Leadership Competencies

Legal Actions Increasing


I have said before that there seems to be a war going on in this country; it is a war on capitalism and on capitalists.

I believe entrepreneurs are the true heroes of our economy. They take the risks and bear the burdens of business start-up and ownership, and create economic opportunities for the rest of us. It is through their efforts that the economy prospers, mortgages get paid, car loans get paid and kids get sent off to college.

For a number of reasons, the current administration’s strategy seems intent on demonizing capitalists and over-regulating them. For many years, I have worked with individuals who sold the business and used those proceeds to start another business. God bless the serial entrepreneur.

I work with individuals who maxed their credit cards and tapped the savings of many members of their friends and family to launch a business. I don’t understand why these people are so burdened and, in some cases, attacked by a government they financially support, by courts and state human rights commissions and sometimes even through the media.

There’s a very fine article in the April 16 2012 edition of USA Today written by Paul Davidson. He cites some scary statistics: the number of labor related lawsuits filed in 2011 was up 32 percent versus the number filed in 2008. In 2011, there were 7,006 wage-and-hour lawsuits filed in federal court, nearly quadruple the 2000 total. Also in 2011, the Department of Labor “recovered” $225 million in back wages for employees, up 28 percent from fiscal 2010. The Department of Labor has added an additional 300 wage and hour investigators in the past two years, increasing its staff by 40 percent to 1050. The department has stepped up its effort to “protect workers.”  Protecting workers really is a euphemism for attacking business people.

Where is the zeal to protect the employer? The burden of regulation and the cost of violating regulations has grown exponentially. The number of people gaming the system is obvious; ask any business owner who has employees. The Gallagher organization’s research indicates that almost 15 percent of the typical workforce is disengaged and working against management.

My experience in working with owners and management is that if they are guilty of anything, it is being focused on performance and productivity. Most entrepreneurs engaged in start -ups are worried about survival. They are not trying to “screw” their employees out of overtime or any other benefit. Rather, they are trying to follow the rules as they understand them and, at the same time, trying to compete, formulate and exercise good business strategies to grow their businesses.

None of this is likely to change soon, so entrepreneurs must not only work hard, but also work smart. I frequently note how businesses can take steps to minimize, even eliminate their liabilities. Although no system is perfect, being informed and acting accordingly is much better than just hoping you won’t be a target.

Category: Leadership Competencies


About the Author: Steve Cohen

Steve M. Cohen, Ed.D., CMC is President/Partner of Labor Management Advisory Group, Inc. and HR Solutions: On-Call, both based in Kansas City, MO.Often described as a “mess management” expert for his ability to skillfully resolve people prob…

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