In the Trenches: Sparks fly after corporate buyout

Oct. 31, 2007
A buyout of a struggling company leads to organization-wide training meetings. These meetings result in some heated debate, and when two black employees are punished for their angry participation, and a white worker is not, a lawsuit is filed.

Back in its day, Nadir Corp. was a big industrial fish in a small market pond. Although a major employer in the area, a confluence of factors both economic and demographic has made it difficult for the company to prosper. Many of the old stalwarts, employees who had been with the company from the day they graduated from high school or were demobilized from the military after the Korean conflict, have been retiring. Then, sales have been a bit soft lately. An evolving marketplace has put the purchaser in the driver’s seat, and fewer of those capricious, demanding people want to throw their financial resources at Nadir’s big-ticket products, which can be arguably viewed as too dated to be successful in the 21st century.

This led to the inevitable layoffs. The resulting brain drain slowed product development, and a vicious spiral engulfed the company. Upper management, with a keen perception of the obvious, cut its losses and accepted a buyout offer from Acme, a hot, young Silicon Valley juggernaut that wanted some manufacturing facilities on the cheap.

With Nadir management desperate to get out from under its problems, the buyout was quickly completed. A new Acme management team, all tanned and fit, arrived to run its new plant. The first order of business was to add staff to fill the obvious gaps in the lineup. Next, to liven things up a bit for the bright future it envisioned, management needed to impose a new, dynamic culture. It wanted every employee, new and tenured, to embrace the successful California-style Acme culture of innovative, self-reliant, independent thinking. It wanted employees to focus their competitive tendencies outward toward the market while focusing cooperation inward.

This explained the requirement that every employee attend a two-week corporate indoctrination course.

Each class section had about 20 people selected at random from the company roster.

Because the purpose of the training was to present the big picture (the underlying Acme philosophy), old and new employees, men and women, various ethnicities and ranks in the corporate hierarchy sat in the same room. As far as the trainers were concerned, everyone was equal, here to learn something important about their future with Acme.

Mary Mack was a new employee, a black female, who seized the opportunity to work at Acme. Among her classmates was Mona Torr, another black female, who had been with Acme for a dozen years, and Johnny Kaikes, a young white male, who came to Acme four years ago. The training class was more like a discussion group than traditional teacher-student interactions one would find in a school room. The trainer presented a concept and the class explored its meaning and value, its implications and ways it might be integrated into the job. Sometimes, these discussions became rather animated.

For example, on the second day, Johnny took exception to the idea that maintenance technicians now must carry wireless GPS-equipped laptops. He was upset, arguing that part of successful teamwork is relationships and face-to-face contact. He also was outraged that Acme could now be so intrusive in its ability to track movements. It was worse than what the government is doing, he said. He claimed this merely indicated that the new owners didn’t trust any former Nadir employee. The disruption was short-lived, thanks to the trainer patiently explaining that the intent was to go paperless, not prohibit relationships and contact among teammates. Afterward, Johnny quieted down and promised to listen more fully before reacting that way again.

Six days into the training, some equally minor point resulted in a heated interchange between Mary and Mona. The incident escalated into a shouting match that embarrassed the rest of the class. The trainer attempted to intervene by standing between the two women and mediating the incident. It didn’t help. Mary and Mona simply ignored her and continued their loud, disruptive behavior that devolved into a curse-filled, abusive back and forth volley of unrepeatable words. It was loud enough to attract the attention of the training manager sitting in his office down the hall.

The tirade ended when Mona, now in tears, abruptly picked up her possessions and told the trainer, “I won’t work here. I quit.” Then, she walked out of the room and went home.

That evening, the trainer met with her manager to discuss what happened, how things got so out of control, what caused it and what should be done. Their conclusion was that this should be reported to management, and the response from that quarter was swift and certain. Both Mary and Mona were immediately suspended pending an investigation. Two days later, Mary was terminated for using profane language and disrupting the training class.

Mary sued Acme, alleging that the trainer overreacted because of inherent racial and gender bias. Mary also claimed that the trainer merely informally chastised a white male who also exhibited a disruptive outburst. And, that incident was never reported to management.

How could this situation have been prevented? Is it even possible to change an ingrained corporate culture? Should new employees be subjected to pre-employment psychological evaluation? How should management handle employee conflicts? Wouldn’t it be wise for Acme to have a well-defined policy in place for this type of employee behavior? Could a pre-training session to discuss culture change with the employees been helpful?

