Bates Research  |  08-19-21

Webinar Takeaways - Employment Issues: What to Expect Going Forward

Webinar Takeaways - Employment Issues: What to Expect Going Forward

Bates Group recently hosted employment litigators and experts for a CLE program to discuss the effects that current and future employment issues have had on workforce reintegration, supervisory activity, mental health and substance abuse, disciplinary actions, and Form U5 language and terminations. Panelists shared what they are seeing today and what employers and employees can expect in the post-COVID work environment.

The panel featured (pictured above, L-R) Linda Houston (Employment Expert, Bates Group, moderator), Beverly Jo Slaughter (Managing Counsel, Wells Fargo), Carole Miller (Principal, Bressler, Amery & Ross, P.C.), Ralph Blascovich (Managing Director and Expert, Bates Group), and Joseph Thomas (Director and Expert, Bates Group).

Here are some highlights and insights from the program.

Workforce Reintegration

The panelists first discussed the general challenges employers are having reintegrating workers back to the office and creating safe work environments. Carole Miller of Bressler observes firms taking two approaches: (i) employers mandating at-work employees be vaccinated, and (ii) employers who are encouraging, but not requiring, vaccines, while implementing safety measures to keep employees safe (e.g., requiring masks for employees who are not vaccinated, requiring unvaccinated employees to be tested regularly). From a legal perspective, she emphasized that employers have an affirmative obligation to reasonably accommodate employees who are unvaccinated because of health or disability issues or religious reasons.

Beverly Jo Slaughter of Wells Fargo described an employer’s need to keep in balance the CDC’s guidance, the federal law on accommodation, state and local requirements, and the comfort of employees. She noted how unusual this need is, compared to previous norms. Health-related issues were previously considered private and not widely shared within the corporation—a result of trying to protect the employee’s privacy while ensuring it does not have any undue impact on their work, or the perception of their work.

Ms. Slaughter advises managers to ensure that (i) the corporate culture does not stigmatize people for wearing masks, (ii) they remain sensitive to these kinds of issues, and (iii) they directly address the people who say they simply don’t feel safe in the workplace. She emphasized that “managers have to be out there during this transition period, listening to employees and escalating issues so that companies and departments can address them and make some considered decisions.”

Recruiting and Retention: Becoming a Destination of Choice for Employees

Ms. Slaughter warned that pre-COVID policies and procedures around when and how much an employee can work from home may need to be revisited. “It’s a balancing act between all the interests,” she said, that will require consideration of new business realities (e.g., Can the business manage through? Is there enough of a critical mass?). It will also impact employee retention: “You don’t want to lose good employees if you aren’t necessarily able to accommodate them.” She noted that these considerations will be different for customer-facing employees, where the issues are clearer: “In that case, there is an expectation built into your job description that you are going to be able to meet with the public.”

Moderator Linda Houston probed further on issues impacting recruiting, highlighting the dramatic amount of movement by advisers during the pandemic. Ms. Slaughter explained that the pandemic created an opportunity and the time for people to consider work-life balance issues and how they wanted to conduct their business going forward. “Financial advisers had time to consider whether they wanted to continue to be an employee, an independent contractor, and where are the best opportunities to service clients,” she said. Ms. Miller agreed, emphasizing that “the name of the game for recruiting and retention [now] is flexibility for employers.” She concluded that “there was movement because financial advisers had time to assess, but also because they learned that they can do their job effectively without a lot of infrastructure and resources.”

Ms. Slaughter recognized the far-reaching consequences of this shift, noting that broker-dealers moved rapidly to adapt. “Some of them now have a model to allow them to have both employees and independent contractors, some of them are forging relationships to allow financial advisers to work under an RIA model but continue to provide the platform.… Broker-dealers are rethinking: ‘what do I want my platform for financial advisers to look like, and how do I become a destination of choice for financial advisers?’”

Managing and Supervising a Remote Workplace

The abrupt migration of so many employees from in-office to work-from-home raised questions as to management and supervision of individuals working remotely. The panelists focused on four areas affected during the pandemic: information technology, outside business activity, social media, and personal behavior. Ms. Houston asked how firms were handling client-related supervision and human resource issues.

Information Technology

On the topic of information technology (“IT”), Joseph Thomas of Bates responded that “[IT] resources have been developed that really allow firms to supervise client activity remotely.” He explained that these systems can detect trends and patterns, regardless of their physical location, and that they allow for one-on-one interactive communications between those in an oversight role and their financial advisers.

Ms. Slaughter added that financial advisers embraced the new technology, particularly in terms of communication platforms like Zoom. She remarked: “We actually pivoted pretty quickly… Remote supervision has been vigorous. [There has been] a lot of coaching and training around raising your hand in a timely fashion, and making sure financial advisers know there are resources available.” On privacy-related concerns, companies are putting policies in place for safe printing and document disposal to avoid the dissemination of confidential materials.

Outside Business Activities

Bates Expert Ralph Blascovich reacted to the growing concern that financial advisers working from home may be more likely to engage in outside business activities. However, as to “detecting unreported, unauthorized outside business activity or selling away concerns, or involvement by representatives in private securities transactions,” Mr. Blascovich said that “the tools that previously were used to detect such activity continue to be the most useful.” That means annual compliance reviews, reviewing email, conducting internet searches, checking social media, etc.

