Posted on September 12, 2007 4:23 PM by
Shanti Atkins
We’d like to think that childish, boorish and demeaning antics only happen at “those other” companies; the ones with different values, cultures, and an unchecked workforce. But the reality is that every organization has the potential not just for isolated instances of egregious misconduct, but also for more widespread, systemic conduct – the kind of misconduct that creates significant legal risk and can destroy the culture and reputation you’ve worked so hard to build.
Case in point: EMC. Today’s Wall Street Journal piece on the data storage giant is a doozy: A Data-Storage Titan Confronts Bias Claims.
Seventeen former saleswomen filed suit against EMC back in 2004 and they’re now seeking class action status. The plaintiffs are claiming discrimination and harassment – and the allegations are pretty old school, not to mention, a PR disaster – locker room antics, company paid visits to strip clubs, demeaning sexual remarks, and retaliation against women who complained about the hostile atmosphere.
EMC denies the allegations and is fighting the class certification, as well as the lawsuit.
Why Compliance Professionals Should Take Note
Whether or not these claims turn out to be valid doesn’t really matter. A full-length, feature story in a national newspaper connecting this type of behavior to EMC’s corporate culture is a stinging blow.
More importantly, this situation sends a wake-up call to organizations across the country. Harassment training, including sexual harassment training, remains an absolute must for today’s workers. Men and women still view and perceive sexual harassment differently. (Men and Women View Sexual Harassment Differently: The Power Divide). And trust me, if you don’t tell employees what you expect of them, you can be certain that “issues” like the ones faced by EMC will continue to surface.
And don’t make the mistake of leaving senior leaders off the training list. Education needs to happen at all levels of the organization. (Don’t Forget Your Senior Execs – They Need Compliance Training Too). And senior execs need to do more than talk-the-talk, they need to live the values. Organizational change needs to happen quickly when it comes to harassment. At EMC, it seems as though denying expenses for strip clubs and a slap on the hand really wasn’t enough to change the tide.
And finally, organizations have to start thinking strategically and proactively about managing class action risks. Plaintiff attorneys are looking for bigger cases and bigger dollar returns. EMC is battling a high profile potential discrimination class action, but a more daunting risk facing today’s employers is wage and hour class actions.
Wage and hour claims have been increasing at an astonishing rate (up 86% between 2004 and 2006). And wage and hour class actions now outnumber all other federal discrimination class actions combined. Not surprisingly, wage and hour education is the next tidal wave of mandatory employee training. Not only does training prevent wage and hour violations from occurring by educating employees and mangers about the basic rules of the road, but employers can also establish a valuable affirmative defense to crippling damage awards by conducting effective and periodic wage and hour training.
Nothing is “Obvious”
I’ve been in this industry for more than a decade now. People often ask my opinion about whether compliance training will reach a saturation point where employees have learned all that they need to know. A compliance nirvana of sorts. (I mean isn’t this stuff “obvious” after all?)
While organizations are embracing more robust and effective compliance programs, we’ve clearly not reached the promised land. With laws continuing to change and evolve, and the workforce continuing to diversify and turn over, compliance training is here to stay. It’s not just a good idea from an educational perspective – courts and regulators expect to see it. (Click here for a snapshot of the key legal drivers behind mandatory compliance training.)
Even EMC claims to have had robust preventative training programs. Will be interesting to see how those play into this lawsuit.
Stay tuned …