Thoughts from a Management Lawyer

Black Sheep and Disruptive Innovation

I've been giving some thought of late to the so called organizational "black sheep" - you know, the contrarians, "malcontents" and those that don't tow the company line (in fact, they might not even be aware that there is a company line or care that one exists if they are aware of it).

I was reminded (thanks to Tim Corcoran for his excellent post) of an interview with two-time Oscar-winning director Brad Bird of Pixar.  Bird's first project at Pixar was the The Incredibles.  When he showed the technical teams story reels of his vision for the movie, they "turned white" and said that it would take "ten years and cost $500 million. How are we possibly going to do this?"  Did Bird cave?  Did he simply compromise his creative vision in favour of the tried and true? 

To the contrary, he said:

"Give us the black sheep. I want artists who are frustrated. I want the ones who have another way of doing things that nobody’s listening to. Give us all the guys who are probably headed out the door.” A lot of them were malcontents because they saw different ways of doing things, but there was little opportunity to try them, since the established way was working very, very well.

We gave the black sheep a chance to prove their theories, and we changed the way a number of things are done here. For less money per minute than was spent on the previous film, Finding Nemo, we did a movie that had three times the number of sets and had everything that was hard to do.  All this because the heads of Pixar gave us leave to try crazy ideas."

That last sentence is worth repeating:  "All this because the heads of Pixar gave us leave to try crazy ideas." 

Some would see Bird's request, to put it politely, as a tremendous risk.  Bird saw it as the only way to do what he knew had to be done to achieve his creative vision.  Same old, same old wasn't going to do it.  Only disruptive innovation attained through unrestrained freedom to do "crazy" things was going to do that.

How many organizations would do what Pixar did?   How many organizations are a singularly and consistently on the cutting edge of their industry?  How many would have the maturity and confidence to engage and empowere the "malcontents" rather than show them the door? 

In my experience, most companies view the so-called malcontents and contrarians as disruptive forces that have to be "brought in line" with the "common corporate vision" or sent on their way.  They try to change them rather than exploit the fact that they see things differently.  Pixar's success is surely owed, in some part, to the fact that they saw the "black-sheep" as a strength. 

I am reminded of an excellent book by James Surowiecki called The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. When you surround yourself with people holding different points of view, perspectives and information you make better decisions than if you sought the opinions of a homogeneous group holding identical, uniform or consistent opinions and views. 

Labour relations is all about your point of view

The Fraser Institute has released its 2009 edition of Labour Relations Laws in Canada and the United States - An Empirical Comparison and it is sure to generate some healthy debate.  Here's the blurb about the study and the perspective:

"This study is the third installment of a long-term project to evaluate the extent to which labour relations laws bring flexibility to the labour market while balancing the needs of employers, employees, and unions. Balanced labour laws are crucial in creating and maintaining an environment that encourages productive economic activity. Labour relations laws inhibit the proper functioning of a labour market and thus reduce its performance when they favour one group over another or are overly prescriptive through the imposition of resolutions to labour disputes rather than fostering negotiation among employers, employees, and unions. Empirical evidence from around the world indicates that jurisdictions with flexible labour markets have more productive labour markets (higher job creation rates, lower unemployment, and higher incomes) which produce a higher standard of living."

The general conclusion of this study is that:

"Overall the trend is clear. US states tend to have balanced labour relations laws focused on providing workers and employers with choice and flexibility. Canadian jurisdictions, on the other hand, generally maintain much more biased and prescriptive labour relations laws."

Whether you accept this conclusion depends, in part, on your own definition of balance and your particular view of the world.  There are many who would not want to emulate US labour laws and would see them as favouring one side over the other - again, it depends on your point of view. 

For example, this blog post from the President of the Saskatchewan Federation of Labour comes at it from a different perspective. 

The debate about balance in labour relations is one that seems irreconcilable.  We see labour laws used as part of the platform of most political parties where they propose to "right the ship" by bringing their view of balance to labour relations. 

As an example, when the NDP came to power in Ontario in the early 1990's  they did so on a platform of labour relations reform.  They quickly re-wrote the Labour Relations Act to, arguably, make it easier for employees to organize and, some would argue, tilt the balance in favour of labour and the unions.  When the NDP lost power to the Conservatives who successfully campaigned on the platform of the "common sense revolution", they repealed the NDP's reforms (Bill 7) in favour of "balance" through free choice.  Some argued that this unjustifiably shifted the balance too far in favour of the employer.  Then the Liberals beat out the Conservative and they take the opportunity to implement their view of balanced labour relations by re-pealing some of the Conservative government's reforms.

