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This week's edition of AOA E&O Prevention:
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AOA Tips, Views, News & More
Pre-Employment Tests Are Much Better than Job Interviews to See if Applicant "Fits-In" Your Corporate or Organizational Culture
By Michael Mercer, Ph.D. of Mercer Systems, Inc.
Whether an applicant "fits in" the corporate culture is better determined by pre-employment tests than by interviews.
Important for you =
Most managers & recruiters do lousy at predicting if applicant will succeed - or flop - on-the-job based on interviews of applicants. That is one reason many companies use pre-employment tests.
After all, pre-hire tests are (a) based on extensive research and (b) can be custom-tailored for each job in a company. In contrast, interviews are rather subjective, and applicants easily can 'fool' the job interviewer.
For "white-collar" - professional & skilled - jobs, companies use two types of pre-employment tests:
1. Behavior or personality test
2. Mental abilities or intelligence-related tests
Correctly using these two types of pre-employment tests should entail scientifically creating custom-tailored "benchmark scores." That entails finding specific personality and intelligence-related test scores gotten by the company's best employees in each job.
When I do such custom-tailoring benchmark research, I discover the benchmark scores of the company's best employees reveal the company's "culture."
For example, for many jobs the benchmark scores of the company's best employees include high scores on these pre-employment test scales:
* Follows Rules, Policies, & Procedures, i.e., perfectionism
* Reactions to Pressure, i.e., poised under pressure
As you can see, such benchmark scores of the best employees reveal the company's culture - e.g., perfectionist, poised-under-pressure, optimistic, and teamwork/collaboration-oriented. Also, scores on intelligence-related tests tell you the intelligence level of your best employees in each job. You do, after all, want to hire employees who are as smart as your best employees.
Managers must hire terrific employees - to help grow their companies. A key ingredient of hiring terrific employees is forecastinging if an applicant will or will not "fit in" your corporate or organizational culture.
Use pre-employment tests to get an accurate determination of whether or not an applicant may "fit in" your corporate or organizational culture. Start by doing benchmarking study of your best employees' scores on both personality tests and intelligence-related tests.
Then, do the most logical action: Focus on hiring applicants who get pre-employment test scores similar to your best employees. By using pre-hire tests in this way, you use a custom-tailored and research-based method to discover if an applicant "fits in" your corporate or organizational culture.
COPYRIGHT 2013 MICHAEL MERCER, PH.D., www.Pre-EmploymentTests.com
Michael Mercer, Ph.D., created 3 pre-employment tests that companies use to assess job applicants' (a) personalities, (b) mental abilities or intelligence, and (c) dependability or integrity. These pre-hire tests - are the 3 "FORECASTER(tm) TESTS." Dr. Mercer's 6 books include best-seller "HIRE THE BEST & AVOID THE REST(tm)." He also delivers speeches and seminars at companies and conventions. You can learn about the 3 FORECASTER(tm) pre-employment tests, or subscribe to his "HIRE THE BEST Newsletter," at www.Pre-EmploymentTests.com
Contact Dr. Mercer at firstname.lastname@example.org or
Good News Regarding "Settle and Sue" Malpractice Actions: Plaintiffs Must Prove a "Case-Within-A-Case"
By Marc J. Zimet, Esq. of Jampol Zimet LLP
On November 20, 2012, the California Court of Appeal for the First District issued an opinion in
Filbin v. Fitzgerald (No. A128544) that is good news regarding "settle and sue" legal malpractice actions. The court hold plaintiffs in such actions to a high standard; they must establish "but for" causation by proving a case-within-a-case. Evidence that the settlement failed to live up to the lawyer's usual standard is not enough.
The underlying case in Filbin involved an eminent domain action against the owners of 13 acres of unimproved land adjacent to the San Luis Obispo Regional Airport. The Filbins' land was widely regarded as a junkyard and an eyesore. Following several years of failed attempts at forcing the Filbins to clear their junk, San Luis Obispo County obtained an order for immediate possession of the property. The County offered the Filbins a $1.25 million purchase price. The following month, the Filbins retained Mr. Fitzgerald, a prominent and highly respected local lawyer with extensive experience in condemnation proceedings. A year later the Filbins disagreed with Mr. Fitzgerald concerning the value of the land. (Mr. Fitzgerald's appraiser valued the property at $4.5 million; his clients believed the property was worth $12 to $15 million.) The Filbins discharged Mr. Fitzgerald three weeks before trial was set to start. They hired another lawyer, obtained higher appraisals, and proceeded to trial. In the midst of trial, they settled with the County for $2.6 million.
The Filbins filed a legal malpractice suit against Mr. Fitzgerald, claiming professional negligence and breach of fiduciary duty, on the grounds that he had: 1) misstated the requirements of the eminent domain mandatory settlement rule (CCCP section 1250.410) in a letter to them, 2) misstated the same rule in court, and 3) unnecessarily met with the judge to discuss his withdrawal from the case. In analyzing causation and damages, the trial court applied the standard of proof set forth in Marshak v Ballesteros (72 Cal.App.4th 1514) and Slovensky v. Friedman (142 Cal.App.4th 1518), and explicitly rejected the standard set forth in Viner v. Sweet (30 Cal.4th 1232.) The plaintiffs presented evidence that "Fitzgerald's cases typically resolved at a level between 75% and 80% of his experts' appraisal." The trial court reduced that percentage due to several factors, applied it, and concluded that, "But for the breaches of the standard of care by Fitzgerald, Plaintiffs would have settled their case for the sum of $3,174,500." Subtracting the $2.6 million settlement, the trial court granted a judgment of $574,000.
