own blog on a quieter day.

Treasury Pushes For Expanded Reporting Responsibilities

Anyone who thought we were out of the woods after the House Ways and Means Committee approved a plan to pay for a $3.5 trillion spending package that did not include increased reporting requirements for banks and credit unions is mistaken. Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig have written letters urging Congress to include the proposal in the final budget package.

With the caveat that there has been no language officially proposed, the idea under consideration would mandate that financial institutions report gross report flows of income in and out of accounts that exceed $600.

Clearly this would impose an onerous new mandate on credit unions and alienate more than a few members. Stay tuned for more information from the Association.

How Was Your Examination Service?

The NCUA announced yesterday that federal credit unions will be asked to submit a post examination survey that will be administered by the NCUAs Ombudsman’s office as part of a pilot program.

If you have fantasies about using the survey to vent after a rough examination, you will be disappointed. The letter explains that “examination disagreements or reports of waste, fraud, or abuse should not be reported through the survey response.” At the risk of being branded a heretic, the industry spends way too much time obsessing over the examination process.  After all, disagreements are inevitable and it’s actually a sign the system is working.

FHFA Makes It Easier To Finance Investment Property

The Federal Housing Finance Administration and Treasury announced that they were suspending certain agreements entered into this past January which placed caps on the number of investment property mortgages that Fannie Mae and Freddie Mac could purchase. This is the latest in a series of moves by the new leadership at the FHFA to use the GSEs to more aggressively provide aid for homebuyers.

Acting Director Thomson discussed the changes at NAFCUs Congressional Caucus. In a closely related development, the FHFA is also proposing changes to the capital requirements for the GSEs.

Let The Redistricting Games Begin

Yesterday marked the first formal step in the once-a-decade political blood sport that is redistricting. By the time the process is complete, the Legislature will have approved new Congressional and Legislative Districts that will shape the direction of politics and policy for decades to come. This morning’s Times Union is reporting that the bipartisan commission designed to propose the initial redistricting plan has instead proposed two separate plans. One supported by Republicans, the other by Democrats. It boldly predicted that a partisan stalemate looms in New York redistricting, which is tantamount to Claude Rains’ character Captain Renault claiming to be shocked that gambling is taking place in a casino. 

September 16, 2021 at 10:14 am Leave a comment

How Yahoo’s $42 Million Mistake Can Help You

If you think you’re having a bad day, you could be thankful that you’re not Yahoo CEO Marissa Mayer, who has to explain to her Board of Directors why she fired her hand-picked Chief Financial Officer a little more than a year after he took the job at a cost of $42 million in severance benefits.

He was reportedly a bad fit with the company from the beginning, clashing with Mayer within months of being hired and failing to deliver advertising revenue.

I know I don’t have to tell you that going through the process of hiring someone only for that person not to work out is one of the most expensive costs of doing business. You may want to pick up this month’s issue of the Harvard Business Review and take a look at what some of the most innovative companies in America are doing to transform HR practices.

Regardless of how big or small your credit union is, there are new approaches you should consider taking. The best written value statements in the world are meaningless unless you can translate them into tangible practices for your credit union.

So, how does your credit union translate its corporate value statement into a tangible HR action plan? The question is particularly important for the credit union industry where so much of our growth and ultimate survival depends on projecting a unique brand of financial services. One approach that has been highlighted recently involves getting a wide variety of your staff involved in the hiring process.

For example, at Amazon, even hires for Junior Executive positions go through numerous interviews. These interviews are conducted by employees, or bar-raisers as they are called within the company, who volunteer for the job. What makes the program unique is that an applicant will be analyzed not only by the department with which he will be working but by an individual who may have little day-to-day contact with him or her once hired. What’s more, these bar-raisers all have the authority to nix a candidate. The result of this approach makes hiring at Amazon a laborious and time consuming process, but it ensures that whoever is hired not only has the skills to get the job done but has the type of personality that will ensure she is a good fit for the company.

