Did you know, you CAN like your lawyer?
Whether you’re a sole proprietor, a CEO of a major corporation, or a medium-sized company owner, there are a lot of things you need to keep in mind to run your business smoothly. How well do you communicate with your employees? What steps do you take to ensure they are given equal opportunities? David Seserman, a successful Colorado civil trial attorney and the founding member of Seserman Law LLC, helps shed light on how businesses should handle their relationship with their employees. He believes that companies must provide equal opportunities among their subordinates. Highlighting the importance of proper communication and transparency in every organization, David gives advice on what businesses should do to prevent harassment from happening and elaborates on how attorneys can advocate for both the employer and employee’s rights and responsibilities.
Watch the episode:
Listen to the podcast:
Transparency and Employee Relationships with David Seserman
My name is David Seserman. I am a civil trial attorney with the law firm Seserman Law. I use the term civil trial attorney for a very specific reason. I consider myself a trial attorney and not a litigator. The difference is a litigator is pretty good at pushing paper, arguing things, but is a bit uncomfortable at trial. A trial attorney enjoys going to trial and the challenges that that raises. I’ll give you an example. The way you can tell the difference between the two is if you are at a settlement conference and you are talking about resolving the case and the other side says to you, “David, if we can’t resolve this and settle this case here and now, then we’re going to go to trial.” If that’s an opportunity, you’re a trial attorney. If that’s a threat, you’re a litigator.
We’re incredibly fortunate to have you on the podcast. I have my cohost, Meranda Vieyra. She’s with Denver Legal Marketing and we have David Seserman of Seserman Law. David, tell us a little bit about your business and who you serve.
As a trial lawyer, you have to focus your practice. Most of my practice is in the realm of employment and employee benefits litigation. My employment law practice is fairly straightforward: age discrimination, gender discrimination, breach of employment contract, misappropriation of trade secrets cases and matters like that. I expand that to employee benefits because I have a fairly strong background in ERISA, that is retirement benefits, health and welfare benefits, benefits of that nature. I consider myself more of an HR attorney because I cover the gamut. I have always carefully maintained a practice where I represent both management and individuals. I feel like that gives me a much more balanced perspective and allows me to counsel whoever it may be, whether it’s a C-Suite executive leaving a company or management looking at, “How do we deal with a situation where one of our employees just walked out with some trade secrets?” I can counsel them a little bit better because I understand the arguments that both sides will make.
For your practice, what’s your predominant geographic focus?
For the most part, it’s Colorado. I am licensed in Colorado. I don’t hold a license to practice law anywhere else. That being said, I have handled matters all over the United States. Sometimes you get the call that says, “We need you or want to hire you in this case.” It could be a court appearance in New Orleans or it could be in Dallas. It depends, but the predominant focus for me is localized. I try to stay very involved in the Colorado community and I try to concentrate my practice here because it’s home and it’s what I know best.
They don’t know you and they don’t know how long you’ve been in the law field. Tell us a little bit about what led you to be an attorney and a little bit of your background in law here in Colorado.
I had an undergraduate degree in finance and in management. I went into sales and I set records for the company that I was working for the first couple of years. I got moved into a basic level of sales management, then I had some creative ideas. I went to the senior management and said, “Out in the field, if you could package this with that, it would help us here and we could sell more product.” The response I got back from management was, “Your job is to produce and sell. That’s marketing. You’re in sales, you’re not in marketing.” I decided at that point, I wanted to use my mind a little more in business.
I always knew I’d return to school. I thought I’d probably get an MBA, but I decided as a lawyer, I’ll be able to use my mind a lot. That challenge would exist in law. I went to law school. Coming out of law school, I was 100% convinced I would be a business lawyer. I wanted to start with what the challenge was. I can always use my business background and become a business lawyer, but the challenge was going to be becoming a trial attorney. I’ve decided that’s where I’m going to start my career. Years later, I’m still doing it.
We’re all subject to the TV attorney shows and whatever goes on with those things. When you’re going to trial, what do you do to prepare mentally? Is there a typical organize process or steps that you do to lend confidence for when you arrive?
You have to become very myopic and focused just on the facts and law surrounding the case that you’re about to go to trial on. The first thing I do is I apologize to my wife and I apologize to anybody who’s going to be around me for the next few weeks because I know I will become unbearable. It’s reality. You have to have the myopic focus and so you’re not necessarily a pleasant person to go to a ballgame with or to have a casual conversation with. The reason is you have to focus on what it is you are doing.
You have to become a master of every fact in that case for trial because when a judge says to you, “Mr. Seserman, what about such and such?” you need to be able to respond on the spot. If you need a document, you need to be able to pull it out. It used to be pulled out of a box and give it to the witness. Now, it’s displayed typically on a screen of some sort, but you have to have access to that document. You have to know where it is. You have to know what it says. You have to know what a witness says and what it says in your deposition or you waive the right to ever bring that up again. You have to have mastery and focus.
