Appellate court finds that well-documented investigations and disciplined note-taking assist employers in assessing possible disciplinary action and demonstrating nondiscriminatory reasons for disparate disciplinary treatment. The court noted that the investigator’s notes used to create her summary report were accurate and that her investigation was thorough and carefully orchestrated. The decision demonstrates the value of well a defined investigative process and the importance of properly trained investigators. Here’s the unedited decision (3nd of three installments):

MARTINEZ v. GRAINGER

Arturo E. MARTINEZ, an individual residing in Minnesota, also known as Arthuro E. Martinez, Plaintiff–Appellant, v. W.W. GRAINGER, Inc., an Illinois corporation, Defendant–Appellee.

No. 11–1422.

– December 22, 2011

Part III

III. Martinez also appeals the district court’s grant of summary judgment to Grainger on his breach of contract claim. Counsel agreed at oral argument that Martinez had no formal employment contract with Grainger. Martinez contends, however, that he accepted Grainger’s offer of a unilateral contract by his continued employment. He relies on Pine River State Bank v. Mettille, 333 N.W.2d 622, 626–30 (Minn.1983), which found an offer of unilateral contract based on language in an employee handbook, but Martinez does not point to any provision in Grainger’s employee handbook which supports that theory. He further alleges that Grainger was obligated to provide appropriate notice of any deficiencies and place him on a performance improvement plan before terminating his employment.

The record does not support the creation of a unilateral contract. See Martens v. Minn. Mining & Mfg. Co., 616 N.W.2d 732, 745 (Minn.2000) (handbook provisions too indefinite to be offer of unilateral contract). Grainger’s employee handbook expressly declares that employment is at will and that the policies and benefits described do not create an express or implied employment contract. Martinez submitted no evidence that Grainger invariably placed an employee on a performance improvement plan prior to termination but departed from this policy in his case. The evidence actually shows that such a decision is discretionary with the supervisor.

Alternatively Martinez relies on an exception to the at will employment doctrine that prohibits employers from discharging an at will employee for refusing to violate a “clearly mandated public policy.” See Phipps v. Clark Oil & Ref. Co., 408 N.W.2d 569, 571 (Minn.1987) (allowing wrongful discharge claim for at will employee who was terminated for refusing to violate Clean Air Act). Martinez argues that this exception applies because Timm required him to take ownership of conduct that had not occurred. Employee depositions show however that the conduct presented to Martinez in LePage’s list accurately reflected employee perceptions. Moreover, Timm’s demand that Martinez take ownership of the issues at the branch did not establish violation of “any state or federal law or rule or regulation adopted pursuant to law” for the at will exception to attach. Id. In the absence of evidence of an employment contract or any exception to at will employment, Martinez’s breach of contract claim fails.

Martinez’s final claim is that Grainger violated 42 U.S.C. § 1981, which prohibits racial discrimination in the making of private and public contracts. See St. Francis College v. Al–Khazraji, 481 U.S. 604, 609 (1987). Because this claim is premised on the existence of discriminatory conduct in the context of an employment contract which Martinez failed to show, the district court did not err in granting Grainger summary judgment on it.

IV.Accordingly, the judgment of the district court is affirmed.

FOOTNOTES

1.　　The Honorable Joan N. Ericksen, United States District Judge for the District of Minnesota.

2.　　One employee picked out two comments on LePage’s handwritten notes that she did not recall stating.

MURPHY, Circuit Judge.

Got questions? Contact Eugene F. Ferraro at 800.650.7005.

Appellate court finds that well-documented investigations and disciplined note-taking assist employers in assessing possible disciplinary action and demonstrating nondiscriminatory reasons for disparate disciplinary treatment. The court noted that the investigator’s notes used to create her summary report were accurate and that her investigation was thorough and carefully orchestrated. The decision demonstrates the value of well a defined investigative process and the importance of properly trained investigators. Here’s the unedited decision (2nd of three installments):

MARTINEZ v. GRAINGER

 Arturo E. MARTINEZ, an individual residing in Minnesota, also known as Arthuro E. Martinez, Plaintiff–Appellant, v. W.W. GRAINGER, Inc., an Illinois corporation, Defendant–Appellee.

No. 11–1422.

– December 22, 2011

Part II

Martinez was surprised at the comments and asked for specific examples. LePage provided one example in which an employee and several customers were locked out of the branch on a cold winter morning. The employee knocked on Martinez’s window so that he would open the door. Martinez then entered the adjacent warehouse and yelled and swore at the employee who had not unlocked the door with such fervor that the locked out employee told LePage “if I [were him] I would have been crying.” LePage also described an incident in which Martinez stood behind an employee who was on the phone with a customer and raised his voice, speaking to the employee in a manner described by other employees as “brutal” and “belittling.”

Timm asked Martinez what he would do if he returned to work on Monday. Martinez later recalled his answer that there would need to be changes, but he could not remember if he said that he would need to change. Timm interpreted Martinez’s response to focus on the employees as the problem. He believed that Martinez was not sufficiently acknowledging his own deficiencies or displaying a willingness to try to change his employees’ perceptions of him. Timm asked Martinez what he would do about this if he were in Timm’s shoes, and Martinez replied that he did not know. After the meeting Timm decided to terminate Martinez’s employment, which LePage supported. Timm and LePage have both stated that Martinez was terminated in light of the seriousness of the employees’ grievances combined with his own failure to “take[ ] ownership” of his managerial shortcomings.

