Category: Human Resources

Insuring Against Claims Brought Under the Fair Labor Standards Act

Employers face numerous federal laws that govern the employment relationship. These laws, such as Title VII of the Civil Rights Act, the Family and Medical Leave Act, and the Americans with Disabilities Act, impose requirements on employers regarding the manner in which they interact with their employees. If these requirements are overlooked, employers can expect to be called upon to pay a potentially substantial damage award to the aggrieved employee. While avoiding a violation of all applicable employment laws is the goal of every organization, there is one law which employers should be concerned about above the others—the Fair Labor Standards Act.

The Fair Labor Standards Act (FLSA) is the federal law that establishes the minimum wage and that governs the payment of overtime compensation. Its broad applicability, the manner in which it was drafted, and its complex and highly technical requirements, make it one of the most feared federal employment laws. The significance of potential FLSA violations has only increased since the economy began taking a turn for the worse because the ever-increasing number of laid-off employees has served to increase the number of potential plaintiffs.

The FLSA has been described as the perfect plaintiff’s law. Consider that in most cases, the FLSA’s attorney’s fee provision operates to only benefit the employee. Under the FLSA, an employer who successfully defends an employee’s claim is typically not entitled to an award of attorney’s fees. The FLSA also allows a single employee to file a lawsuit on behalf of all similarly situated employees. Under the FLSA’s collective action provision, the burden a plaintiff must satisfy before being authorized to notify all potential class members is relatively low. This means that an employer may be faced with the prospect of defending a collective action involving dozens, or even hundreds, of current and former employees.

In addition to the procedural benefits afforded employees under the FLSA, the complexity of the law itself serves to increase the level of concern faced by employers. Unlike laws that prohibit discrimination or harassment, which are relatively easy to understand, the FLSA is replete with complex and technical provisions which, in many cases, are counterintuitive. For example, when does the amount of time an employee spends on a break constitute hours worked? If an employee is compensated at two or more different rates, how is the overtime calculated? When can an employer make salary deductions without jeopardizing the employee’s exempt status? If an employee violates company policy and works overtime without permission, does the employer have to pay the employee overtime? In many cases, the answers to these questions cannot be obtained by relying on common sense. So, in addition to being relatively plaintiff-friendly from a procedural standpoint, the FLSA’s complex and highly technical nature increases the likelihood of a violation.

Given the confluence of these factors, it should not be surprising to discover that literally thousands of lawyers and law firms have developed a niche practice involving nothing more than filing lawsuits under the FLSA. These firms seek out recently laid-off employees for the purpose of putting their former employer’s compensation practices under a microscope. And in most cases, the employer’s attorney will likely recommend settling the lawsuit as soon as possible.

Electing to settle the lawsuit early is virtually predetermined by the FLSA itself. In most cases, the employee will be entitled to a relatively small amount of unpaid wages. The real evil lurking behind the lawsuit is the attorney’s fees. Almost immediately after filing the lawsuit, the amount of attorney’s fees that the employee will be entitled to receive from the defendant-employer likely dwarfs the amount that may have been due the employee under the FLSA. This amount does not include the amount the employer will have to pay its own attorney. From a purely economic standpoint, it makes more sense to settle the case early for $10,000 and be done with it, than it does to litigate the case by paying at least twice that amount for the employer’s own attorney, and still face the prospect of having to pay the employee’s damages plus the employee’s attorney’s fees. Thus, the most common course of action is to settle the lawsuit, even if the employer has a valid defense to the employee’s allegations.

These reasons, coupled with the surge in lawsuits brought under the FLSA, compelled many insurance companies to exclude claims brought under the FLSA from standard employment practices liability insurance (EPLI) policies. Since the numbers simply did not support insuring against FLSA claims, FLSA exclusions found their way into virtually every EPLI policy.

