Protecting your company from a gender discrimination lawsuit requires a commitment to creating clear staff policies, paying close attention to how your employees interact, and documenting just about everything

When news of gender ­discrimination and sexual harassment allegations filed against Sterling Jewelers hit the mainstream media in March, Carinthia Kishaba wasn’t surprised. She says she witnessed ­favoritism, inappropriate behavior, and unfair ­hiring practices when she worked for Shaw’s ­Jewelers, one of Sterling’s 12 chains, in Monroeville, Pa., a decade ago. She also noticed that none of the district managers were female.

“You saw a lot of women on the sales floor, but men were still running the operation,” says Kishaba. Tired of the politics and doubtful that she’d be promoted, she left to work for a ­family-run operation, but the atmosphere wasn’t much better. So she created her own workplace, opening Couture Rocks Fine Jewelry in Southlake, Texas, in 2010.

Gender, or sex-based, discrimination is defined by the U.S. Equal Employment Opportunity Commission (EEOC) as treating an applicant or employee unfavorably because of that person’s sex. Sexual harassment is defined as unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. In 2013, more than 27,000 sex-based discrimination charges against employers were filed with the EEOC; nearly 63 percent were found to have no reasonable cause.

Sterling Jewelers, based in Akron, Ohio, is fighting the suit filed against it and denies the claims: “We believe that the facts show that they are without merit,” said Sterling spokesman David Bouffard in a statement.

With or without merit, accusations and lawsuits surrounding either situation are never easy for a retailer. “Claims are extremely disruptive to staff and can be extremely expensive if you are found liable,” says Cecilia Gardner, president and CEO of the Jewelers Vigilance Committee (JVC).

Set policies

The first thing you should do to protect yourself is to create written store policies that outline all of your business practices, including everything from your return and exchange policies to employee relations.

Claims involving sexual harassment or gender discrimination can be extremely disruptive to staff. (Getty Images)

“Taking a proactive stand and formulating a policy is extremely important not only to support your staff and to ensure you are creating a good ­workplace, but also to protect you from serious liability,” says Gardner.

Unfortunately, many companies overlook this step, says Kate Peterson, CEO of luxury industry consultant Performance Concepts. “Whether you have three or 30 employees, there is no excuse not to do this,” she says. “Put a copy in everybody’s hands. Your company’s future is at stake.”

You can hire someone to create a manual or you can do something as simple as search the Internet to find requirements and verbiage for your state. The JVC offers a Jewelers Employment Manual, which helps business owners develop and implement “common-sense policies and procedures.”

Jackie Ford, an employment law expert and partner at Vorys, Sater, Seymour and Pease in Houston, says jewelers can help avoid gender discrimination lawsuits by including policies on pay levels for any given position as well as the specific criteria used for deciding where an employee falls within a pay range. “If someone comes in and says, ‘Hey, I’m paid less than my male counterpart,’ you can show the employee how you set the range for the job and explain how you decided where each employee fell within the range,” says Ford. “There might be a perfectly good reason. If you haven’t written it down in advance, it’s hard to show why.”

Criteria can be set using anything that is reasonably job-related, says Ford. What you cannot do is base pay scale on illegal criteria, such as race, ­gender, religion, pregnancy, and national origin.

“You might decide that you care more about someone’s sales volume,” she says. “Another ­jewelry store might care more about years of experience. You can pick any job-related criteria as long as you’re consistent.”

Sometimes, higher or lower salaries are awarded due to factors that fall outside normal procedures, Ford says. “For example, someone might come in with bigger qualifications than are required, but at the end of the day, they’re overqualified for the job,” she says. “When you get away from your stated criteria, you run a risk.”

Jewelers should also provide their employees with job descriptions, says Andrea Hill, CEO of ­jewelry industry consulting firm StrategyWerx.

“These aren’t static,” she says. “Often, the person working on the sales floor takes over social media and then helps with administrative stuff. Jobs change. Employees deserve a document that outlines what their job is right now. Pay disparity often happens when someone’s job has evolved but their job description is old.”

Look for the signs

“Creating the manual is 30 percent of the battle,” Peterson says. “The remaining 70 percent is making sure everybody knows what’s in it and enforcing it.”

Gardner suggests business owners spend time with their staff to gauge the dynamics between coworkers and between managers and employees. Check what is being done on your computers, what is being said over the watercooler, and what kind of pictures are hung in your break room. Any inappropriate material might be grounds for a complaint.

The onus is on the business owner to create a safe workplace for employees. (Image Source/Corbis)

Casual language and attitudes shouldn’t be a part of your business. “Socializing with employees is fine in a comfortable business environment,” says Peterson. “Partying with employees is not. When people are drinking, they often do stupid things that somebody regrets.”

Peterson says the biggest thing small-business owners can do to stay out of trouble is to take a good hard look at their own behavior. “Too often, they say, ‘They’ve known me for years, they know I won’t mean anything by it,’?” she says. “People are always friends until you annoy the wrong one.”

Also, pay attention to outside influences. If a sales rep is behaving inappropriately, address it immediately, says Gardner. Talk to your staff and encourage them to report any bad behavior. As a business owner, it’s your job to create a safe workplace.

Finally, foster a culture of respect. “When people are not treated with respect, they start looking for reasons why,” says Hill. “The key is to treat people as equal human beings even if they’re not equal in rank.”

It’s also important to consider your own biases, says Hill, who recently encountered a retailer who was treating an African-American employee unfairly. “We’re all humans, and biases sneak in,” she says. “It could have been learned at home or from an experience on the school yard.”

Then avoid the pitfalls

Peterson says there are two common ways retailers get in trouble: “First, they allow themselves to be held hostage to employees,” she says. “Someone threatens to quit and gets a nice big raise because the boss can’t afford to lose them.” In a retail environment, incentive-based pay helps eliminate this problem, with the more qualified employees making more than the less qualified.

The second pitfall is to pay employees a higher rate if they are not using the company’s benefits package. “Unless you’ve specifically laid out this option and everyone has the same choices, you can be running into trouble,” says Peterson.

Hill says discrimination against women has abated over the past 30 years, but it still happens. “It’s shocking that it’s still a problem, but it is,” she says. “With the case against Sterling, remember anybody can bring a lawsuit and make a claim. We need to let the justice or arbitration system go through its proper course.”

Whether or not Sterling Jewelers is found liable, Kishaba is hopeful that the lawsuit will instigate change in the industry. “I’d like to see it give a voice to all of the women who never spoke up,” she says. “I hope it creates a safer, more equal workplace.”

(Top: Getty Images)

 

Handling Complaints

What do you do if an employee comes to you with a discrimination complaint? Get out your pen or keyboard and document it, says Jewelers Vigilance Committee’s Cecilia Gardner. 

• “Create a written memo outlining the complaint, with as much specific information as possible,” she says. 

• Take a neutral position about it and, in a nonconfrontational way, speak to the person against whom the complaint is alleged to determine whether the complaint can be substantiated. Be sure to document that conversation as well. 

• Investigate the situation, and talk to those involved to make a determination on action. Kate Peterson of Performance Concepts says there must be no recrimination as a result of filing a complaint. 

• Insist on confidentiality. Keep the details of the case private. If information leaks out, it could damage the reputation of the accuser and lead to a defamation lawsuit against you.

• After your decision, keep all documents on file in case of further incidents. “If things don’t stop, you may need to take steps for a more definitive correction, including termination if that seems appropriate,” says Gardner. —SV

(Getty Images)