Martinez sued Grainger for disparate treatment in his pay and termination based on his race and national origin in violation of Title VII, the MHRA, and 42 U.S.C. § 1981. Martinez asserts that he was the only branch manager paid below the salary range for that position. He points to five other branch managers who were not terminated despite comments in their employment records about their expressions of anger, leadership deficiencies, volatility, ineffective communication, and creation of a tense environment. In addition to several other statutory and common law claims, Martinez alleged that Grainger breached his employment contract.

The district court granted summary judgment to Grainger on all of the claims by Martinez. Martinez appeals the dismissal of his wage discrimination, termination, and breach of contract claims, arguing that he showed that Grainger’s explanations were pretextual and that Grainger breached its contract by violating company and public policy under Minnesota law.

We review the grant of summary judgment de novo, viewing the evidence in the light most favorable to the nonmoving party. Skare v. Extendicare Health Servs. Inc., 515 F.3d 836, 840 (8th Cir.2008). Summary judgment is appropriate if there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56.

II. Title VII prohibits an employer from discharging an individual or discriminating against an individual with respect to his compensation on the basis of race or national origin. 42 U.S.C. § 2000e–2(a)(1). Claims under the MHRA are governed by the same standards as claims under Title VII. Kasper v. Federated Mut. Ins. Co., 425 F.3d 496, 502 (8th Cir.2005).

Here, the parties agree that Martinez did not present direct evidence of employment discrimination and that the burden shifting framework established in McDonnell Douglas Corp. v. Green applies. 411 U.S. 792, 802–04 (1973). Under this framework, Martinez must first establish a prima facie case of discrimination by showing (1) that he is a member of a protected class, (2) that he was meeting Grainger’s legitimate job expectations, (3) that he suffered an adverse employment action, and (4) that similarly situated employees outside the protected class were treated differently. See Clark v. Runyon, 218 F.3d 915, 918 (8th Cir.2000) (termination); cf. Ledbetter v. Alltel Corp. Svcs., Inc., 437 F.3d 717, 722 (8th Cir.2006) (wage discrimination). If Martinez presents a prima facie case, the burden shifts to Grainger to rebut the presumption of unlawful discrimination by articulating a legitimate, nondiscriminatory reason for its adverse employment action. See Bearden v. Int’l Paper Co., 529 F.3d 828, 831 (8th Cir.2008). The burden then returns to Martinez to prove that the proffered reason is a pretext for intentional discrimination. See Putman v. Unity Health Sys., 348 F.3d 732, 735 (8th Cir.2003). We address Martinez’s termination and pay claims in turn.

Martinez has established that he is Hispanic and Cuban born, that his performance reviews were satisfactory, and that he was terminated. Martinez has also shown that other branch managers engaged in similar conduct to his but were not terminated. See Wimbley v. Cashion, 588 F.3d 959, 962 (8th Cir.2009) (quoting Texas Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253 (1981), and applying “low-threshold” standard for plaintiff to show disparate treatment of similarly situated employees at prima facie stage). He has thus made out a prima facie case of discrimination.

The record shows, however, that Martinez failed to establish that Grainger’s proffered legitimate, nondiscriminatory reason for his termination was pretextual. Timm and LePage testified that Martinez was terminated based on the gravity of his conduct as described by other employees and his perceived failure to take responsibility for the environment at the branch and his own leadership deficiencies. The deposition testimony of the branch employees confirmed that the notes LePage used to create the summary list for Martinez were accurate and that the specific examples she gave of his problematic managerial style were brought up during her investigation. Martinez also testified that he was unsure whether he had told Timm and LePage that he believed that he, rather than his employees, needed to change. According to Martinez, Timm explained to him that he was terminated because he “wouldn’t take ownership of the (employee) complaints ․ [a]nd if [he] couldn’t take ownership, [he] couldn’t fix the problem.” Martinez is thus unable to show that Grainger’s stated reason for his termination was “unworthy of credence” because it has “no basis in fact,” Smith v. Allen Health Sys., Inc., 302 F.3d 827, 834 (8th Cir.2002), or has shifted over time. Lake v. Yellow Transp., Inc., 596 F.3d 871, 874 (8th Cir.2010).

Martinez has also not shown pretext through evidence that similarly situated non Hispanic or non Cuban born employees received more favorable treatment. At the pretext stage, Martinez had to show that the other branch managers were “similarly situated in all relevant respects” and that the “misconduct of the more leniently disciplined employees [was] of comparable seriousness.” Wimbley, 588 F.3d at 962 (discussing rigorous test).

The evidence demonstrates that the five other branch managers differed from Martinez in material respects. None of the employment records for the other branch managers shows the same level of concern about volatility and hostile communications that Martinez’s employees conveyed in their interviews with LePage. Concerns about some of the other managers focused on employee interest in receiving more feedback or the manager’s unavailability to support their work. One manager was not supervised by Timm at the time the relevant comments were made. See Clark, 218 F.3d at 918. A manager described as moody and “overly aggressive” in his communications was placed on an improvement plan rather than being terminated because he gave thoughtful responses to concerns, had a history of high performance, and demonstrated a desire to improve his communication and leadership skills. This manager’s employment records also included no reports of belittling, demeaning, and brutal behavior or of yelling and swearing at his employees. In sum, the record shows less problematic conduct by other managers and their clear commitment to improving their own leadership skills.

