Businesses behaving badly (updated, again)

There’s a bad behavior pattern cropping up in business dealings these days: management or owners taking cover behind tough economic times when they cut workers off at the knees.

Three examples are rolling around in my head, one big and well reported, the other two are smaller.

A New York Times story by Nick Bunkley reports that General Motors and Chrysler, after showing 2,000 auto dealers the door last year, are getting some up-close-and-personal attention from the feds. The automakers sent the dealers packing as part of a monster bankruptcy proceeding. But they didn’t reckon with the number of family-owned dealerships willing to call foul.

This isn’t just about money. As the son of one Utah auto-sales dynasty said:  “My mom and dad want their honor back as much as anything…It’s the ultimate showing of disloyalty, after all the years we’ve been loyal to them, to take our stores.”

This is a situation to watch. If the feds slap the automakers and forbid such sweeping “layoffs” and closures, it will dramatically affect bankruptcy reorganizations. Whether that benefits consumers remains to be seen.

The smaller, yet insidious, other examples: I’ve now heard from a few people about what I call the “work-now, pay-later” approach. It’s simple. You the employee put in two or three months at your new job…and THEN you get your first paycheck.

The first person who told me about this practice was a broker in a large Bay Area brokerage; an experienced and successful transplant from a Pacific Northwest firm. He waited three months for the first check…no small challenge when moving to spendy San Francisco. The next story that wafted my way came from a fellow freelancer, in this case an award-winning journalist of considerable stature. She’s writing for one of the biggest news sites on the planet…and the first paycheck came two months after she started.

And this:

An international cosmetic company, let’s call it Terrific Skin Co.,  places its employees at counters in upscale department stores. These workers are in an odd netherland: Not employed by Terrific Skin Co., its huge parent company, nor by the department store.

Instead, a third party, a “staffing agency,” employs them as temporary workers. They have contracts, but the terms all favor the employer. As a result, the Terrific Skin Co. salespeople are often let go without any reason or warning. They may not even be eligible for earned vacation time or anticipated benefits if the axe falls early in their tenure.

This business model is cropping up more often since the economy tanked. It allows operations like Terrific Skin Co. to staff their counters with top-drawer supervisors (licensed skin-care experts in this example) during holidays and sales, then send them packing when things slow down. This model is one that adapts easily to any number of employment scenarios, from department-store counters to basements full of software-code writers.

Worker bees getting delayed paychecks and staffing-agency casualties: Take a leaf from the book of the auto-dealership victims. Tweet, blog, out your employers; complain at city and state levels. Tell the rest of us so we stop buying whatever it is your cheesy bosses are selling.

(Second Update: Check out this blog item from NYTimes about low-wage workers getting routinely cheated.)

(Third update.)