December 21, 2023

Lawsuit Takes Aim – Is HR to Blame for $54M Settlement?

On December 21, 2023, the California Civil Rights Department announced filing a proposed consent decree before the Los Angeles County Superior Court to initiate the process for court approval of a proposed $54 million settlement of a lawsuit filed in 2021. The lawsuit alleged claims of sex discrimination in terms and conditions of employment (including compensation, assignment, promotion, constructive discharge, termination); unlawful sexual harassment; retaliation; failure to prevent discrimination, harassment, and retaliation; and unequal pay.

HR took a hit in the lawsuit that claimed, “Numerous complaints about unlawful harassment, discrimination, and retaliation were made to Defendants’ human resources personnel and executives…But, Defendants failed to take effective remedial measures in response to these complaints. Employees were further discouraged from complaining as human resource personnel were known to be close to alleged harassers. An internal investigation into the human resource unit noted that there was a “big lack of trust” and that “HR not held in high regard.”

This is not all on HR. At least ten individuals were also sued in their individual capacity but were not yet identified in the initial filing, simply named as “DOES” (aka John Doe), “each of the fictitiously named defendants is legally responsible for the occurrences, injuries, and damages alleged herein.

Lessons learned? HR often walks a fine line when it comes to personal relationships with executives, managers and staff. In the last few weeks, I have received questions from more than one client asking about these very issues. From friends, follows, and “likes” on social media to personal activities outside of work. This case reminds us to consider how what we do may impact how we are perceived by others and of the need for HR professionals, management team members, and executives to remain objective and unbiased in their work.