A second thing you can do is to follow the example of Netflix and recognize that as your credit union evolves there are some employees who may no longer be a good fit. What Netflix does, to the consternation of many HR attorneys, is minimize the importance of performance reviews and instead empower managers to quickly communicate with employees and let them go when their skills no longer reflect the company’s needs. Netflix has avoided many potential legal pitfalls with this approach by also giving out some of the most generous severance packages within Silicon Valley.

January 16, 2014 at 8:37 am 1 comment

Could asking an employee to be discreet violate the labor law?

Writing the blog has been extremely cathartic for me, since now instead of muttering and yelling at the news every morning I can simply let you know how I feel.  But occasionally, I come across something that makes me pull what little hair I have left out even with the blog.  This is one of those cases, and I’m sure your HR people will feel the same way once they get the news.

The scenario is this:  suppose you have an employee who brings a concern about a supervisor’s direction to your attention and feels so strongly about it, he is being borderline insubordinate in refusing to carry out the request.  For instance, let’s say that someone feels that a new interest rate promotion might pose a long term risk to the safety of the credit union and is refusing to put together a marketing plan.  After getting the employee’s side of the story, your HR director tells the employee to keep the discussions confidential pending a review, as is company policy.  To me, this is just a common sense request.  But to the National Labor Relations Board, this request may constitute a violation of any employee’s right to tell fellow employees about concerns with workplace conditions. 

That’s the gist of a recent ruling of the NLRB.   The labor law allows all employees whether they are unionized or non-unionized to engage in concerted activities with regard to workplace conditions.  A hospital’s HR director heard a complaint from an employee who was concerned that his supervisor’s order violated federal regulations related to the manner in which surgical equipment should be cleaned.  The HR director told the employee not to talk about his concerns with other employees or supervisors pending the completion of her investigation.  The hospital justified the policy, as I would have, on the grounds that its procedures help ensure the integrity of the investigation, but the high priests of labor regulations concluded that the “generalized concern with protecting the integrity of the investigations is insufficient to outweigh the employees rights”  under the labor law.  As a result, the employer was ordered to eliminate from its policy a provision which categorically forbid employees from discussion of, among other things, disciplinary actions.  The proper procedure was for the HR director to first demonstrate how his concerns for confidentiality outweighed the employee’s rights to share his concerns.  Only after this evaluation can an employee be asked to keep investigations confidential. 

As pointed out in a blog post from the Bond, Schoeneck and King law firm which tipped me off to this decision, “. . . it would be prudent for employers to make an individualized assessment in each case before deciding whether to ask an employee not discuss a matter with co-workers.”

One quick thought, it’s rulings like this that make people hate lawyers for good reason.  The workplace is not a court room and should not be treated as one.  Every new regulation or administrative finding restricts the ability of employer and employees to use common sense and to be held accountable only when their bad judgment results in legitimate wrongdoing.

August 9, 2012 at 7:54 am Leave a comment

Should You Hire the Ex-Con?

What should you do when you find out that the person applying for a customer service representative job or other position at your credit union has been convicted of a crime?  The answer is not as clear cut as you might think.  This is one of the emerging points of emphasis in the HR world and it has unique implications for credit unions. 

In April, the EEOC came out with a guidance emphasizing the legal protections given to people convicted of crimes who apply for a job.  There are two federal prohibitions to keep in mind here.  On the one hand, NCUA statute and guidance authorizes NCUA to fine credit unions up to $1 million (that’s right, $1 million) for each day in violation and/or up to 5 years in prison for hiring persons convicted within the last 10 years of crimes involving fraud or dishonesty, except where such crimes were de minimis.  You should take the time to read this guidance.  There are very specific criteria for what constitutes a de minimis crime.  The only way you can hire someone or continue someone in your employ who has been convicted of a disqualifying crime is with the authorization of the NCUA. 

You might conclude that given the potential pitfalls, it just isn’t worth it to hire someone who has been convicted of a crime.  This is where the EEOC guidance comes into play.  Simply put, a policy or practice of categorically refusing to hire someone who has been convicted of a crime may violate federal law because of the impact it has on hiring minorities (don’t shoot the messenger on this one, but that is the basic idea).  Consider the following example, taken verbatim, provided by the EEOC and its guidance:

Example 9: Exclusion Is Not Job Related and Consistent with Business Necessity. Your Bank has a rule prohibiting anyone with convictions for any type of financial or fraud-related crimes within the last twenty years from working in positions with access to customer financial information, even though the federal ban is ten years for individuals who are convicted of any criminal offense involving dishonesty, breach of trust, or money laundering from serving in such positions.

