Sloan Program: Entry 1: Arriving at Stanford for Orientation

This week I started as a Sloan fellow at the Stanford Business School – which isn’t called the Stanford Business School at all – it’s almost always called the GSB by people in the know (short for the Graduate School of Business) -- so if you run into a Stanford Business School alum, say "GSB" to them and they'll be impressed. So I’m going to augment my usual “entrepreneurship entries” in the Zen entrepreneur blog with updates on what it’s like to attend this program at Stanford, for those of you who might find this fun or interesting, or perhaps both.

For those who have never heard of the Sloan Program, it’s a program that exists in three business schools in the world – starting with my undergraduate alma matter, MIT (which has, confusingly, both the Sloan School of Management and the Sloan Fellows Program). Here’s what I know about the history of the program:

The program was started by the old grandfather of modern American business, Alfred P. Sloan, the first CEO of General Motors. He was also an honorary member of the Dead Entrepreneur’s Society (ask me about that one privately if you’re interested since it was a group that existed briefly at MIT back in the early 1990’s). Mr. Sloan believed that mid-career executives who had been identified as “future business leaders” in America needed a special program that was set away from the business world to study management. Thus they (we) could return to the world of business with a fresh perspective, as well as practical leadership and business training that would be very difficult to get "on the job". Later, Sloan decided (through some wrangling by the schools themselves since he supposedly rarely gave money to any institution other than MIT, or so I’ve heard) to give some money to Stanford and the London Business School for similar programs. Each of the three Sloan programs is different – for one thing, they all have different lengths. For another, they have different curriculum (curriculi?).

Of course in Sloan’s day, being a “future leader” meant being an executive at one of America's largest companies. In fact, in the beginning all Sloan Fellows (as we’re called – don’t ask me why we’re Fellows and not students – I haven’t the slightest idea but it sounds very cool), were sponsored by their corporations. Today, many of us are either entrepreneurs or in-between jobs, who either have enough money to burn (er, I mean to say invest) for the program ourselves, or are wiling to do the American thing and borrow money from the federal government or private banks to attend. We’re called “self-funded” fellows (as opposed to “company-sponsored” fellows).

The only differences between self-funded and company-sponsored Fellows, as far as I can tell thus far are: 1) company-sponsored fellows have to go back to the company that paid for their tuition (rumor is that some companies will make you pay back the tuition if you don’t return), and 2) company-sponsored fellows have to get special permission to attend workshops like “entrepreneurship”, nor are they allowed to to use the career services at Stanford to look for jobs (for obvious reasons!). Otherwise the classes and experience are pretty much the same.

I heard about this program, surprisingly, not at Stanford or MIT, but at the London Business School, at my younger sister’s graduation from her MBA class last year. I saw a bunch of guys at the graduation who were my age (late 30’s) rather than her age, and I started to wonder what these old guys called “Sloans” were doing at Business School.

I chose to apply to the Stanford program because 1) I’ve always wanted to go to Stanford, which has a great reputation, 2) It’s at the heart of Silicon Valley and I’m a software entrepreneur, which makes for a good fit, 3) It’s in sunny California and not cold Boston or foggy London, and last but not least, 4) it was the shortest of the three Sloan programs (10 months, starting in September and ending in July).

I figured it would be OK to take a break from my business for this many months if I kept my cell phone with me at all times, still participated in board meetings and late night calls from time to time. We’ll see how well that works.

So with that out of the way, this week the US Fellows arrived on campus (many of the international Fellows arrived early), and we finished our orientation for the Sloan program. Classes start formally next week after the Labor Day weekend. Here are some quick observations about the first week:

1) Our class is very international. Given the global nature of business today, that’s probably a good thing. I think we have 18 different passports represented in our class of 57 people – other Fellows have come all the way from India, Japan, Singapore, China, Korea, Argentina, Brazil, and Europe to attend this program. I for one am looking forward to seeing how business is done in these other parts of the world and seeing how the dynamics of the class evolve with so many cultures represented.

2) As part of the curriculum, we get to go on "field trips" to some interesting companies in the US. I guess it wouldn’t really do for Business School students to just study at a University without going to see some real life businesses. For those of you who’ve never been in business school, these kinds of trips are not labeled "fun" but are actually part of the academic curriculum. This year we get to visit Google (if you don’t know who they are you probably wouldn’t be reading this blog online), LinkedIn (one of the more successful social networking sites of the past decade), Boeing (yes, we get to see the biggest building in the world, which is the size of 74 football fields), Nike (way cool, but we were warned not to wear Reebok or other competitive sneakers when we visit them -that would be considered a sneaker faux pas), as well as some institutions in DC and New York in the spring. Last year, the DC trip included a meeting with Bernanke (the Fed Chairman who replaced Greenspan), but not sure if we’ll be able to get him this year.