However, some insurance companies are beginning to offer defense coverage for FLSA claims in their EPLI policies once again. Although the coverage may be subject to a sub-limit, some coverage is being provided nonetheless, oftentimes at very reasonable premium rates. By purchasing this coverage, employers no longer need to be held hostage by the plaintiff-friendly FLSA. The existence of such coverage gives employers, through their insurance company, the option of actually defending against such claims rather than being forced by the economies to settle. In the current economy, no amount of money is considered disposable, and by obtaining an EPLI policy that offers coverage for FLSA claims, employers no longer have to feel compelled to buy their way out of a lawsuit brought under the FLSA.

If you would like to learn more about obtaining an employment practices liability insurance policy to insure against FLSA claims, contact us.

Did You Know? Employee Dishonesty

Did you know that eight out of ten crimes against businesses are carried out by employees? Workplace fraud and employee theft are more prevalent than ever: It is estimated that the average American business loses six percent of its total annual revenues due to some form of employee fraud. Small businesses are particularly vulnerable to occupational fraud and abuse because they usually cannot afford extensive safeguards against these risks, nor can small firms easily absorb the large losses to which employee fraud and theft can lead.

Most business owners prefer to think of their employees as loyal, trustworthy and honest, and are unwilling to accept the reality that those whom they regard as “family” might be stealing from them. But there are many reasons why an employee may be tempted to defraud an employer, not the least of which is financial pressure on the employee. Also, a dishonest employee may attempt to rationalize a crime with such excuses as “The company will never miss this money” or “This isn’t really stealing because I’m not being compensated as I deserve.”

Typically, losses attributable to employee fraud can range from relatively small, one-time thefts to long-term schemes that go undetected for years. Statistics indicate that the average length of time that an employee fraud goes undetected is eighteen months, during which time an employer can lose enormous sums of money. That’s why early detection of employee fraud is vital. To protect against this ever-present risk, companies would be wise to establish loss prevention programs that include training in fraud prevention and detection for all managers.

Additionally, sound controls must be in place to prevent employee fraud, with thorough reviews of these loss control practices occurring regularly.

But no loss prevention program is foolproof, which is why all companies ought to obtain separate employee dishonesty insurance coverage. Under virtually all commercial property policies, employee dishonesty coverage, also known as employee theft coverage, is a standard exclusion. But employee dishonesty insurance is specifically designed to protect an employer from financial loss due to the fraudulent activities of an employee or group of employees, including such employee-driven crimes as embezzlement and internal theft. No business owner wants to believe that employee dishonesty insurance is necessary, yet without such coverage, a business is severely exposed to potentially devastating losses. That’s why no business insurance program is complete without appropriate employee theft coverage.

To learn more about how you can protect your business from employee dishonesty, contact us.

Oh No, I Have Been Served! – Unlawful Discrimination Lawsuit

The day was progressing like any other – putting out fires, monitoring production, cultivating new business – until the receptionist announced the presence of an unexpected visitor. The hand you held out for an introductory shake was met with a bundle of paperwork. The confusion created by the unanticipated delivery was momentarily clarified when the visitor mumbled a few parting words: “You’ve been served.”

A brief scan of the documents revealed that a former employee filed a lawsuit in federal court alleging unlawful discrimination. The expected stream of emotions soon followed: bewilderment, denial, fear, anger, and finally pragmatism. Something needs to be done, and since an answer to the complaint must be filed within 20 days, contacting an attorney must be near the top of the list.

Unfortunately, defense attorneys do not typically handle cases on a contingency-fee basis. Rather, they bill their time hourly, and while many attorneys provide a complimentary phone call, the meter typically starts running shortly thereafter. Clients are ordinarily expected to cut a substantial retainer check before any steps are taken to mount a defense.

Needless to say, defending against an employment practices lawsuit, such as one alleging discrimination or harassment, is a costly proposition. Even if the employer wins the lawsuit, the outcome of the experience will likely be viewed as a loss. The bill for attorneys’ fees alone will invariably cause financial harm to an organization. For those already struggling through difficult economic times, the harm may be irreversible.