Ms. Slaughter reinforced that point, saying, “You try to counsel people to look for red flags.” These include, for example, declining production and frequent or large withdrawals in IRA or other types of accounts. But she also noted circumstances that should alert managers to potential pressures on financial advisers which can lead to changes in behavior. For example, when an adviser “is in the transition from a guaranteed draw, you want to look at their business development and help them with marketing plans that focus on the platform rather than other things.” She pointed out that managers must be “intentional” and reach out to people, and she encouraged managers to have conversations with their financial advisers to determine if someone is in financial distress. “It’s my experience that financial distress leads to people finding ways to try to monetize their client base.”

Social Media

Remote work and the rise in social media use have raised questions on whether regulatory standards and guidelines are likely to change. While Mr. Thomas referred to the development of new and robust systems to monitor transactions and activity as a solution to many of the supervisory issues, Ms. Miller noted that there was an uptick in the use of social media and unapproved or personal systems during the pandemic. Specifically, she pointed to increased use of social media for political and other personal expression in 2020. Employment issues arise when the postings are inconsistent with company values or equal employment opportunity and diversity objectives. “We saw a lot of use of texting and chat rooms and other communications [on unapproved systems] and a lot of disciplinary action flowing from that,” she shared.

Behavioral Concerns: Mental Health and Substance Abuse

The panelists discussed the spike during the pandemic in both mental health and substance abuse issues. They stressed that such behavior is harder to detect in a remote working environment, given that these issues usually come to the attention of management through direct observation. According to Ms. Miller, human resource departments should address these issues based on objective facts and observations: “the missed deadlines, the slurred speech, the tardiness, the nonsensical emails.” Ms. Slaughter added that you have to keep reminding people of available resources (e.g., employee assistance and information programs, ombudsman’s hotline, ethics hotline) so the issue can be escalated and managed appropriately.

Mr. Blascovich weighed in on behavioral issues during the pandemic, observing that “people will say and do things on the internet that they wouldn’t think of doing in person.” Ms. Miller agreed. She said that employees are more emboldened in a less-formal home setting, and that the setting itself creates the impression that traditional standards do not apply. She highlighted the rise in bullying and harassment claims during the pandemic and said that there are fewer opportunities for policing and monitoring that behavior.

Ms. Slaughter noted other work-from-home realities including the fact that it is easier to access alcohol during normal working hours. On the other hand, currently “many individuals feel more confident about lodging a complaint and bringing it to the attention of management.” She said the increase in claims—and terminations—was also influenced by “the news of the day,” which has led management to emphasize that harassment issues must be addressed in a timely fashion. 

Bates Offers Employment Dispute Litigation and Compliance Support

Disciplinary Proceedings, Claims, Terminations and Damages

Ms. Miller and other industry experts are predicting an uptick in employment claims as employees reintegrate the workplace. This is due not only to the above-described phenomena, but also because many financial services firms had general moratoria on terminations during the pandemic which are now being lifted.

Given the success of remote hearings during the pandemic (less expensive, more efficient), the panelists agreed that it is likely that FINRA will include some remote aspects (e.g. more virtual testimony permitted) into live proceedings and that we are likely moving into a hybrid world.

The panelists also debated Form U5 language on terminations. Ms. Miller commented that “virtually every employment claim has a U5 defamation claim with it. When you terminate an employee, if they are a registered representative, you are going to defend this claim. You should keep that in mind when you are crafting it.” Mr. Thomas added: “When you prepare a U5, you have to use true and accurate information, but also make sure not to increase a firm’s risk of future litigation.” Mr. Blascovich, who has served as a U5 expert in many employment cases, advised to “write down the specific reason is for terminating the person, particularly if it is investment-related or securities-related as opposed to an HR violation.” At hearing, it can be highly useful when a party is challenging the actual stated reason for termination on a Form U5 to have an exemplar depicting in greater detail exactly what led to the termination to demonstrate how the stated reason for termination could have been worse (or better) for the claimant, he noted.

On damages related to a termination claim, Mr. Thomas—who frequently testifies on substantive and quantitative damages issues—recommended performing a thorough damage analysis. “Look at the facts, past performance, trends and patterns of performance from a financial adviser standpoint. We want to look at the competitive situation, what the drivers of the production were at any given time, and ways to project the analysis going forward.”


The panelists discussed the breadth of issues raised by remote working during the pandemic and the challenges and adjustments necessary to adapt to a post-pandemic employment framework. Changes in the employer-employee relationship, in information technology as an increasingly dominant supervisory tool, and in social and digital engagement will continue to evolve and be a focus as we move forward. Bates will keep you apprised of further developments.

View this webinar on demand at our recorded Programs page.

About Bates Group’s Employment Dispute Litigation & Compliance Support

With over 40 years of industry experience and advanced quantitative capabilities, Bates Group supports all aspects of employment related litigation, due diligence, internal investigations and employment compliance-related support.

Bates’ substantive employment experts are proven industry professionals with experience in sales practice, supervision, employment investigations, regulatory reporting, recruitment, contract negotiation, bonus plans, compensation agreements, and the onboarding and termination processes, including U4/U5 at both broker-dealer and RIA firms.

Our professional staff and experts also provide damages and compensation analyses, including past and future earnings models, what-if scenarios and tax consequences. We have significant experience in assisting counsel with claimants’ damages models, the impact of underlying assumptions, and the application of market/industry considerations, including promissory notes, protocol departures, non-protocol departures, etc.

Bates Group provides consulting and expert testimony for a host of employment related and financial industry matters. Our regulatory team supports financial institutions with regulatory and internal investigations and our compliance team supports financial institutions with due diligence reviews, gap and risk assessments of personnel, and enhanced supervision.

For more information, please contact

Andrew Daniel, Director, at or 503-724-8995


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