I walked into my office on the 31st floor of San Francisco's One Market Plaza, a posh piece of real estate in the heart of the financial district with a window overlooking San Francisco Bay. I felt good about working for Hamilton Taft & Co. and got along splendidly with the chief executive officer, Connie "Chip" Armstrong. My officemate was reading The Wall Street Journal and had a worried look on his face. "We made the front page," he said.
It wasn't a complimentary story.
As a payroll-tax management company, the business filed local, state and federal payroll-tax forms on behalf of clients and deposited their payments with each appropriate taxing agency. The newspaper story, and the dozens more that followed, alleged that Mr. Armstrong and his staff diverted millions of dollars in client funds. They allegedly did this by manipulating tax forms to create a Ponzi scheme that siphoned off client funds intended to be paid to the government and then covered the deficit with further manipulations on subsequent filings. I personally had created the program that generated the tax forms, and so by implication, I was also guilty.
In 1997, Mr. Armstrong was sentenced to nine years in prison and ordered to pay nearly $63 million in restitution to clients, according to an Associated Press report. In 2000, the 9th U.S. Circuit Court of Appeals upheld 17 of his 21 convictions and ruled that there was enough evidence for a jury to find that he had intended to defraud clients.
Most of the staff and I had been spared being charged with criminal wrongdoing, but what ensued was just as bad.
A Career Killer
After I left the company, my job search was infected by my link to the scandal. Since my greatest accomplishment involved the creation and processing of the tax forms that were allegedly fiddled with, I couldn't very well boast about them. Indeed, when I was fortunate enough to land a job interview, I spent the bulk of the time satisfying the hiring manager's morbid curiosity about the case, trying to explain that:
I wasn't party to the decisions to invest the funds in real estate, gas and oil;
There was another side to the story; and
The money isn't buried in my backyard.
Following many frustrating interviews and a handful of unacceptable job offers, I decided to become a free agent. For years, I'd spent my spare time writing magazine articles for the business and trade press as well as occasional public-relations items for local companies. Faced with a problematic job search, it seemed like the best time to transform myself into a consultant and freelancer, a course I've followed since that time.
Lifting the Cloud
The "guilt-by-association" syndrome, where a good employee's reputation is darkened by the cloud of a former employer's misdeeds, is more common than many people realize, according to Kevin Rosenberg, managing director at BridgeGate LLC, an executive-recruitment firm in Irvine, Calif. "There are numerous mid- to senior-level executives I've worked with in the past who have worked diligently for exceptionally good organizations that have had exceptionally bad things happen," he says.
Janice Bryant-Howroyd, CEO of Act-1 Group, a Torrance, Calif.-based placement and temporary-staffing agency, is just one of many human-resources professionals who have encountered and overcome such problems for their clients. She tells of a high-level administrator who lost her job amid a scandal at her prior employer, a small company whose owners had acted inappropriately in handling its finances. In other circumstances, the high-ranking administrator "would have had recruiters searching her out," says Ms. Bryant-Howroyd.
The administrator was able to land a new position in part because she had a placement professional -- Ms. Bryant-Howroyd -- doing advance work to soften the blow to potential employers by explaining the situation ahead of time and providing reassurances that she was in no way involved.
Executives also can be tainted with guilt by association when their companies come under new management. Mr. Rosenberg says he once worked with a job candidate who held a vice president-level job at a publicly held consumer-goods manufacturer under scrutiny for its accounting practices.
The candidate was an exceptional manager and had nothing to do with the manufacturer's financial troubles, says Mr. Rosenberg. "However, the new regime of people that came on board to correct the situation looked at the line managers as part of the problem," he says. "He had the cloud over his head because of the actions of a very few individuals within the organization. His concern was how the [job] market would accept his candidacy based upon the issues that [the company] faced."
Ultimately, the manager stayed with his company but suffered the consequences of belonging to the old guard under new management. He lost perks and saw additional layers of management inserted between him and the top echelon of the corporate structure. Further, he had fewer advancement opportunities since he wasn't part of the new "inner circle."
Rising From the Ashes
Well-meaning friends and acquaintances will likely tell job seekers tainted with guilt by association to simply leave the association off their resumes. Mr. Rosenberg counsels against this. "Be forthright," he says. "Don't wait for someone to surface the history, especially if it's recent, because it will always surface."
Ms. Bryant-Howroyd agrees. Doing so will be difficult, she acknowledges. "It's kind of like seeing the dentist without the advantage of anesthesia," she says. "Whether you handle it in an amusing way or a serious way or a direct way, state it right up front."
Being Your Own Spin Doctor
Paul Villella, president and CEO of HireStrategy, a Washington, D.C.-based executive-recruiting firm, says that the notoriety of a scandal sometimes actually helps job seekers secure interviews. "Any press is good press," he says. "Once you're in there, you have the ability to focus on your own skills and your own capability."
Mr. Villella offers this approach for discussing the potentially sensitive topic with hiring managers: "Certainly, you're aware of the troubles we've had at Company X. I want to let you know that my role kept me out of that, I wasn't involved in it at all, and in fact, my focus was on these areas..."
It's possible to distance yourself from a scandal, according to Jeff Kaye, president and co-CEO of Kaye/Bassman International, a Dallas-based network associate of Management Recruiters International Inc. "Turn it into a positive, as a motivation for change. Present the problem in such a light as to create value in having been part of it," he says. For example, having gone through a corporate scandal could give a human-resources professional valuable experience in handling employee morale during a difficult time.
Hiring managers who are willing to listen to your story, understand the players and the dynamics involved and move beyond it are likely to be better employers, says Mr. Kaye. "If an organization truly objects to the fact that you worked for a company, it's probably not [an organization] that you want to work for," he says.