Employment and employment matters are all over the news in Colorado and beyond in 2019. I pulled a statistic that I thought was super interesting as a business owner and also because I work with business lawyers. They say that small, medium-sized businesses face a 12% chance of unemployment claim. What do you think about that? Is that accurate? Is it more or is it less than what you’ve seen?As a trial lawyer, you have to become very myopic and focused on the facts and law surrounding the case that you're about to go to trial on. Click To Tweet
I’m surprised that the number is only 12%. In my experience, virtually every employer faces that kind of claim down the road. In the press, there are lots of employment claims. You can’t help but get online and read the news and not see some employment claim out there. People understand that, “I lost my job. I think I’m in trouble, I’m going to make a claim and maybe I’ll get some money for it.” I’m surprised it’s that low.
I was surprised. I thought it was high, but you’re right. You see it from a completely different perspective being that you see this from both sides, the business side and also the employee side. If I’m a Colorado employer, what are the top three mistakes that you see right now with regard to lawsuits of any sort regarding employment?
The first one is failure to communicate. The way that you can avoid most certainly employment lawsuits as management is to be transparent. When an employee doesn’t do his or her job to your expectations, it’s important that you communicate your expectations to that individual and not wait until a year later for the annual review where you then say, “The employee was doing a decent job this year and you don’t even criticize.” That’s the second thing. One is to communicate. The second one is to be honest and candid in those communications. Those would be the top two. The third would be to educate yourself on the law. Understand the rights you as a business owner have and the rights that your employees or contractors have.
When you communicate with the employee, how do you prove that you’ve had the conversation or do you need to take and do written communication records?
Unfortunately, you do need to document what you’ve done. If you don’t, then it becomes the classic, “He said, she said.” It’s always a good practice to internally document just like a physician. When a physician is performing a procedure, the physician is typically engaging in dialogue throughout the procedure because it’s being recorded and documented what it is she did as the physician in that case. As a business owner, there’s no downside whatsoever to having some level of documentation of who and what met. The second thing is as a manager, take advantage of the fact that you have multiple individuals on the management side. When there is a critical meeting with an employee, have at least two people there so that there’s less question about what was said and what was communicated. Having that second individual can be good in terms of, “Did I communicate this correctly?” Also, it stops the classic, “You said that. No, I didn’t” situation.
As you think about the components of the value of the business, part of it is policies and procedures. I would presume that job descriptions would fall in there somewhere. I’m a fast-growing company and I can hardly get people on board fast enough. Colorado’s economy is pretty good. What should that business owner be thinking about as they’re onboarding these people to try to take and streamline or alleviate this issue?
There are several things. What is it you want that person to do? What is that person’s job? You mentioned the job description. In employment law, a job description is becoming more and more critical and arguably mandatory at this point. If an employee has to be able to lift ten pounds repetitively to perform his or her job, if it’s in the job description, that’s going to help when the employee can’t perform the essential function of the job which is to repetitively lift. Surprisingly, in the gig economy where people work at home all the time, if it’s important that an individual be present in the office from 8 to 5 or whatever the hours are, it’s a good idea to put that in the job description. Surprisingly, I’ve seen a few situations where there’s a debate about whether showing up to work is an essential function of a job. That’s important. Finally, related to that is what about the hours? Is somebody exempt or non-exempt? What are the expectations that are on there?
For employers, what does exempt and non-exempt mean?
Fair Labor Standards Act is the law I’m referring to. There are state equivalents in almost every state, but it’s the idea of are you properly salaried and exempt from overtime or are you paid by the hour? Where that comes up is somebody is paid hourly, but they have access to emails on their cell phone. She is expected to check her emails at night. She’s working when she’s checking those emails, but she’s not being compensated for that. That can become a huge liability down the road when she terminates her relationship with a company and says, “I wasn’t paid for all the hours I worked.” Communicate expectations and have certain policies in place.
One of the things that we talked about before that makes your practice perhaps unique is that you’re on both sides between the employee and the employer. For some folks, they may take umbrage at the fact that you’re on one side or the other only. How do you see that both sides exposure is helping a business owner because of your exposure?
The reason I maintain what I call a balanced practice is it gives me an opportunity to understand both sides of the argument or both sides of the equation. I’m able to meet with a business owner and talk about, “Here are the arguments that I would make if I were on the plaintiff side of this, if I was representing your employee. These are the things you need to consider.” I bring credibility to that conversation because I’ve been on that side. It’s not just something they’d go, “We don’t know what you’re talking about.” That’s a large part of why I maintain a balanced practice.
It’s a good distinction. It’s like you’re on sell-side buy-side, both.
You brought up a unique example of someone being on their email at night after work. You see it from both sides. You see it from the executive side who’s being forced to answer emails at 9:00 PM. You also see it from the business owner’s side of, “Was that a requirement of the job?” I think to see both sides of the coin there is an interesting perspective on Colorado Employment Law.
I’m seeing a ton in the news with regard to discrimination. Just in Colorado, in Denver, the #MeToo, sexual harassment, all kinds of issues are rife for lawsuits. Can you shed any light on avoiding that?
I look at things proactively when it comes to legal services. Oftentimes, people don’t hire attorneys in time and then they face a lawsuit or a claim or something like that. Having a lawyer look over your employment agreement before you sign it or being a business owner and having your lawyer draft your contracts, not your assistant, all of these things proactively help your business in the long run. With regard to discrimination lawsuits in Colorado, do you have anything to add on how to prevent that if you possibly can?
