When Does Discipline Cross the Line to Overreaction?

A year plus into the #MeToo movement, employers are all too aware of the negative reaction born from failing to react to incidents of discrimination and harassment in the workplace. But employers also need to be mindful of situations where their snap decision to terminate an employee for perceived discriminatory conduct towards a co-worker or customer can ultimately cause backlash if the allegations prove false.

According to ABC News, a Minnesota Chipotle location recently rehired an employee it had initially terminated for refusing to serve a black customer unless the customer prepaid. The customer recorded the employee’s refusal of service with his cell phone and the video went viral. When Chipotle learned of the incident it immediately terminated the employee. However, a series of tweets from the alleged victim and his friends revealed boastful comments about a “dine-and-dash” incident at Chipotle. Chipotle reviewed the evidence and decided to re-hire the employee.

While this was, undoubtedly, the right move, it is important for employers to create policies whereby snap decisions like this aren’t always made in today’s age of increasing allegations of discrimination and harassment. While the misconduct that led to the Chipotle employee’s termination (and ultimate rehire) was not employment discrimination, it does display the need for dialogue between executives and managers concerning how best to discipline those employees implicated in an incident of harassment or discrimination.

By engaging in succinct dialogue among all levels of the organization, you are more likely to come up with a policy (such as paid suspension) while your human resources or legal departments investigate allegations that stem from clients, customers, employees or third parties. As the Chipotle story shows, making a quick decision to terminate an employee involved in a viral incident can actually exacerbate the situation.

The incident at the Minnesota Chipotle serves as yet another example of the possibility that there is “more than meets the eye” when investigating allegedly discriminatory or harassing incidents. This is certainly not to say that legitimate incidents are not increasing in frequency (they are), but it serves as a reminder that a thorough investigation of all incidents is necessary before making a decision on how to proceed. Failing to do so can have catastrophic public relations and legal consequences.

Third-Party Vendors: Great Value with Great Risk

Your business must move quickly to evaluate opportunities, enter markets, develop products, ramp up sales, respond to customer needs and complaints, and a host of other challenges that make the difference between success and failure.

Leveraging third-party partners, such as suppliers, contractors, consultants, agents, distributors, representatives, and other parties, is now more important than ever for a business is to move grow rapidly and confidently in today’s fast-paced world.


What would you do?

These third-party partnerships can create both the potential for great value and chance of great risk. What would you do in the following situations?

  • A vendor with lax information security controls led to significant personal data disclosures of customers and the customers’ end-consumers
  • An agent you have recruited to seek business from foreign governments on your behalf is engaging in bribery.
  • You receive shoddy or defective parts from your subcontractors or found unsafe components or raw materials built into products for end-consumers.
  • As an exporter you discover that partners violating international trade requirements.

There are a multitude of scenarios that your employees, in various roles in your company, could encounter when working with third-party vendors and these can put your organization in a great deal of risk.


What could happen?

While your company may not be the source of the problem in the above scenarios, it is still going to bear the brunt of the fallout which can result in:

  • Failure to meet your obligations to customers
  • Inability to meet expectations to stakeholders
  • Damage to your company’s reputation for integrity
  • Suspension, restrictions or debarment from certain opportunities


What should you be doing?

As a company, you should be addressing the specific challenges in relationships with suppliers, contractors, agents, representatives, distributors, and other partners and educating all employees throughout an organization that work directly or indirectly with third parties to be educated on these relationships.

Such training would be particularly valuable to:

  • Leadership charged with building and maintaining relationships with third parties
  • Sales staff who work with agents, representatives, and distributors
  • Procurement or purchasing staff who work closely with third parties
  • Operations staff who interact regularly with third parties
  • Functional staff who manage contractors and consultants
  • International trade staff who work with agents, brokers, and similar partners

These partnerships can create both the potential for great value and chance of great risk in maintaining an ethical reputation. In order to safeguard against potential problems, companies need to develop more sophisticated ways to evaluate, establish, and maintain third-party relationships to protect from unanticipated risk and, in turn, help them best achieve their goals from the relationship.

Under Armour Ends Practice of Expensing Visits to Gentlemen’s Clubs

For years, Under Armour allowed its employees, managers, supervisors and even its CEO to expense lunch buffet and happy hour visits to a variety of Gentlemen’s Clubs as part of its corporate policy. Under the former policy, Under Armour employees were encouraged to take clients, colleagues and sponsored athletes to strip clubs to relax and entertain their guests, and the company was more than willing to pay for it.

Yesterday, the Wall Street Journal retrieved an email from earlier in 2018 that ended the longstanding Under Armour practice. The company also issued a statement to CNBC committing the company to addressing inappropriate behavior. The message stated:

“We have addressed these serious allegations of the past and will continue to address workplace behavior that violates our policies. Inappropriate behavior that challenges our values or violates our policies is unacceptable – and will not be tolerated. We are committed to providing a respectful and inclusive workplace.”

Office sponsored strip-club visits are nothing new to a variety of industries including legal, financial and athletic (among others). That said, women have recently become extremely vocal about the offensive nature of these types of business development or “team building” exercises, and the practice has slowed greatly in recent years. With the advent of the #MeToo movement, many companies have understood that catering to machoism and the objectification of women is a recipe for disaster in an environment where all employees' sensitivities to potentially offensive conduct are heightened.

