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You have a successful family business. Things are going along well. Then one day, your brother (who is not involved in the business) asks if you would hire his daughter, Samantha. Samantha is a nice young lady, but she has struggled some in life. “Gosh,” your brother says, “I would greatly appreciate it if you could find even a low-level position for Samantha.”

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In the meantime, your son (who is involved in the business), falls in love with Gretchen. They are going to get married, which will require Gretchen to move from across the country. “Gosh,” your son says, “Let’s bring Gretchen into the business.”

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Problems That Can Arise From Hiring Family Into Your Business

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So now you have hired your niece and your daughter-in-law. Things go well for a few years, then some issues arise:

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If Samantha were not a family member, you would fire her on the spot. In addition, your son tells you that he cannot stand the sight of Gretchen anymore and does not want to work in the same building with her. What do you do now?

A Family Employment Policy Provides Answers Before Questions Arise

At this point, you are likely wishing you could rewind the clock back to where you could have adopted a family employment policy. Such a policy would have:

A family employment policy addresses some very important issues:

These are heady questions that people often prefer to avoid. Nevertheless, failure to have a plan can result in terrible outcomes for both the business and the family.

How Do I Develop Our Family Employment Policy?

One approach is for a family business to adopt a mission, a vision and those values specifically related to the involvement of family in the business:

With respect to a family business, a mission statement can answer the following questions:

A vision statement can provide the following:

A values statement can address the following issues:

What Should Be Included in Our Family Employment Policy?

Based on the answers to the questions raised above, your family will develop rules or positions related to employment of family members. Examples of the kinds of statements that can be included in a family business mission/vision/values statement include:

Developing a mission/vision/values statement around family employment can help set expectations, prevent misunderstandings and take some of the emotion out of a difficult situation in the future. Without a stated philosophy, families and family businesses can suffer enormous damage when a family member/employee acts or performs badly.<br> <br>If you need assistance developing or updating your family employment policy, please contact Louis Rabaut in our Labor and Employment Practice Group, Mark Harder, chair of our Private Client and Family Office Practice Group or your Warner attorney.

Legacy Matters

Private Client and Family Office

Of Counsel

Louis C. “Lou” Rabaut

Trusts and Estates

Why Your Family Business Needs a Family Employment Policy

The Warner Norcross + Judd LLP lawyer responsible for the contents of our advertising and this website is managing partner <a href="/people/mark-j-wassink/" aria-label="Mark Wassink">Mark Wassink</a> who can be reached at <a href="mailto:mwassink@wnj.com" aria-label="email Mark Wassink">mwassink@wnj.com</a> or 616.752.2189. Please read our full <a href="/privacy-policy/" aria-label="see privacy policy">privacy policy</a> available on our website.

Why Your Family Business Needs a Family Employment Policy

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