Who's right and who's wrong?  In the end, and like in so many areas in life, it depends on your perspective.

A Reminder about What We (Lawyers) Do

Patrick Lamb has been blogging for a long time and I've been following his writing for years.  While I've never met him or, for that matter, spoken to him (though I'd like to), I've found his insights to be so on the money.  He's a true rebel. Don't believe me?  The ABA labeled him as such.  Need more proof?  Check out his firm Valorem.

Recently, Patrick discussed the matter of advice.  It's not complicated - people pay us for our advice.  Pretty straightforward.  But what sometimes happens is that either no advice is given at all (this usually starts and ends with "you can't" or by quoting law but without taking it to the next level - providing a practical opinion) or advice is given that is so qualified that it can barely be called advice at all. There's nothing easier (or safer) than siting on the fence, but that's not what we get paid for.

Patrick puts it far more eloquently than I could:

A client has an inherent, unqualified right to know what his or her lawyer thinks, what the lawyer would decide if he or she was the "decider."  Sure, it can be a close call with no sure right or wrong answer.  I'm sure client's react by saying "easy decisions never make it this far north in the organization and we live with incomplete information and uncertainty every minute of every day. Welcome to my world, now get over yourself and TELL ME WHAT YOU THINK."

It is amazing that lawyers don't have their hands cut off just so they can't say "on the one hand ..."

This is a great reminder well worth taking to heart.

"Never let a crisis go to waste."

What a wonderful quote that is.  I wish I could take credit for coming up with it but I can't.  In fact, I lifted  it from a Harvard Business School Working Knowledge article Building Businesses in Turbulent Times and specifically in answer to this question:

Q: Is a recession really the time for a company to make major changes?

A: Change is coming anyway, so leaders need to take control. At HBS, our motto is, "Never let a crisis go to waste." The major dislocations happening in industries around the world give companies a great opportunity to lay the foundation for the future. Because everyone acknowledges the current crisis, they often readily accept restructuring and changes that were not possible in the past—even if change has been needed for some time....

Companies are making changes.  Some drastic others more subtle, but all are trying to do things  that they believe, based on whatever analysis and thinking they've done, will allow them to survive the current crisis and come out the other end with a viable and profitable business.  Mindset is important as companies engage in change.  That mindset, and I will unrepentantly borrow again, is "I'm not just going to survive—I'm going to thrive."

Not a law post, but lots of good information in this article for anyone contemplating change in their business or interested in innovation in these times.

Happy Holidays!

I wish you all a happy, restful and safe holiday!

I look forward to another year of blogging (just not for the next couple of weeks) and thank you for your readership. This year promises to be very interesting.

A New Labour (actually Labor) and Employment Blog

Those who follow this blog have read a number of posts mentioning Michael Maslanska who is the managing partner of the Dallas office of Ford & Harrison, a leading US labor and employment law boutique with offices across the country.

Well, Mike has recently started a blog called Work Matters that is well worth checking out and adding to your list of daily reads.   Though the blog is, obviously, written from a U.S. perspective, many of the topics that Mike writes about (on the blog as well as in the Texas Lawyer, where he writes the Work Matters column) have a universal application.

Welcome, Mike! 

HR (Finally) Gets a Seat at the Table? Apparently, Not

Another in a long line of articles on the disconnect between HR and the business comes to us from Management Issues:

While, CFOs and CTOs are forging new working relationships and creating business cases for processes, programmes and technologies that track financial outcomes, HR as a whole is, by and large, not proactive enough to become a proper, strategic partner, it argued.

As an outsider (sort of), it seems so self-evident that HR should have a significant role at the boardroom table.  Yet, study after study and article after article suggests that, for a variety of reasons, they do not.  Some of the reasons (a good number of them in fact) relate to how they are perceived by business leaders. 

It's not enough to say, as the article appears to, that "we are a valuable asset and should have a central role in the strategic direction of the business".  To quote Neil Peart "show, don't tell" appears to be the lesson here as CFOs and CTOs have learned. 

Your Help is Needed

As readers of this blog may know, I am an Adjunct Professor at Woodsworth College, University of Toronto, where I have taught the employment law course for the last 10 years.  I'm in the process of updating the course book for September.

I need your help in pulling together some of the more important employment law cases decided over the past 12 months in Ontario or coming out of Ontario.  Not labour cases or human rights or other cases of that nature.  Just pure employment law cases. 

