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‘Fairness’ audit prevents surprise liability

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in Human Resources

It’s hard to control what low-level supervisors are doing—especially when it comes to distributing work in a commissioned sales environment.

Your best protection is to conduct a self-audit of all leads. Make sure everyone is getting a fair cross-section of leads based on easy-to-understand metrics.

Recent case: Denry Brown, who is black, worked as a salesman for Sears Home Improvements. He was paid strictly by commission, based on the number of sales he converted from leads the company provided.

Sears arranged appointments for salespeople to make in-home sales presentations of various home improvements, such as new kitchens. Each morning, a district sales manager received a list of appointments for the day and distributed those to the sales staff. Each received two leads per day, including so-called prime leads in which both spouses were scheduled to be present. Those leads were the most lucrative because they typically were easier to close.

Sears received an anonymous call to its ethics hotline complaining that black salespeople didn’t get the best leads, which resulted in lower pay. Sears investigated and found that there was very little difference in the quality of the leads. It concluded that there was no discrimination going on.

Later, Brown, who was not the salesperson who called the hotline, quit and sued. He alleged that he earned less than white salespeople because his leads were typically in lower-income areas.

Sears had solid evidence (based on its earlier investigation) that showed no statistically significant difference in the quality of the leads assigned to white and black salespeople. The court agreed and tossed out the case. (Matias, et al., v. Sears Home Improvements, No. 09-15177, 11th Cir., 2010)

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