Bandag Automotive Case Notes:
This case highlights some of the challenges a growing company faces, in particular
when there is a change in leadership. Bandag Automotive is a family-owned business
that has recently shifted leadership from Jim’s father to Jim. Jim’s focus on the bottom-
line ignores some of the long-term costs of poor human resource (HR) management
practices. In the absence of a leader with HR expertise, Jim faces several employment-
related legal challenges including those involving the Americans with Disabilities Act
and the Family Medical Leave Act. Jim also cut benefit offerings in the interest of cost
savings without exploring the impact on the organizational culture and employee
performance.
Questions:
B-1. Given Bandag Automotive’s size, and anything else you know about it, should we
reorganize the human resource management function, and if so, why and how?
With over 300 employees, Bandag Automotive should have one or more full-time HR
professionals to manage HR practices. Many of the organization’s legal challenges
have occurred because of a lack of expertise in understanding potential liability issues.
Further, some expertise in employee benefits could assist Bandag in evaluating the
value and utilization of employee benefits and making appropriate recommendations.
Compensation expertise could also contribute to cost efficiency in salary administration.
B-2. What, if anything, would you do to change and/or improve upon the current HR
systems, forms, and practices that we now use?
There are several opportunities for change or improvement in the company’s current HR
processes. Some possible examples:
• Customizing the HR forms used to Bandag’s needs instead of using generic
forms.
• A more formalized process to evaluate the external competitiveness of salary.
The company could establish formal salary grades to ensure more effective
flexibility, are meeting employee needs without unnecessary costs to the
B-3. Do you think that the employee whom Jim fired for creating what the manager
called a poisonous relationship has a legitimate claim against us, and if so, why and
what should we do about it?
It was noted that the employee possibly had a mental illness, and thus, could have a
claim under the Americans with Disabilities Act (ADA). The company should have
determined if the employee’s illness would be considered a disability under the ADA. If
it was a disability, then Jim should have determined if they could reasonably
B-4. Is it true that we really had to put Gavin back into an equivalent position, or was it
adequate to just bring him back into a job at the same salary, bonuses, and benefits as
he had before his leave?
The Family Medical Leave Act (FMLA) requires that employees be returned to the same
or equivalent positon. The courts have generally held that an equivalent position does
B-5. Miriam, the controller, is basically claiming that the company is retaliating against
her for being pregnant, and that the fact that we raised performance issues was just a
smokescreen. Do you think the EEOC and/or courts would agree with her, and, in any
case, what should we do now?
The case does not note if Miriam had any history of performance problems, but it
suggests that she did not. If she was terminated without any warning about her
performance, there is a strong likelihood that the EEOC and the courts may agree with
her given the timing of her termination after her leave and request for a flexible work
B-6. An employee who is deaf has asked us to be one of our delivery people and we
turned him down. He’s now threatening to sue. What should we do, and why?
The company needs to go through a process of considering the employee for the
position. While the employee does have protection under the ADA because he is deaf,
the company needs to determine if he is qualified to do the job with or without a
B-7. In the previous 10 years, we’ve had only one equal employment complaint, and
now in the last few years we’ve had four or five. What should I do about it? Why?
Clearly Jim’s new approach to management is creating some of the legal problems the
company is now facing. Implementing more formal HR policies and practices will help