3) We are going to South America for an international trip at the end of the year. It seems that most people I know in business school end up travelling to Asia for an international study trip– either China or India or both -- since that’s where the “action” is today. In fact, last year’s Sloan class at Stanford just went to Asia at the end of their program. So, I gotta say at first I was a bit puzzled by our decision to go to Latin/South America instead. But I am looking forward to the novelty of it - Brazil has a very interesting economy these days, I’ve never been anywhere in South America, and I hope to see both Machu Picchu and the Nazca lines after the end of the trip. I’ll get to go to Asia on my own anyways (after all, I do own part of an outsourcing business in Pakistan, and India and China are not too far from there, political considerations aside). However, at least one of our South American friends didn’t seem too excited by going back there for the international study trip – he’s planning a separate vacation after our trip, going to, you guessed it, Asia.

4) Bill Gates is your friend. We had a Microsoft Excel workshop that was meant to “refresh” our understanding of Excel, with Professor Moore, who did in fact write the book on modeling with Excel. I’ve never met anyone who seemed to be so taken with Microsoft Excel – despite the many bugs that he warned us about. I thought I knew Excel pretty well already – having put together budgets, income statements, proposals, and balance sheets for my many companies. Turns out I didn’t know much about Excel at all – never heard of Goal Seek or Data Table, not to mention add-ins like Solver, Crystal Ball and Extend. Wish I had known about these sooner – they might’ve come in useful! I guess i'm going to be spending alot of time with my new friend over the school year.

5) Study Groups are the Key to Our Salvation. We were assigned to our first Study Group during our Orientation and we had a meeting with our group where we were supposed to discuss our strategy for running the group and how best to make it effective. I guess this was in good corporate style since I really had no idea what a Study Group was, or what it was supposed to do, and I suddenly found myself in a meeting about how best to run one. During my undergraduate days all we had were informal study groups – nobody was assigned to them, we were just a few friends who studied together and might, on occassion, copy each other’s problem sets if we didn’t have time to get them done by the due date (actually did I just say copy? No, that was a JOKE – at MIT we would NEVER copy one another’s problem sets, it is after all against the rules you know). In some classes during my undergrad days, we had group projects where one grade was assigned to the whole group for the project - maybe that's what a Study Group is. In Business School, it seems like everything hinges on Study Groups. Once I figure out exactly what one is supposed to be, I’ll let you know how best to run one!

6) Sloan Fellows have it easy compared to regular MBA’s. Since we’re older, with more management experience than your typical MBA student, most of us haven’t been to school in a while (the average work experience in our class is 12 years). That means that we get a bit of “special treatment” – though it does mean we have to come to school early. We have what’s called a “pre-term” – we take 3 classes for 3 weeks (Strategy, Managerial Accounting, and Microeconomics) without grades – it’s to get us used to the idea of “sitting in a classroom”, “arguing our points”, doing “assignments”, and doing all the things that students do again. Since I graduated 16 years ago, I think this is a very good idea!

In fact, this sounded pretty easy to me – we had a similar thing at MIT during my undergraduate days: our whole freshman year was pass/fail which took away a lot of the stress of competing against so many smart kids when you first arrived on campus. Many of the Sloan Fellows are married with kids, and some are business owners like me, so we have a lot of other things to be stressed out about. Like I said, this pre-term seemed like it was going to be pretty easy; but it turns out we have to read our first case and several chapters of our textbooks over the labor day holiday before our first class on Tuesday. Oh well, I better stop writing and start reading. Half the weekend is over and all I’ve done so far this weekend is go to a barbecue with other Sloan Fellows, and visit the world-famous Sausalito Art Festival.

SPECIAL DISCLAIMER: the opinions and experiences recounted in these blog entries about my year at Stanford for the Sloan Program are my own personal observations and ranting. This blog is not endorsed by either the Stanford GSB or by any of my fellow Fellows.

Can't Currently Count on Kin Care Case

How's that for alliteration? OK, it's Friday. So sue me. Maybe I can represent me. Anyway, the Supreme Court took up McCarther v. Pacific Telesis Group here. The issues on review:

Petition for review after the Court of Appeal reversed the judgment in a civil action. This case presents the following issues: (1) Does Labor Code section 233, which mandates that employees be allowed to use a portion of "accrued and available sick leave" to care for sick family members, apply to employer plans in which employees do not periodically accrue a certain number of paid sick days but are paid for qualifying absences due to illness? (2) Does Labor Code section 234, which prohibits employers from disciplining employees for using sick leave to care for sick family members, prohibit an employer from disciplining an employee who takes such "kin care" leave if the employer would have the right to discipline the employee for taking time off for the employee's own illness or injury?

We posted on this opinion here. We wrote an article here. Much toner and pixels spilled for naught. Now we must wait for the Supreme Court to decide this important wage and hour / leave issue here. If you want us to do an amicus brief while we're waiting, email me.

Court of Appeal: Inadequate Notice of Disability But Sufficient Notice for CFRA Leave

The Court of Appeal decided that Continental Airlines management had insufficient notice that its employee, Henry Avila, had a covered "disability" under the Fair Employment and Housing Act. The employer knew the employee had missed work because he was "sick," was hospitalized for three days, and that he presented a couple of slips from Kaiser putting him off work for short durations. The court, though, found it was undisputed that the employer did not know that the reasons for the absences amounted to a "disability" under FEHA. The plaintiff's failure to accommodate claim failed for the same reason.

