When HR Gets It Wrong: At Fox, Uber and Mizzou, Where Was Human Resources?

By Dana Wilkie Jul 17, 2017
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This is the first in a four-part series of articles—"When HR Gets It Wrong"—that explores the challenges HR faces when confronted with allegations of misconduct, inequity and other problems at an organization.

Former Uber engineer Susan Fowler says that her manager propositioned her for sex. The ride-hailing app company's HR department, she claims, let the guy off the hook because he was a "high-performer."

Former "Fox & Friends" anchor Gretchen Carlson claims that the late Roger Ailes, Fox News founder and former CEO, asked to see her underwear and suggested they have sex. She never went to HR, she noted in her sexual harassment lawsuit naming Ailes, because she feared retaliation for doing so. 

University of Missouri System President Tim Wolfe and Chancellor R. Bowen Loftin both resigned in November 2015 following complaints that they failed to address racial discrimination against students and to hire more faculty members of color. So when it came to diversity in hiring, where was the university system's HR department?

Today, HR professionals are perhaps better trained and more skilled than ever. They have access to sophisticated anti-harassment and diversity and inclusion training and services. And they are bombarded with news stories about companies that lost court battles, money, customers and reputations because of sexual harassment, discrimination, gender pay inequities and more.

Yet HR faces many obstacles to unearthing—and ending—these chronic issues: cronyism, reluctance to confront higher-ups, fear of retaliation, cultures that condone or ignore misbehavior, inadequate employee training, and lack of diversity in the C-suite or in the HR department. All of these issues can render an HR department powerless and ineffectual, make it appear in collusion with executives, or leave it completely unaware of misdeeds at its own company.

 


Too Close for Comfort

Ailes stood accused of sexual harassment and other inappropriate behavior by a group of past and present Fox employees, some of whom have spoken on the record about the alleged incidents. Ailes denied the allegations, and died on May 18.

There are several reasons why HR may never investigate—or only half-heartedly investigate—complaints of harassment or discrimination, experts interviewed for this article say.

One is cronyism.

In a 2014 biography, Gabriel Sherman wrote that Ailes placed "eyes in every department" and positioned his former secretaries in parts of the business so he could make use of their loyalty to him. He used Brigette Boyle as an example: She started as an assistant to Ailes and was later placed in Fox's human resources office. Before departing the network in August 2016, Boyle was senior vice president of recruitment.

It's doubtful, said sources for this article, that employees would have felt comfortable bringing accusations against Ailes to Fox's HR department.

Retaliation happens, and HR professionals know it.

"I have always said that … to be an ethical HR leader, you need to always be prepared to lose your job," said Fran Sepler, who is president of Minneapolis-based Sepler & Associates and who has a contract with the federal government to design workplace training to prevent uncivil, rude, abusive, discriminatory and harassing behavior. "Good CEOs know that they need someone exposing their blind spots … even if it means getting tough messages or someone playing devil's advocate."

While it's best for HR professionals to keep executives at arm's length in case they ever have to investigate them, cronyism nonetheless happens, said Karen Kruse, an employment law attorney in Seattle.

"The loyalty of HR professionals to their organization's leadership tends to stem from the relationship that develops between HR and leadership as they work together on various issues over the years," Kruse said. "Often, these relationships develop significant levels of trust and mutual respect. An HR professional who holds an executive in high regard may have significant difficulty being objective if allegations of impropriety are made against that executive."

In addition, HR leaders may find it hard to remain objective about executives while trying to prove their worth to these same people, said Patty Wise, a partner with Toledo, Ohio-based Niehaus Wise & Kalas Ltd. and co-chair of the Society for Human Resource Management's Labor Relations Special Expertise Panel.

 "HR professionals are often seeking approval and even membership among the senior management group. The goal may be a 'seat at the table,' and so what might be viewed as cronyism may also demonstrate professional success and achievement." 

Giving the Star Employee a Pass

Another reason that HR may turn a blind eye toward an employee's misdeeds is because the person accused of misconduct is a top performer.

