I remember going the the ABA’s employment law boondoggle in 2010. Occasionally, I like to get my law geek on.
On the second day, I attended a panel session on emerging sex discrimination issues. One of the panel lawyers was a transgender woman. We were discussing the difference between sex and gender.
In brief, sex is the state of your genitalia (which is no longer entirely dictated by chromosomes). Gender is what you feel inside.
At that moment, I realized that the sex and gender discrimination laws do not specify that they only protect people born one sex or another.
And there is no place where this was going to be a bigger problem than the bathroom. (Edit: Since writing and publishing this blog in 2015, this has come true.)
I started imagining scenarios where a person in the middle of a sex-transition would have to reassign bathrooms. I could see situations where the women might object, or claim to feel unsafe or sexually harassed. (Edit: This has happened now.)
I could see situations where the transgender person would claim to be harassed, rejected or cat-called by male co-workers, and that becoming a sexual harassment case. (Edit: This has happened now.)
I could see situation where an employer, struggling to make everyone happy, makes no one happy. Perhaps the employer makes a third bathroom for the transgender employee, and that person feels singled out as a result.
The relative population of transgender people is small. But recent publicity regarding their civil rights has expanded the law.
For example, the EEOC ruled in June 2015 that a transgender person has a right to use the bathroom that is consistent with their expressed identity. Policies otherwise are discriminatory and prohibited under Title VII. The EEOC’s position is a harbinger of where the law will go either by courts or Congress.
Sex reassignment surgery is none of the employer’s business, so a person can state their preferred gender and the employer must allow for it, without inquiring as to the state of their genitalia.
There will undoubtedly be other employees who will feel uncomfortable about this. It is fairly predictable that there will be women who feel threatened by a biological man (sex) who identifies as a woman (gender) entering the woman’s bathroom.
It is also predictable that this will create religious accommodation issues. Some religions are stricter about segregation between the sexes than others.
Who knew the potty was so complicated?
As usual, the employer is caught in betwixt and between competing human interests. So what do you do?
Well, at this point, the employer should allow people to use the bathroom of their choice. So the employer is going to have to come up with additional accommodations to avoid religious or sexual harassment allegations.
One such accommodation would be to create a third bathroom that anyone who wishes to be “private” can use. Or get rid of segregation of the bathrooms altogether if that is possible.
For many offices, changing the bathroom construction just won’t be practical. For those employers, you will have to counsel people to get along and navigate disputes through diplomacy. Sometimes you will have to tell an employee to accept the use of the bathroom by a transgender person and to work around it.
The employer should not (and in most cases cannot) challenge someone’s stated gender identity and must treat them accordingly, no matter how it competes with the rights, interests and sensibilities of other employees.
We can all argue about whether this is fair or not. But it’s the facts. On balance, it is much more likely that the transgender person will be the harassed rather than the harasser. So balance your policies towards accommodating the transgender person. And respond carefully to all allegations of harassment or predatory behavior.
Eric is really angry. Less than a year ago, he started a business with four guys he knew from friends of friends. They shared the dream of opening a sports bar dedicated to soccer that would serve international beer and bar food.
They found the perfect spot and signed a lease. Eric personally guarateed the lease and put $30,000 down for a deposit. He paid for all the kitchen equipment and hired a contractor to bring the building to code.
His partners (they were all equal according to the one page document he typed up) chipped in for a little while. One brought in some TVs. Another bought some beer and tended bar sometimes. Another pitched in a few thousand dollars to buy some advertising to announce their grand opening.
After a month, the first partner was run out by Eric after taking cash from the till. He never came back.
Then one of the partners got sued for pinching the waitresses. Eric became embroiled because they were not a registered partnership or corporation.
Six months in, Eric ran out of savings before the bar started turning a profit and he got behind on rent. He asked the third partner for money. Instead, the third partner took all the TVs and left.
The waitresses quit because they were paid late. There was no cash for food or beer. And the landlord said that Eric was personally responsible for the five year lease — a debt of $250,000 at least.
After a few more months of barely scraping buy, Eric closes the doors to his dream bar. And the landlord sues.
Although this is a fictional story, I get a call from someone like Eric at least once a month. The details vary, of course. But the story is more or less the same: an erstwhile entrepreneur gets burned by less-than-honest partners or landlords and now has major problems. He’s broke, depressed and ruined.
It’s a really depressing story for an optimistic entrepreneur like me. But sadly, 80% of businesses fail within their first year. And the blow up is usually spectacularly devasting for an owner like Eric.
I am CONVINCED that many businesses would not fail if they had simply started off right. New business owners make a lot of the same mistakes that lead to failure. These include:
- Not organizing legally, following ALL the steps necessary (e.g. just filing an LLC is not good enough)
- Failing to keep professional accounting records from Day 1 and getting into tax problems
- Not having good contracts with business partners and investors (this is one of the biggest mistakes)
- Getting stuck in a bad commercial lease
- Not having adequate resources to deal with all the things a new business must do because of lack of planning or education, which destroys cash flow because of constant traps and problems
- Failing to follow good employment and pay practices from Day 1
- Underestimating what starting and running a successful business takes
Eric didn’t call me before starting his business. If he had, I would’ve given him my ebook, How to Start A Business… Legally: A Quick and Easy Checklist.