So, as an example, Keays which came out of Ontario is on the list as is Wronko from the Court of Appeal. 

I would be tremendously grateful if you could either leave a comment or send me an email with your suggestions of some important Ontario employment cases that have come out of any level of court in the past 12 months or so. 

Thanks in advance for any help you can offer.

Where Have all the One Day Cases Gone? Part II

My earlier post on this topic has generated some discussion (which is great) and I have received a number of email, including from some arbitrators who have also given this subject considerable thought. 

Norm Jesin, an experienced arbitrator and vice-chair at the Ontario Labour Relations emailed me and gave me permission to post his comments here.  Here is the email in it's entirety:

Michael

I have just been referred to your blog of June 21 regarding the reasons for the disappearance of the one day hearing.

You have touched on a matter that has been of great interest to me when I was in practice and now as an arbitrator.

I agree that mediation is important but should not be persisted with when it is clearly futile.

More importantly, I do think that too many hearings take too long, - especially given the relative importance of the issues involved. I recently talked about this at the 6 minute lawyer conference chaired by your colleague – Matt Certosimo. I am now encouraging parties to avoid evidence wherever possible by simply relying on a pleading like version of the facts. When parties agree, we reserve their opportunities to present particular evidence that may be crucial and contested. However, I have found that many cases can still be conducted at a much quicker pace and many may even be completed in a day or less – if the parties wish to be cooperative (that is Key) in a speedy, but still substantive process. I also believe that there are more and more arbitrators conducting themselves with the intent of having a less costly process.

You may feel free to post these comments on your blog if you wish.

Thanks

Norm Jesin

Thanks for your email Norm, it's much appreciated.  It's great to get the perspective from the decision maker.

Norm's comment about arbitrators trying to adopt ways of more expeditiously dealing with the issues is well taken.  It must be frustrating in some ways for arbitrators (and it's not something I've thought too much about from that perspective) because, in the end, they can make a suggestion about the process but, really, they are at the mercy of the parties who will have to "agree" to whatever the process is for running the case.   We are, as lawyers, trained to conduct hearings in a particular way (opening statements, present your evidence, examine, cross-examine, closing).  It's a bit of a security blanket in some ways that we're loathe to give up.  Maybe we (really, "I") need to be more attuned to the arbitrator's suggestion regarding process or at least more thoughtful and patient when it comes to a suggestion as to process that is a little (or a lot) different from the one that we're used to?   

In many situations, not all of course, there's a better and more efficient way of running the hearing that might be more in line with the "historical" process than the process that it has morphed into.  In the end, if the case can be done more efficiently, everyone wins and that's probably the only time in an adjudicative process that you can say that.

Where Have all the One Day Cases Gone?

The other day I was asked by a client (I will paraphrase the question) "where have all the one day cases gone?"  In other words, why can't (most) arbitration cases be completed in one day?  It's a great question.

When I was just starting my undergraduate degree in Industrial Relations I took the standard intro course.  My first paper in university was about the advantages of labour arbitration process.  In my research I came across all kinds of information and recall listing the following:

1. Speed and efficiency
2. Cost
3. Informality
4. Expertise

This was back in 1986 (it's hard to believe). 

I recall writing that arbitration is "great" as compared to the courts because you get into a hearing quickly, you get a decision quickly, the rules of evidence are somewhat relaxed, thus giving the process an air of informality that is designed to get at the heart of the issue, you are before an expert who is intimately familiar with the nuances of labour relations. Because of all of this, the workplace parties are able to address their disputes in a timely and cost effective way and then move on.

What's changed?  Here's my thoughts on "where have all the one day cases gone?" (and why it takes longer to conclude a hearing). You can still do a one day case, but it's less common that in the past for a number of reasons: 