We conclude that the district court did not err in granting summary judgment to Grainger on Martinez’s Title VII and MHRA claims that his termination was a result of unlawful discrimination.

Martinez also claimed wage discrimination. Even assuming that he made out a prima facie case by showing that he was the only branch manager paid below the recommended salary range based on branch level, Martinez did not meet his burden of showing that Grainger’s explanation for his compensation was pretextual. See Ledbetter, 437 F.3d at 722 (reviewing prima facie showing of wage discrimination on the basis of race).

In this claim Martinez focuses on the facts that St. Paul was the sixth largest branch in the district and that he was the only manager paid below Grainger’s recommended salary range. Timm stated, however, that the designated level of the branch and corresponding salary range was only one consideration in determining pay and that his evaluation of managers reflected several other criteria related to sales volume and business complexity. See Wimbley, 588 F.3d at 962 (comparators must be similarly situated in all relevant respects). The documents submitted in support of Martinez’s assertion that St. Paul was the sixth largest branch do not include a ranking of branches by overall size. Instead, the evidence shows that during the time period in which Martinez was either the eighth or ninth highest paid branch manager, the St. Paul branch ranked in the bottom quartile on many of the metrics identified by Timm as the basis for compensation decisions. Martinez does not dispute the evidence that Timm considered the St. Paul branch comparable to the branches in Rochester, St. Cloud, Sioux City, and Minneapolis and that he was paid more than the managers in these branches at various points during his tenure. The district court properly granted summary judgment on this record to Grainger on Martinez’s discriminatory wage claims. (Continued)

Appellate court finds that well-documented investigations and disciplined note-taking assist employers in assessing possible disciplinary action and demonstrating nondiscriminatory reasons for disparate disciplinary treatment. The court noted that the investigator’s notes used to create her summary report were accurate and that her investigation was thorough and carefully orchestrated. The decision demonstrates the value of well a defined investigative process and the importance of properly trained investigators. Here’s the unedited decision (1st of three installments):

MARTINEZ v. GRAINGER

Arturo E. MARTINEZ, an individual residing in Minnesota, also known as Arthuro E. Martinez, Plaintiff–Appellant, v. W.W. GRAINGER, Inc., an Illinois corporation,

Defendant–Appellee. No. 11–1422.

December 22, 2011

Before WOLLMAN, MURPHY, and BENTON, Circuit Judges.

Arturo Martinez brought this action against his former employer, W.W. Grainger, Inc. (Grainger), alleging wage discrimination and termination on the basis of race and national origin in violation of Title VII of the Civil Rights Act of 1964, the Minnesota Human Rights Act (MHRA), and 42 U.S.C. § 1981. Martinez also claimed that Grainger breached his employment contract. The district court¹ granted summary judgment in favor of Grainger on all of Martinez’s claims, and Martinez appeals. We affirm.

I. Martinez was born in Cuba and began working for Grainger in 1994. Grainger sells facilities maintenance products through a national network of branches and distribution centers. In April 2003, Jeff Timm, a manager for the branches in Minnesota and some neighboring states, promoted Martinez to the position of branch manager for St. Paul. Timm supervised Martinez and twelve other branch managers. As Martinez’s supervisor, Timm conducted annual performance reviews of Martinez and determined his annual salary increase and bonus. In July 2009 Timm decided to terminate him.

When Martinez began serving as St. Paul branch manager, his pay was increased to slightly more than that of his non Hispanic predecessor. Grainger classified its branches into three different levels based largely on the number of employees at each. The highest level was designated at 3. Each level corresponded to a salary range, and the salary range for each level overlapped with the salary range for the next biggest branch level. St. Paul was classified by Grainger as a level 2 branch while Martinez served as manager, and Timm stated that he considered St. Paul a high level 1 or low level 2 branch. Martinez was paid below the low end of the recommended range for a level 2 manager from 2003–2005 and in 2007.

In determining the annual merit salary increase, Timm reviewed the recommended salary ranges and but also considered the “complexity, volume of business, originated sales, originated orders and assigned sales” at each branch. Timm took into account the branch manager’s involvement in district, regional, or national business improvement efforts as well. Based on these metrics, Timm considered the St. Paul branch comparable to the branches in Rochester, St. Cloud, Sioux City, and Minneapolis. From 2003–2005 Martinez was paid more than some of the managers at these locations and less than others. From 2006–2009 Martinez was paid nearly the same as the St. Cloud branch manager but more than the Rochester, Sioux City, and Minneapolis branch managers, none of whom were Hispanic.

In his annual performance reviews, Timm consistently identified communication and leadership practices as areas in which Martinez must improve. While Martinez was on vacation in 2009, Timm noticed customers in the St. Paul branch waiting to be served. When he asked an employee who was present to help, the employee responded that he was not scheduled to work yet.