The employer in this hypothetical situation has no choice but to deal with the imminent present since nothing can be done to change the past. However, for those cringing at the thought of personally experiencing this situation in the future, there is one thing that can be done to alter the experience – obtain employment practices liability insurance (EPLI).

EPLI protects employers in the event of such workplace claims as discrimination, wrongful termination, and sexual harassment, as well as other civil wrongdoings, such as wrongful demotion, failure to promote and discrimination by third parties (i.e., clients). Generally, a policy covers eligible losses stemming from such causes of action, as well as associated litigation costs, including attorneys’ fees. And the insurance company will provide the services of attorneys who specialize in defending against such claims, thereby significantly increasing the likelihood that employers will prevail in the event litigation does occur.

Yet, despite these obvious and valuable benefits, many organizations choose to forego purchasing EPLI. Those responsible for protecting their organization from the risk of loss have plenty of reasons for deciding not to purchase EPLI. However, upon closer examination, it is clear that the security afforded by these reasons is illusory. Let’s take a look at a few.

None of my employees would ever sue me. Let’s assume that this is true (although we know it isn’t). Did you know that several equal employment opportunity laws, such as Title VII and the Americans with Disabilities Act, also protect applicants? While some organizations may take comfort in the belief that their employees would never sue, such a perception does not address, much less protect against, the possibility of an employment practices lawsuit being filed by an applicant. Needless to say, those relying on the charity of strangers for security have a significant hole in their risk management umbrella.

Our organization complies with all employment laws. There is little doubt that most organizations have every intention of complying with applicable employment laws, and that they, in fact, make a good faith effort to do so. Unfortunately, this reasoning incorrectly assumes that lawsuits are only filed by those who were actually victims of an unlawful employment practice. In reality, many employers are ultimately found to have not violated the law, yet they were still required to defend their actions in court. Undertaking a defense is expensive, and from a purely economic standpoint, vindication through the judicial system is rarely worth the price of admission.

It can’t happen to me. Clearly, this age-old rationalization is as wrong in this context as it is in everyday life. According to the Equal Employment Opportunity Commission, the number of employment related claims is on the rise. Hence, it is not only happening, but it is happening in greater numbers. While this increase in claims may be attributed to several factors, including a struggling economy or corporate cutbacks in HR training and monitoring, there is good reason to believe that the increase will continue well into the future.

Consider that the ADA Amendments Act broadened the scope and applicability of the Americans with Disabilities Act. Since more people qualify as disabled under the amended law, more people will be entitled to the ADA’s protection. In practice, this signals the existence of a new and significant risk exposure – an ADA lawsuit – that may not have previously existed. Therefore, the likelihood of falling victim to an employment practices lawsuit is greater now than it was then.

We are a small operation so we don’t have to worry about employee lawsuits. While employee lawsuits brought against large companies make the headlines, smaller operations should be equally concerned about being sued for an unlawful employment practice. Compared to large corporations, many smaller organizations operate casually and informally. While a collegial atmosphere can make for a more relaxed workplace, it may increase the likelihood that behaviors are not properly monitored or that policies are non-existent or loosely applied. Moreover, smaller organizations often do not have the budget or infrastructure to ensure the proper handling of human resources. Since these factors almost invariably lead to lawsuits, smaller organizations are prime candidates for EPLI.

We have an excellent HR department that ensures compliance with all equal employment opportunity laws. While placing an emphasis on human resources can go a long way toward reducing the risk of being sued for an unlawful employment practice, it is by no means a guarantee. Two things merit discussion on this point. First, unlawful employment practices occur despite top-notch HR departments. Consider that a well-known, publicly traded clothing retailer paid approximately $50 million to settle a class-action discrimination lawsuit despite what was surely a well-qualified HR department. Furthermore, it is important to acknowledge that efforts of the HR department do not always filter down to the entire workforce.

Second, in some situations, the risk of violating an equal employment opportunity law cannot be reduced by the HR department. The recent amendments to the Family & Medical Leave Act’s regulations provide a good example. Until the precise scope and applicability of the regulations are determined by the courts, employers are operating with their best guess as to what the regulations actually require. Unfortunately, this means that some employers, regardless of the quality of their HR department, must defend their actions in court, often at great expense. This reality underscores the importance of EPLI.

