Don't Let a Rogue Employee Sink Your Small Business
It's natural to cut your best employees some slack when they make a mistake. Just make sure that "slack" doesn't turn into a noose around your own neck.
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PrintIt’s not uncommon for a business to excuse the mistakes of a high-performing employee. But before turning the other cheek it’s essential that you evaluate the severity of the mistake and decide whether giving your superstar a pass could land your business in serious hot water.
A Sales Star Gets a Pass
Take, for example, the recent case involving a Sears employee who won a $5.2 million jury award for racial harassment. The African-American employee had been subject to racial slurs on multiple occasions by his supervisor. The incidents were reported to management. But instead of addressing the problem with the harasser, the company failed to investigate the matter and then subjected the employee to fear of retaliation.
Essentially, Sears made a bad situation worse.
Why would they do such a thing? According to plaintiff’s counsel, the harasser was one of the top salesmen in the country for Sears. It was about the money. They didn’t want to kill the golden goose.
After a month-long trial, the jury also made it about the money. It came back with a $5.2 million damage award in favor of the ex-employee.
$2.2 million of that amount represented lost earnings as well as pain and suffering. But the more interesting part of the damage award was the remaining $3 million -- in punitive damages.
'Malice, Oppression, or Fraud'
Punitive damages are intended to punish a company for its actions. The jury was particularly upset with the way Sears' policymakers and managers acted. The jury said the company acted “with malice, oppression or fraud” when it didn’t promptly investigate the harassment complaints. Ouch!
The jury’s message is painfully clear: Management is responsible for reining in and disciplining rogue employees. The law applies equally to everyone. When management fails to do its job properly they put the entire company at risk.
What all of this means for even small businesses is that employment suit are triggered by perceptions of unfairness. That unfairness could be the result of crossing a statutory line, such as racial discrimination or harassment, or it could be the uneven application of company policy. Following the law and avoiding double standards is therefore an easy way to reduce the risk of employment suits.
When confronted with a harassment claim:
- Investigate the matter.
- Document the findings.
- Evaluate your legal exposure.
- Take appropriate disciplinary action if warranted.
- Take action -- don’t ignore the claim and do nothing.
Yes, it really is that easy.
Hanna Hasl-Kelchner is a business legal strategist, author, speaker and trainer who teaches and coaches business people on how to avoid lawsuits. She is the author of The Business Guide to Legal Literacy: What Every Manager Should Know About the Law and forthcoming Champions: Knock out strategies for health, wealth and success from today’s leading experts. Follow Hanna on Twitter @nononsenselawyr. Subscribe to this blog’s RSS feed to get the latest updates.