You raised a lot of topics, but I’m going to try to answer your last question. What I’m about to say is not radical or new. It is important that to avoid any potential claims, especially discrimination claims, whether it’s age discrimination, gender or racial discrimination or #MeToo which is a form of gender harassment that you see in the news a lot. As management, you need to treat employees fairly, to give employees equal opportunities, not to discriminate, which is the same thing I would have told you ten years ago. There’s nothing new there, but there is a heightened sensitivity in everything. The danger I’ve seen with #MeToo, in particular, is where #MeToo is a bit different than let’s say your traditional gender discrimination case. It has the ability to reach back many years to make a claim.
In employment law, and I don’t want to get into the real specifics necessarily, but it’s become very clear that if you have a policy in place as management that says, “Employee, if you believe you are being treated improperly or unfairly, you must make a claim in a timely fashion. You must inform the management so that we, as management, are aware of this situation and have an opportunity to react. If you don’t do so in a timely fashion, you’re going to be barred from ever making that claim.” What #MeToo has expanded it to is the ability to say, “Eight years ago, I believe that my supervisor acted inappropriately. I, the victim, am not looking to claim any damages necessarily, but there is a situation that occurred eight years ago and this person should pay for it now.” From an overall perspective, I agree with that. You shouldn’t be able to get away with sexual harassment from eight years ago. However, it’s very difficult for a manager to defend himself or herself from that kind of claim.
What I have seen and what bothers me in #MeToo, in particular, is I have seen a lot of in particular male managers that are reluctant to find themselves alone with a female subordinate working one-on-one. They’re afraid that like, “Five years down the road, she may decide to leave for whatever reason. She’s going to claim that I inappropriately propositioned her or something of that nature that may impact my relationship with my significant other at that point, that may torpedo my career even though it may very well be false. I’m going to avoid that situation. I am not going to be alone with women.” That’s unacceptable because that means in that situation, a male manager is not going to mentor an absolutely 100% capable woman just because of her gender.
With that being said, I’m this male supervisor. I have an up and coming young employee that happens to be male or female either way and I’m reluctant. What can you do to take and bring that employee along and still manage to protect the firm that you work for?
If you are the male in that situation, you absolutely must give your female subordinate the opportunities, but be very aware of situations you put yourself in. For instance, if you’re on a business trip, perhaps you don’t want to stay in adjoining hotel rooms and go out drinking until 2:00 in the morning.
That’s the low IQ solution.
On the day-to-day high IQ, it’s difficult because traditional mentorship is a one-on-one relationship, one-on-one support. That has to be given there. You’ve got to watch your actions. As in this case, the senior male, you can’t be touchy-feely. If you naturally like to rub someone’s shoulders as it’s been in the news lately, then you just don’t do it. On the flip side, if you are the subordinate and you feel like you’re not getting mentored, bring it up in a non-average serial fashion. You don’t have to say, “I think I’ve been discriminated against. I’m going to bring a charge of discrimination against you because you’re not giving me an opportunity.” Bring it up in a situation where you say, “I feel like I’m not being given opportunities. Is there something wrong with my performance?” Maybe it’s subconscious, but the manager may be avoiding the situation without thinking about it.
Are there protocols or maybe a proactive lecture that a law firm like yours can provide that can help Colorado businesses to tackle this?
There is, but most of that lecture is going to boil down to communication. Just communicate your expectations in the working relationship. Keep an active dialogue. Work hard to create that active dialogue. Lots of companies don’t do that. If someone is not performing, the easiest thing to do is simply avoid that person. As an attorney and as a former managing partner of a large law firm, I always made it a policy if I had to terminate an associate attorney’s employment, I would bring that individual’s manager into the meeting. That individual need to see what the deer in the headlights look was because I would receive it. Typically, the junior person would say, “I didn’t know it wasn’t acceptable. I didn’t know you had a problem with my work,” to which the supervising attorney might say, “Didn’t it occur to you the fact that I haven’t given you an assignment in six months? Wasn’t that something that you were thinking about or the matter?” “No, I thought that things were light.” Communicate timely.
For the business owner, I’m tidying up my company. There’s going to be some period of time where I’m going to transition my company and I don’t know where I stand on de-risking based on the areas that you cover. Do you stress test or go do a review or look at company documents presale to try to help that business owner?It's important that you communicate your expectations. Click To Tweet
It certainly is a service that I offer. It’s not the one I’m called upon that often to do because it’s not something that a lot of business owners want to deal with the presale. They just want to say, “Here are my revenues. Here are the employees I have. Do you want to keep them? Do you not?”
What about on the other side? What does the buyer think though? Do the buyers start to recognize this?
My sense is more and more buyers are beginning to recognize some of that, especially when it comes to, and I don’t want to diverge too much intellectual property. A lot of companies, a lot of their value is tied up in IP. It does become very important in acquiring companies. What kind of intellectual properties are key to the company that I am about to buy and how is it protected? You can bring in someone like me to say, “What kind of documented protections are in place? Are we relying just on the Uniform Trade Secrets Act to say employees shall not take, information that is considered to be confidential or has it been documented?” If it’s documented, is it narrowly focused and therefore much more enforceable in the eyes of a judge who may say, “I don’t want to preclude someone from working down the road?” Yes, it is very important.