Timm became concerned about the overtime record at the branch. He spoke to a woman who worked for Martinez about whether employees were reluctant to work overtime, even when necessary. Timm testified in his deposition that this employee raised more pressing concerns about how Martinez was treating his employees. At her deposition the employee stated that she recalled speaking with Timm about overtime but did not remember expressing other concerns. When approached by Timm, a third employee described the environment at the branch as “really bad.”

After his interactions with the three employees, Timm contacted human resources specialist Joyce LePage and requested that she conduct an investigation at the branch. LePage interviewed the branch employees individually. It is undisputed that no employee had ever lodged a formal complaint against Martinez, and employees commented that Martinez “ran a tight ship,” provided opportunities for professional growth, and set high standards for the branch. But employees also reported in their interviews with LePage that Martinez created a fearful work environment and described instances when he yelled, swore, and was demeaning, volatile, and intimidating to employees. At their depositions, employees were shown LePage’s notes from her interviews with each of them. All but one confirmed that the notes accurately reflected their comments.² LePage and Timm discussed the employee comments and decided to meet with Martinez to get his perspective on them. LePage prepared a summary list of “recurring themes and descriptors” from the interviews to present to Martinez. LePage did not attribute the comments to specific employees to protect their confidentiality, explaining that this was standard practice and that she was particularly mindful that Martinez might retain his position and should not have that information. (continued)

Pre-employment background checks also are known as consumer reports. They can include information from a variety of sources, including credit reports and criminal records.

When you use consumer reports to make employment decisions, including hiring, retention, promotion or reassignment, you must comply with the Fair Credit Reporting Act (FCRA).The Federal Trade Commission (FTC) enforces the FCRA.

Complying with the FCRA

According to FTC, you must take certain steps before you can get a consumer report, and before and after you take an adverse action based on that report.

Before You Get a Consumer Report

You must:

• Tell the applicant or employee that you might use information in their consumer report for decisions related to their employment. This notice must be in writing and in a stand-alone format. The notice cannot be in an employment application. You can include some minor additional information in the notice, like a brief description of the nature of consumer reports, but only if it does not confuse or detract from the notice.
• Get written permission from the applicant or employee. This can be part of the document you use to notify the person that you will get a consumer report. If you want the authorization to allow you to get consumer reports throughout the person’s employment, make sure you say so clearly and conspicuously.
• Certify compliance to the company from which you are getting the applicant or employee’s information. You must certify that you:

                     1. notified the applicant or employee and got their permission to get a consumer report;

                     2.complied with all of the FCRA requirements; and

                     3. will not discriminate against the applicant or employee or otherwise misuse the information, as provided by any applicable federal or state equal opportunity laws or regulations.

It’s a good idea to review applicable laws of your state related to consumer reports. Some states restrict the use of consumer reports – usually credit reports – for employment purposes.

Before You Take an Adverse Action

Before you reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action based on information in a consumer report, you must give the applicant or employee:

• a notice that includes a copy of the consumer report you relied on to make your decision; and
• a copy of A Summary of Your Rights Under the Fair Credit Reporting Act, which the company that gave you the report should have given to you.

Giving the person the notice in advance gives the person the opportunity to review the report and tell you if it is correct.

After You Take an Adverse Action

If you take an adverse action based on information in a consumer report, you must give the applicant or employee a notice of that fact – orally, in writing, or electronically.

An adverse action notice tells people about their rights to see information being reported about them and to correct inaccurate information. The notice must include:

• the name, address, and phone number of the consumer reporting company that supplied the report;
• a statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it; and
• a notice of the person’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days.

Disposing of Consumer Reports

When you’re done using a consumer report, you must securely dispose of the report and any information you gathered from it. That can include burning, pulverizing, or shredding paper documents and disposing of electronic information so that it can’t be read or reconstructed. For more information, see Disposing of Consumer Report Information? New Rule Tells How.

For More Information

Call Business Controls, Inc. at 800.650.7005 or visit the FTC’s Business Center: Your Link to the Law. There, you can find specific FCRA information on:

• Getting consumer reports (see Section 604(b) of the FCRA, 15 U.S.C. § 1681b(b));
• Taking an adverse action (see Section 604(b), 15 U.S.C. § 1681b(b), and Section 615(a)), 15 U.S.C. § 1681m(a);
• Compliance for the trucking industry (see subsections (b)(2)(B), (b)(2)©), and (b)(3) of Section 604(b), 15 U.S.C. § 1681b(b));
• Using investigative consumer reports (see Section 606 of the FCRA, 15 U.S.C. § 1681d);
• Investigating misconduct (see Section 603(x) of the FCRA, 15 U.S.C. § 1681a(x)).

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

A WSJ interview with Eugene F. Ferraro, CPP, CFE, PCI, SPHR

Reporter: So as President of ASIS, could you please tell me in your own words…

Ferraro: For the purpose of clarity, I am not the president of ASIS. I apologize if I had given that impression to you. I am a long-time volunteer leader and currently serve ASIS at several levels:

a. I am the Program Advisor for the ASIS offered review course for those intending to sit for the PCI (Professional Certified Investigator) certification exam. As such, I develop the content and substance of the review course and select and manage the faculty that provides the training.

b. I am a Commissioner on the ASIS Standards and Guidelines Commission. This body develops guidelines and ANSI (American National Standards Institute) standards affecting the international security community. I co-chair the committees currently developing a workplace violence prevention and intervention standard and another tasked with the development of an investigations standard.

c. I am also one of many who speak every year at its annual conference. The topics I usually address are investigative issues and matters having to do with privacy.