The Court of Appeals reversed, concluding that "there was no causal nexus between Fitzgerald's representation and the Filbins' subsequent decision to settle." The higher court agreed with the lower court that Mr. Fitzgerald's misstatement of California Code of Civil Procedure section 1250.410 fell below the standard of care. It also agreed that Mr. Fitzgerald could have submitted a written Substitution of Attorneys form rather than appearing on his Motion to Withdraw. However, it disagreed about the standard of proof for causation and damages, citing Orrick Herrington & Sutcliffe for the proposition that "to prevail in a legal malpractice action, simply showing the attorney erred is not enough." Rather, the plaintiff must also establish that "but for the alleged malpractice... settlement of the underlying lawsuit would have resulted in a better outcome. (Citing Viner, among other cases.)" The Filbins produced no evidence that Fitzgerald's decisions "hobbled" them at settlement. They produced no evidence that Fitzgerald's mistakes caused them to do anything to their detriment. Most importantly, the Filbins introduced no evidence that the County would have agreed to a greater settlement were it not for Fitzgerald's mistakes. "Whatever Fitzgerald may have done or failed to do, the Filbins presented no evidence showing to a legal certainty that those acts or omissions proximately caused any injury. There is certainly no basis for believing that a greater settlement was lost. (Citing Viner at 1244.)"
Many states are wrestling with how to handle "settle and sue" cases. Only one state, Pennsylvania, has adopted a flat prohibition on such suits. The other states that have considered Pennsylvania's stand have rejected it (Connecticut, Maryland, Massachusetts, Missouri, Nebraska, Nevada, and New Jersey.) The California Supreme Court apparently has accepted the existence of settlement liability despite concerns that recognition of such liability could undermine the public policy in favor of settlements.
Nevertheless, Filbin gives lawyers good reason to feel less vulnerable to such suits. Filbin reiterates that although any settlement could theoretically be challenged as inadequate, lawyers are only liable for the seller's remorse of their clients when evidence is produced that "but for" the lawyer's breach of professional duty, the settlement would certainly have been higher. This opinion also points to the possibility that the causal chain may be broken when one attorney is substituted for another. Although California allows "settle and sue" malpractice claims, it holds the plaintiffs making such claims to a high standard of proof.
For additional information, contact Marc at email@example.com (213) 689-8500
By Wilhelm Dingler, Esq. of Marshall Dennehey Warner Coleman & Goggin, P.C.
On Friday, January 18, 2013, James E. Boasberg of the United States District Court for the District of Columbia granted a Motion for Summary Judgment in which the Court ruled that the IRS lacked statutory authority to promulgate or enforce the new regulatory scheme for "registered tax return preparers" created by 76 Fed. Reg. 32,286. In addition, Judge Boasberg permanently enjoined the IRS from enforcing the regulatory scheme.
The lawsuit, Loving v. Internal Revenue Service, 1:12-cv-00385-JEB (2013 U.S.D.C., D.C.), was brought by three paid tax-return preparers who were not previously regulated by the IRS. The IRS estimates that approximately 600,000 to 700,000 tax-return preparers will be affected by the Court's decision. As a result of the decision, these tax-return preparers will not be required to pass the qualifying exam or pay the annual application fee. In addition, these paid preparers will not be required to take the fifteen (15) hours of continuing education courses each year that was also part of the regulatory scheme. They are now free to provided paid tax-return preparation services without the oversight provided by 76 Fed. Reg. 32,286.
The Court's decision is based upon strict statutory construction and the Court's belief that the regulatory scheme is not supported by existing law. In June, 2011, the IRS promulgated an extension of the Circular 230 constraints to any person who "prepares for compensation, or who employs one or more persons to prepare for compensation, all or a substantial portion of any return of tax or any claim for refund of tax under the Internal Revenue Code." The Court held that the act of tax preparation was not "practice" before the IRS and, therefore, the IRS could not extend the Circular 230 constraints to this class of persons and struck down the regulations as applied to them.
This decision leaves intact regulations concerning preparers who are attorneys, CPAs, enrolled agents, enrolled retirement plan agents or enrolled actuaries. Those individuals are otherwise regulated by the IRS under 31 C.F.R. § 10.3 (2009). The IRS options in response to the Court's decision include an appeal and request for a stay of the injunction pending appeal, ask Congress to enact legislation to grant them the authority to do what the Court said was not currently authorized by statute or they could abandon the program entirely. In a conference call held yesterday by the IRS's Return Preparer Office, Director Carol Campbell had numerous questions but few answers.
This decision has potentially far-reaching ramifications. We continue to monitor the issues and will provide updates as necessary. To discuss this matter further or to obtain a copy of the Court's opinion, please contact Wilhelm Dingler, Esquire of our Philadelphia office via e-mail at firstname.lastname@example.org. or (215) 575-2682.
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