I cannot stress this enough. Getting set up right and under the guidance of someone who has started or help start many businesses will save you thousands of dolalrs and help prevent failure.
Someone like Eric spends $100,000 to open his bar, only to crash and burn in just a few months. Now he’s liable for another $250,000 just with a broken lease…. There are still employee liabilities and taxes to deal with (and that’s if the partners all just disappear). His legal fees with me are going to be a minimum of $50,000. Alternatively, he will bankrupt and lose everything.
In a more perfect universe, Eric would have come to me a year ago. He would have hired me for between $5000 and $18000 and I would’ve helped him set up everything and given him the benefit of my years experience in business start ups.
He would’ve avoided the bad partners, the bad lease, the sexual harassment lawsuit and the waitresses quitting.
He also would have been on track to avoid the plethora of other problems that come from starting a business.
And then his $100,000 investment would not have been such a hopeless risk!
If I practiced law just for money, I would rather have people like Eric pay me $50,000 or more to pick up the broken pieces of their dreams and help them move on.
But I’d rather more small businesses be successful. And the odds of that are much improved when you invest in the foundation when you start up.
Either way, you’ll be calling me.
Last December, the license plates were stolen off my company car in San Diego. As I was in Saint Louis, I requested replacement plates by mail. But the DMV rejected my request because I did not send the original title. This was pretty frustrating because, when I bought the car in 2013, I sent in the original title with a request for transfer to my name. The DMV sent me back a photocopy of the title and then refused to register the car because all I had was a photocopy of the title. It took me a full year to get the car registered. I still haven’t received the title.
When my request was rejected, I knew that I would have to personally go to the DMV to try to get plates.
When I arrived back in San Diego, my imagination started to run. I worried that they would not help me and that I would waste days at the DMV filling out forms. I worried that I would never get the title and could never sell the car. I worried that I would have to take legal action to get the title. I worried that the car would get impounded for not having plates and that I would lose it or have to pay thousands to get it released. I worried that I would go to the DMV and have a frustration meltdown with the clerk and get arrested.
So I avoided it. It took me three weeks to go to the DMV. In the meantime, my staff was driving around without plates. And I was very aware of how dumb and risky that is.
Everyone indulges in avoidance behavior. It happens all the time.
The phone rings and you know it is someone calling about a bill you forgot to pay. You avoid the call because you have no good answer for the person on the other end of the phone. Maybe you ordered some inventory based upon a purchase order and your customer reneged. Now you owe for the inventory and your cash flow doesn’t support paying the bill.
Or maybe you are waiting for a check from your biggest client and, once it comes in, you can pay the bill that’s been sitting on your desk for two months. So you don’t take that phone call because you don’t want to have the difficult conversation.
Here’s another common scenario: You receive a letter from a lawyer or a government agency. You open the letter and it’s bad news. They want something. Usually it’s money. You don’t reply to the letter because you don’t know what to say. Then you ignore all the letters that follow. Or maybe you don’t open any of them at all, and send them straight to the trash can.
This behavior is dangerous.
Because, most of the time, these situations do not resolve through lack of action.
In fact, ignoring phone calls and letters can lead to horrible and unnecessary consequences. Ignoring letters from lawyers and governmental agencies can lead to loss of money, loss of your business, and, in a few rare instances, loss of your freedom. That’s why you need to be proactive in handling difficult conversations related to business activities.
If funds are short, accommodations can almost always be made between parties. If performance is the issue, discussing the barriers will help everyone understand the reality. This is always better than waiting to “see what happens.” If there is some other issue, a conversation at least brings peace of mind.
The thing to remember is: Everyone has been in your shoes.
If you have a difficult time thinking about responding to a notice because you are clearly in the wrong, you must realize everyone makes mistakes. Mistakes can be fixed, but you have to face them. The person on the other end of the phone or the writer of that letter has probably been in the same (or a similar position) in his career.
Don’t let your thoughts carry you away to the worst-case scenario.
The worst-case scenario rarely happens. When I mustered my courage and went to the DMV, for example, the clerk said, “you must be very frustrated,” fixed the problem, and gave me new plates, all within 30 minutes. I suffered from all those anxieties for nothing! I felt both silly and relieved.
And in my many years of practice, I have never had a situation spiral to the “worst-case scenario” once I got involved. When you face things and proactively deal with them, usually the worst-case doesn’t happen.
If you are concerned about the worst possible outcome, call me and we can discuss possible responses.
In many cases, I can teach you what to say and how to say it. Or I can speak for you. I can also help you with a follow-up letter to a business demand that will keep your relationship in tact and offer you relief.
In some cases, (like a letter from a governmental agency) any response you provide can be used against you. Those are times you definitely want me to help out.
No matter what, ignoring the problem will only make it worse.
Always take action to resolve the problem. You will feel relieved when you do!
But before you do, contact me.
We can discuss the situation and create a plan for your response.
This is not just good business advice. It is good advice for your health and emotional well-being.