For the record however, I am the current president of NCISS (National Council of Investigation and Security Services; see NCISS.org). Unlike ASIS which is a “society” comprised of professionals seeking unity and a common forum for the development and sharing of ideas, NCISS is a trade organization. NCISS is focused almost solely on monitoring, tracking and driving legislation affecting the security and investigations industry at the federal level. It is a political force far stronger and influential than ASIS. NCISS and ASIS frequently work together on legislative issues affecting our constituents. I actively manage the NCISS/ASIS relationship and go to D.C. at least twice a year for the purpose of working that relationship and calling upon our lawmakers relative to the bills they are proposing which affect the security and investigative industries.

Now to your questions.

Reporter: How CPTED has made a change in your organization, if any?

Ferraro: Relative to ASIS, the answer is a qualified yes. ASIS owns its headquarters building in Alexandria, Virginia. Alexandria, just outside of D.C. is the headquarters of hundreds of trade association and professional societies. ASIS has occupied the five story building for over ten years. It was an existing structure and CPTED apparently was not a consideration at the time of its construction. After acquiring the building, ASIS contracted a trusted and well known security consultant (a member of ASIS) to design its security plan. The plan includes little more that access control, improved lighting and a few physical barriers. Because of the type of business activity conducted in the building and its location (a low crime area), the level of physical and electronic security is adequate at ASIS HQ.

Relative to my own business, Business Controls, Inc., CPTED has had only a minor influence. We occupy approximately 10,000 square feet of leased space in a two-story, multi tenant building in a business park. The business park is very well maintained and patrolled and is in a very low crime section of the outskirts of Denver. Prior to occupying the space we made several tenant improvements with CPTED in mind. They include: putting a light panel (window) in the common hallway so as to allow the receptionist to see who is at the door before she permits entry into the space; moving several executive office such that are no longer in the line of fire in the event of a shooting incident in our lobby; moving the server room away from the exterior of the building and windows to a windowless, hardened secure room with its own power and climate control. As an organization that provides security consulting services, we consider CPTED in every site security survey we conduct.

Reporter: What you know “CPTED to be doing today.”?

Ferraro: CPTED is still an under-appreciated discipline. There remains a disconnect between those that design buildings (architects) and those in the security profession. All too often, security is an afterthought. For example, security for the airline industry is not a new concern, but look at the design of most newer airport terminals. Very little consideration if any, was given to the issue of proper and efficient passenger screening. The disconnect however is recognized. As a member of the ASIS annual Academic and Practioner Symposium held every year, the topic of extending security studies and awareness into other disciplines has been thoroughly examined and discussed. For twenty years the Symposium has brought together thought leaders in academia and the security/loss prevention and asset protection profession in order to study and find solutions to systemic security problems and issues. Following each gathering, a committee of attendees prepares a paper on the issue addressed and publishes it. They can be found on the ASIS website. However, my opinion that CPTED is under-appreciated and utilized remains.

Reporter: What you believe to be the future for CPTED?

Ferraro: The future of CPTED is bright. Though the concept of CPTED has existed since ancient times (think of castles and moats), the science of CPTED has yet to be invented. By science I mean, the discipline lacks meaningful, discipline. In practice it is more of an idea or concept than a practice. Thus, there remains huge opportunities for the advancement of it. I believe, as do other thought leaders in the security space, CPTED has the potential to rival that which we consider to be the security industry is today. That is, CPTED will someday be a science-profession-discipline much like architectural design and security are today.

Besides allowing organizations to maintain legal compliance, the implementation of an anonymous employee hotline makes good business sense for a variety of other, possibly more valuable, reasons. Such a reporting mechanism allows for fraudulent activity and other employee misconduct to be detected sooner than it might otherwise be, enabling organizations to effectively manage the problem before significant losses accrue and the organization’s reputation is tarnished. Establishing an anonymous employee hotline provides another avenue by which other forms of employee misconduct, such as harassment, discrimination, and/or theft, can be reported as well, thereby further limiting the organization’s exposure and liability.

Human Resources officers and Risk Management Personnel have quickly realized the benefit of receiving reports of employee misconduct through hotline mechanisms. They now have the ability to detect safety concerns and criminal activity as it is “brewing” and manage it before safety is compromised and the organization faces a huge liability. What’s more, the costs associated with the implementation of an anonymous employee hotline are minimal in comparison to the potential losses incurred through long-term fraudulent activity or litigation resulting from the inappropriate treatment of human resources-related complaints.

Establishment of an anonymous incident reporting solution further communicates to employees that their concerns are taken seriously and that the organization is committed to ensuring the safety and security of their employees. Such a system encourages employees to act when they discover coworkers behaving inappropriately. Furthermore, it helps create an organizational culture that values ethical behavior and honesty and instills a level of confidence in employees that the organization will respond when reports of fraud or other problems are received. Management cannot act in response to activity of which they are not aware, and research indicates that employees are more likely to bring forth information if they have the ability to do it confidentially and anonymously. Therefore, anonymous reporting systems increase an organization’s ability to identify and appropriately manage issues as they arise.

