FIRED My Employee... He SUED ME!!!

Hey, everyone, it's Mike Andes and you're listening to the Business Bootcamp podcast. Today I'm going to be sharing a story about one of my first employees and how they sued me. That is not clickbait. This is a real story, but I want to share the takeaways and what you can learn and what I learned from that experience. Before we get into today's show, a big thank you to today's sponsor, which is Gusto. If you haven't already, go to gusto.combootcamp try out their software completely free for 90 days. That's three times longer than the usual trial on their front page website, and I really think you'll enjoy it. It's great platform to be able to track time, pay benefits, and allow your employees to see where their money is going. Every single paycheck, in terms of all of the taxes and all the rest of it that comes out of their paycheck. So check it out today, go to gusto.combootcamp so, first off, let me tell you the story, and then I tell you three things that I learned and I feel like is valuable for us as employers to know as we get into these situations with employees. So this is the story. So my first couple hires were all people that I knew from church or related to me in some way. And in my opinion, when you're first getting your business started, it's not a bad thing to do that either. Hire people you've worked with in the past, friends, family, relatives, et cetera. The reason I'm not against it at the very beginning is because at the beginning, you really just need people that you can trust. Because usually you don't have the systems and the structure and the organization and team meetings and peer reviews, and you don't have a culture that is pushing people in the direction because there's not a group when you hire the first person, there's not a group of five people that kind of have dictated with their culture what the standards are. So there's no cultural pressure. And so what can happen is a lot of times we need people that we can trust that are going to show up to work, that are going to actually look out for our best interests. They're gonna want the business to succeed. And they're not trying to look for ways to exploit or make money off of us or, like, slack off. They want us to do well. They want the business to do well. And so a lot of times, at the very beginning, your business, I'm not opposed to that as the Business grows and expands. Usually you kind of get rid of those people just because that whole like friend relationship or family relationship starts to wear off as the company gets bigger, you have less of a personal connection with them. They don't see you as much. So a lot of times, as time goes on, if you do hire people that you know and your friends and family up front, usually you kind of. They eventually have to leave. They eventually have to go over the course of the next. The following few years. And that's what happened with us. However.

The first few were all people I knew, people that I was friends with or related to. Me worked out really well. Then I knew, hey, we're going to start growing here. We're going to start expanding. I'm going to go hire people that I don't know anymore. And the very first person that I hired that was not friends and family is the person who sued me. Now, I can't share anything. Like their name. I can't share anything. Some details I can't share because when we settled outside of court, that was part of the agreement, is that you can't share certain information. So what happened? This is what happened. So I hired this individual. He was a lot older than. A lot like our employees at the time. It was like me and my friends, right? So we're talking like 20, 24, 22 years old, like our group that we're getting started the business. And at the time, I would have been 19. And so.

He was the first person. He was in his 40s, had a family. So, okay, this is the real deal. We're starting to grow. We have people that have families and we need to provide and all this sort of thing. And second day on the job.

I get a call from the crew that says he was hurt and that he needed to get picked up. So right away, I dropped what I did. I was doing, canceled my estimates for that day and drove to the property where they were at. It was about 25 minutes away, and picked him up. And. And so he was saying that his back was hurt, right? And I'm not going to. I'm not denying that he was perhaps hurt. What he was saying is that he was on the trailer, the back part of the trailer, the ramp part, and he slipped, fell, and hurt his back. So after further review, as this whole process unfolded, I later went on to find out that he was working for a roofing company that was not licensed, did not pay L and I. And this was his kind of version of being able to get his surgery paid For. And so, of course, though, even once you find that housing employer, you can't use that information. And so in terms of, like, trying to go after them or you can't fire them or say that they did something wrong because their word against yours, like, at the end of the day, there's a very good chance he potentially could have slipped on the ramp. However, he was with another employee. That employee was training him. Therefore, they literally don't go out of each other's sight. And that employee was like, no, he's been going off the job site. When he. When I wasn't around, he went into do things that he knows we shouldn't be doing, which is smart. We don't allow smoking at our company, and it definitely limits our hiring options, but it's definitely a policy, and they knew it. And so what he had already done that day twice, is leave the job site and go into a portable potty, portable bath, toilet, and smoke. And so the other employee that was training him knew that. So they were already in a mood when I showed up and had to pick up this employee that was now, quote, unquote, hurt. And so this is where I made a mistake. And so I'm not saying anything other than I had to learn a lot in this process because I hadn't hired a lot of people I didn't know a lot of regular. So this is what happened. I take pick up this individual from the job site. They're hurt. I take them back to the shop. I have now heard, because I talked to the employee at the job site. I said, you know, what's going on? They shared with me about him leaving the job site, him not being engaged, like, we need to fire this individual anyways, regardless of whether or not he got hurt, basically. So what I should have done is on that drive home, like, hey, you're not a good fit. You know, you're gonna have to find another job somewhere else. You're let go, you're fired, whatever you want to say. However, instead of doing that, I was trying to be nice and said, you know what? You know, since you're hurt and everything, why don't we just go ahead and let you go? Because obviously, you know, we don't want the