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Small town PUD hit with almost $2 million in claims.

January 31, 2015

 

For those of you that don’t live in the Pacific Northwest, Clatskanie, Oregon is a small community where the Clatskanie River enters the Columbia River.  I have only been there twice.  This is one of those communities where you get pulled over for doing 26 in a 25 mph zone.  I know because I was pulled over for doing 26 in a 25.  That was more than 10 years ago and I know I should get over it.  In spite of my feelings about their traffic enforcement, Clatskanie is a beautiful town that has that baseball, hotdogs, and apple pie, all American, feel to it and bills itself as the Center of the Universe (the folks in the Fremontneighborhood in Seattle may disagree).  That’s why I was surprised to see that the Clatskanie PUD has paid out nearly $2 million to settle sex harassment complaints against a former manager and General Manager of the local Peoples Utility District (PUD) and that does not take into account the legal fees that have been spend to date.  Going to take a lot of speeding tickets to make up $2 million.

 

Apparently the General Manager and another manager of the PUD engaged in unwelcome comments and unwelcome touching.  It is alleged that a woman was told that there should be a flat fine for groping women based on the body part groped.  That way  he could just pay the fine and move on.  In addition, women were told they did not have the “:proper plumbing” to succeed and that women were asking for it by the way they dressed.  One woman had her buttocks slapped on multiple occasions and had her blouse pulled open by a manager. It was also alleged that women were the subject of retaliation after they reported this conduct.  Apparently, once the reports were made, the General Manager ordered a person in the IT department to manipulate records to hide evidence.

 

According to the The Daily News Online, the new General Manager issued the following statement, “We have instilled a culture here of accountability, fiscal responsibility and transparency and within that culture we have addressed these issues.”  Nice words, but as mom used to say, “The proof is in the pudding.”

 

It is unfortunate that culture change only occurred after the PUD committed a trifecta of wrongs and paid out almost $2 million.  First, they waited until they were sued to change their culture and, as a result allowed female workers to endure unwelcome touching and unwelcome comments. Second, rather than have robust procedures in place to investigate reports of sexual harassment and protect the reporting party, the PUD retaliated against the women who were victimized.  Third, they attempted to alter or destroy electronic evidence.  There is a term for that. No it’s not “stupid” it is called spoliation of evidence.  When a party destroys or alters evidence the judge has the ability to remedy the wrong. The remedy can be telling the jury that they are to believe that the evidence was destroyed because it was damaging to the party or the judge could find the party that destroyed the evidence to be at fault without a trial and turn the trial into a determination of how much should be awarded to the plaintiffs.

 

The problem in Clatskanie is not unique to that community. Small communities and organizations typically don’t have the resources found in their larger counterparts and so they tend to place a low priority on line items such as training management on how to handle workplace complaints of harassment, discrimination or retaliation.  The same holds true for training for the non-management workforce.

 

Employers, large and small, often focus on the hard costs of a claim (i.e. how much is our financial exposure) and disregard the soft costs associated with a claim. By soft costs I mean the cost associated with having your team distracted from doing their job because a lawsuit is pending.  Litigation requires you to produce documents (hard and electronic copies); to refrain from deleting documents or altering files, to participate in litigation such as deposition testimony and trial testimony and it impacts the overall morale of your workforce.  Let’s face it, if you’re business is building widgets,  that is what you want to do and building widgets does not include being a defendant.

 

At the end of the day, the goal should be to create a culture where human capital is valued and respected.  As the baby boomer generation nears retirement, quality employees will become increasingly scarce. The companies that understand that talent is the key to their future success are the same companies that will create a work environment where employees want to come to work because they are valued and appreciated.

 

Take Aways:

 

1.  Culture change starts at the top.  

 

I have worked with employers for a long time. As a general rule, when you have problems at the non-management level, it is because upper management talks the talk but does not walk the walk.  When upper management sets the tone, problems like those experienced by the Clatskanie PUD rarely occur.

 

2.  Training saves your company money.

 

Back in the old days, there was a company that made oil filters. Their slogan was “you can pay me now or you can pay me later.”  The premise was that you can pay for the cost of a quality new oil filter at the time of the your oil change or you can pay to replace your car’s engine at a later date. Money spent on training today, will avoid litigation in the future and may preempt the loss of a valuable employee. It’s your call.

 

3.  Regularly, review your handbook, your policies and procedures.

 

An organization is a living growing entity.  As it grows some policies are no longer useful. Get rid of them. Make sure you have a policy prohibiting harassment, discrimination and retaliation.  Also, provide your employees with a roadmap on how to report harassment, discrimination and retaliation.

 

4.   Never ever retaliate against an employee for make a report of unwelcome workplace conduct.

 

There is a reason that retaliation is one of the most popular claims in the arsenal of an employment law attorney, it is relatively easy to prove and the awards are significant.  An attorney once told me, she never underestimates management’s unique talent for shooting itself in the foot when a claim is made.

 

5.  Do not destroy or alter evidence.

 

If you don’t get this, you need more help then I can provide or am qualified to give.

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