Your employees have been publicly accused of discrimination. Now what?

Having an employee publicly accused of discrimination or harassment can be an employer's worst nightmare

Your employees have been publicly accused of discrimination. Now what?

Having an employee publicly accused of discrimination or harassment can be an employer’s worst nightmare — particularly in the age of viral social media. Faced with the possibility of costly reputational damage and potential legal action, employers are increasingly expected to respond swiftly and publicly to such instances of bad behavior.

However, responding too hastily, without carefully thinking through the consequences, can also carry significant legal and reputational risks.

In a highly publicized incident earlier this year, a woman posted allegations on Facebook that she and her boyfriend, who are both African American, had been harassed and racially profiled by the security team of a New York cidery they had been visiting.

The allegations, which have since been confirmed, stated that security guards repeatedly approached the couple to accuse them of stealing from the gift shop. Worse yet, these accusations occurred during the boyfriend’s marriage proposal.

The story quickly went viral, with numerous calls for the company to take immediate and serious action. Not even 24 hours later, the cidery announced on Twitter that it had “replaced” the third-party security team and was mandating unconscious bias training for all staff. It later added that a manager had been fired as well.

Reactions to the decisions were mixed but even those most critical of the company’s response could not deny it had acted swiftly and decisively.

Despite this seeming PR victory, from a legal perspective the case raises important employment-related questions. Would the company’s actions – which were clearly accelerated by the public outcry – have been advisable from a legal and business perspective? Not likely.

Few would question that incidents of racial profiling and harassment demand disciplinary measures — up to and including termination of the employment agreement. In certain cases, such measures may actually be required in order to satisfy obligations under applicable health and safety legislation. 

However, in most instances, an employer must first substantiate the allegations by conducting a thorough internal investigation. Only then can it determine what disciplinary response, if any, is warranted. At a minimum, an investigation should involve speaking to the parties involved and any witnesses, reviewing video and audio evidence, and assessing credibility. Depending on the nature of the allegations and the number of witnesses, such investigations can take a few hours, several days or even weeks.

Failure by the employer to investigate allegations before taking action could result in a court finding that an employee had been wrongfully dismissed – and even awarding the employee additional damages for the manner in which he or she had been dismissed.

Even riskier for employers is the decision to publicly announce the termination of an employee based on uninvestigated allegations. Even if the parties in question are not identified by name, their reputation and chances of securing future employment could still be harmed. A court might find that such action warrants certain extra-contractual damages including, without limitation, aggravated damages, bad faith damages and punitive damages.

Therein lies the struggle: to find the right balance between appeasing public opinion and thwarting further negative press while not exposing your organization to unnecessary legal liability. Fortunately, it need not be a zero sum game.

Although not perfect, oftentimes the best solution is to immediately place the alleged perpetrators on a paid or unpaid administrative leave, pending the outcome of the internal investigation. Simultaneously, organizations should issue a public apology to the aggrieved parties and, depending on the specific circumstances, announce the decision to institute mandatory training.

Obviously, the legal perspective is only one of many that employers must consider in this type of situation. Indeed, some employers may find it makes more business sense to take strong, decisive action — and to be clearly seen doing so — even if it means exposing itself to legal risk. The cidery in the situation described above clearly believed this was the right choice.

Whenever responding to employees’ bad behavior, an employer must carefully weigh the business realities, the seriousness of the allegations and the public response against potential legal risks. As always, an employer’s best approach to managing such cases is to have a robust policy already in place and to swiftly apply that policy when the inevitable storm — social media-based or otherwise — begins.

Andrew Bratt and Matthew E. McCarthy are Toronto-based employment lawyers at Gowling WLG.

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