I think about the company that’s got a distributed workforce. They’ve got contractors around. Let’s say I’m a software company and I have some programmers on the East and West Coast then I also have some in a foreign country. I’ve got all my stuff build and I’m ready to go. How do you take and start to advise a company on protecting intellectual property when you have contractors scattered from one planet to another?
You need to start with what documentation you have. Get into a discussion about what documentation should be in place. Start with the uniform laws. There are uniform laws such as the Uniform Trade Secrets Act. In Colorado, we call our version the Colorado Uniform Trade Secrets Act. On a federal level, there is the Defend Trade Secrets Act that went into effect a few years ago. Something like IP is specifically recognized by both state and federal laws. It’s important to take a look at what is protectable and what kind of restrictions are going to be honored. I’ll give you an example. In California, this is a very generalized statement, but it is very difficult for a company to restrict an individual from earning a living under the guise of a restrictive covenant agreement, more commonly known as a covenant not to compete. There are other states that are much more management focused and it is much easier to put in place a very almost punitive restriction on employees.
That leads to the discussion of, what do you need as a company? I see lots of litigation over restrictive covenant agreements where typically someone has been hired by a company. Let’s say that she is in sales, she’s been very successful and the management has made the decision that she no longer needs to be part of the company. Assuming there’s nothing illegal about that decision, it’s not because of her gender or something like that, that’s a fair and rational business decision. The management takes the next step and says, “While she’s not good enough for us, we want to enforce the agreement that says she can’t work in the industry for two years.” That creates litigation. A two-year agreement is something that somebody may have to fight over because they have to put food on the table versus a narrowly drawn agreement that says, “For six months, you’re not going to touch the top six companies that you worked with for the previous six months.” You’re probably not going to end up in a lawsuit over that.
It boils down to documentation and communication, seeing the theme here. A ton of people are looking outside the box when it comes to employment, in the Denver Metro area and especially in Boulder where we have these different gig economy, freelance hot spots. Can you expand at all on the benefits of hiring someone that has a little bit more freedom in their position?
You’ve hit on one of the real hot button issues in employment and that is, how do you deal with the gig economy, the independent contractors, versus an employee? Clearly, a lot of individuals who provide services want to be considered independent contractors. They want the ability to work for Bob one day, for Meranda the next, doing the same thing, but they get involved working for Meranda. Meranda’s got a lot of good work that she keeps feeding them. Over the course of two years, there’s been enough work for Meranda.
They’re working for Meranda because that’s as hard as they want to work or they’re happy with the challenging work but Meranda’s treated them as an independent contractor. From Meranda’s perspective, from the company’s perspective, from the individual’s perspective, everyone is very happy unless for some reason the individual didn’t carry health insurance and has a need for health insurance and then says, “I should have gotten that from my employer because I think I was an employee. I should have gotten pension benefits or something else. You didn’t give that to me. Now I’m going to sue you,” especially after the relationship is terminated.
The government is very clear on their position on that. The government wants to be parental and to find an employment relationship. The government wants to collect unemployment insurance compensation, which you can do for employees but not for independent contractors. The government wants to make sure that individuals are protected against themselves and so when they are providing services, they are building up retirement benefits. They are receiving health insurance. There is a real healthy or unhealthy tension there. Where that’s going to come down, I don’t know right now. It is certainly in the ride-sharing services, particularly in California. California has said these individuals are employees. If your requirement to drive a ride share car is you must have a car that is no older than ten years old, that it must be in good operating condition, that you must keep it clean, that you must greet a ride with a friendly smile.
Now it sounds like the management is controlling the terms and conditions of the working relationship. The management is permitting the individual to suffer, is the term, working for a company. I think you’re going to see in the next couple of years an awful lot of case law, as well as statutory changes at a legislative level come out to deal with the gig economy because clearly, the companies, the individuals providing services want that freedom. The government is very lax to allow that freedom because there are a number of negatives. It’s more and more where we seem to be headed.
You’re putting a hat on backwards. I’m the freelancer and I’m going like, “What do I need to be aware of when I take and sign up on a freelance contract with the company?”
You need to think about are there any restrictions that the company is trying to place on you? I’ll give you an example. We talked about restrictive covenant agreements protecting intellectual property and the way that intellectual property, among other things, is typically protective is some level of the restrictive covenant. “I am going to give you my secret formula. You’re going to use it while you work for me. You agree that in order to protect that for X period of time, six months, a year, following the time our business relationship ends, that you are not going to compete with me.” That’s typical intellectual property protection.
If you’re an independent contractor, you can’t have an agreement like that. You may be able to but it’s very difficult to enforce against an independent contractor. One of the tests of the independent contractor is providing the exact same services to competitors. A lot of so-called freelancers, especially in the arts, creatives and writers, they want to be contracted to write a column for a publication and write a column for another publication. They want to take their column from point A to point B. If you start to restrict that, now you sound more and more like an employee.
I’m now a newly graduated college kid with a degree and no experience and go, “I am going to have to go through the intern python.” What advice do you offer to the intern and employer about working with interns?
That was a common practice up until about a few years ago. Kids coming out of college were told, “Why don’t you come work side by side with our employees. We’ll bring you in as a newly minted college graduate, as an intern for three months. We’re going to bring in eighteen interns. If you’re one of those eighteen, we’re hoping to hire maybe six. Why don’t you come work for us for free for three months and we’ll see who we want to hire?” That was very common. There is no question in that that is not legal. If someone is being classified as an intern, that individual better be an intern. By that, there are a number of different tasks, but the major one is who’s benefiting.
