Management Buzz 04/02 Firing your CEO and the latest ADA Supreme Court ruling

Head Case

CEO turnover surged in 2001, with 929 CEOs leaving their posts,according to outplacement firm Challenger, Gray & Christmas.Firing CEOs is almost trendy these days as a way for companies toshow investors and clients that they're intent on making aturnaround. If you think it's time to show your chief executivethe door, ask yourself these questions: Is this CEO the rightleader for your company at this time and in this economy? Is thecompany's performance the CEO's fault, or is it the resultof bad direction or information from you? Does the CEO recognizethe problem, and does he or she have a credible plan for changingit? If not, and "if you're under-performing yourcompetitors for four quarters in a row, the CEO needs to go,"says Gary Sutton, author of The Six Month Fix: Adventures in RescuingFailing Companies (John Wiley & Sons). "Whenearnings are down, you can almost automatically assume it's theCEO unless you see competitors in the same boat."

Once you decide the CEO's tenure is up, it's importantto move quickly to get your company back on track. "It maysound brutal, but it needs to be," Sutton says. "CEOs arewell-rewarded for good profits. So the downside needs to be just aspainful as the upside is euphoric."

Pain Relief

In a victory for business owners, the Supreme Court limited thescope of the Americans With Disabilities Act (ADA) on January 8.The court's ruling in Toyota v. Williams said an employee'scarpal tunnel syndrome had to significantly affect her "majorlife activities," which the court declared included such dailyactivities as brushing your teeth in addition to work. Stickingclosely to established precedent and the written law, the justicesruled that work itself does not constitute the sum of major lifeactivities.

But don't interpret the ruling to say carpal tunnel is not aproblem. "I think employers dodged a bullet on this one,"says Michael D. Karpeles, head of the labor and employment group atChicago law firm Goldberg Kohn. "Another carpal tunnelsyndrome case might come out the other way."

The ruling, however, represents a power shift that should helpentrepreneurs, says employment law specialist Byrona J. Maule atOklahoma City law firm Phillips McFall. It places the Supreme Courtsquarely on the side of Congress' written intent rather thanthe law's interpretation by the Equal Employment OpportunityCommission, which administers the ADA. Still, nothing in the rulingchanges the need to judge every ADA claim on a case-by-case basis."When somebody requests a reasonable [ADA] accommodation, getsome professional human resources or legal advice on how you shouldrespond," says Karpeles. "And document youractions."

Business writer Chris Sandlund (csandlund@entrepreneur.com)works out of Cold Spring, New York.

Contact Sources

• Gary Sutton
  www.sixmonthfix.com
• Goldberg, Kohn, Bell, Black, Rosenbloom & MoritzLtd.
  (312) 201-4000, www.goldbergkohn.com
• Phillips, McFall, McCaffrey, McVay & MurrahP.C.
  (405) 235-4100, www.phillipsmcfall.com