From changes in pension benefits, to redundancy rights and outgoing packages, employment laws mould the way businesses operate, in terms of human resources, financial impact and regulatory compliance. In order to keep abreast with the latest changes, employment specialist law firm Ogletree Deakins offers expert knowledge and advice for its clients.
Here Carson Burnham, Head of the firm’s International Practice Group, talks to Lawyer Monthly about her thought leadership in this area, and provides insight into the simplest and most complicated of employment benefit issues that can arise, and how these can change from country to country.
On employment matters, what are the most common issues you advise businesses and private clients on?
My clients generally are US headquartered-multinationals with operations outside the States. They must deal with the challenges of managing employees in jurisdictions with employment laws that are dramatically different to those we understand well here, since – outside the US – employees have a contractual right to continued employment on the same or better terms as they move forward through their careers as they did on the day they were hired. From a strategic perspective, this limits any organization’s ability to make decisions that would amount to a unilateral change to terms and conditions of employment. As any leader of an organization will tell you, it is unrealistic to expect to operate in today’s world without changing corporate strategy, which in turn changes people’s jobs. My role is to advise our clients in how to implement those decisions, while staying within the legal framework available to them.
I most frequently advise on carrying out day-to-day management decisions outside the US, such as workforce planning following or in connection with acquisitions, employment terminations, establishing as an employer in a new country, implementing changes to non-US employment policies to make them consistent with one another worldwide, and executive hiring. A large part of my practice also focuses on workplace ethics investigations and their aftermath.
Do you work mostly alone in this arena or alongside a team? How do you apply thought leadership in your work as such?
I lead a team of lawyers in the US, the UK, Germany, Mexico and Canada who work together to resolve our clients’ cross-border matters in a way that works best for them. We also work hand in hand with lawyers from independent firms all over the world. Having come from an in-house environment prior to founding this practice here at Ogletree, I developed a staffing model for matters that is different than what one typically sees in private law practice. Rather than taking a staffing approach where partners have separate cases and associates may be assigned to the case, we approach our matters as a team, assigning two or more senior lawyers to each matter to serve as point of contact for the client and to ensure that we get their work done within their timeframe.
The remainder of the group works to support a project lead however may be necessary at the time, without regard to title. What matters is who has the expertise and how can they help. This means that at any given moment, when one of us is unavailable, others are informed and can step in to maintain our service in line with our clients’ expectations, without having to introduce new people to an issue or to reinvent the wheel. We are all located in separate geographies, so we use technology very effectively to maintain a virtual office. This works wonders in communicating efficiently and ensuring that the entire group knows when support needs to be directed in one direction or another based on urgency. Because the nature of our work requires the ability to operate flexibly across time zones, the dedication that this team has to supporting one another is what makes us successful. We take comfort in knowing we can truly rely on one other to step in and collaborate to take care of our clients.
Have there been any recent US law amendments that would affect the way you work with employment matters?
The continued focus on enforcing the Foreign Corrupt Practices Act on conduct by affiliated entities of US corporations impacts our investigations work, as we know that ethics issues that arise need to be viewed not just as potential violations of local law and not just as local employment- or labor-issues, but need to be reviewed and addressed with the scrutiny applicable in the US under our corporate ethics standard. The increased prevalence of attempts by employees outside the US to raise “whistleblower” claims under Dodd Frank/Sarbanes-Oxley has also affected our work, in that these claims also apply to allegations of corporate fraud on an extraterritorial basis. Although there has not yet been resolution as to whether the whistleblower protections of these laws apply to the claimants themselves, the “bounty” offered by the SEC to these potential claimants is perceived as attractive enough to continue their momentum.
Of wage & hours, contract breach, performance management, disciplinary, redundancy or maternity issues, which incites the most disputes in businesses and why do you think this is?
Redundancy issues. As an initial matter, these are the types of corporate restructurings that are often driven by finance decisions, and the true costs of international layoffs are rarely known to US based Finance teams. Here in the States, we consider layoffs to be generally fixed-costs, whereas abroad – in Central Europe or Asia, for example – what amounts to statutory severance entitlements rarely (if ever) reflects the actual cost of a layoff. In these regions, in fact, there are strict restrictions on the right to terminate for economic reasons, so a company is faced with having to undertake a finance-driven restructuring that would qualify as “unfair dismissal” under local law.
The practical impact of that reality is that companies are often forced to negotiate separations at much higher costs than what would appear if the statutory or contractual severance entitlements in employment contracts were the only consideration. In addition to the frustration this causes for US multinationals at the management level, it causes equal (if not more) frustration in the jurisdictions where these actions are carried out, when employees and/or labor tribunals perceive that Americans neither know nor have respect for employee protections under local law. At a time of incredible pressure at the personal level and at the corporate level, this is often when disputes arise that have long-term effects on an organization’s culture.
You coordinate and implement compensation and benefits practices for businesses worldwide; which jurisdictions would you say cause the most complications for your clients?
France. French employment law is among the most protective in the world, and it is commonplace and culturally acceptable for employees to routinely refuse to accommodate adjustments to rights, compensation or benefits. Further compounding matters, there are intensive and detailed procedures required in order to institute any kind of compensation or benefits practice, the failure to follow which can result in an injunction against an organization. Even when procedures are followed, each affected employee must agree to accept the new programs. The cultural conflict between how businesses operate and how employees consider their jobs described above is best illustrated in this jurisdiction.
How does being a member of the International Labor & Employment Law Committee, as well as many other associations, contribute towards your thought leadership in the global employment arena?
We are continuously growing and developing our service offerings and our teams based on our relationships with good lawyers, all over the world. It is through committee work like this that we are fortunate enough to meet lawyers with an entrepreneurial mindset – who understand that the world is growing smaller and smaller every day in the field of global commerce. We form close professional relationships with one another through our committee work, and develop a nuanced understanding of one another’s strengths such that we can pull together colleagues on a global basis when an urgent need arises for one of our clients. I would not have been able to build this practice and maintain its current trajectory without the generosity of my colleagues all over the world with their time, their ideas and their flexibility. It is an honor for me to be part of a community with the common goal of improving legal services worldwide.