There is no room in the budget for EPLI. Certainly, budgetary constraints are always a valid consideration. While many view the premium for EPLI as the budgetary figure worthy of consideration, the real figure is the amount that will have to be paid out in the event a lawsuit is filed. How do the attorney’s fees and the plaintiff’s judgment fit into the budget? A realistic approach to the budget should consider the potential cost of not obtaining EPLI rather than the cost of the premium. When such a calculation is undertaken, purchasing EPLI is almost always considered a smart investment.

Although there are many reasons for not purchasing EPLI, once a lawsuit is filed, all of those reasons lose whatever merit they may have once had. There is a world of difference between personally dealing with (and paying for) the defense of an employment practices lawsuit versus forwarding the papers to the insurance company. One option is not only cheaper, but it provides a peace-of-mind that allows the organization’s focus to remain on the continued successful operation of the business. Needless to say, the alternative is much, much worse.

If you would like more information about EPLI, please contact us.

The “Intentional Act” Exclusion: A Chink in the Armor of Workers” Compensation Statutes

In addition to increased productivity, the Industrial Revolution brought with it the unwanted consequence of increased workplace injuries. The explosive growth in industry made the workplace increasingly dangerous, and the frequency and severity of workplace injuries soared. As the number of injured workers increased, so too did the number of lawsuits against employers. The result was an inefficient, time-consuming, and costly judicial process that did little to address the problems encountered by employers and their injured employees.

The State of Washington echoed these sentiments in its workers’ compensation statutes by noting that “the common law system governing the remedy of workers against employers for injuries received in employment is inconsistent with modern industrial conditions. In practice, it proves to be economically unwise and unfair…The remedy of the worker has been uncertain, slow and inadequate. Injuries in such works, formerly occasional, have become frequent and inevitable.”

In response to a judicial system that no longer met the needs of those it sought to serve, states began enacting workers’ compensation laws in the early 1900s. The dual goals of providing for injured employees and of reducing employer/employee litigation served as the foundation for many of today’s workers’ compensation statutes.

States achieved these goals by opting for a legislatively mandated allocation of risk that employed a two-pronged approach: compelling employers to provide for injured employees outside of the traditional tort system, and prohibiting injured employees from suing their employers for workplace injuries. Employers and employees were forced to accept this statutory compromise known as the “compensation bargain,” an arrangement based on a mutual renunciation of common law rights and defenses by employers and employees alike.

On one hand, employees enjoy the benefit of what is essentially a no-fault workers’ compensation system that offers prompt medical attention and benefits regardless of any fault on the part of the employee. Consequently, employers are prohibited from asserting any defenses against the injured employee seeking compensation, effectively making employers strictly liable for injuries suffered by their employees.

However, in exchange for providing this no-fault insurance, employers benefit from the statutory removal of injury-based employer/employee lawsuits from the common law tort system. An example of this is illustrated in West Virginia’s workers’ compensation statute, which provides that the “enactment of… the workers’ compensation system in this chapter was and is intended to remove from the common law tort system all disputes between or among employers and employees regarding the compensation to be received for injury or death to an employee… .”

Such a provision theoretically protects an employer from being sued by an injured employee who claims, for example, that the employer’s negligence caused the workplace injury. Recall that under the compensation bargain, the injured employee relinquishes the right to sue for potentially greater, although uncertain, damages via a common law negligence claim in exchange for the right to automatic and prompt workers’ compensation benefits.

The chosen method for removing employee injury claims from the common law was by granting employers immunity from any such lawsuits or, alternatively, by mandating that the benefits provided under a state’s workers’ compensation laws are the exclusive remedy available to an injured employee. Regardless of which method is chosen, the substance and effect are the same, and the benefits of taking such cases out of the traditional common law tort system are realized.