Many of the third-party systems that are available enable immediate documentation of all reports and report-related activity. Such documentation potentially limits an organization’s liability should a reported issue end up in litigation in the future. The organization has the ability to document all steps taken to ensure the appropriate disposition and outcome of all issues reported. Such activity limits claims that the organization failed to comply with any one or more legal mandates in place regarding corporate ethics programs.

While the advantages are clearly substantial, organizations must be aware of the potential drawbacks of such a hotline program. For example, because employees have the opportunity to remain completely anonymous if they so choose, the organization may be limited in their ability to follow up with reporting employees regarding the matters disclosed. Many systems rely solely on the reporting employee taking the initiative to call back and the organization has no way of directly contacting him or her. Some investigations may be delayed or extremely restricted due to this inability to proactively follow up with reporting employees.

 Organizations should be aware that, while thorough documentation of all complaints and investigative steps taken assure compliance can be demonstrated, all documentation is potentially discoverable in any future legal proceedings. Employers must balance both sides of this legal conundrum in the interests of protecting the organization’s assets while simultaneously instilling a sense of security among their employees.

 Furthermore, organizations may find themselves in legal difficulty if they fail to warn reporting employees of the potential risks associated with reporting concerns while remaining completely anonymous. While it is not likely in the best interests of an organization to attempt to deduce, however simple or complex, the identity of the anonymous whistle-blower, evidence indicates that this is done with alarming frequency and as many as 70% of employee whistle-blowers experience some form of retaliation. Anonymous reporting employees will find it difficult to demonstrate a causal link between their report and the retaliatory action. However, providing a broad warning about the potential risk associated with reporting anonymously would significantly diminish employees’ confidence in the reporting mechanism.

Want to learn more about employee hotlines and anonymous incident reporting systems? Contact Briggin Palmer at 303.526.7600 or bpalmer@BusinessControls.com

Treat me kindly, my beloved friend, for no heart in all the world is more grateful for your kindness than the loving heart of mine.

Speak to me often, for your voice is the world’s sweetest music, as you must know by the swishing of my tail when your footstep falls upon my waiting ears.

Please take me inside when it is cold and wet, for I am a domesticated animal, no longer accustomed to bitter elements.  Do not hesitate to blanket me and protect me. I ask no greater glory than the privilege of you letting me walk quietly beside you, for I  am the schoolmaster and forever your teacher. 

Jackson 1992-2012

Keep my trough filled with fresh warm water, for I can’t tell you when I’m thirsty. Feed me nourishing food that I may stay well, to run and play, to brush up against your side or to simply greet you at our gate. 

And, my friend, when I am old, and I no longer enjoy good health and happiness, do not make heroic efforts to keep me. Forgive me if I bring you no more fun or pleasure.  Please see that my trusting life is taken gently.  I shall leave this earth knowing with the last breath I draw that my fate was always safest in your loving hands. Thank you my dear friend. I will wait patiently in God’s glorious green pasture and will come running for you when I see you up on Rainbow Ridge. 

My love always, 

Jackson

My wife and I had the privilege of caring for Jackson for five years. Though he was a registered Thoroughbred and trained as a hunter-jumper, we were not once on his back. He had been over-worked and mistreated by his former owners. In pursuit of ribbons and trophies, they injured his spine and disabled him. Adopted by us, he became our school-master. He led and trained our other horses. He protected the herd, was always out in front and never failed to lead the way. Though not strong, he was proud. He was our friend and trusted companion and we will miss him deeply.

Late last year, ASIS International and the Society for Human Resource Management (SHRM) issued a joint ASIS/SHRM Workplace Violence Prevention and Intervention American National Standard. I had the pleasure of participating as ASIS Standards and Guidelines Commission liaison co-chair with friend and colleague, Mike Crane of IPC International. The new Standard is aimed at helping organizations implement policies and practices to more quickly identify threatening behavior and violence affecting the workplace, and to engage in effective incident management and resolution.

The document reflects a consensus from professionals in the fields of security, human resources, mental health, law enforcement, and legal. It serves as an important tool to help organizations evaluate current practices; develop or enhance workplace violence prevention and intervention programs; and effectively manage post-incident issues.

Go to this page and click link

“Practitioners can use the Standard to evaluate whether their organization is taking sufficient steps to protect employees from a wide range of problematic behaviors that can compromise workplace safety,” said Rebecca A. Speer, Esq., founder and principal, Speer Associates and chair of the Workplace Violence Prevention and Intervention Standard  development committee. “It helps to answer the tough questions many security, HR, and legal professionals need to ask:  ‘Are we doing enough?’ and more importantly, ‘Are we doing the right things?’”

The Standard defines the recommended scope of an organization’s efforts to prevent and manage workplace violence; describes the key stakeholders within an organization who will be responsible for this issue; delineates the components of a workplace violence prevention and intervention program; outlines intervention techniques; and addresses post-incident issues.

“On behalf of the membership, SHRM has been very pleased with the outcome of this partnership with ASIS,” said Lee Webster, JD, MBA, SPHR, GPHR, director of HR Standards, SHRM. “Through this relationship the HR and the security communities have created an enduring and comprehensive approach for business professionals to manage the risk of violence and to better assure the safety of employees under their charge. There is no higher duty for HR professionals, which makes this work so gratifying.”