If the individual from an educational perspective is the party that’s benefiting, then maybe you’ve got a stronger argument that the person is in the intern. For instance, she’s a senior in college. She wants to experience in the ad agency. She’s getting college credit for working at the ad agency. The ad agency is spending more time training her than she is providing services. Good chance that person is an intern versus the same individual. She’s just graduated from college. She’s working on creative copy for our company, for their customers and clients. Probably she’s ought to be paid as an employee.
For the business owner, how do you take, protect and provide, to make sure you go like, “I want to give back.” My kids went through intern hell as well. I don’t know what else to call it. In my industry as well, it’s challenging to have an intern on board. What do you do as an employer to make sure you’re trying to give back, but you’re trying to cover yourself too?
Bring somebody on as a part-time employee. Pay the person. Make them know this is a temporary assignment. “I’m going to bring you in. It’s going to be up to a three-month assignment. I’m not guaranteeing that if you don’t show up at work that I’m going to keep paying you. This is what I’m going to pay you. I don’t know that this is long-term or not. It may morph into something else, but here’s what I can offer you right now.”
We’re going to shift gears. Meranda is going to cover some of the sexual harassment areas.
Proactive advice coming from the perspective of a Colorado civil trial lawyer – what are some speed bumps or some ways to rein in and proactively protect yourself or your business from any kind of sexual harassment lawsuits? I know in Colorado, sexual harassment lawsuits are on the rise. We’re not giving any legal advice here, but off the top of your head, what are the easy things that someone can do? For sure call a lawyer or call you, but any ideas to share on that?
From which perspective?
I like from both because I think that your perspective is unique because you do see it from the employer and the employee side. Let’s start with the C-Suite executive. Are there any things that I can do when I’m in a room with a bunch of male executives? The conversation goes awry. Should I be doing anything to protect myself? Should I document it?
The first you’ve got to do is if you are in a position where you’re feeling uncomfortable because of the banter, the treatment, the joking, whatever may be going on, say you’re uncomfortable. Ask others to stop and say, “This makes me uncomfortable. Can we please change the topic?” To protect yourself, at least internally document that request. It doesn’t hurt to take a note and write it down somewhere, whether it’s on your phone or somewhere else and say, “I asked so and so to stop,” because if it doesn’t stop, then now you’re into repeated conduct. You need to document that repeated conduct so when you go to HR, you said a C-Suite executive when you go to the CEO, you have to confront them and say, “I’ve asked for this to be stopped. This is incorrect and this now needs to stop.” If it doesn’t, that’s when you have to reach out to a lawyer.The relationship with the lawyers to the clients is as a fiduciary, and so there is a lot of trust and repose there. Click To Tweet
Being a professional and being in the legal community for 21 years, I think we have a laid-back culture in Denver in all different industries. Sometimes, joking can get out of hand. Sometimes, they can toe a line. It is important even if you can’t stop the conversation – if you are brave enough, because sometimes these things are uncomfortable – to write it down. That advice coming from Colorado employment lawyer that sees this all the time is key from the employee-employer perspective. Training also key for sure and looking at employment manuals. Do you consider that to be once a year thing? Is it once a month thing? How often should a Colorado business owner be looking at these documents?
Employment manuals should be a living and breathing document that certainly ought to be reviewed periodically. That being said, when a client comes to me and says, “We want an appointment manual,” my first question is “Why? Why do you want to document your policies, your procedures? Why did you want to create restrictions on your ability to manage your employees through an employment contract?” For instance, the classic is progressive discipline. Why do you want to put in a progressive discipline policy that your employees otherwise have no right to? You need to look at if you want an employment manual, what do you need?
We talked about job descriptions. It’s probably a good place for those or reference that they’re there, their basic policies. We do not tolerate sexual harassment, but be very careful there because a lot of companies have adopted a zero-tolerance policy. A zero-tolerance policy applies to everybody. When the zero-tolerance policy says, “Sexual harassment includes fourteen sexually suggestive emails,” that’s got to apply to everybody. That means you can fire the janitor because he has fourteen and inappropriate email, but if it’s the EVP who does that, you’ve got to treat the EVP the same way.
You get into discussions about maybe you want to say it’s going to be dealt with, but it’s not a zero tolerance. There’s an opportunity to communicate to somebody that this is not acceptable behavior, “If you do it again, you’re out.” As opposed to zero tolerance that says, “You’re out right now.” Yes, it should be looked at. We prohibit discrimination. That’s not going to change. The definition of what discrimination is, that does morph over time. We talked a little bit about #MeToo. That is something that we see again in the news. One of the potential presidential candidates is a bit of a touchy-feely person who has been informed or accused that his touching of women, rubbing shoulder, a kiss from a politician on a head, made somebody uncomfortable or a number of people uncomfortable.
There are allegations of sexual misconduct but placing them in an uncomfortable position. That was acceptable at one point. That’s what politicians did. Politicians kissed babies, hugged people, shook hands, gave the old kiss on the cheeks. That’s changing. Now, that’s not a good thing you want to be doing. That’s not something I would recommend to anybody including coworkers. You’ve got to think twice. If you see someone, especially in management which is a hugger and likes to hug coworkers, as an HR executive, senior management, you better counsel that person because that’s a potential liability now.
