The High Costs Associated with Workplace Discrimination
April 27, 2023
The adverse effects caused by workplace discrimination carry a high price for both individuals and organizations. But these costs go far beyond those that are purely economic. Discrimination in the workplace hurts employees, employers, and the entire organization in multiple ways. Bias and intolerance cause social, physical, and psychological harm. This kind of toxic behavior in the work environment undermines morale, productivity, and trust and can even lead to acts of violence. In addition to creating a hostile work environment, acts of discrimination can damage a company's reputation, negatively impact the bottom line, and result in costly legal action.
The Economic Costs of Discrimination
The U.S. Equal Employment Opportunity Commission (EEOC) recently released the details for the more than 67,000 charges of workplace discrimination the agency resolved in the fiscal year ending June 30, 2020. The agency reported securing close to $432,000,000 for workplace discrimination victims through resolutions and litigation. The EEOC says the average amount paid out in a settlement for employment discrimination claims is around $40,000. However, depending on the specific circumstances and the facts associated with the case, the agency also stated that a settlement or verdict could be upward of seven figures.
Charlotte A. Burrows, the current Chair of the EEOC, said, "The EEOC advances opportunity for all our nation's workers and plays a critical role in ensuring justice in the American workplace. Despite an incredibly challenging year, the EEOC's dedicated workforce advanced the agency's mission to fight employment discrimination on all fronts."
What are the Typical Costs Associated with a Discrimination Lawsuit?
Lawsuits filed regarding allegations of workplace discrimination are heard in the U.S. Civil Court system. Title VII of the ADA limits an employee's ability to recover emotional distress and punitive damages to $300,000. Other laws, however, such as Section 1981 and similar state laws, do not cap damages recovered for either emotional distress or punitive damages.
What Is Workplace Discrimination?
Workplace discrimination can come in many forms. Acts of discrimination can be based on race, gender, religion, age, or disability. This kind of toxic behavior can also include sexual harassment. If an employer faces charges that allege workplace discrimination, they should contact an experienced labor and employment lawyer and arrange a consultation as soon as possible. Depending on the specific facts and the severity of the circumstances in the matter, a settlement or verdict could cost the company up to seven figures. If you are an employer facing a charge alleging workplace discrimination, consult with a skilled attorney now.
Discrimination Has an Enduring Effect
Discrimination in the work environment has an enduring effect that can manifest in countless ways. When discrimination is directed at employees or job applicants based on race, gender, age, religion, or other protected characteristics, the aftermath is experienced by both the targeted individuals and those within the organization who witness it. Acts of discrimination do not just harm those who are targeted but can also lead to problems that can undermine an entire organization. Bias and intolerance can cause a decrease in morale and motivation and create an environment of fear and mistrust. Employers may find it challenging to attract and retain talent when a company's reputation has been damaged due to discriminatory behaviors. In addition to economic, social, and psychological costs, discrimination in the workplace can also impact the company's bottom line due to loss of productivity and frequent absenteeism.
Workplace Discrimination Can Affect the Bottom Line
Successful businesses that are focused on growth must be able to attract and retain talented professionals to take them to the next level. But workers who experience or witness repeated acts of discrimination in the workplace are likely to seek new positions elsewhere. When a company's knowledgeable, experienced, and highly skilled employees begin to explore new opportunities outside the company, their departure can significantly impact the organization's profitability. When employees do not feel confident about their future within an organization, they can lose their motivation to perform to the best of their abilities. Additionally, their time and energy searching for new employment can significantly reduce their productivity and attention to detail. Discrimination will impact the job satisfaction of all employees, not just the workers who have experienced it. Like the disgruntled employees who have been victims of or witnessed acts of discrimination, other workers within the organization may also seek new opportunities to distance themselves from ongoing toxicity. There are high costs associated with low employee engagement, and worker dissatisfaction can result in even higher costs to recruit and train new staff members. Discrimination in the workplace should never be tolerated. It is a toxic behavior that threatens the well-being of employees, presents risks to the employer, and negatively impacts the company's bottom line.
How Employers Can Prevent Misconduct in the Workplace.
Create a Healthy Work Environment
Employers must take a strong stance against discrimination and communicate to all workers that every staff member deserves to be treated with respect, compassion, and professionalism. Employers who deliver a message of tolerance and respect to everyone on the team will indicate what it takes to establish a healthy workplace environment. Employers can prevent workplace misconduct by being kind, supportive, respectful, and inclusive. By modeling good behavior, employers can create work environments founded on professional conduct.
Employers should empower their employees by encouraging them to report misconduct. Employers should support employees to further professionalism in the workplace by discouraging all types of negative behaviors. If employees speak up when they witness or experience negative behaviors that include harassment, bullying, or discrimination, they become part of the solution.
Every organization's leadership team must be held accountable to establish professionalism in the workplace. They must be able to identify harmful behavior, intervene, and stop instances of misconduct. No one in management should be allowed to ignore bad workplace behavior.