The Standard’s requirements and recommendations are broad in order to provide the necessary flexibility organizations will need to implement specific prevention and intervention strategies appropriate for their workplace needs. To download a free copy of the new standard go to http://www.shrm.org/TemplatesTools/Toolkits/Pages/WorkplaceViolenceandPrevention.aspx and click the hyperlink shown in the accompanying image.

If you have questions regarding the Standard and how your organization can best use it, please contact me at eferraro@BusinessControls.com or call me at 800.650.7005.

For those of you who may not have been following the news, it might be a surprise to know that according to the latest FBI crime statistics, crime rates in America continue to fall (see chart). According to the FBI’s Crime in the United States report, overall the estimated volume of violent crimes in 2010 dropped 6 percent compared to the 2009 figure, the fourth consecutive year it has declined. For the eighth consecutive year, the volume of property crimes went down as well—2.7 percent. According to the FBI, the report was compiled from data submitted to it by more than 18,000 city, county, university and college, state, tribal, and federal law enforcement agencies from around the nation. Best of all, violent crime offenses were down across the board—the largest decrease was robbery, down 10.0 percent. Property crime offenses went down as well—the largest decline, 7.4 percent, was for motor vehicle thefts.

Crime Rates Down Across the Board

But who needs the FBI, when our nation’s hard-hitting investigative reporters have nothing bigger to report than stories like these:

Watsonville: Security Guard Arrested After Reportedly Forcing Off Woman’s Pants, Underwear
San Jose Mercury News (12/24/11) Kelly, Cathy

A security guard at a shopping center in Watsonville, Calif., has been arrested on suspicion of sexual battery after he allegedly pulled down a woman’s pants in the shopping center’s parking lot. Authorities say that Jose Moreno, who works for Santa Cruz Peninsula Security, approached a woman who was sleeping in her car in the shopping center’s parking lot early in the morning of Dec. 23 and asked for her identification. Moreno also asked the woman, who was sleeping in her car because she was too tired to drive home, whether she had any drugs or weapons. Moreno then said that the woman was hiding things in her pants and allegedly forcibly pulled down her pants and underwear. Web Link

Police: East Erie Gas Station Where Monday Shooting Occurred Robbed Early This Morning
Erie Times-News (PA) (12/28/11) Hahn, Tim

Police in Erie, Pa., are investigating whether a robbery that occurred at a gas station in the city early in the morning on Dec. 28 is connected to a series of other robberies that occurred nearby earlier this year. The latest robbery took place at a Country Fair store at roughly 12:05 a.m. on Dec. 28, when two men armed with handguns forced a security guard who was standing outside the store back into the building and made him get on the ground. Three other men armed with guns then ran into the store and rounded up the employees, forcing them to open the cash registers and give them money, as well as cigarettes and other types of tobacco products. All of the robbers eventually got away. Police say that the robbery may be connected to six robberies that took place at a nearby Kwik Fill station earlier this year. Three people have been charged with robbing the Kwik Fill in August, though the rest of those robberies are still being investigated. The Kwik Fill has since been closed.  Web Link

Seems obvious to me that when stories like these make national news, no one needs the benefit of crime statistics to know that crime in America indeed, is on the decline.

Be safe out there .

There can be no argument, our employees are our most valuable asset.  They can make us, as easily as they can break us.  However, many employers don’t take the time or expend the necessary resources to seek out, and hire the best people possible. The result is often disappointment and frustration, and sometimes even litigation. Although there are no guarantees, there is a great deal employers can do to attract, hire and retain quality employees.  Here are the Ten Best Hiring Tips for 2012:

Recruit constantly, not just when a position needs to be filled.  Recruiting is a continuous and never ending process. It is not something an organization only does when it needs to hire. Maintain a revolving inventory of qualified candidates so that when positions become available, interviewing and screening can begin immediately.

Mr. Eugene Ferraro

Don’t use generic store bought employment applications. They look unprofessional, and frequently don’t meet current legal standards.  Instead, create a customized application. Be sure to provide plenty of space for applicants to explain their leaving prior employers. Allowing enough for a one word explanation will likely yield only one word. But, before going to press, have it reviewed by an attorney to ensure it complies with applicable federal and state law.

