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The Damaging Effects of Workplace Racism

How to protect workers of color from racial trauma

A woman in a business suit kneeling on the floor in an office.

​Two Black men who worked at a paper plant in McClellan, Calif., experienced racial harassment from co-workers and a supervisor. The company must now pay up.

Paper manufacturers Packaging Corporation of America Central California Corrugated LLC (PCA) and Schwarz Partners LP, which owned the manufacturing plant, will pay $385,000 and implement preventive measures to settle the racial harassment lawsuit.

The U.S. Equal Employment Opportunity Commission (EEOC) filed the lawsuit.

"This case should be a strong reminder that all employers have a duty to act quickly to stop harassment and hate speech in the workplace," EEOC San Francisco District Director Nancy Sienko said in a statement.

According to the EEOC's suit:

  • Co-workers and a shift supervisor commonly broadcasted racial slurs over the facility's radio system.
  • Black employees were taunted with graffiti of swastikas and a makeshift noose.
  • A shift leader drew a Confederate flag inscribed with the phrase "long live the Confederacy" on a workstation.

The company's HR department closed the investigation due to insufficient evidence without interviewing the alleged harassers, the EEOC stated.

Per the settlement, the defendants are required to:

  • Pay $385,000 in lost wages and emotional distress damages to the two former employees.
  • Revamp company policies and train employees on preventing and reporting racial harassment.
  • Implement policies and procedures to facilitate the prompt and thorough investigation of any future complaints of discrimination or harassment.

"As our nation continues to [deal] with lingering racial discrimination, we appreciate that these employers agreed to promptly settle this matter and to provide significant relief," Sienko added.

How Can Racism Influence Workplace Productivity?

Peter Spanos, an attorney with Taylor English Duma LLP in Atlanta, said the lawsuit against PCA and Schwarz illustrates the serious consequences that can occur if employers do not investigate and act upon harassment in the workplace.

"It dramatizes why it is important for companies to provide preventive education and training for its supervisory and management personnel," Spanos explained. "It also illustrates how unnecessary comments and other talk in the workplace can be unlawful harassment."

A 2021 survey by the Society for Human Resource Management (SHRM) revealed that more than 2 in 5 Black workers (42 percent) feel they faced race- or ethnicity-based unfair treatment at work in the past five years.

[SHRM resource hub page: Overcoming Workplace Bias]

Nika White, a Greenville, S.C.-based anti-racist activist who runs her own diversity and inclusion consulting company, explained that racial microaggressions are particularly problematic in workplaces.

"Numerous workers are encountering subtle microaggressions that leave them feeling confused, hurt, angry and deflated without anyone to talk to because the 'aggression' seems small," she said. "Those seemingly small interactions that come from stereotyping and assumptions have a lasting physical and mental impact but are harder to identify and recognize, especially when workplaces exhibit institutional racism by not having policies and processes to prohibit and punish racism."

Racial trauma can result in symptoms similar to post-traumatic stress disorder. It can lead to mental health issues such as anxiety and depression as well as physical problems including stomachaches, headaches and a rapid heartbeat.

Racial inequities at work can also result in decreased workplace productivity.

"Not only are those directly harassed demotivated, but others who differ from the general demographic makeup of the workgroup can feel threatened, leaving them disengaged from the workplace," said Francine Gordon, a lecturer at Santa Clara University's Leavey School of Business. "In cases where problem-solving or innovation are involved, harassment can silence the targeted individual, who may have the most to offer."

Tips for Preventing Workplace Racism

Spanos said employers can take several steps to reduce or eliminate unlawful racial harassment and discrimination. He explained that companies should:

  • Adopt clear and meaningful anti-harassment and anti-discrimination policies.
  • Periodically provide anti-harassment training to the workforce.
  • Train appropriate HR personnel in how to investigate and handle discrimination complaints.
  • Issue and update mission statements that emphasize the company's commitment to a workplace free from unlawful harassment and discrimination.
  • Offer readily available avenues for employees to complain about alleged harassment or discriminatory treatment, including an open-door policy.
  • Train supervisors to alert responsible HR personnel of harassment, even if no formal complaint is received.
  • Host employee forums periodically to explore whether any discrimination or harassment is occurring.
  • Take prompt and remedial action if an investigation reveals any unlawful conduct or conduct that violates company policies or mission statements.

"Both formal and informal complaints should be taken seriously," Spanos added. "Prompt and reasonably thorough investigation should be done in each instance."


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