Amendment 55 – Prohibit Firing Employees

This initiative will essentially make it impossible to fire an employee. Yes the initiative says you can fire for “Just Cause”, but the courts make that determination, and if they disagree can award back pay and force reinstatement of the employee. The potential penalty is so severe that companies will not be able to afford the risk.

And there is not even a probationary period. If from the first day of work a new employee is a disaster – too bad.

Further info at Colorado Ballot – The misnamed Just Cause for Employee Discharge Initiative.

Arguments Against

Lets look at high-tech start-ups because they are the job engine for high-tech job growth. Most of them fail. Of the ones that succeed, most of them come very close to failing several times before they finally make it. It is a very tough Darwinian environment where you have to be very good, react very quickly, and have an idea that people actually will pay for once it’s delivered. And the people who put money into these ideas have to look for the ones where the odds, while bad, are better than any of the other opportunities.

So what does this initiative do to start-up companies? It kills them.

  • Start-ups fire people who are competent. Because competent is not sufficient, to survive in the start-up world you need people who are incredibly good (the rule of thumb is the top 5%). Having to hang on to people who are average (or god forbid mediocre) means we get beat by another company that is staffed with superstars.
  • Start-ups fire superstars. Because how well a team works together has a larger impact on success than the skills of any individual. So someone who is the best programmer, but does not play well with others, is actually a detriment to the team as a whole.
  • Managers make mistakes. In a start-up you have to make decisions quickly. By definition some of those decisions are wrong. But if you make sure on every decision, once again you’re out of business. So at times you fire people who were competent, and would have done a good job, but you made a bad decision.
  • Lets say they are clearly incompetent. We hired (on contract) a sales team who’s job was to call leads. And they were required to work at least 20 hours/week. So when we ended the contract and ended up in court as to was it “for cause,” even though the sales team admitted they had made a total of 1 call over 2 months and had worked under 20 hours some weeks, the judge still found it was not for cause (and we had to pay for an additional 30 days of time). So even if someone is clearly incompetent, that doesn’t mean a judge will agree.

So what does the above do to startup companies (which grow to over 20 people quite quickly)? They will get saddled with incompetents. And that will have a devastating effect on morale as the others then have to work even harder to make up for these boat-anchors. A successful start-up is a group of people that are putting their heart and soul into making a long-shot a success. This kills that drive.

And so what happens to the venture capital money? Venture capitalists aren’t stupid – that money all goes out of state to places where a company can fire those they need to fire. For really good ideas they will tell people that if they move to any other state, they will fund them. Which is ironical since we presently have people moving to Colorado for the start-up environment here.

In short, rather than building on the companies we presently have here and possibly becoming the top place in the country for renewable energy start-ups, this will stop virtually all future start-ups and piss away what we presently have. This puts Colorado on the road to an economy where the only businesses here are ones that must be here such as mineral extraction & retail. For any company that can locate elsewhere, it will.

High-tech companies compete world-wide. They derive no advantage from a geographical location. Nor do they derive an advantage from being inside the U.S. They have competitors located in both China and India and their location also has no impact on who wins sales. They successfully compete against these other companies while paying higher salaries, health insurance, more in taxes, etc. But they can’t compete with this proposed albatross around their neck.

And here’s the kicker, when they go out of business, there’s no jobs. Even if this level of job protection is imposed, when a company shuts down, all the jobs are gone. So if you impose iron-clad job protection for all employees at a 55 employee start-up, you have not protected those 55 people from being fired – you have destroyed those 55 jobs.

Arguments For

This measure provides employees of private-sector companies with the same protections available to most government employees and employees protected by collective bargaining agreements.

Vote NO! Devastating Impact Vote No

This is without question the most damaging proposal on this year’s ballot (56 is a close second).

Companies that are based on highly skilled knowledge workers cannot succeed if forced to retain those that can’t do their job. It’s not they they will not do as well – they will fail. Software companies, bio-tech companies, renewable energy companies – they all compete in a global market where location in Colorado provides no competitive benefits.

These companies will have to either move… or go out of business. If we are going to drive out these types of companies, what are we left with? This puts us on the path to have an economy like Mississippi where the available jobs are low-paying blue-collar jobs along with high unemployment.