For the audience, this is a general conversation not to be construed as legal advice. For the folks who are going like, “I think I need to reach out,” how do they find you?
The easiest way to find me is through www.Seserman.Law. That’s my website. That gives you my bio. That tells you a little bit about me, my practice, what I’ve done and my background. Someone can send me an email at DSeserman@Seserman.Law or call me at (303) 900-2406. The easiest way in this day and age is to be on my website. Take a look at it. That has all of my contact information. You can send me an email from there.
Meranda said it before. The biggest mistake the audience can make is if you have a question, if you have a concern, call. Don’t sit there and stew on it until you don’t have an option to call. In thinking about the inside of the companies, I have a large population of employees. I have some employees that have a specific skill set and I have a faster-moving employee that develops that same skill set. They move at a different pace, but their compensation level is different. From an employer standpoint, how do you make sure you’re not discriminating against an employee based on your pay scale? We see the pay gap between men and women and it’s an ongoing topic.
The oversimplified answer is to independently, if not blindly, review your employees and their compensation and their job opportunities. It’s not all compensation, but there are opportunities for promotion and advancement. The more you can do that from an objective, blind basis, the better.
What does it mean blind?
You look at someone’s job performance as management. You don’t know the name of the individual, especially if you have a large workforce. You don’t know the gender and the age of the person. You just take a look at that person’s historical performance. Where does that individual fit in terms of compensation, benefits, opportunities? Related to that from an HR perspective, you have to run the opposite analysis, which is when you do see who is getting terminated for poor performance, who is in and up on performance improvement plans, who is being given job opportunities and promotions. Now you need to associate various categories: gender, age, national origin, disability, the whole litany with those individuals to see statistically speaking, is there discrimination here? I don’t want to say statistics don’t lie or statistics do lie, but statistics certainly reveal an awful lot of information. Clearly, in an employment discrimination lawsuit, statistics can stand alone prove discrimination.
It suggests a direction, doesn’t it?
As the population ages, there are more Baby Boomers staying in the workforce. As a business owner, what types of things are you starting to see as it relates to the Baby Boomers side?
I’m seeing Baby Boomers staying in the workforce longer, not retiring at age 60, 65, stretching into 70 and beyond. Also, situations where aging individuals are not as productive as they used to be whether it’s from a mental or a physical ailment. If they worked for a traditional company that gives you raises year after year, then the less productive individual becomes a highly compensated individual. When there is a cutback, the management says, “We’re overpaying. How do we deal with that?” The answer is it’s very dangerous. You have to look at it very carefully. For instance as a lawyer, you have paralegals. We’re going to pay paralegals between X and Y. That’s the pay scale. If a longer service paralegal hits Y, then he or she may not be receiving pay raises because that is the upper side of the pay grade and it becomes bonuses. You may lose that individual, but you have to think about that instead of just pay raise year after year. Where also by default, if you’ve been there since you were 25 and you’re now 55, you have 30 years of pay raises.
One unrelated issue I wanted to just touch on here. Some of the audience might have a general counsel and they might be big enough to have in-house counsel for their company. Do you ever work with in-house counsel on the employment side or on the HR issues that they face?
I feel like it’s impossible to know everything. How would you augment what they’re doing?
It depends on the skill and knowledge set of the GC. A lot of general counsel and this is a very generalized statement, come out of the business side. Their expertise is business law, perhaps securities, but business transactions. It would not be unusual for somebody in that case to say, “David, you practice a lot of employment law. You spend time keeping abreast of what’s going on. I’d like to be able to counsel with you more or call you up occasionally and say, ‘What do we do here?’” Interestingly, most of those relationships that I’ve developed over the years end up being developed because the client gets it.
The initial introduction with the client or the general counsel is as outside counsel where you’re in a fairly intense lawsuit situation, but then the person likes my approach. I was a trial lawyer, but we’re also attorneys and counselors at law. I take the counseling part very seriously. I pride myself that I spent a lot of time helping business owners in particular make decisions and weigh the options. I’m not going to make the decision for them, but I can certainly counsel and guide them in terms of what are the risks from an appointment perspective of going in this direction. “If we want to have restrictive covenant agreements, can you educate us on that because we want to protect the IP?” We want to have everybody sign the same agreement including the janitor and the CEO. Maybe that’s not appropriate. We can engage in that discussion.
There are a number of organizations that rely heavily on volunteers at that level. They go in and they work away and so on. As an organization that has a large group of volunteers, what types of things should I be thinking about as it relates to those folks?
It depends on the size of the organization. There are going to be a lot of factors. In general, you don’t want volunteers becoming employees unpaid labor. That won’t hold up if or when that’s challenged in court. The reason I said the size matters is if you have a huge several hundred employee nonprofit and you have volunteers who occasionally pitch in with their services, that’s okay. You can have someone who’s on the board who’s an accountant, helps out with some accounting, maybe do some management oversight because that individual has the skill.
