Not all press is good press. No corporation wants to see its brand publicly associated with employment discrimination and multimillion-dollar lawsuits, particularly now that the Internet enables collective memory to extend far beyond the headlines of the last few weeks. In addition, class litigation guarantees years of headaches for in-house counsel and ever-increasing legal costs in even the best-case scenarios.
Most companies believe they are providing a working environment that conforms with equal opportunity mandates. Unfortunately, a belief in the fairness of workplace policies, practices and procedures is not enough. While it is fine to hope for the best, smart companies should always plan for the worst. The question, then, is what steps corporate counsel should take to ensure that the nightmare of a class action discrimination lawsuit never becomes a reality.
Corporations often don't raise the hard questions that,will help them avoid litigation. However hard the questions may be to ask, the benefits far outweigh the initial discomfort.
When addressed, these questions lead to workplaces that are more efficient, productive, and successful. Savvy GCs may want to add to the agenda sometime soon a discussion of the following:
1. How are we identifying and developing our best employees?
A good place to start is to look at your company's best and brightest. Employees' and employers' interests align most closely within this group, and failures in the system for top performers often portend larger problems for average or subpar employees and more frequent liabilities for the company.
First, critically examine who the company is currently identifying or treating as the "best." A company's failure to have a systematic method of determining which employees are truly the best can be a major source of liability. You want to make sure that those identified or treated as the "best" employees are also the strongest performers. When a company fails to recognize the strongest performers as the "best" employees, those overlooked individuals quickly can become plaintiffsparticularly when protected classes are noticeably under-represented in the group recognized as "best."
Second, smart companies don't assume that managers are accurately and reliably rewarding, developing and promoting the best performers. Instead, these companies create a range of systems where employees can self-identify as being interested in training, mentoring, development and promotion; where the options and criteria for development opportunities are transparent and widely disseminated; and where senior management, human resources, and/or an independent talent-management committee are actively monitoring how the "best" employees are being developed.
These systems create records of who has sought out promotion or development and why they did or didn't receive it, which in turn provide clean and clear evidence that refutes promotion or development discrimination claims.
2. How reliable are our performance evaluation systems?
Beyond considering the strongest performers, you also want to make sure that the company's performance evaluation system is accurately and reliably assessing and classifying all employees.
Even those performance review systems in which companies have invested significant time and resources may require additional fine-tuning before you can be confident that the strongest employees get the highest ratings and the weakest employees get the lowest ratings. This additional investment is worthwhile as nearly all employment decisionsincluding those regarding compensation, discipline and promotionflow from the performance evaluation process.