1. The issues that go to arbitration have become much more complex;
2. The stakes of many cases that get to arbitration for the workplace parties are significantly greater than in the past;
3. The jurisdiction of the arbitrator to hear matters has greatly expanded to include non-traditional labour claims such as, depending on the case and the collective agreement, defamation and other tort type claims;
4. The arbitration process has become increasingly legalistic, formal and court-like.  As an example, the rules of evidence have, historically, been relaxed at arbitration.  That is still the case, in some respects, but evidentiary issues are increasingly being raised and argued.  This, I think, is inevitable given the issues that come before arbitrators, the complexity and significance of those.  The admission of video evidence is a hotly litigated issue these days with arbitrators in Ontario at least falling into two camps (relevance (we'll admit it if it's relevant to the issue) vs. reasonableness (we need to balance the interests of the employer and employee).  There are other examples, but the point is that the rules of evidence are becoming more formalized and court-like.  Again, historically courts have dealt with various tort claims.  Since the Supreme Court of Canada case in Weber, those have, with more regularity, been found to come within the purview of the arbitrator.  So, it's not surprising that more court-like-formality would be injected into the process (and that's not necessarily a bad thing given that the outcome of the arbitration would be as significant as if the issue had been decided by a judge, as was the case in the past)
5. The start of the hearing is often delayed.  Off the top, there are at least a couple of reasons for this.  First, there is a propensity to mediate every case.  I am a huge fan of mediation and believe that most cases can be successfully resolved through mediation if the parties are prepared to compromise and exercise some degree of creativity.  But there are some cases that simply need to be litigated and a decision written by a third party.  There are many and varied reasons for this, including political reasons.  In those cases, where mediation is undertaken, it turns out to be a futile, often frustrating, waste of time and money for everyone that, in the end, does nothing more than delay the hearing.  To the extent that blame lies anywhere here, it lies, in my view, on the representatives of the employer and the union.  It is for them to shut down the process at the earliest opportunity where one or the other is of the view that mediation is simply wasting time.  Many counsel and clients are afraid of offending the arbitrator where he or she has proposed mediation by saying, in effect, "thanks but no thanks".  They don't want to be seen as the impediment to a process that the arbitrator him or herself has proposed.  I, for one, am more concerned about offending my client by having them unwillingly participate in a process that, in the end, they have no desire to be involved in and which simply delays the start of the hearing and increases their costs.  Arbitrators who propose mediation are trying to be helpful to the parties and do not know the internal dynamics behind the case.  They are not there to be obstructionist nor are they there to offend or upset anyone.  They are trying to help.  I believe that they appreciate counsel politely but candidly shutting down the process at an early stage rather than allow it to continue simply because the client or the lawyer doesn't want to be seen as "the bad guy".  The second reason why hearings are delayed is because, on day 1, the parties spend time dealing with a whole range of preliminary or pre-hearing matters such as the sufficiency of production of documents and particulars.  The outcome is more often than not an adjournment with further delays in the start of the case.  These are matters that are more appropriately dealt with prior to the start of the hearing between the lawyers or parties.  If the grievance procedure is truly about exchanging information about your position with a view to exposing strengths and weaknesses in an open and candid way with a view to determining if the case can be resolved short of arbitration, then there's really no reason for learning the other side's case on day 1.  Historically, arbitration has been about ambush (many took pride in the fact that this distinguished arbitration from court).  That is less so today and, in the end, keeping things close to the vest simply results in further delay and cost.
6. Agreeing on the evidence (facts) is happening with less frequency.  If the parties can put together an "Agreed Statement of Fact" the case will run more efficiently.  Too often, though, time is not spent in advance of the hearing on this with the result that, on Day 1, the parties try to hammer out some agreement in the morning or simply forge ahead and call the evidence on all issues, even those that are not in dispute.
7. Scheduling is more difficult than ever before.  Recognizing that one day cases are few and far between, scheduling a date is tough, scheduling continuation dates is tougher and getting consecutive dates is tougher still.  The most frustrating part of my work is scheduling.  It takes forever, you get a date in November, then another in May, then one in June and so on until the case is done.  This is inevitable, lawyers, clients, witnesses and arbitrators are busy and it is difficult to reconcile schedules.  I'm not certain that there's a solution to this.
   
8. The time between the last day of hearing and the release of the decision.  Because cases take longer to complete, the evidence is more involved and the issues more complicated the day of the "bottom line" decision issued on the last day of hearing with "reasons to follow" is simply unheard of anymore.  Instead, the workplace parties wait for weeks and, more commonly, months for the release of the decision with all of the uncertainty that waiting entails.  For example, in a discharge case, the proverbial "clock is ticking" on damages while on an interpretation of the collective agreement case, the parties might be dealing with an on-going dispute (say about scheduling) that has a continuing element to it that hangs over the parties.  This is not a criticism in any way, simply an acknowledgment that writing a decision takes time, especially given the complexity of issues that come to arbitration.  

Well, these are my thoughts on why the day of the one day case is, largely, behind us and why arbitration takes more time to complete than in the past. 

As always, I am very interested in your thoughts.  Comments are open and if you are concerned about anonymity and don't want to leave a comment, please email me (I will not disclose anything you send me).  I'm also interested in whether this is a problem in other jurisdictions and, if so, what if anything, has been done to try to deal with the issue.