If that individual now becomes 30 hours a week of volunteer doing bookkeeping, that probably crossed the line. That individual ought to be paid for his or her services. If you have a six-person nonprofit, then the heavy lifting, sometimes there is nobody who has the accounting skill set. Perhaps the basic bookkeeping is done by somebody who’s on the board and says, “I can do this. This is pretty easy. This is what I do for a living. I’ll help out a little bit. We’ve got revenues of $100,000 in this nonprofit. It comes from eight sources.” You have to be careful because most employment laws do apply to nonprofits as well.
I’m acquiring a business and I go, “I’m focused on making sure the documentation, policy procedures and all this stuff.” I reach out to you and say, “I’d like you to take in and have you look through from best in class, first in class or average.” What types of things would you consider doing or do you get that request periodically?It is critical in any business aspect that you have transparency and communication, that you understand what your role and expectations are. Click To Tweet
I get the request periodically, somewhat rarely. The first thing I want to do is learn the business, learn what the goal is of the company. I have a lot of lawsuits I have handled for many years where business owners, management decided they didn’t want to hire a lawyer early on. They went on the internet, they found some form and said, “This seems to do what I want. I want an intellectual property agreement. This is entitled Intellectual Property Agreement. I’m just going to implement that. Good for me, I saved a whole bunch of lawyer fees.” As an attorney, it’s very important that I get to know my client a little bit and understand what my clients’ goals are so that we can create documents that are more enforceable. They absolutely meet the needs of the business whether it’s the business that exists now or if it’s you and you’re about to acquire a business. Maybe we need to look at, what are your goals, what needs to be protected, what is in place and do we need to change those?
Or is there a big risk and you change your offer.
It’s like finding out that you’re about to buy a company and there was a lawsuit out there. You might want to take a reserve against that lawsuit and learn a little bit about it.
I’m a company and I’m trying to make a choice between the board or an advisory committee. What types of advice or things that you’d be concerned about if I was trying to choose between an advisory group versus a board?
Define your term adviser between the board because a lot of people use those interchangeably.
Probably the best way that you could think that it actually fulfilled an advisory role as opposed to a board.
You can have less exposure on an advisory role. It’s a bit like the volunteer on board. You’re not there on the board. You are dealing with a fairly high level and you keep it at that high level. Board, now you have fiduciary and other direct responsibilities. You have direct management oversight. If you are a board member of a corporation, you may be on the compensation committee. That means you have a responsibility for compensation. You may be on the IP or technology committee. Learn your role, learn the expectations. It is critical in any business aspect, whether it’s employment or otherwise that there is transparency and there’s communication, but you understand what your role and expectations are. If you’re in the position of being the delegator, you make sure that anybody who is being delegated to understands your expectations.
I know that Bob helps people sell businesses and handles exit issues. You do something similar when it comes to Colorado law firms. When they’re looking at dissolving or merging, what issues do law firms face? How do you help? Why is your expertise a little bit different?
It’s become a hobby. The first law firm I was with dissolved a number of years ago. Being a former managing partner, I was selected as the liquidating agent, the person responsible for dissolving the law firm. Several years later, I was called by another large law firm in Denver. They were in the process of deciding whether it should wind up business and I ended up being retained to dissolve that law firm as well. I’ve been responsible for the disillusion of the two largest law firm failures in Colorado history. I don’t know if that’s good or bad. There’s nothing like waking up one morning and realizing that you have all of the corporate authority vested in you of a failed 60-year-old law firm. Law firms are not like other businesses. We operate under a number of restrictions.
First of all, the relationship with the lawyers to the clients is as a fiduciary and so there is a lot of trust and repose there. We operate under very stringent ethical guidelines. It’s not like you can just say, “We manufacture widgets. We’re closing up on Tuesday. We’re all walking away. We’re taking all of our inventory and we’re throwing it away.” We can’t. We have to protect our clients. We have to protect our clients’ files. We have to make sure that clients are not harmed by the law firm dissolving. You have to make sure that there’s an appropriate transition. You have to review all the files. You have to make sure that for instance, if I have a will at my law firm, that the law firm, the process of disillusion doesn’t throw away my will.
It’s a very different disillusion and it involves business aspects. It involves legal ethics. It involves an awful lot of common sense, a lot of counseling because the worker bees, the attorneys want to move onto their next project. They don’t care about what’s coming in their law firm. They’re not getting paid from them anymore probably. You want to try to avoid a bunch of lawsuits. I’m pleased that in both situations, there were no lawsuits among former owners or partners of the firm. No one got sued by clients because of the disillusion. You look at some of the national failures and shipping just the opposite. There’s been an awful lot of litigation. It’s an odd hobby, if you will, that I’ve developed.
Law firm dissolution is an interesting practice area. Not a ton of lawyers do this out here. You are honestly one of the only ones I’ve come across. I see a lot of business dissolution, but law firm dissolution, especially in Colorado, doesn’t happen as much as you would think. I do think because of two factors, we’re going to see more of this in the next, I would predict five years. Do you see more of this because of the outside influences of larger national law firms gobbling up the smaller mid-sized law firms in Denver?
