Lawsuits and EEOC claims usually don’t materialize out of thin air. In 20/20 hindsight, there are always warning signs. But hindsight is after the fact. If you want to stay ahead of the unwanted legal headaches it’s critical to develop foresight as well as peripheral vision.
One of the biggest stumbling blocks to developing a prospective outlook is for managers, and particularly entrepreneurs, to recognize and admit that there is a problem and that they might in some way be contributing to the problem.
All too often the M.O. that’s adopted is denial. The problem is ignored or trivialized with comments like” that’s just the way it is around here – like it or leave it.” Or maybe it’s trivialized by blaming the employee. You know, “They’re just too sensitive.”
Ironically, when an employee raises a problem or a concern, one of the worst things any company can do is to ignore it and do nothing.
Take for example the case of Sunfire Glass Inc. in Phoenix. The EEOC filed a sexual harassment complaint against the company on behalf of two female glassblowers. The two women repeatedly complained to management about severe physical and verbal abuse while on the job – inappropriate touching, lewd gestures, and vulgar language, all of which was specifically aimed at them. The company did nothing. Their complaints were consistently ignored. Finally, they couldn’t take it any more. They quit.
So what did the company do when the EEOC came knocking? Unbelievably, they ignored it! They did not file an answer. They did not appear in court. With no defense, a court had no choice but to enter a default judgment in favor of the EEOC. They awarded each woman back pay, interest, and damages of $100,000. All together, Sunfire Glass was ordered to pay them more than $267,000.
What’s particularly disturbing about this case is the court’s finding that the owner of the company would engage in these harassment tactics too. For example, he would grab at the women in inappropriate ways while they were blowing hot glass and were unable to defend themselves. (Like grabbing is ever appropriate? Or like they should have to defend themselves?)
It’s truly an outrageous case. But, it nonetheless happened in this day and age. Still, there are several lessons we can take away from it:
1. Entrepreneurs are not exempt from legal requirements. It always pays to know what legal rights and duties apply to your business and to utilize legal literacy in your day-to-day business relationships to manage your company’s legal risk exposure. You may own the business, but you never own the employees.
2. Take employee complaints seriously. Ignore them at your risk. Don’t be dismissive or condescending about it. Listen to the complaints carefully, even if you disagree with the allegations. Strive to be impartial and fair. Try to put yourself in the employee’s shoes and look at the situation from their perspective, otherwise it’s just a matter of time before things implode.
3. Never ignore a lawsuit. Not mounting a defense allows the other side to tell your story, not you. Failing to appear in court is disrespectful and will not endear you to the judge. It will encourage the court to find against you and award the plaintiff all that they asked for (and maybe more).
4. Following Sunfire’s M.O. is a surefire way to get in trouble.