Finally, this does not protect the job, it protects the bozo presently holding the job. When a company fires someone, it’s rarely a downsizing, it’s because they need someone better. So the job still exists, it’s just they will offer it to someone else. So this initiative does not protect jobs per-se, it merely protects the person presently in that job who is inadequate for the position.

In addition, to continue with the incredibly successful Colorado Labor Peace Act of 1943, this (and the other 6 peace act violators) must be defeated.

My vote on Amentment 55

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26 Community Comments, Facebook Comments

  1. sxp151 says:

    I thought there was a deal to take this and the health care proposal off the ballot, in exchange for something or other.

    • DavidThi808 says:

      But everyone involved has suddenly gone quiet. So who knows…

      • Lone Wolf McQuade says:

        Although it is necessary for these to be taken off of the ballot, how can you call the scenario that Libertad laid out anything but extortion on the part of the labor Unions?

        This is blackmail! This is outrageous!

        Oh, never mind this is just business as usual.  Just another day at the office for the Union Bosses.

        • DavidThi808 says:

          Three initiatives that would destroy unions were put on the ballot, the unions responded with 4 initiatives that would destroy businesses.

          And the fact that the unions are willing to pull theirs shows them to be the grown-up in this case.

          • BlueCat says:

            The unions built the broadest most prosperous middle classin the world here and, ever since Reagan, the unions AND the lower and middle classes have been on the losing end of class warfare.  

            The union measures are back against the wall defense of the working American even though  so many of today’s working Americans have been bamboozled into thinking the party of the corporate elite is on their side.

            But then so many of them are the type who keep voting on the basis of issues like abortion, which the conservative Rs they elect never actually DO anything much about, instead of on their own power and prosperity.

            They don’t seem to notice that while the anti-union forces scare them about job loss, it’s the economy those same voices promote that keeps losing well paying jobs and replacing them with garbage, or as is now the case, nothing.

            The best years of steady improvement for the overwhelming majority were the years of union growth and strength.

            • Bondo says:

              People often point to a decline in unions and a decline in real wages and say “see, it’s unions.” But this is misleading…a lot of the reason we see a decline is the massive increase in health care costs. If you include health care, I imagine compensation may well be increasing still. And the unions are in part to blame for tying health care to employment and making it harder to adopt sound national policy like every other developed country. Health care reform failed in ’93-94 not because of ideological aversion to a different health care system, but because the people who do have health insurance (no matter how inefficient and costly) are often fearful of the change.

              Moreover, union decline lately has a lot to do with changes in the nature of the economy (more global). The main problem for lower/middle class is not the decline of unions but the failure of government to put any reasonable policies in place to capitalize on the benefits of global trade in a way that benefits everyone. Unions really cannot do much about it, it will come down to the politicians.

              P.S. The accuracy of the “What’s The Matter With Kansas” argument is in dispute…poor people vote Democrat, wealthy people vote Republican, on average.

        • Libertad says:

          Whoever in any way obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires to do so … shall be fined under this title or imprisoned not more than twenty years, or both.

          The Hobbs Anti-Racketeering Act of 1946 (P.L. 79-486, 60 Stat. 420), passed as an amendment to the Anti-Racketeering Act of 1934, was part of Congress’s efforts to combat labor racketeering and the activities of organized crime. Like its predecessor, the Hobbs Act prescribes heavy criminal penalties for acts of robbery or extortion that affect interstate commerce. The courts have interpreted the Hobbs Act broadly, requiring only a minimal effect on interstate commerce to justify the exercise of federal jurisdiction, and interpreting the concept of extortion to cover receipt of bribes by public officials. As a result, the Hobbs Act has been used as the basis for federal prosecutions in situations not apparently contemplated by Congress in 1946, including intrastate robberies and public corruption.

        • tallport says:

          Negotiating is not extortion.  On the other hand, attacking unions because they want to expand could be called extortion.   Federal law guarantees people the right to form and join unions, but you do not care about the law do you?  Employers should need “just cause” to fire somebody.  That is why we have “due process of law” and “equal justice”, but I know you find such principles annoying huh?  

  2. Bondo says:

    Yeah, this one is really bad.

