Exec claims systemic bias? Don’t shoot the messenger

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in Hiring,Human Resources

If a manager or other high-level employee comes forward with charges the company discriminates based on race, sex or other protected characteristics—stop, look and listen!

Unless you are absolutely sure there’s no basis for the manager’s claims, take those charges seriously. Whatever you do, don’t punish the manager or try to drive him out for raising concerns. If you do, you may end up owing far more than back wages. A jury may conclude he was right and zap the company with punitive damages, too.

Recent case: Brian Kauffman, who worked for Maxim Healthcare Services, took an internal stand against what he perceived as a companywide, long-term effort to keep the business “a white-male-driven company.” Because he was involved in the hiring process, he had a big-picture view of who was hired and who wasn’t.

In particular, he complained that a black candidate wasn’t hired because he was “too ghetto,” and that he was berated for hiring a woman who was “soon to be knocked up.” When Maxim fired Kauffman, it told him it was because the hiring decisions he wanted to make wouldn’t fit “within the company’s culture.” He sued.

A jury concluded the company fired Kauffman for opposing illegal discrimination. It awarded him $137,000 in damages, plus $1.5 million in punitive damages. The court then reduced the punitive damages to $551,000, concluding that four times actual damages was a reasonable amount and would be enough to “discourage” Maxim and others from similar behavior. (Kauffman v. Maxim Healthcare Services, 04-CV-2869, ED NY, 2007)

Final note: Executive insiders claiming systemic discrimination can be an employer’s worst nightmare in court. Juries often consider top managers trustworthy because they appear to have nothing to gain and everything to lose by bringing attention to such problems.

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