Sam, who is Latino, applies to Your Bank to work as a customer service representative. A background check reveals that Sam was convicted of a misdemeanor for misrepresenting his income on a loan application fifteen years earlier. Your Bank therefore rejects Sam, and he files a Title VII charge with the EEOC, alleging that the Bank’s policy has a disparate impact based on national origin and is not job related and consistent with business necessity. Your Bank asserts that its policy does not cause a disparate impact and that, even if it does, it is job related for the position in question because customer service representatives have regular access to financial information and depositors must have “100% confidence” that their funds are safe. However, Your Bank does not offer evidence showing that there is an elevated likelihood of committing financial crimes for someone who has been crime-free for more than ten years. After establishing that the Bank’s policy has a disparate impact based on national origin, the EEOC finds that the policy is not job related for the position in question and consistent with business necessity. The Bank’s justification for adding ten years to the federally mandated exclusion is insufficient because it is only a generalized concern about security, without proof.

 Whether you agree or disagree with the logic of the EOC’s analysis (which, in my ever-so-humble-opinion, is based on extremely shaky legal ground I don’t have time to rant about now), you should avoid policies that categorically refuse to consider employees who have been convicted of crimes, even though you know your policy is based on a desire to uphold high ethical standards for persons responsible for handling other people’s money.

August 6, 2012 at 7:26 am Leave a comment

When bad-mouthing the boss is legally protected

Suppose after reading this blog, you take one more look at your Facebook and find that an employee of the credit union got home from work last night and posted a sarcastic critique of the credit union’s latest marketing advertisements.  Can the employee be fired?  This is the type of question for which the National Labor Relations Board (NLRB) provided guidance in a memorandum released by its Office of General Counsel summarizing fourteen administrative decisions in which employees were terminated after posting comments on social media.

As explained by attorney Michael Schmidt in a column yesterday in the New York Law Journal (subscription required), the analysis provides a useful advice for any one involved with your credit union’s HR and management functions.  Most importantly, even if your credit union is not unionized, the National Labor Relations Act gives employees the right to engage in “concerted activities” for either the purpose of collective bargaining or to provide mutual aid and protection.  This means that before firing that employee who bad-mouthed the credit union’s marketing efforts, there are several things to keep in mind:

  • Whether the posting on Facebook was with or on the authority of other employees and not solely the opinion of the poster.   In other words, was the employee just griping about a bad day or are other employees encouraging him to speak out about a bad idea.
  • Assuming a group of employees are acting together (i.e. concerted activity), is such a posting protected?  As explained by Schmidt, employee speech is protected when it implicates the terms and conditions of employment.  For example, a car salesman was deemed to be engaging in protected speech when he sarcastically posted pictures and comments about a recent sales event hosted by the dealership because such management decisions impacted commissions.
  • Whether the posting is so reckless or malicious as to provide grounds for dismissal notwithstanding the fact that its subject matter would otherwise be legally protected (i.e. the Charlie Sheen rule).  On the one hand this stands for the principle that you can’t bad mouth the boss with impunity, but in reviewing the memo you might be surprised to find that the NRLB found it was ok to poke fun at the auto sales event because the employee was merely expressing frustration.
  • Finally, even if you are 0-3, the NLRB may still let you get away with firing the employee if you can show that you would have fired him notwithstanding the comments.  However, as criminal defense lawyers sometimes say to their clients, don’t start packing your toothbrush based on that argument.

Clearly, these are extremely fact sensitive inquiries.  Given the fluidity of the field, you would be well advised to contact your HR professional before firing an employee based their opinions expressed in social networking media.  Your reactions may be totally legitimate, but there are legal issues as new as the technology.

October 25, 2011 at 7:00 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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