45 Days — Chapter 4— It’s Easy to Fire In France

“45 Days” is a non-fiction account of my experience as the Founder of Rude Media between May 1, 2016 and June 15, 2016. 45 Days was written starting on June 16th, initially as a therapeutic effort to process my experiences internally, as well as to try to distill down an experience that very few Founders have shared openly.

June 21st — This afternoon I took a break from taking in all that New York City has to offer to return to France — or at least, I got as close as one could to returning home while abroad. I attended the 3rd edition of La FrenchTouch Conference, an event where French people come to NYC to talk about France. The event itself is pretty good, if you’re willing to navigate a mostly French-speaking networking room. I got to reconnect with a few French friends who live abroad, a few French friends who are too busy to meet when we’re in France, and I also got to have a good chat with Trello CEO Michael Pryor.

I haven’t truly been able to attend an event since I became an event organizer — I’m constantly analyzing speaker management, attendee flow, design decisions, operational strengths/weaknesses, or inspiration for things we can try on our end. Even when I attend music festivals, I find myself budgeting out the cost of each stage, trying to predict the vendor agreements, and calculate the ROI for switching to a digital payments platform.

Like most journalists, I also have trouble sitting through conferences, with very few exceptions. If there’s someone I want to hear from, I’d rather request a 1-on-1 interview before or afterwards. I imagine most attendees, given the option, would rather a face time with speakers than listening to them — this is something that more ambitious conferences look to tackle, either by forcing speakers to ‘be available’ after they are on stage (TNW Conference does a great job of this), or by creating alternative speaker formats. One of my objectives with future events is to hire actors and put them on a speaker stage decorated like a bar, a palace, a prison — anything that will get speakers out of their comfort zone, and create variables (like a prison guard coming by and yelling ‘lights out!’ or a bartender taking orders from speakers when they come on stage) that create real experiences that can’t be imitated through face-to-face chats.

I’m often surprised by events that under deliver, or are just outright bad — Our motto at Rude Media has always been “do events that don’t suck.” There doesn't’ seem to be a correlation in size of team to quality of event, even if you factor it the ratio of team size to attendee size or budget. That is, you can’t throw people at a problem. Great events — Slush, Pirate Summit, SXSW, Bonnaroo, Burning Man — regardless of size, they create the only experience the matters. The one where, even if you haven’t been, you 1) want to go, and 2) know that it will be good.

Events are human, both in that they leverage something inherently human (socializing), and they are largely dependent on the organizing team. 4 highly motivated people with identical visions (and you have to have a vision) can do more damage than 40 people who are looking to tick boxes in a check list.

As a media company, that means that hiring in our events team is as important as hiring in our product team. And qui dit “hire” dit “fire” — you can’t talk about one without talking about the other.

And boy have I had some interesting hiring experiences in the past 45 days.

Once we knew that the company needed to reduce burn drastically, we knew that there were only two potential outcomes: fire most of the team, or fire all of the team (that is, close shop). Once you come to terms with the fact that not choosing who to fire is akin to firing everyone, it makes it very easy to make decisions. We already knew that anyone not actively producing revenue for the company would have to go, so the product team got the word first, which began my first of three experiences with firing people that I’ll share today.

Part 1: Firing people when you have to.

The first thing the product team wanted to know was when their last day was. I had already told them (Chapter 1) that after June 15th they shouldn’t expect to be paid, so I told them that would be a good date to keep in mind. Then began the first dreadful question of “which type of layoff will it be?” — and this is where 1) I have to pause and explain employment law, and 2) I discovered why labor laws scare Americans and freeze the French economy.

For all intents and purposes, there are only two contract types for employees — those which have a pre-arranged end date (think contractor, but with way more rights), and one that goes forever. They are named CDD and CDI, the final D/I stands for “Determined” and “Indetermined” Duration of Contract. Those contracts generally default most decisions to the 1,000+ page labor code, which mandates hours worked, requirements for employers to notify employees of certain decisions, process for laying employees off, and much, much more.

The only extra thing you need to know is that all contracts have a trial period, which can last up to 3 months and can be renewed once. So, essentially, the strict labor laws kick in after 6 months.

I went to my accountant (accountants are to France what lawyers are to the US — they tell CEOs what to do, and CEOs shut up and take it) and gave the list of the people I’d need to lay off. One of them was still in their trial period, so they could be let go the next day. Another wasn’t, which I knew (he’d been with us for 18 months), and I wanted to know the best way forward in order to give him the best unemployment advantages possible.

Again, two options:

1. He signs a paper saying he’s OK to leave (Rupture Conventionelle), or
2. He doesn’t. And we lay him off for economic reasons.

I asked which would be best for the employee, and my accountant lied to me. Not on purpose, just because they didn’t care about the employee, so they didn’t know that a 2012 law which looked to reduce the number of Rupture Conventionelle had made it so that employees who agreed to be laid off would get reduced unemployment.

She also lied to me for another reason, but I’ll be back to that later. Let’s pause on this story, and look at another employee that I had hired for another part of our team.

Part 2: Firing people when you want to.

I brought on board a team mate at the beginning of this year — we had ramped up quickly, and, for a variety of reasons, this employee got a CDD instead of a CDI, which everyone else had. It was only 8 months, so I didn’t read much into it.

One month in, it wasn’t working. At all. I had known the team member for nearly 4 years before working with them, and so when the first suspicions began to form that maybe they weren’t a good fit, I told myself that I had to give them time. I told the rest of the team to give them time, as they, too, began having doubts about the fit with the team.