In describing these benefits, one state’s supreme court noted that “in return for accepting vicarious liability for all work-related injuries regardless of fault, and surrendering his traditional defenses and superior resources for litigation, the employer is allowed to treat compensation as a routine cost of doing business which can be budgeted for without fear of any substantial adverse tort judgments. Similarly, the employee trades his tort remedies for a system of compensation without contest, thus sparing him the cost, delay, and uncertainty of a claim in litigation.”

Compliance with the letter and spirit of the compensation bargain is essential to maintaining the benefits both parties enjoy. Many states, recognizing the importance of maintaining this balance, have withdrawn any immunity an employer may have been entitled to if the employer fails to obtain the necessary workers’ compensation coverage, thus freeing the injured employee from his or her obligation to abstain from suing the employer under a traditional common law theory.

However, despite the compensation bargain, injured employees, or their personal representatives in cases involving the employee’s death, have routinely tried to sue their employers by claiming that the employee’s injury or death was the result of an intentional act. If an employee’s cause of action succeeds, then his or her employer will generally lose the immunity it enjoys under the workers’ compensation laws.

This loss of immunity is consistent with the general policy against allowing an individual to insure against the consequences flowing from an intentional act. The concern is that if an individual were permitted to insure against a loss brought about by an intentional act, then there would be no incentive or deterrent to keep that individual from intentionally harming another. In other words, how effective would the prospect of incarceration be if a criminal was able to have another serve his or her prison term? Such is the reasoning that underlies the intentional act exclusion.

Although intentional act exclusions are commonly found in workers’ compensation statutes or state judicial opinions, the precise articulation and application of these provisions can vary. Some states, like Louisiana, provide that “worker’s compensation [is] an employee’s exclusive remedy for a work-related injury caused by a co-employee, except for a suit based on an intentional act…which means the same as an intentional tort.” The statute defines intent to mean that the person who acts either “consciously desires the physical result of his act, whatever the likelihood of that result happening from his conduct, or knows that that result is substantially certain to follow from his conduct, whatever his desire may be as to that result.” Simply stated, intent in Louisiana refers to the consequences of an act rather than to the act itself.

Florida uses a slightly different approach. Like Louisiana, Florida waives workers’ compensation immunity for any injury or death caused by an employer’s intentional tort. The existence of an intentional tort, which must be proven by the heightened standard of clear and convincing evidence, can be established in two ways. The first way simply requires proof that the employer deliberately intended to injure the employee. The second way requires proof that the employer engaged in conduct that the employer knew, based on prior similar accidents or on explicit warnings specifically identifying a known danger, was virtually certain to result in injury or death to the employee. Additionally, there must be proof that the employee was not aware of the risk because the danger was not apparent, and that the employer deliberately concealed or misrepresented the danger so as to prevent the employee from exercising informed judgment about whether to perform the work. This is a significant obstacle to overcoming Florida’s workers’ compensation immunity.

West Virginia’s statute makes overcoming workers’ compensation immunity similarly difficult by requiring an injured employee to prove “deliberate intention,” which is a legal term of art encompassing numerous (and effectively higher) standards of proof that the employee must meet.

The considerable hurdles that stand in the way of overcoming workers’ compensation immunity reflect one of the central aims of the compensation bargain: that workplace accidents be addressed outside of the traditional common law framework, regardless of the severity of the injuries they cause. However, the fact that an employer will not be shielded from liability for “intentionally” injuring an employee, regardless of how that term is defined in a particular state’s statute, should serve to remind employers that their employees are not disposable assets that can be casually placed in harm’s way. Employers should become familiar with the duty of care owed to employees and should abide by that duty to be assured of enjoying the benefits of the compensation bargain.

Prospects Notice Every Move You Make

Every move you make.That’s what it takes to land your next prospect. Recently, I’ve had the pleasure of learning, from a renowned sales guru, the art of the close. And, it seems to be as simple as reading your prospect and mirroring their behavior.