LNI's rates to go up and all of that for the other crew members. It's not fair to them. And I was trying to be nice in letting him go and losing, like, this logical pattern. But you cannot do that. You cannot fire someone because they got hurt. That's illegal. You cannot do it. You should not do it by the end of the day. What we ended up finding out a week later is that the roofing company he was working for before did not insure, did not have L and I did not have a license. And therefore he was literally coming over to get a surgery done on our bill for L and I, and again, our word against theirs. I was like, I can't take this to court. There's. I don't have proof or evidence of him not slipping and perhaps dislocating that previous injury already. However, I'm not like, that's why we settled outside of court. And. And so basically what ended up happening, I had to take an entire day drive to Seattle, meet with attorneys in their office, sign a check, give him money, and then be done with it. Right. Like, kind of. It was like, over. He can't disclose my name, I can't disclose his name or how much we paid. I paid out for that. It was a big hit. Like when we were first getting started, second year business. Like that was a big hit financially and for the company to kind of get through. But all of that aside, I really could care less about the story. I'm not here to, like, get sympathy over that fact. What I'm trying to do is make a point of what I learned and what hopefully you can learn when you get into the same situation. Because you're going to have an employee that doesn't do a good job. You're going to have an employee that goes against protocol. You're going to have an employee that gets hurt. Stuff like that's going to happen. So here are the three things that I learned. Number one, always, always, always, always call references when you're hiring people. If they don't have references, they are not working for me. I don't care what position is. I don't care if they sound really good, if their interview went really well, if their resume looks impeccable. There's just absolutely, in my opinion, no way to hire someone without calling their previous employer. And we have had people that we thought were lights out, incredible hires, and like, literally trying to already start scheduling them, thinking when they're going to be starting all the rest of it, and then literally come to find out when we call the references that they had just left. That employer didn't return their keys, didn't return their company credit card, didn't return their uniform, said stuff on the way out to all the other employees. Like, those are the things you kind of need to know. Because of course, the employees are saying, you know, I wasn't really a good fit at the last company. Or like, I want to see, I want to change industries or I want to, I want to grow. I want to come up with a company that's going grow and I can have a place to build my career. Of course they're going to say those things. What they're not going to tell you is how that ending, how that ending happened, and what was said and done on that exit out of their previous employer. Whenever an employee is let go, you better be calling that reference, you better be wanting to know why and make sure it aligns up with the employee says. Because sometimes there is just, you know, they're not a good fit. Sometimes there's not a good fit between an employee and an employer, and that's fine. But does their stories align? That's very important. So number one is the numbers. One thing I learned, because I did not call his references, I would have learned. I would have learned that this roofing company was not legit, that they were all under the table, and I would have probably picked up on some stuff if I would have called some references. Number two, know if you are in what's called an at will state, so an at will state is where you do not have to give reason when you fire somebody. So most states in the United States, you need to look this up. If you're, you know, just do at will and then put your state name and it'll tell you if you are an at will state or not. And an at will state means that for any reason at will, you can fire somebody. You don't have to give them a reason. You don't have to give an explanation. There doesn't have to be any sort of. You can literally say you're fired. And that's completely legal in most states. You need to know if it is legal in your state, because there are some that it's not. However, if you are in an at will state, I would recommend when you let someone go, when you fire someone, just tell them they're not a good fit and they need to go find another place and they're fired. That's the easiest way to do it, simply because you're gonna get into a lot of legal tape if they want to make you ruin you. Especially with everything going on right now in terms of racial things and gender issues and all these things happening. You just don't know what someone's gonna come up with. They could make something up like, I got fired because they said I was fat. You just never know what they're gonna come up with. And especially once you have let someone go, they're usually pretty bitter about it. So that's their opportunity to kind of stab you in the back if they want to. Obviously, I have fired some people in the past and we had a long discussion. We've talked about their performance, we've talked about where they could have improved, and that's what I would ideally want. But when there's a toxic hire, like someone that you just do not want to deal with, you just want to get them out of the system, you don't want them around your employees, other employees anymore, and I would just say, hey, look, you're done, Bye bye and see you later. Because if you give any explanation, if you give any reasoning, like I did, I made the mistake of talking to this individual and sharing about giving excuses as to why I was firing him. That was the wrong thing to do. So if you're in an at will state and you want to let someone go and you don't really have any care in terms of like trying to help them in their future, then you should just, bye bye, go bye bye. I would ideally like to sit down, go over what they could improve in all the rest of it. But honestly, that's happened already. I've usually already had a discussion or manager has already had a discussion with them in terms of like, hey, here's where you could perform better, here's where you're lacking, this is where you could improve. All of that's already gone on. So by the time I'm getting to firing them, it's like, look, we're done. You didn't improve after we talked already. So usually at an in and out will state, you just want to be like, you're fired or you're not a good fit here. You should go find a place where you can succeed. Whatever verbiage you want to use, but do not, in my opinion, give too much