Federal Reserve Board: H.2 Release for Week Ending January 23, 2016; “Toxic” Employees Working Paper; Administrative Leave

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending January 23, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Change in Bank Control First American International Corporation, Brooklyn, New York — change in bank control of First American International Corporation and its subsidiary, First American International Bank, Brooklyn.

-Permitted, January 21, 2016


PB Financial Group, Inc., Denver, Colorado — withdrawal of the Board’s July 7, 2015, denial letter disapproving a change in bank control notice by Justine Hurry to acquire PB Financial Group, Inc., and its subsidiary, Premier Bank, Denver, in light of the bank’s closure.

-Approved, January 21, 2016






Enforcement Flagship Financial Group, Inc., Eden Prairie, Minnesota — written agreement issued August 19, 2011, terminated January 14, 2016.

-Announced, January 19, 2016


Prospect Financial Corporation, Warwick, Rhode Island — supervisory agreement issued by the Office of Thrift Supervision, dated October 6, 2010, terminated January 14, 2016.

-Announced, January 19, 2016




Separately, I will briefly discuss other items–“toxic” employees and administrative leave.

“Toxic” Employees-A Comment on a Working Paper

Housman, Michael, and Minor, Dylan (2015). “Toxic Workers.” Harvard Business School, Working Paper 16-057. November. 

This working paper suggests that organizations should avoid “toxic workers,” those who engage in behavior that adversely affects fellow workers or other company assets. While an interesting topic, the authors allow for wide interpretations from narrow, industry-specific data.

The authors use 5 standards to determine toxic workers–overconfidence, self-regarding, exposure to toxic employees, a job’s likelihood to produce toxic employees, and profession to follow the rules. It was the last that caught my attention. How could rule following be a sign of a toxic worker? Well, the answer may come from the data the authors use. The data that the authors used for the paper was from job-testing software to large employers (customer care, outbound sales). [Author’s note: These descriptions sound like call center jobs. These jobs tend to be low paying, and have high pressure, and high turnover.]

In the call center environment perhaps being a strict rule follower may lead to unpleasant customer experiences and complaints, hence such a person would be considered toxic.

The weakness of this paper is that the authors did not mention the limitations of their paper due to the source of the data and the specific nature of the jobs covered by the data. Instead, a broad proposition is offered for all workers, when the paper itself is far more limited in fact.

Administrative Leave

The Washington Post, through Joe Davidson, reported on a bill, S.2450, the Administrative Leave Act of 2016. The bill proposes to control the use of administrative leave, which has been used for agencies longer than the limited amounts, according the Comptroller General of the United States. The target of the bill seems to be the payment of leave to employees who are placed on seemingly endless administrative leave.

While that is a good motivation, the zeal to handle this issue ignores paycheck-to-paycheck employees suffering managerial abuse. A likely result is that such an employee would be placed into nonpaid status, potentially starting a spiral of financial disasters. These issues require more care than a quest for a hasty solution. In addition, the employees need to have their voices heard, not just of management, for example, Senior Executives Association, the Federal Managers Association, which not surprisingly support this bill (as they will not likely face financial repercussions for error).

[Author’s Note: The National Border Patrol Council, a part of the American Federation of Government Employees, supports the bill, according to the article–I am not sure why only a component of AFGE is supporting the bill.]

I would hope that these civil service “reform” proposals do not come piecemeal, slowly unraveling the civil service system. Congress should ensure also that all voices, especially employees, are heard before voting on these proposals. It is the responsible, democratic, and fair way forward.