How Employers Should Respond to Allegations
Begin with Preventative Measures
Employers must establish clear and consistent communication with their employees about the importance of professionalism in the workplace. This can be accomplished by implementing anti-discrimination training, creating practical policies and procedures, and addressing preventative measures and reporting.
Support a Healthy Work Environment
Every organization's management team should cultivate and support a healthy work environment. Encouraging diversity, inclusiveness, and open communication will help employees become a part of an ongoing conversation that allows them to feel secure while conveying concerns.
Provide Anti-Discrimination Training
Discrimination prevention training is imperative for all staff members but essential for the leadership team. The executive committee, managers, supervisors, and employees should be trained to identify and prevent discrimination and harassment in the workplace. Those in the management team should be aware of the adverse effects of this kind of toxic behavior on workers and the company and know how to address issues when they arise.
Implement Complaint Policies and Procedures
Employers must develop company policies and procedures to prevent workplace harassment and discrimination. If an employee experiences an unfortunate act of discrimination, bullying, or harassment, the employee must be able to report it quickly and without fear of retaliation. All employees should know how to access the steps necessary to report an act of harassment or discrimination to the parties within the organization who can investigate the matter and put a stop to it. All employers must provide their staff with easy access to the company complaint policy and procedures and facilitate an approachable work environment where the employees feel safe and supported.
Take Accusations Seriously
Employers must view every complaint of harassment and discrimination seriously and respond to each accusation by thoroughly investigating the matter. It is every employer's responsibility to investigate allegations of discrimination, listen to all parties involved, and then respond by taking the appropriate action. In many cases, retaining the services of an experienced and credentialed professional investigator can help employers identify the foundation of the issue and avoid the risk of litigation.
Document the Complaint
When faced with workplace discrimination issues, employers should take the necessary steps to document every complaint, the steps they took to investigate the matter, and the actions they took to resolve the issue. When dealing with allegations of workplace discrimination, it is always wise for employers to consider enlisting the services of a professional and experienced workplace investigator. An experienced investigator can help employers investigate the allegations and help the organization to establish appropriate measures to prevent a reoccurrence.
How Employers Can Protect Themselves from Litigation
Employers can protect themselves from litigation by addressing discrimination in the workplace and establishing preventative measures:
· Develop written policies that clearly define the company's anti-discrimination rules.
· Create a written no-tolerance policy regarding all toxic behavior.
· Educate all members of the organization about employment discrimination.
· Provide ongoing training for all employees about employment discrimination: How to identify it, report it, and prevent it.
· Ensure managers and supervisors have additional anti-discrimination training to help them recognize and stop acts of discrimination in the workplace.
· Consider various options for communicating your organization's anti-discrimination policies: Address your anti-discrimination policy in staff meetings, including the procedure in the company handbook, provide annual training sessions, engage in team-building exercises, and implement focus groups within the organization.
Employment discrimination is against the law. The EEOC protects employees and job seekers from employment discrimination that stems from decisions made based on race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, disability, age (40 or older), or genetic information. When individuals or groups of individuals become targets of employment discrimination, the objective of the law is to provide relief. Victims can recover compensatory, punitive, or liquidated damages when they have been subject to an employer's intentional or unintentional acts of discrimination. Employers have an obligation to their employees to identify and prevent employment discrimination. If you are an employer and need assistance with a complaint about workplace discrimination or need help complying with EEOC laws, the Lynch Law Firm can help.
If You Have Questions About Employment Discrimination
If you are an employer and have questions or need assistance about a workplace discrimination matter, please contact the attorneys at the Lynch Law Firm now. You can email us at firstname.lastname@example.org or call 512 298 2346.
About Natalie Lynch: Founding Attorney
Natalie R. Lynch, a business and employment law attorney in Austin, Texas, has demonstrated expertise in workplace investigations, employment law, and entity formations. Credentialed through the Association of Workplace Investigators (AWI), Natalie is the only consulting expert in Central Texas who delves into allegations of harassment, discrimination, and hostile work environment. As a credentialed dispute resolution mediator, she routinely collaborates with general counsel, internal and external counsel, employment litigators, employment generalists, and senior human resources professionals. She dedicates time to improving the welfare of animals through the Texas Humane Legislative Network. With her extensive business background and solution-focused, purposeful, no-nonsense approach, Natalie excels at:
· Business formation
· Transactional matters
· Labor and employment law
· Employment discrimination matters.
· Employment litigation avoidance
· Harassment Prevention Training Modules
Schedule a Free Consultation with the Lynch Law Firm Now
If you are an employer seeking to resolve an employment issue, protect yourself, your employees, and your business by contacting the Lynch Law Firm for help now. Our team can help you navigate the complexities of your legal matter from inception to resolution. You can contact the firm’s founder and managing member, Natalie Lynch and her team here or 512 298 2346 for services in Colorado, Wyoming, and Texas.
What is Employment Discrimination? | U.S. Equal Employment Opportunity Commission (eeoc.gov)