That's what Fowler heard when she complained to Uber's HR department about the sexual advances of her manager. She showed HR a text in which the manager propositioned her. After leaving Uber, Fowler wrote in an online blog post that HR told her little would be done because the manager was a "high-value" employee. 

A similar dynamic may have been at play at Fox News. According to New York magazine, "it was common knowledge at Fox that Ailes frequently made inappropriate comments to women in private meetings and asked them to twirl around so he could examine their figures, and there were persistent rumors that Ailes propositioned female employees for sexual favors."  

Yet Ailes, who was close with Rupert Murdoch, the executive chairman of 21st Century Fox (Fox News' parent company), "made the Murdochs a lot of ­money," New York reported. "Fox News generates more than $1 billion annually, which accounts for 20 percent of 21st Century Fox's profits—and Rupert worried that perhaps only Ailes could run the network so successfully."

After Carlson filed a lawsuit in July 2016 claiming Ailes had sexually harassed her, "Rupert's first instinct was to protect Ailes, who had worked for him for two decades," the magazine's reporters wrote, noting that Murdoch "can be extremely loyal to executives who run his companies, even when they cross the line."

"If you're telling management that Mr. X—who is the greatest revenue-producer—is mistreating people and sexually harassing women, that's not what the company wants to hear because Mr. X is bringing in the money," said Debra Katz, a partner with Washington, D.C.-based Katz, Marshall & Banks who has litigated employment discrimination, civil rights and whistle-blower protection cases for more than 30 years. "The HR official is in a really difficult position. They may be recommending the firing of this person, and upper management may be saying, 'We can't afford to lose him; instead, these women who are complaining need to leave.' " 

[SHRM members-only platform: SHRM Connect]

Building the Right HR Team

It's possible to prevent unprofessional relationships between HR and senior leaders—and to give HR a level of autonomy that helps it make objective and independent decisions—through careful hiring, said Ramona Paetzold, a management professor at Texas A&M University's Mays Business School. 

"Cronyism shouldn't be there at the start," she said. "A panel of individuals should be responsible for hiring, not just one individual. Allowing for greater diversity and inclusion [on the hiring panel] reduces the risk of cronyism. Senior leaders are often all male, which can be a problem in organizations such as Fox. Diversity … helps to prevent cronyism."

When considering an HR candidate, interviewers should ask how comfortable the applicant would feel questioning executives and midlevel managers about their behavior and holding them accountable, said Alisa Shorago, an attorney and owner of San Diego-based Shorago Training Services, which provides anti-harassment training. 

It can also be helpful to arrange for a company's HR department to report to someone other than senior leaders, said Stephen Paskoff, president and CEO of ELI, an Atlanta-based company that helps organizations address bad behavior in the workplace. That could be an ombudsperson, outside counsel or board members.

Building a New HR Department at Fox

After Ailes' resignation, Fox's new co-president, Jack Abernethy, hired Kevin Lord to serve as the new executive vice president of human resources and as chief compliance officer. Lord, who has more than 15 years of HR experience at companies like GE, does not report to the co-presidents, but instead to Gerson Zweifach, chief corporate counsel of 21st Century Fox.

Since joining, Lord has grown the Fox News HR team. While a Fox News spokeswoman wouldn't say how many people the company had in its HR department before Lord's arrival, she said Lord has added four people to the team, all of them with master's degrees in business or HR and all with experience at top companies. One of the new people has been named head of recruiting and diversity—a new position at Fox News—and another will be in charge of the channel's remote bureaus, also a new position. 

"The top priority for … Abernethy and the senior leadership team has been to change the culture and implement a more-open environment after Roger Ailes' 20 years at the helm, but this isn't something that can happen overnight," said the spokeswoman. 

· Why Roger Ailes’ Reputed Bad Behavior Went Unchecked
· Fox CEO Investigation Should Serve as Reminder to HR
· HR Lessons from Bill O'Reilly's $25M Severance Deal

Fear of Retaliation

HR professionals often encounter another problem when asked to pursue allegations against executives: their fear of retaliation. 