However, the court held that Continental was on sufficient notice that the employee needed CFRA leave. Avila's merely calling in sick was not sufficient notice:

That plaintiff called in sick was, by itself, insufficient to put Continental on notice that he needed CFRA leave for a serious health condition. (See Gibbs v. American Airlines, Inc. (1999) 74 Cal.App.4th 1, 9 [“an employee who calls in sick to work for several days while taking antibiotics for an apparent flu has not provided her employer with ‘notice sufficient to make the employer aware that the employee needs CFRA qualifying leave’”]; see also Stevens v. Department of Corrections (2003) 107 Cal.App.4th 285, 292 [“in the context of leave for an employee’s own serious health condition, the mere notice that an employee seeks to use sick time is insufficient to place the employer on notice that the employee seeks CFRA-qualifying leave”] [dictum].)

Yet, the court held (2-1) that the employee's claim that he gave the Kaiser doctor's notes to an unidentified manager was sufficient to create a triable issue of fact that he sufficiently requested a CFRA leave. The employee's testimony was sufficient to require a trial as to whether the company had adequate notice that the employee was hospitalized for 3 days, sufficient to
constitute a "serious health condition" requiring leave. The dissenting justice believe that the employee did not make a sufficient request for leave.

The opinion in Avila v. Continental Airlines is here.

California Paid Sick Leave Bill - Status

AB 2716 is the California bill that would mandate paid sick leave for ALL employers (even small ones), albeit with a few exceptions stated in the bill. The bill is modeled after San Francisco's paid sick leave ordinance, here. This is the probably the bill that would have the most impact on employers if it is passed and signed.
But, according to the Legislature's website, the bill has been placed in the Senate Appropriations Committee's "suspense" file (here). So, this bill may be dead, at least for this session.

DGV

California Supreme Court Says "no" to "Limited" Non-Compete Agreements, but "yes" to Broad Releases

The California Supreme Court issued its opinion in Edwards v. Arthur Andersen - read here -

The Court flatly rejected the "limited" or "narrow" non-competition agreement as unlawful under Bus. and Prof. Code section 16600. The court said that California's unfair competition law bans all non-compete agreements, even when they only restrict the employee's right to work for a limited number of employers. So, bid a sad goodbye to Ninth Circuit cases recognizing the "limited" non-compete such as International Business Machines Corp. v. Bajorek (9th Cir. 1999) 191 F.3d 1033 and General Commercial Packaging v. TPS Package (9th Cir. 1997) 126 F.3d 1131.

Below the fold, but perhaps more importantly, the court upheld a release that covered "any and all" claims. The lower court held that the release was invalid because it included unwaivable claims such as for reimbursement of expenses under Lab. Code section 2802. The court said that general release language such as at issue in Edwards impliedly did not include the release of claims that are not capable of being released:

We apply this rule in holding that a contract provision releasing “any and all” claims, such as that used in the TONC in the present case, does not encompass nonwaivable statutory protections, such as the employee indemnity protection of section Labor Code 2802. In so holding, we interpret the TONC such that it does not violate Labor Code section 2804. As a consequence, the TONC is neither unlawful nor null and void.

So, that's really good news for those of us employment lawyers who don't carve out all unwaivable claims from our releases.

DGV

California Supreme Court Takes Up Harvey v. Sybase

I posted here about Harvey v. Sybase. The California Supreme Court granted review here. The issues are whether the "same actor inference" (against discrimination) applies at trial and heightens the plaintiff's burden, and whether a court of appeal reviews a punitive damages award under the "clear and convincing" evidence standard.

Stay tuned.

Narrowcast Supreme Court Opinion Contains Hidden Gems

So, I actually did not read Miklosy v. Regents on the day it was issued. The headline holding is that the state's Whistleblower Protection Act, Gov't Code section 8547 et seq., does not apply to the University of California, unless the University fails to address an internal complaint. Of course, this case is important to the University, its lawyers, its employees, and people who sue the University. But I'm none of those.

Yet, at the end of the opinion, the Court made some key rulings that affect all of us California employment lawyers:
- the court endorsed the long line of court of appeal decisions holding that individuals may not be held liable for wrongful termination in violation of public policy;
- the court held that claims for intentional infliction of emotional distress are preempted by the Workers' Compensation Act even when the conduct alleged violates public policy. The claim for wrongful termination is not preempted, but the common law IIED claim is.
- public entities may not be sued for wrongful termination in violation of public policy.

DGV

New California Law: Limit on Wage and Hour Releases

The Governator signed another employment law. This one's called AB 2075, which modifies Labor Code section 206.5. already prohibits releases of any claim for wages unless payment has been made. The new subsection (b) will define "release" to include

requiring an employee, as a condition of being paid, to execute a statement of the hours he or she worked during a pay period which the employer knows to be false.

If your organization requires employees to certify their hours before you pay them to avoid later wage claims, you may wish to take a look at your practices. This law will take effect 1/1/09.

DGV