Here’s how it goes: your prospect sizes you up in 49 seconds, give or take; and uses the remaining time he spends with you to confirm his initial opinion of you. If he cannot confirm his initial perception, but finds himself interested in doing business with you anyway, with your character inconsistencies, he’ll make an exception. But the human mind seems unable to reform opinions.

As a woman, I’ve always been sensitive to possible “first impressions.” Will the prospect relate to me? How do I convince my meanest and most vulgar client that I’m O.K. with mean and vulgar? How much jewelry is too much? Is a European Luxury Sedan too much car? Well, as it turns out, all of this is important. It is all part of the package we present. But our package is first delivered with our initial “eye contact” with our prospect.

Here you have it, once and for all — no excuses. Eye contact is the first contact that you have with a client. Secondly, he’ll hear your voice. Lastly, he’ll shake you hand. Eye, Sound and Touch. Make it count, because it counts most.

Your eyes must meet your prospect. Try it out on your own. Have your friend or co-worker stage an introduction between you and anyone. Have you maintained complete contact? Did you find that you looked down to shake hands? Can you continue eye contact? Other than breaks in contact directed by your prospect, don’t give it up. But don’t stare them down. Eye contact relays honesty and openness. First and foremost, your prospect will insist on integrity. Prove it with your eyes.

Next, comes the voice. As you approach your prospect, mirror his volume and tone. If he’s loud and brash, be just as loud and brash. If he’s dour, be dour. Even if you speak first, and mistakenly diverge from your prospect’s style, adjust your voice immediately. Pretty basic stuff, huh? Practice this. Again, stage an introduction session with some of your co-workers. Approach your co-worker, who will play the prospect, with any volume or intonation you choose. Introduce yourself, “Hi, Jim nice to finally meet you.” Have your co-worker respond with any style he chooses. “Great to meet you,” he may mumble. Now, change your style to conform with his. This is a great exercise for new producers. They’ve heard of these basic rules, but have they practiced them?

The touch comes last. Here, as in the voice, you must mirror your prospect. There is no right or wrong, but only what your prospect will perceive. If your prospect gives you a bear hug, then hug your heart out. If he extends his hand and seems to “need his space,” then give it to him. It is important to match a firm handshake with a firm response and a weak handshake with a weak response. Touch is the most intimate thing we do in a sales experience, and it is an important step in our prospect’s ability to judge our ability to relate, communicate and care.

The rest is easy? No, and we’ll leave the dozens of other “behavioral” issues for a later article. But, I’d like you to know the following: it doesn’t matter how you feel or how you act, but rather how you are perceived. It doesn’t matter what you think of your prospect, but rather what you can get him to think of you. Conversely, it would be to your advantage to not make judgments by what you initially perceive, nor care how your prospect acts.

As you gain an understanding of human behavior, you will learn that people are rarely comfortable with everything about themselves. In fact, it is often true that what you see is not at all what you get. You will be effective at tailoring your responses if you understand that many of us have layered armor over our insecurities. What we project to the world is often a defense. Our self-image is set when we’re very young and unable to process rational thought, but the image is immutable. A fat boy might grow to be obsessive about health and fitness. A poor boy might grow to “throw his money around.” A beautiful woman might actually have been an ugly girl, or so she thought. What you see is not what you get.

Finally, and this information will direct the form of the sales style you employ with your prospect. Your prospect will make a decision based on a decision making style. The styles may vary and many sales strategists will call them by a different name. Often, one person may embody various styles or they may alternate styles. You must identify what style they’ll use to make “your” decision. Look for expressions like: “I really feel…” They will need to emotionally relate to you and your suggestions. How about, “I can see…” Give them a picture to grab onto. “It sounds good to me,” might require a…a…a…Song? Although probing is good, feeling is better.

The 10 Must Have Traits Of A Salesperson

“What are the traits of an effective salesperson and how are they identified in a candidate?” These questions have been studied for decades and a broad range of opinions have been offered by corporate executives, college professors, industrial psychologists and human resource managers. Corporate America, in need of effective and profitable salespeople, continues to develop interviewing and testing standards designed to define and uncover sales talent.

