Last March, I wrote about a lawsuit the EEOC filed against a department store that allegedly refused to hire a woman because she was pregnant. In the post “Thoughtless Comments Make For Easy Pickings,” I noted some interesting accusations contained in the case — including that the pregnant woman claimed she was told that the hiring manager “had not had much luck hiring pregnant women” and that she should re-apply “after giving birth.”
The post offered suggestions on what you might do if, as an HR professional, you had any doubt about whether any of your business’s employees might make such comments or might not know that pregnancy discrimination is illegal. Further, I noted that these types of allegations suggested a case that would ultimately need to be settled long before trial.
Well, it was reported yesterday that the case did settle. The department store agreed to (i) pay $40,000 to the applicant, (ii) provide training to its workforce, and (iii) post an anti-discrimination notice. The EEOC will retain oversight to ensure that the store follows through. The store continues to deny any liability or wrongdoing, but likely settled to avoid getting in front of a jury — and I cannot blame them for that decision. While the settlement is not an insignificant sum, it is certainly far less than a jury likely would have awarded if it heard and believed the employee’s allegations.
The settlement reiterates how expensive a few wrong-headed comments can be. Not only is the store out a significant sum, but it surely spent plenty on attorneys fees in the case, now has to deal with added training and posting obligations going forward, and undoubtedly has had to deal with the internal fallout and external public relations hit of this case being in the media and known in the store’s community. Comments (and lawsuits) like this can hurt a company’s brand and reputation. That damage can be far worse than the direct financial costs of a settlement. Company officals also had to spend time dealing with these issues, possibly replacing some managers, and certainly addressing concerned employees, rather than focusing on running their business (which is having enough trouble without disputes like this).
This case is a simple, clear reminder of the real costs of employment discrimination. While we don’t know exactly what happened in the case or if the comments were made (since it never went to trial), if they were there might well have been poor hiring, poor training (or lack of any training), insufficient oversight, and/or not having or enforcing clear policies against non-discrimination, among other root causes.
If anyone in your organization ever suggests that your business cannot afford to hire right, train well, monitor managers and employees and enforce policies, perhaps a case like this will remind you — and help prove to them — that it is actually more expensive not to follow wise HR practices.