- Yes and no. What I’m seeing right now is exactly what you’ve described, which is a lot of national law firms or regional law firms coming into Denver and taking over, acquiring existing firms. That’s not a dissolution situation. That’s an acquisition. All of the responsibilities are transferred to the national law firm. Along with that, I think you will see a number of failures. Your partners decide they don’t want to practice together anymore. They have different business philosophies. It could be a whole bunch of different reasons. It’s also just the economics. Part of the reason you’re seeing a lot of national law firms coming to Colorado is that there are a lot of economic benefits to running the business of a law firm by being very large. You can centralize an awful lot of administrative responsibilities and functions. There are a lot of advantages to being like me, a sole practitioner or a very small firm. There is a lot of efficiency and flexibility that’s there. In between, there are a lot of inefficiencies. A number of those firms, I agree with you. There are numbers of medium-size firms that are subject to failure.Another aspect of this that I’m seeing is called “the silver tsunami.” Traditionally lawyers, doctors – professionals in these areas – they’ll die at their desk. What we see now are people retiring. We’ve got over 40,000 active lawyers here in Colorado and my guess is we’re going to start to see a shift in some of the larger names that we’ve known for years. I think they’re going to start to close or merge, without anybody to transition the practice to is what I’m suggesting.
Historically, and this is a bit oversimplified, lawyers are not the best at transitioning their business. As lawyers, how many hours do you work and what kind of dollars do you bring in are part of how you are assessed internally in a law firm. Also, what is your client base? Do you control X amount of business? Are you responsible for keeping others in the law firm busy? If you leave, will those clients follow you? Because of that, lawyers historically keep their client relationships very close to the vest. Many are guilty of not doing a particularly good job of mentoring, of bringing in that next generation because that next generation might get along better with the next generation of leadership in the client, then that next generation has the ability to walk out the door.
It’s true in a lot of businesses. It’s certainly true in wealth management where you represent grandpa and grandma who founded the business. Those are your friends, but their kids or grandkids take over the business and you want to manage their money as well. You need to develop that relationship with the next generation. Lawyers have struggled with that a lot. One of the things that happen is there is a failure because if I’m the senior partner at a law firm, maybe I decided to leave or I retire as you suggest. Now that client is up for grabs, that client decides to leave. If that client represented a significant percentage of revenue from the law firm, panic sets in. Several lawyers go, “Our profits I can see aren’t going to be as great in the next year. I’m going to jump ship,” then three or four of the profitable lawyers jumped ship. The rest say, “We can’t make it.” I’ve seen that a couple of times. You’re correct. I agree with you. I think there will be a number of law firm dissolution.
In my experience, what I’ve seen is sometimes lawyers can put the blinders on and don’t realize that there is more to practicing law, especially when you own your law firm. There’s a business side of it. Developing that pipeline prevents dissolution. Sometimes lawyers won’t hire other lawyers to help them and I’ve seen a real disconnect with that. Not all business lawyers are created equally. Even lawyers, can’t know everything. Hiring an outside lawyer that has experience in HR, in Colorado Employment Law, can be a big payout in the long run. I’m glad you shared a lot of this stuff. It’s go-to advice.
One of the things I’m pleased about my practice is that among my client base, there are quite a few lawyers and law firms. It’s always nice when you say the feeling of, “My professional colleagues trust me with their employment advice,” or you get a call from somebody that says, “Judge so and so referred you.” My favorite referral of all time was from a court reporter who deals with lawyers all the time. I got a call from her brother and said, “My sister said I need to hire you.” It was a real compliment. I appreciated it.
I sincerely appreciate your candor and sharing your knowledge and we’ll try to do this again.
It’s fun to talk to you, David.
About David Seserman
With more than three decades of experience, David Seserman is one of Colorado’s foremost civil trial attorneys. As the founding member of Seserman Law LLC, David works with businesses and business people as a trusted advocate and ally. He maintains a broad civil litigation practice that has included multiple trials resulting in seven figure verdicts for his clients. He has successfully tried issues involving commercial disputes, wrongful discharge, intellectual property, disability, breach of employment contract, age discrimination, Title VII, and FLSA claims. To each matter that he works on, David brings years of proven results and courtroom experience.
David is a trained mediator and collaborates with professionals and companies in a variety of industries including finance and accounting and real estate. He is hired to resolve the legal issues that they face related to human resources such as employee benefits law, pension, and ERISA claims. As a skilled negotiator, he drafts executive compensation and severance agreements that navigate the complex business and tax issues at play. David is also one of the go-to legal practitioners for law firm dissolution in Denver and has served as the liquidator of the two largest law firm dissolutions in Colorado history.
As a leader in the Colorado legal community, David lectures to business professionals and other lawyers on a variety of topics. His speaking engagements explore the theft of trade secrets, electronic evidence, litigation strategy and tactics, employment law, as well as electronic communications and privacy. David earned his J.D. from the University of Denver College of Law and in law school served as the Business Editor of the Denver University Law Review. David graduated with a Bachelor of Science in Business Administration degree from Washington University in St. Louis.
About Meranda Vierya
Meranda is the owner of Denver Legal Marketing LLC which was founded to bring the value of her years of experience in high level, high impact legal marketing to solo practitioners and law firms.
Meranda enjoys the challenge of helping smaller law firms become more visible to their clients and in the legal community, which grows their reputation and grows their practice. She views law firm marketing holistically, as many big businesses and general counsel do, including diversity and inclusiveness, recruitment and retention programs into marketing strategy.