As senior leaders in the company, you and your peers are probably pretty confident in handling most issues that come up in the workplace.
But the managers who are not well-versed in employment law will need to lean into HR’s expertise to avoid an expensive mistake — like this recent retaliation case.
Is Former Employee Eligible for Rehire?
In 2023, a former employee reapplied to work at Cinergy Entertainment Group, Inc., a Texas corporation operating movie theaters in several states.
According to the EEOC’s lawsuit, the former employee had worked as a bartender at one of the theater locations in 2022 when she became pregnant. After she informed her manager about her pregnancy, she was let go.
When the employee reapplied in 2023, a company vice president told her she was not eligible for rehire. Why not? Because she filed a discrimination charge with the EEOC after she got fired from the bartending position the previous year, the lawsuit alleged.
The former employee then filed a second complaint with the EEOC.
EEOC: Retaliation Violates Title VII
In the EEOC’s view, the alleged conduct violated Title VII, which protects individuals from workplace retaliation.
The EEOC filed a lawsuit after unsuccessfully attempting to reach a pre-litigation settlement through the agency’s voluntary conciliation process.
“When an employer takes an adverse employment action against an employee because the employee exercised her right to file a charge of unlawful discrimination, it has a chilling effect. Other employees are then hesitant to come forward to report discrimination,” Melinda C. Dugas, regional attorney for the Charlotte District, said in a statement. “Resolving issues involving unlawful retaliation is a priority for the EEOC.”
EEOC Trial Attorney Nick Wolfmeyer said, “Employees should never suffer from reporting allegations of discrimination to a federal agency. The EEOC takes allegations of retaliation seriously, and we will step in to protect employees’ rights.”
Ultimately, the company agreed to settle the case. Under a two-year consent decree resolving the dispute, Cinergy Entertainment Group must:
- Pay $137,000 in damages to the former employee
- Implement a revised anti-discrimination and retaliation policy
- Provide training to all managers at each of its local entertainment centers nationwide
- Provide training to managers and HR at the corporate level, and
- Post an employee notice at its Charlotte location.
Lessons for Finance Pros
What can you learn from Cinergy’s expensive lesson? There are a few important takeaways:
- Leverage HR’s expertise. Treating HR as a strategic business partner can help you navigate complex employment laws. Involve HR early and often when dealing with employment matters that can have legal repercussions. Doing so shows your C-suite peers that they can – and should – rely on HR, too.
- Budget for potential liabilities. With $137,000 in damages awarded, this case shows how retaliation claims can strain a company’s financial resources. You might want to invest in risk management solutions to identify liability risks and implement strategies to reduce liabilities. You may also consider purchasing insurance coverage, such as directors and officers (D&O) liability insurance, to protect against legal claims.
- Understand the importance of collaboration at the top. By working with heads of other departments (like HR and legal), senior finance leaders help create a leadership team that values compliance – and that in turn, can help your company avoid a legal headache that ends up costing big bucks.