Finally, two months in, I send word to my accountant that it wasn’t working out, so I’d like to terminate the contract early.

The phone rang.

Note to self: when your accountant calls you, it’s because you’ve just written something super illegal and they don’t want a trace that they responded/acknowledged your request.

You see, I was in a bit of trouble, because the trial period for the CDD had been set to one month. It had expired. Which meant, if I terminated the contract, I could be held liable in court for the salary and employment charges that I was foregoing.

Shit, I thought. I’m going to have to get this employee to quit willingly.

We went on a walk — our office was too small to have discrete conversations, and I knew this one would get loud — and we spent an hour having it out in the streets, pointing fingers. Finally I told them “one way or another, you will leave this company. You are so detrimental to the morale of the team, that you will kill this company by staying.” She agreed to leave.

I emailed my accountant with the good news. My phone rang.

It turns out, even if the employee wants to leave early, both employee & employer would be sued by the state for breaching contract. That’s right: the French government will sue you if you want to leave a company you work for, if you’ve signed a CDD.

All of this had been happening prior to the 45 Days, and when things began looking bad, I couldn’t have anyone damaging morale any further, so I told the employee to work from home and to only interact with me. It was financially bad for the company, but I needed the rest of the team ready for what was ahead.

Not once did anyone ever tell me that I could be sued if an employee wanted to leave my company, and I have trouble seeing how this could be a useful employment strategy, because the solution to both of these situations ended up being exactly the same.

Part 3: Firing people when you need to.

The turning point came when I spoke with a good friend, Thibauld Favre, founder of Democratech, and formerly Founder & CEO of Allmyapps. I worked with him back in 2012, and in 2015, after his company failed (well, sort of), I had him tell his amazing story on stage at our Founders Event.

The schizophrenic nature of being a Founder meant that, once failure was an option, I had a responsibility to plan for both the best- and worst-case scenarios. I called Thibauld and he advised me someone to talk to. I met with them to talk and explained the situation.

That’s when I learned about just how easy it is to Fire people in France.

I told my lawyer the same thing I had told my accounts and my investors: no matter the outcome, the order of my priorities were as follows:

1. Make sure my team lands on their feet.
2. Make sure my investors land on their feet.
3. Make sure I land on my feet.

We began exploring the possibility of filing bankruptcy — bankruptcy in France can mean either closing the company, or freezing debts while the company gets back on its feet. I asked the fate of the team, and that’s when I learned the following:

When employees are laid off as a result of a company filing for bankruptcy (who gets laid off is determined by the court, although advice from the Chairman is heavily taken into account), those employees are entitled to the following:

1. They are laid off within a week of the company filing
2. They are entitled to up to 45 days of back-pay, covered by the French Government
3. They can opt to have 100% of their salary during one year through Unemployment, or opt for the traditional 50–70% of salary over two years.

So, this meant that, given my June 15th deadline for decision-making, I would be able to cover every salary for every employee no matter how things played out, and everyone (except for me, of course — Founders don’t get unemployment benefits, which works just fine for me. Small price to pay for freedom.) would be taken care of.

I didn’t need to ask anyone to agree to any terms — they, unfortunately, didn’t have much of a say as to whether we filed bankruptcy — I didn’t have to go through Unions or even follow the code du travail redundant request for meetings to inform the employee that they will be called to another meeting to discuss their lay off, which needed to be confirmed by a letter sent in the mail. That’s an actual part of the process of laying someone off. Unless, of course, you file for bankruptcy.

Our offices are right next to Republique, which meant that, since April, every night when I left the office between 7 and 10PM, I passed by 20-somethings who were protesting labor reforms proposed by the French government earlier this year. Those reforms would make it easier for people like me to layoff employees, and would also cap and standardize indemnities paid out to employees in standard cases.

I wonder if anyone bothered to tell them what happens when you can’t layoff someone that you need to? France’s labor policy for the past 30 years has been to bake stability straight into the labor code. As a result, labor unions control the country. Or at least they did, when the economy was doing well. Because, when the economy is doing very poorly, I’d like everyone to know that there is always an easy way to lay off employees: you don’t pay indemnities, you don’t have to wait 6 weeks, you don’t risk getting sued by the government (well, maybe — but that’s another story), and you don’t even need an accountant to approve of it. In fact, “don’t tell your accountant if you’re filing for bankruptcy” is the most sound advice I can give any Founder.

As I sat in the meeting, listening to how simple it would be, if we decided to opt for bankruptcy, to close the company or restructure it, I couldn’t help but wonder why everything else in the French system couldn’t be more easy. If the only cost to filing bankruptcy is giving up what you’ve built, and the cost of continuing for 58% employment charges, VAT charges, being sued for laying off team members, recommended letters in the mail,…. if the worst thing I’d have to do is accept the fact that I had failed, I knew I could handle it.

And that was the first taste I got at the 7th stage of grief: acceptance.

Once I knew that worst case scenario, employees could be taken care of, it was time to look at best case scenario: what can be salvaged, where do we go from here.

To continue reading 45 Days, feel free to click through the Table of Contents below, or subscribe to my posts on Medium — I’ll be adding new chapters regularly.

• Chapter 1: The Last Meeting in April
• Chapter 2: The Seven Stages of Grief
• Chapter 3: Open Heart Surgery
• Chapter 4: It’s Easy to Fire in France
• Chapter 5: Ephemeral. Exclusive. Entertaining.
• More Chapters published soon — Subscribe for updates!