Companies often provide benefits and other financial incentives to encourage better performance or to heighten loyalty. Should a company recover its investment when the employee fails to perform and leaves the company?

A recent Tennessee case highlights the rare instance where an employer successfully recovered its investment in an employee. Sweetwater Hospital agreed to pay for Carpenter’s tuition to become a nurse anesthetist and to release Carpenter from repayment if she remained with the company for five years. When Carpenter finished school she applied for work elsewhere because Sweetwater did not have a nurse anesthetist position. After the company filed its lawsuit, Carpenter filed a counterclaim for breach of contract based on the hospital’s failure to provide a job.

The Court ruled in favor of the company finding that the agreement between the parties did not obligate Sweetwater to provide work, but did require Carpenter to repay the debt. Although the case might be viewed as encouragement for employers to sue employees to recover a company’s investment, the case seems more useful when viewed as a study of the risks faced by a suing employer.

The Sweetwater case highlights issues that should be considered by an employer before filing an action to recover an investment in an employee or a loss caused by a departing employee. First, a claim brought against a former employee risks a retaliatory counterclaim like discrimination, defamation, or breach of contract. Defending a frivolous lawsuit can cost an employer thousands of dollars, oftentimes more than the company’s initial investment or loss. Second, a claim against a former employee to recover an investment or a loss will [Read more...]

On November 10, 2011, the FDIC updated its 2012 Plans to Review Existing Regulations for Continued Effectiveness (“Plans”).  In a relatively short document, the FDIC described its 2012 priorities relating to the implementation of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).  The 2010 law makes major changes to the financial industry including the regulatory responsibilities of the FDIC.  As the implementer of bank closings, the FDIC has received most of the media and community bank attention during the recent economic downturn. Thus, the FDIC’s Plans are big news; for whom?

While lawyers, accountants, consultants, and other experts grapple with the impact of Dodd-Frank on capitalization, ratios, liquidity, and ATM fees, the human resource professional within a community bank must translate the new strategies and solutions into action; i.e., acts performed by real people.  The challenges of the human resource profession in community banks reflect a common problem facing human resources in most industries and businesses; i.e., how to incorporate an avalanche of new regulations into an already complex and crowded legal framework; how to learn and implement an overnight cultural shift towards technology; and how to deal with the ever-present nature of human beings.

The woods are lovely, dark, and deep, But I have promises to keep, And miles to go before I sleep, And miles to go before I sleep.  -Robert Frost 

FDIC’s Plans Effect on Community Banks

The FDIC’s Plans flow from an earlier Executive Order issued on July 11, 2011 in which the President recommended that “independent regulatory agencies” review “existing significant regulations” in order to Develop … a plan … to determine whether any such regulations should be [Read more...]