Jan 25 2007 by Brad

What To Do With An Alcoholic Business Partner

Question:  We have recently discovered that our business partner is an alcoholic.  He is integral to our business and we need to find him help.  He’s been to a couple of AA meetings, but doesn’t like the “atmosphere.”  Any recommendations?  I don’t expect you to provide recommendations for treatment facilities. However I am interested in knowing how an entrepreneur should handle a situation in which s/he feels that in the best interests of the company, a key partner/executive/investor should exit or transition into another role for whatever reason. What evaluation process should the entrepreneur go through before making a final decision? How do you recommend the entrepreneur approach that person and with what type of exit or transition strategy?

Our Take:  This is a very unfortunate and sensitive matter.  Besides the personal issues, there are also business and legal considerations to address and we can not urge you strongly enough to speak to your lawyer, as state law can drastically change your options.  Normally, either Brad or I answer questions posed to us, but for this post, both of us will respond, Brad highlighting the business side and Jason addressing the legal.

Brad’s Take: I am no expert on alcoholism.  However, I have had several friends that either became alcoholics or drug addicts.  In each case, their addiction dramatically decreased their ability to function in a business context over a period of time until it reached a point where they had a meaningful negative impact on the business they were involved in.  These were both tragic situations – there were deep personal relationships that were shattered as a result of the stress, tension, and dynamics of the relationships around the addiction.  As a result I only know one way to deal with this in a business context – head on and directly.  As a human, I believe I am responsible for my actions and you are responsible for your actions.  All actions have implications and part of being a person, being business partners, and being friends is that you have to deal with the implications of your respective actions.  While your personal philosophy may be different than mine, I felt the only way to answer this question from a business perspective was to start with my philosophical frame of reference.

If you share my perspective, I’d recommend having a direct and very difficult conversation with your partner.  I’d do it in a non-confrontational manner – in a comfortable setting – with the backdrop of your fundamental concerns. In this case, it appears that your partner acknowledges his addiction, which is a great start.  I’d offer any and all help I could – and be as flexible as possible – within the context of reasonableness – to help him find help.  If AA doesn’t work for him, I’d help him find alternative programs, including such things as therapy and in-patient treatment for addictions.  But I’d insist that he address the issue as a part of staying involved with the business.  If he was unwilling to do this and his addiction impaired his ability to be effective, I’d immediately confront the issue of him departing the business if he was unwilling to address the issue and get help.  I would not be judgemental in any way – in fact I’d acknowledge that I wanted to do everything in my power to be supportive and helpful – but insist on dealing with it in the context of the business.  In my experience, one of the most challenging things for someone that has an addiction to deal with are limits on their behavior, especially in the context of the addiction.  While it sucks to have to be the person that draws the lines in the sand in a situation like this, it’s often necessary.

Jason’s Take:  I agree with everything that Brad has said. Unfortunately, if things don’t work out, you may have to consider firing your partner. Depending on where your business resides, you may or may not be able to terminate someone with a substance abuse problem.  In some states, you have to allow the person to seek treatment for 30-90 days and hold their position open while they are gone.  In the case of a key employee, it can be really tough on a young business to have this person absent from the company and to not have the option to replace them.  Even after this treatment period, you then have to give them some reasonable time to re-integrate into the business.  If you terminate the individual following treatment, one must always be aware of the potential “retaliatory firing” lawsuit.  This is a state-by-state analysis.  In some states, you can still fire a person for any reason.

Do note however, that a person with a substance abuse problem can waive their right to seek treatment and instead accept the termination and sign a release.  Obviously, there will be a price tag attached to this.
As for an “evaluation process” I’d suggest one of two polar opposites:  document everything, have multiple people in each conversation, put the person on notice, offer assistance, etc., or document nothing.   The “everything” approach will build the best record and in the event of a lawsuit, hopefully you can prove that you jumped through all the hoops and that the termination wasn’t an unjust termination.  The “nothing” approach is more akin to sweeping things under the rug.  This would play well if you think you can get a signed release at a reasonable price.