A jury on Friday issued an $11.5 million verdict against the world’s largest HR organization over allegations it had racially discriminated and retaliated against a former employee.
The Society for Human Resource Management, known as SHRM, was found liable for racial discrimination and retaliation and hit with a ruling of $1.5 million in compensatory damages and $10 million for punitive damages, according to Ariel DeFazio, a lawyer for the plaintiff.
SHRM said it plans to appeal the decision. “Today’s decision does not reflect the facts, the law, or the truth of how SHRM operates,” the trade group said in a statement. “We have acted with integrity, transparency, and in full alignment with our values and obligations.”
SHRM was sued in 2022 by Rehab Mohamed, who worked at the trade group as an instructional designer from 2016 to 2020. The case was tried over the course of five days in a Colorado federal court.
“The optics are bad because they’ve held themselves out as an authority on best practices,” said Alice K. Jump, an employment attorney and partner at law firm Reavis Page Jump.
Mohamed said in her suit that she was racially discriminated against by a white supervisor and faced retaliation for complaining to management. She said she raised concerns about racial discrimination and retaliation with leadership, including SHRM’s CEO, Johnny C. Taylor Jr., and its head of human resources, throughout the summer of 2020.
While testifying on December 4, Taylor said he wasn’t involved in Mohamed’s termination. A former SHRM employee, Mike Jackson, who said he was responsible for investigating the matter, told the court that Mohamed’s was the only discrimination claim he had ever investigated.
In response to questions from Hunter Swain, another of Mohamed’s lawyers, Jackson said that he left SHRM in 2021 and his title was manager of employee experience. He said he became a certified HR professional while employed there and that he had undergone one training session on HR investigations just a few months before the discriminatory events that Mohamed cited in her lawsuit took place.
When asked by Swain what he learned from the training, Jackson said he couldn’t remember any specifics.
SHRM has consistently denied Mohamed’s claims. In September, SHRM asked the court to bar Mohamed from introducing evidence or argument that the organization is a specialist in HR best practices.
The following month, US District Judge Gordon P. Gallagher denied SHRM’s request, saying its “asserted expertise in human resources is integral to the circumstances of this case and cannot reasonably be excluded.”
In his testimony, Taylor said SHRM’s work includes advising HR professionals about best practices, including those pertaining to investigating internal complaints of discrimination and retaliation. He said SHRM has a set of curricula around best practices for investigating employment complaints.
The verdict was not surprising given that SHRM promotes itself as an expert in HR, Boston employment lawyer Evan Fray-Witzer told Business Insider. “You’re going to be held to a higher standard,” he said.
In recent years, SHRM has been embroiled in various controversies, as Business Insider recently reported. These include a new attendance policy that penalizes workers who arrive even a minute after 9 a.m.; a memo about a “conservative” dress code that bans sequins; and a companywide meeting in which Taylor said some staffers were “entitled,” “complacent,” and “sloppy.”
During pre-trial discovery for Mohamed’s case, SHRM revealed the existence of two other discrimination complaints from employees. One case, filed with the Equal Employment Opportunity Commission in 2018, was settled. The other, filed with a California regulator in 2021, is pending. SHRM also denied wrongdoing in those cases.
“We are very happy that the jury spent a week listening very closely to the evidence and that they decided, as a result, to hold SHRM accountable,” Mohamed’s lawyer, DeFazio, told Business Insider. She said the verdict would “send a message to workplaces in the entire country.”