1.  In addition to requiring completed applications be signed, get a signed release of liability from each applicant.  In addition to the notifications and authorizations required by the Fair and Accurate Credit Transactions Act of 2004, the release should be fashioned as to protect the prospective employer from any invasion of privacy claim that might arise during the pre-employment screening process.  The release should authorize, without liability; the examination and use of public records, communications with former employers, and reference checking.
2.  Interview thoroughly and consistently.  Use only trained interviewers, and ensure that they know what can, and can not be asked.  Develop an interviewing process whereby every applicant is properly interviewed and his or her skills are examined and job suitability can be determined.  Allow the applicant to thoroughly explain; strengths and weaknesses, how long he or she thinks it will take to become a contributor, and any gaps in employment.  Retain all notes as part of the applicant’s permanent file.
3.  Request as many references as possible, and check them thoroughly.  Ask the applicant to provide the work, and home telephone number of every reference provided.  Additionally, ask for the names and telephone numbers of former peers, and subordinates. Contact each one of them and ask for help to determine if the applicant is suited for the position for which they’ve applied.  Be direct, but be respectful, and take notes.
4.  Insist the applicant provide relevant documents, such as recent performance reviews, check stubs, military discharge records (DD 214), copies of transcripts and degrees, and professional licenses if applicable.  Applicants should unhesitantly produce such documents—smart applicants anticipate this increasingly common request.
5.  Conduct a thorough and complete background investigation.  In most states, an applicant’s driving history and criminal history (if any) are public records and available to perspective employers. A string of traffic violations or even misdemeanor offenses should be taken seriously. A history of bankruptcies, tax liens and unfavorable judgments can also be red flags.  Check federal and local laws before making any inquiries, and be sure to comply with the Fair Credit Reporting Act and its amendments.
6.  Drug test all applicants.  According to recent studies, one third of the population has used an illegal drug at lease once, and 11.6 million are still regular users. Substance abusers are less productive, have more accidents and miss more work than non-substance abusers.  Budget permitting, consider psychological testing as well.  Tests that have been scientifically validated will help match applicants’ skills with job requirements, and screen out those unlikely to meet performance standards.
7.  Team consult with staff members and collectively identify the best candidates.  Establish a standardized rating system and rate qualified applicants based on skills, work experience, past performance and the information provided by references. Re-interview the best candidates before making a final decision.  Put your offer in writing and have it acknowledged by the final candidate by signing it.  Maintain good will with those not selected, with a timely thank-you letter.
8.  Sell the organization, not the job.  It is common for business owners, recruiters and even, experienced human resource professionals to over sell a position.  The practice often leaves the new employee disillusioned, frustrated, and angry.  Instead, sell the organization and all that it offers.  Valuable benefits often not mentioned include; technical training, personal and/or professional recognition, and professional networking opportunities.
9.  It is a sad fact, each year, businesses lose over $40 billion dollars to employee theft and dishonesty.  While this staggering figure continues to rise annually, employers of all sizes can do more to reduce their individual losses.  But, the best investment against employee crime is to make careful, well informed hiring decisions.
10.  This series and course material was designed and developed by Eugene F. Ferraro, CPP, CFE, PCI, SPHR.  Mr. Ferraro is the founder and CEO of Business Controls, Inc.  He has been a corporate investigator for over 29 years, specializing in the investigation of workplace violence, employee dishonesty, fraud, harassment, discrimination, substance abuse, and criminal activity in the workplace.  He has conducted thousands of investigations for employers (public and private) throughout the world.  He has been a member of ASIS International since 1987 and currently serves as the Program Advisor for the PCI Review course.  He is a member of the ASIS International Standards and Guidelines Commission.  He has written numerous articles on the topic of workplace investigations and interviews and interrogation for Security Management magazine and is a frequent book critic for the magazine.  Mr. Ferraro is also the author of eight books, of which Investigations in the Workplace (2006) is his most recent, and it may be found wherever quality books are sold.

Remember, if you are not properly screening your applicants-you are likely hiring those who have been rejected or fired by one of your competitors.

Eugene F. Ferraro, CPP, CFE, PCI, SPHR is the founder and CEO of Business Controls, Inc.  He has been a corporate investigator for over 29 years, specializing in the investigation of workplace violence, employee dishonesty, fraud, harassment, discrimination, substance abuse, and criminal activity in the workplace.  He has conducted thousands of investigations for employers (public and private) throughout the world.  He has been a member of ASIS International since 1987 and currently serves as the Program Advisor for the PCI Review course.  He is a member of the ASIS International Standards and Guidelines Commission.  He is board certified in both Security and Human Resources Management. He has written numerous articles on the topic of workplace investigations and interviews and interrogation for Security Management magazine and is a frequent book critic for the magazine.  Mr. Ferraro is also the author of nine books, of which Investigations in the Workplace, Second Edition (2012) is his most recent, and it may be found wherever quality books are sold.

Business Controls, Inc. is a leading SaaS (“Software as a Service”) provider of incident reporting/case management software and risk consulting services. From a Microsoft .NET platform, BCI delivers fast, cost-effective risk mitigation solutions to over 22,000 client locations in 130 countries as well as sophisticated investigative and consulting services.

Eugene F. Ferraro, CPP, CFE, PCI, SPHR is the founder and CEO of Business Controls, Inc.  He has been a corporate investigator for over 29 years, specializing in the investigation of workplace violence, employee dishonesty, fraud, harassment, discrimination, substance abuse, and criminal activity in the workplace.  He has conducted thousands of investigations for employers (public and private) throughout the world.  He has been a member of ASIS International since 1987 and currently serves as the Program Advisor for the PCI Review course.  He is a member of the ASIS International Standards and Guidelines Commission.  He is board certified in both Security and Human Resources Management. He has written numerous articles on the topic of workplace investigations and interviews and interrogation for Security Management magazine and is a frequent book critic for the magazine.  Mr. Ferraro is also the author of nine books, of which Investigations in the Workplace, Second Edition (2012) is his most recent, and it may be found wherever quality books are sold.

Business Controls, Inc. is a leading SaaS (“Software as a Service”) provider of incident reporting/case management software and risk consulting services. From a Microsoft .NET platform, BCI delivers fast, cost-effective risk mitigation solutions to over 22,000 client locations in 130 countries as well as sophisticated investigative and consulting services.