explanation or description in when you are firing someone if they're toxic and you've already tried to help them. Like when I talk about firing, I'm not like, oh, just fire everyone. Like, we work with them, we try to make them see if there's room for improvement. What can you do better to actually keep your job? And we make it clear before we fire them, like, hey, if you don't improve in these areas, you're not going to be a good fit here and we're going to let you go. And so it's not like Usually it's not like a big surprise for people. They've been talked to several times. All right, number three, don't allow a bad hire. This is the most important one. Don't allow a bad hire to sour you towards building a team and delegating. This is very, very. I still remember driving back from Seattle, it's about a two hour drive, and being like, I am not going to allow this bad situation and what's just gone down to affect the future of what we're trying to do at Augusta. Because I know if we're going to get anywhere with Augusta, I'm going to have to hire people. I'm going to have to trust people, I'm going to have to delegate people. I'm blindly delegate to people and trust them to take care of things. And I was not going to allow that one circumstance and one bad apple to ruin all the rest of what we were trying to do at Augusta. And what can happen is if you allow a bad hire, especially initially in your business, to affect you, then going forward, you don't trust people, you don't delegate. You micromanage. You have your hands in everything. You don't allow people to have their own credit card. You don't allow people to see the bank statements. You don't open up your books to your employees because you're always paranoid about someone trying to take advantage of you and mess you up and sue you or whatever. So I still remember in my mind being like, I am not allowed. Like, this is done, this is over. I learned my lesson. I made a mistake. I shouldn't have said that. And now I am, like, moving on from this. And one of our franchisees recently, his very first employee, on his very first day, they were mowing, doing their thing, and then literally halfway through the day, his employee went across the road to a gas station, got in a car with someone and left. And it was like, he was like, okay. And in his mind, he was like, you know what? He did exactly this. I'm not gonna let that affect me. He went into what he called beast mode and just did the rest of the lawns all himself and knocked it out the rest of the day. Now that's what you have to do. If you do have a bad hire, your first one, you might go through two or three people on your first employee and they're all not good fits. That's very, very discouraging. Especially if you're going to the spring rush, you're really busy, you need an employee. But do not allow that to sour you to trusting other people, allowing your team members to grow within the organization and focusing on the fact that in order, in order to scale, you've got to delegate. You can't do everything. And you're going to need great people and you're going to need to allow to empower them with trust to make decisions without you do not micromanage them. Number four, last thing that I learned from this whole experience is to have an employee handbook. It's very, very simple. It seems very simple, but especially when it comes to labor positions where they're leaving the office and they're going out away from you, you need to have an employee handbook that kind of holds them to the line of what's expected of them, what's kind of the regulations, what's the rules. Do you allow them to text and drive? Do you allow them to smoke on the job? Do you allow drugs? Do you do drug tests? Is there maternity leave? Is there paternity leave? Is there off site meetings that are like everything to do with every single part of your business needs to be spelled in a document. Obviously that needs to make sure it's compliant with your employment laws in your local state. You can just take it to your local labor office and ask them if it's compliant. But you want to have those things in writing. So if you do fire someone, you can say, look, they agreed not to smoke on the job. And it says right here and they signed this, that they read it and that they agreed to these terms and we caught them smoking. Here's a picture from another employee. Like whatever it is, you need it in writing though, especially the gray area. So, for example, in some states you can fire someone and you can make a policy for your company that says you cannot smoke on the job. And if you don't have that in writing though, and you just say, oh, you're fired because you were smoking. You can't do that. But if you had it in writing and you both agreed to that term, to that policy, then you can fire them based upon that reason. Okay, so at the end of the day, you want to have an employee handbook that spells out everything in the business exactly what's expected of them. Have them sign that before you ever allow them to work, even before they come on for a trial period, they need to sign that. So that way if anything goes bad, at the end of the day, you can go back to that document, hold it up and be like, you signed this, this is yours. And you agreed to these terms because a lot of stuff when it comes to employment is not black and white. What time they should show up? What are the repercussions of showing up a couple minutes late? All of that stuff should be spelt out. The protocol for what happens if they like, how should they respond if they need to call out sick? That needs to be spelled out. Who do they contact? What's the deadline before they considered an unexcused absence? Can they call it 7:59 when they're supposed to start at 8:00 and tell you that they're sick for the day? Is that allowed? And then not to show up. These are things that you've got to have spelled out in an employee handbook. And I hope that my experience several years ago is helpful to you so you don't have to make the same mistake. Because trust me, it was not fun. Especially when you're young in your business. It can really, really sour your approach to growing the team. And financially it's. It was a disaster. When I have to write a checkout to someone that I bitterly did not want to have to do that. But anyways, it's watered under the bridge. I hope you learned something, because I certainly did. And I hope that as you hire employees, especially on the field, field workers, laborers that use some of these principles, be able to make a better working environment for them, a greater degree of trust so that they can actually grow and thrive and grow their own career. And you don't have to end up like I did in a lawyer's office writing checks out to people you don't like me. I'm Mike Andes, Business Boot Camp Podcast. Thank you so much for watching. We'll see you on the next video.