An attorney says:

Management can’t always prevent personality conflicts between employees. The trainer might have tried asking the two feuding women to leave the room so as to not disrupt the entire class, and that might have provided a moment for them both to calm down and reflect on the inappropriateness of their behavior.

Mary’s suit against Acme likely will be unsuccessful. The law looks at whether an employer treated an employee in the unprotected group more favorably than the employee in the protected group. Here, for example, Mary claimed that Acme treated Johnny, a white male, more leniently than it did her, a black female because his conduct wasn’t reported to management and he didn’t lose his job.

But Mary and Johnny weren’t similarly situated because they didn’t engage in acts of comparable seriousness. Johnny merely questioned the wisdom of a work rule, albeit in an aggressive fashion. He didn’t engage in a heated exchange with a coworker that involved profanity, nor does it appear that his antics disrupted the class to the same extent that Mary and Mona did. Acme was guilty of no discriminatory treatment here.

Many employers opt to provide employees with diversity training so that employees become more sensitized to, and even learn to value, cultural differences among their coworkers. But here the conflict arose between two employees of the same gender and race. I can think of no training or policy that has a prophylactic effect on employee personality clashes.

While some employers administer pre-employment personality tests, any test that screens out employees must be validated according to strict guidelines established by the Equal Employment Opportunity Commission, and these tests aren’t to be used lightly.

Julie Badel, partner
Epstein Becker & Green, P.C.
(312) 499-1418
[email protected]

A corporate consultant says:

I'm unconvinced this case could have been prevented. Prevention implies predictability, and there just weren't any clues that would have indicated the potential for this conflict. Even if pre-employment testing had been applied to newly hired employees, this would have included only Mary, and since a conflict requires the participation of at least two individuals, the tool wouldn’t have prevented this case.

The multi-hierarchical and multi-tenured composition of the classes wasn't sufficiently causal to have been a reasonable predictor. And, though the nature of the disagreement between Mary and Mona wasn't made clear, it's irrelevant; there's just no excuse for their behavior. Their complete lack of professionalism and self-discipline wasn’t mitigated by the facts of the case, and hijacked an entire class. Had there been an attendee of higher rank at the training event, that individual should most certainly have intervened and this may have been helpful, but those who behave this way wouldn't be constrained by policies or diverted by pre-training briefings.

Certainly, conflict of some type is a daily occurrence in most business operations, but what these women engaged in doesn't even rise to the level of pre-pubescent playground altercations.

Francie Dalton
Dalton Alliances Inc.
(410) 715-0484
[email protected]

An academician says:

First, I’d get rid of Acme’s training program. It doesn’t make sense. Nadir employees should get the same introduction to Acme as do new Acme employees. This should include a heavy dose of the Employee Manual and what behavior is acceptable and what isn’t. Plus a heavy dose of Acme’s values, because values are the basis of the organization’s culture. And if Acme has any special programs, they, too, should be included. For example, I recently worked with a company that was big on Six Sigma, and the employees in a company they acquired received Six Sigma training in addition to the orientation training.

Effective organization cultures are planned, they don’t just happen. Company values are the key. And most value statements cover the behaviors that appeared in the training session (usually in a phrase that talks about “treating everyone with respect and dignity”). For many companies, examples being GE and J&J, the company values are part of the annual appraisal. Managers and employees who don’t “walk the talk” are counseled to find work elsewhere. And there’s ample evidence to demonstrate that “strong culture” companies have better financial results than those with weak cultures. So, if Acme doesn’t have a strong values statement, and doesn’t have a strong employee manual, then it should get one quickly.

There’s the question whether employees should receive psychological evaluations before being hired. We do it regularly with certain jobs, police for example. But it’s not used in most jobs because testing is too expensive and usually has a poor cost/benefit ratio. However, most good HR people can spot a problem candidate quickly. For example, one good indicator is the applicant’s employment record. Did the person bounce around from job to job? That’s a red flag and probably indicates this isn’t someone to hire. Or, one can do a quick check of criminal record quickly and inexpensively.

Professor Homer H. Johnson, Ph.D.
Loyola University Chicago
(312) 915-6682
[email protected]

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