    It is interesting though that this is considered so bad, yet the argument for is it gives the same protection of government/union workers. If these protections are bad for private industry, why aren’t they bad for government/union workplaces. One would think we’d prefer maximizing the quality of government and union workers as well. So wouldn’t the wise move be to not only deny “just cause” from expanding but actually try to do away with it where it presently exists?

    • Lone Wolf McQuade says:

      The reason the wonderful participants here on this blog are scurrying around like ants after their hill has been kicked is they can’t reconcile their arguments from one day to the next.  They have themselves completely pigeon holed.  By arguing one day for something they are contradicting themselves from the day before.  

      Want proof?  Watch their responses.  They deflect every question about the root principles and resort to name calling and grand-standing.  

  3. Arvadonian says:

    No 55.

    Hiring an employee isn’t a marriage, “Till death do us part”.

  4. If this would have the doomsday effect you claim, then why has that not happened in the many places where this is already the rule?

    How many times have we heard that fair labor practices would kill business, and yet when we put in place workplace safety and child labor laws, we only improved the quality of American business?

    • DavidThi808 says:

      1) Public sector jobs. Since those jobs must exist and cannot move, it’s a cost they bear. But regardless of the cost, the job does not go away. And ask anyone you know who holds a public sector job if they know of co-workers that should be fired – but cannot because of the rules.

      2) Montana. However, there are 2 big differences in Montana. First, Montana has a trial period so if someone is clearly not a good fit, they can let them go early on. Second, the majority of Montana’s economy is extractive industries and those jobs cannot move.

      The impact here depends on the industry. For a coffee shop it raises the cost of a cup of coffee a bit but that job will remain. But for high-tech, green energy, bio-tech, etc jobs – this is killer. They can move – and will.

      • So you are saying that in both the places you can think  of where this exists, it is working really well, but neither of them count.

        However, when you look at a place where this doesn’t exist, ie. your imagination, the plan is a terrible failure, and how it works in non-reality is what counts.

        Your fear about competitiveness is one that has been used against many worker protections including those that have effected gender, racial, and collective bargaining rules, and yet it has been shown time and time again to not be a factor.

        “This has worked everywhere that it has been tried, but those places are not here, so we should not try it here.”

        Funny argument you have there.

        • bob ewegen says:

          See “The French disease.”  Unlimited job security undercuts every nation that has enacted it into law.  

          • Libertad says:

            Also, the government should outsource more … of course not on a sole source basis. Competitive bidding is the key and managing contracts with penalties and incentives is always required.

            • Bondo says:

              The numbers on outsourced (well privatized) public work are not good. Pretty much across the board, when you send work out to a for-profit company rather than doing it in-house, it ends up more expensive. The only exception I can think of is when a specific capital/infrastructure requirement exists that the private group has that the public does not.

              That bad policies make public employment less efficient than it could be is not the same as saying private employment is better for a public service.

              Anyway, TakeBack, no one is saying this works where it exists, David pointed out why it has avoided being an abysmal failure in those places. Success and not failing badly are not the same thing, no matter how long Bush is President.

        • DavidThi808 says:

          Job security in public schools is a major problem. Incompetent teachers harm every child that comes through their classroom and where that harm turns a child off of education, they have sentenanced that child to a life of economic poverty.

          My point was merely that no matter how awful a teacher is, that school is not going to be moved out of state and that job is not going to be eliminated. In fact, it creates more jobs as we need the social workers, cops, etc to handled the increased number of people who drop out of society.

          Very big difference from a private sector job that can be funded here, or in another state, or in China or India.

          • Mr. Toodles says:

            The old standby hyperbole regarding teachers. Predictable as the 2 minute hate on Udall.

            • DavidThi808 says:

              BVSD has 1,500 tenured teachers. In 16 years they have fired 0. Are you saying over that 16 years ever teacher has been competent?

              Tenured incompetent teachers are a large part of the problem with our public schools. Not the only large problem, but one of them. And to pretend otherwise hurts the children in schools every day.

              But if you have evidence to show that we are better off never firing tenured teachers, please do post it.

              ps – I don’t hate Udall, I just don’t respect him – big difference.

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