Although Under Armour’s statements make a serious attempt at sincerity, the overwhelming number of national news articles on this topic display the danger in allowing inappropriate practices to continue. Although there will likely be a number of male employees upset with the company for correcting its inappropriate policy, moving away from a potentially misogynistic culture is never a bad thing.

Much of the ink that has been spilled on this topic in the last 24 hours has been overly critical of Under Armour permitting employees to expense visits to the strip club. However, at least the company was honest about its mistakes and is seeking to take a more positive stance on this subject in the future. This is in stark contrast to the many employers who allow incidents of harassment and discrimination to continue to persist on their premises and do nothing more than pay large settlements with confidentiality provisions to cover up their practices. While the practice may not have been appropriate, at least the company did something to admit its wrongdoings and attempt to rectify them going forward.

As always, companies need to take steps to ensure their images are protected and their cultures are inclusive and free of harassment and discrimination. Given the large number of stories like the Under Armour strip club fiasco, now would be an exceptional time to conduct an audit of your harassment policies and training guidelines to determine what steps your organization can take to ensure your organization is not the subject of the next embarrassing news story.

How the EEOC is Revamping Workplace Culture to Prevent Harassment

As the United States continues to grapple with how to best respond to the spate of complaints and press about workplace harassment, the US Equal Employment Opportunity Commission (EEOC) further explores new avenues to addressing this concern. In 2016, the EEOC published its “Select Task Force on the Study of Harassment in the Workplace,” a report which looked into other resolution approaches, including focus on and training related to workplace civility and bystander intervention. Businesses are carefully monitoring the EEOC’s efforts and progress on this issue as it presents among the most forward-thinking regulatory programs to prevent and stop illegal conduct through voluntary measures that also present an economic benefit to organizations.

This week, the EEOC expanded on these efforts. Some 200 attendees were present at Wednesday’s EEOC morning-long Public Meeting on “Revamping Workplace Culture to Prevent Harassment”, to hear testimonies from seven panelists with expertise in unions, research, legal practice, boards of directors and institutional education.

The meeting’s discussion explored the following topics:

Harassment claims continue to rise in the wake of the #MeToo movement. EEOC commissioners reported a significant rise in harassment complaints this year over 2017. And not only sexual harassment—reports of other forms of harassment based on protected categories continue to rise.

Narratives collected that tell of individuals’ stories harassment are compelling. Stories of sexual harassment and abuse, and other forms of harassment, provide strong testimony regarding the perils of this problem. EEOC has begun using some of these stories to help businesses appreciate the gravity of the problem, not just in terms of numbers but also regarding lives harmed. One principal concern is that reporting harassment is such a challenge for many employees that this effort needs to be balanced with related rewards: trust in the organization’s processes for handling complaints, knowledge of the report’s outcome, greater recognition the the reporter did the ‘right thing’, etc.

Harassment hurts business. Some discussion echoed prior EEOC research and guidance that businesses suffer from harassing conduct: low morale, lost productivity, departing employees, among other problems.

A holistic effort is needed within institutions to solve the problem; one solution will not work. The solution must be a combination of leadership and culture, policies and procedures, training, leadership and employee accountability.

Culture and leadership are priority. Without leadership guiding the way to a change in corporate culture that will not tolerate any form of harassing conduct, all the policies, procedures and training will not produce the needed effect. The commissioners and panelists often returned to the importance of these issues in making continuing and sustained progress in eliminating workplace harassment.

Training quality is more important than the type of training. The meeting raised the ongoing discussion of online versus live training, with examples of where each worked well. The deeper discussion involved what elements of training provided the best results:

  • Legalistic training that focused on the definition of harassment appeared to be shortsighted.
  • Contextual and behavioral training is viewed as more effective, which such topics as involved why harassment occurs (abuse of power), how it affects victims, what steps that victims and bystanders can take, barriers to overcome to encourage employees to raise concerns. Also, the meeting elicited the importance of conversations about proper and improper conduct as part of an effective solution.

Accountability is key. If leadership is not held accountable for influencing a harassment-free workplace and harassers are not disciplined for their conduct, then the commissioners and panelists expect little progress to be made.

Bystander awareness and intervention may significantly lessen the problem. The more that individuals in a workplace are willing and able to call out negative behaviors as they occur, the less that harassers will feel they can get away with their conduct or that it’s implicitly condoned. This was identified as a key component in a shift within an organizational culture.

Workplace civility may be a critical tool. Panelists indicated that shifting the focus from negative conduct to positive, affirmative behaviors has a number of benefits:

  • It changes the point of view toward more acceptable workplace practices, which employees are more comfortable addressing, than negative behaviors, which employees may have a harder time dealing with.
  • It helps to call out minor, undesirable conduct before that conduct rises to a level considered as harassment, much less illegal harassment.
  • It focuses the employees’ conduct on an organization’s policy rather than the law, which often articulates a lower level of questionable conduct as improper.

Syntrio continues to monitor the EEOC’s progress and harassment issues in the public sphere as we strive to develop training that enables individuals and organizations to promote respectful workplaces that value all individuals and that prevents or quickly and effectively deals with harassment of any kind.