March 24th, 2008
HR in Prison: Sad End to a Sad Case
No matter where you work today, no matter how bad you think your job or work situation might be, take heart in the fact that it could be a lot worse. You could be Stephanie Jensen.
Jensen, the former vice president for human resources at San Jose, California-based Brocade Communications Systems, went on trial late last year on stock-option backdating charges. Jensen was accused of colluding with her boss, former Brocade CEO Gregory Reyes, to conceal employees’ salary packages from company auditors, shareholders and federal regulators.
Jensen was convicted in December on one count of falsifying company books and one count of conspiracy. Last week, the other shoe dropped for her. She was sentenced to “four months in prison … [as well as] one year of supervised release after serving her prison term and fined the maximum of $1.25 million,” according to a report on ZDNet News. She must also spend the first three months after her release from prison in a halfway house.
Although Judge Charles Breyer of U.S. District Court in San Francisco allowed Jensen to remain free pending an appeal, he had some strong words for the former HR vice president, saying that her sentence should send “a message to individuals who may be confronted with a situation very similar to the one you were confronted with, and that if they don’t say ‘no,’ they are going to spend a lifetime regretting the decision they have made.”
Jensen isn’t the only HR person to get caught up in backdating stock options, but she is the first one to get prison time. Jensen wasn’t an innocent in this backdating scheme. Prosecutors made the case in court that “the facts, and her own admissions, demonstrate that [Jensen] was selfish and knowledgeable, not naive and inexperienced,” as her defense contended.
Most interesting to me is what Jensen’s attorney told the judge before sentencing. Jensen’s “principal wrong,” her attorney wrote, “was not one of design, but rather of inaction, in not questioning more forcefully the direction she received from her superiors.”
In other words, Jensen simply needed to do the right thing. She needed to question the orders from her superiors that she knew were wrong, rather than just go along with what she was asked to do.
“Do the right thing” is one of those catchphrases that sounds good in the abstract but sometimes gets more difficult in the real world. Jensen needed to do what she knew was right, but somehow, her ethical compass led her down the wrong path.
Prison time is a bad way for it to end, but perhaps others who seek that elusive seat at the table will learn from her example and see that being a yes man is not the way to get there.
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I wonder if, in this case, the ‘punishment fits the crime.’ It seems terribly harsh given the circumstances. Apparently, she was not a totally willing participant. I have just read an article about bullying in the workplace. This is becoming more and more commonplace.
Is this justice? Her life will be incredibly hard from this time on and she may never recover. To effectively destroy a person for ’selfishness’ is cruel and unusual punishment in my opinion.
Posted by: Lydia Ferrell | March 26th, 2008 at 3:18 am
As a person who has spent considerable time as the head of HR/LR for both private and public organizations. I agree with the article. We always have to do the right thing and be ready for retaliation. Oh yes, there is Whistle Blower “protection” for what it is worth, but to use it is shooting oneself in the foot. My demotion after saying “no” to illegal activity only allowed the boss to put people in place that won’t say no. It is unfortunate because the new HR leader had never been involved in HR before his promotion and will not know any better. Is this sour grapes? No, I would do it again if faced with the choice. I lost my position but still have my integrity and ethics.
Posted by: Yankee | March 27th, 2008 at 4:55 am
HR professionals have an inherent fiduciary responsibility to their leaders, employees, and stockholders (owners) to always do what is right….even if it costs you your position. When a company has a culture that partakes in obvious illegal activity against the advice of HR leaders, it’s time not only to say no, but to find a new company. That is what makes true HR professionals so critical and so valuable. Effectively packaged, you not only do what is right, but also protect any manager who goes astray. Your gut knows what is right intuitively. Those who don’t, are in the wrong profession to begin with.
George E. Bowen
Vice President, Global HR
Posted by: George Bowen | March 28th, 2008 at 4:30 am