Title VII of the Civil Rights Act of 1964, the federal law that prohibits most workplace harassment and discrimination, protects workers from retaliation if they make a complaint. If they do suffer retaliation, they can sue the company or individuals under Title VII.

If that happens, Paetzold said, "the company looks worse than it did before and is potentially subject to greater liability, loss of reputation and loss of shareholder value."

But retaliation happens, and HR professionals know it. 

In his employment law practice, Glen Kraemer has investigated several CEOs and other C-suite leaders concerning sexual harassment. 

"As frequently occurs in situations involving a high-level executive, many CHROs [chief human resources officers] are palpably afraid of retaliation," said Kraemer, a partner with Hirschfeld Kraemer in Santa Monica, Calif. "If you feel that fear, it will be extremely difficult to do the required work and nearly impossible to be perceived by the complainant, the workforce and the public as being up to the task."

Katz has represented HR professionals who've been fired for raising concerns that senior leaders didn't want to hear. Often, she said, employers will warn HR practitioners are not protected under Title VII and other anti-retaliation laws because they were just doing their jobs and that unless they step too far outside their defined job duties during an investigation, they won't be protected from retaliation. While the U.S. Equal Employment Opportunity Commission (EEOC) has rejected that interpretation of Title VII's anti-retaliation provisions, she said, some courts in recent years have accepted it.

"That's very problematic, because HR officials often are at risk if they go to the mat on some of these things," she said. "So ultimately they are forced to act in a role that furthers the desires of leaders rather than calling [offenses] as they see them. In fact, they can become part of the problem because they allow the behavior to go on and facilitate the [firing] of those who raise concerns."

In the Dark

Finally, HR may never hear about wrongdoing at a company because it is never reported. The victims may also fear retaliation or they might not be sure where to go.

For instance, the EEOC estimates that between 25 percent and 50 percent of women in the workplace have experienced sexual harassment. In a survey of 340,000 employees at 21 companies by CEB, about half of respondents said they had witnessed or experienced sexual harassment, but only 8 percent said they had reported it.

In 2015, almost one-third of the 90,000 claims filed with the EEOC involved complaints about harassment, sexual or otherwise. While that may sound like a high number, formally reporting harassment, whether internally or in a lawsuit, is actually one of the least common ways that workers respond to being harassed, according to 2008 research by Lilia Cortina, a professor of psychology and women's studies at the University of Michigan, and Jennifer Berdahl, a University of British Columbia professor who conducts research on gender and diversity at organizations.

The researchers suggest that each year, there are tens of thousands more cases of harassment that go unreported, and that's just in the U.S.

A separate study by Cortina and another researcher in the Journal of Occupational Health Psychology found that two-thirds of employees who reported sexual harassment experienced some form of retaliation.

Are Hotlines Helpful?

Even if workers want to report harassment or discrimination, companies don't always make that easy.

The same CEB survey of 340,000 employees found that when they do report harassment, hotlines are the least popular mechanism for doing so. Only 7 percent of respondents who had witnessed or experienced harassment said they reported it through a hotline.

According to TheNew York Times, many Fox employees didn't even know the company had a complaint hotline.

Why not?

Because, said Paetzold, while it's common to have a hotline, it's also common to make the phone number obscure. 

"Companies have always been preoccupied with a liability focus, not a prevention focus," she said. They "do exactly what they think is required to avoid liability. Companies have a chance of escaping certain remedies if they can show that they provided a sexual harassment policy that was clear and well-distributed and that they made the reporting chain clear.

"That would include providing a phone number if [a worker] needed to report sexual harassment. On the other hand, there's nothing that says that the hotline information has to be so available so as to encourage employees to use it. 

"Hotlines are not the best way of dealing with [complaints]. The goal should be on prevention, not what to do after it happens. Companies need to change their focus."

Tomorrow: The second in a four-part series of articles—"When HR Gets It Wrong"— explores how to avoid the pitfalls that some HR departments have encountered when dealing with allegations of misconduct or bad behavior at an organization. Also, read the third installment here.

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