I have participated, as an employer, in screening techniques that have been highly successful and I have participated in an equal number that have clearly failed. Unfortunately, a majority of sales screening techniques, at their best, will fall short of the employer’s expectations. The most reliable screening tests, although not completely full-proof, will embody a full day of psychological screening by an industrial psychologist. How many of us, as small to medium employers, can afford the $800 – $1500 price tag that goes along with this approach? Is the small to medium employer at a disadvantage in the hiring process? Maybe not.

If you are in the market for a salesperson or a sales team, first consider the “10 Must Have Traits” of a salesperson:

1) Salespeople rarely perceive obstacles.

Obstacles always exist, but a salesperson will typically charge through the obstacle, rarely pausing to take note of its challenge. A salesperson is inspired by obstacles and they don’t “ruminate or contemplate” the challenge for too long.

2) Salespeople overcome rejection.

Rejection does not deeply wound a salesperson. Their emotional response is more akin to the feelings associated with an act of dishonor. After all, a good salesperson knows the client or prospect made the judgment in error. This is not to say that salespeople do not have hearts. They have hearts, but they are selective in whom they respond to.

3) Salespeople live to persuade.

Their desire to persuade will not be misunderstood as simple persistence. These are people that have a belief and passion for their position. Their self-esteem is derived largely from the people and events they inspire to action.

4) Salespeople must be able to “read and relate” to the prospect.

Experiencing the feeling, thoughts, and attitudes of others permits the salesperson to form their presentation and responses in a way that will foster true communication. A prospect’s motivations and a salesperson’s responses to the prospect’s verbal and non-verbal language (body language) represent the basis of all sales efforts.

5) Salespeople want to be liked, but they rarely need to be liked.

Salespeople have a clearly defined mission; they keep their focus on the requisite outcome — the sale. They are not trying to build friendships and they will not be maneuvered to digress from their goal. Although they will develop friendships and are likable people, they do not misunderstand their purpose for visiting with a prospect. They will not construct their message to win friends and be liked, rather they will construct it to close the sale. They would rather not offend, but if they do, it’s O.K.

6) Salespeople like people.

Not all people like people, but a salesperson does. They don’t like all people, but they generally enjoy interacting with people and engaging in lively dialogue.

7) Salespeople need to have some “sense of urgency.”

There are the “plodders” and they, through persistence, routine and hard work, will achieve success. Plodders may not have a sense of urgency, but their peer, the “every minute counts” guy does. These folks are driven by benevolent demons that challenge them every minute of the day. You’ve met these salespeople. They are the producers in the office who have to get the job done now!

8) Salespeople will always have a tale of “accomplishment from adversity.”

These people are proud of their accomplishments and they will usually value the lessons learned and skills developed from a particularly challenging obstacle. They may even be proud of their failure because of their ability to rebound and refine themselves. These people win, even when they lose.

9) Salespeople have to have a definitive lifestyle goal.

Even with the best of sales personality traits, no one will achieve great economic success unless they are driven to be wealthy. As crude as it may seem, working hard at a job that yields “money for effort” requires a distinct and passionate commitment to money or to the power, security, and influence that money can buy.

10) Salespeople need to have a need.

Ask any successful salesperson about ambition and where they feel it is derived from. It seems that “a need” is at the core of their commitment and energy. Their needs are widely varied, but these are not people that want things, they need things.

Many of these traits mentioned above can be uncovered in a carefully crafted interview process. In fact, why not go ahead and ask the questions directly. Remember, though, that an intelligent applicant will be prepared for even the most rigorous of interviews. Ask a direct question, ask it again, indirectly, and then challenge the applicant to support their answer. Throughout the interview, look for opportunities to prove or disprove the existence of the “ten must have traits.” You’ll find them, if they are there.

One last word of advice, and this applies explicitly to experienced salespeople. Never, never, never hire a successful salesperson who cannot support his claims of success with records and wages. Because salespeople, even in the absence of every other sales trait, have a record of closing sales.