Clueless Inc. Invites Trouble

Workforce-management terrain is littered with big financial judgments againstcompanies that thought they were doing the right thing butignored warning signs that they could be a target of lawsuits, legal expertssay. During a recent conference in Palm Springs on human resources and the law,a consensus emerged about some common mistakes. What follows is a composite of acompany, call it Clueless Inc., heading for trouble. If you recognize yourcompany here, you may want to review your policies. Orpossibly line up a good legal team.

• Clueless Inc. likely is in retailing, food services, or manufacturing–industriesthat draw a disproportionate share of discriminationcharges. It probably has strong consumer identity. Coca-Cola’s fear that itscustomers might be lining up to buy Pepsi-Cola is said to have figured in thesettlement of a discrimination suit for $192 million. But small companies aren’toff the hook, either, because they may not have human resources departmentsor staff attorneys to guide them through constantly changing legal requirements.The small company boss likes to hire on the basis of a handshake. He doesn’tkeep records.

  
  

•  Clueless engages in employee profiling, a smoking gun in anydiscrimination suit. Management might think, “This is man’s work,” andrequire a physical-fitness test such as lifting a weight so heavy that womencouldn’t do the job.

  
  

• The lawsuit-ripe company doesn’t like whistle-blowers. Complaints aregiven superficial investigations, then forgotten. The complaining worker isisolated, given an empty office with nothing to do, and harassed in other ways.

  
  

• Hiring and promotion policies at Clueless result in instances of whatAtlanta attorney Douglas Towns calls the “inexorable zero.” This means that,either company-wide or within divisions or management ranks, there are zerowomen, or no African-Americans, or older workers, or disabled workers.

  
  

• Unknown to management, plaintiffs’ attorneys use computers and insidesources to study hiring and promotion practices at Clueless until they know thecompany better than the CEO does. Management is asleep at the switch, thinkingClueless has a top-notch diversity program. They don’t realize that thecompany has such high turnover and movement up and down the ranks that it’snot the company they think it is. Plaintiffs’ attorneys realize thatAfrican-American middle managers are being blocked from further promotion. Whenthe suit ultimately is filed against Clueless, attorneys arrive with such amassive amount of evidence that corporate officers run for cover–and a costlysettlement.

  
  

• The settlement seems almost painless at first, since Clueless is rakingin big profits. Top management figures that the payoff to underrepresentedworkers will hardly affect its bottom line. What they don’t realize is thattheir problems are only beginning. The company may be forced to give power overpay and promotions to a third party, institute consciousness-raising sessions,set up hot lines, and change the makeup of its board of directors.

  
  

Workforce, May 2003, p. 30 — Subscribe Now!