diversity-managed company. It
was very much the mom-and-pop
approach to making these decisions. The individual requested the
independent outside assessment
of his case; we provided it to him
and basically told him that it was
probably an 80 percent fault on the
part of the company as to why the
problems existed, and that was not
sufficient. This individual went on
to carry on the litigation, lose in the
first instance, lose on appeal, and,
obviously, permanently damaged
the reputation of the company.
Not only did they have to pay
large legal fees, wasted management time, loss of reputation and
loss of business, they then still had
to change the practices within the
company to avoid a recurrence of
the situation—the ultimate lose-lose-lose situation.
DIVERSITYINC: WHEN IS IT A
“CLOSE CALL” ON WHETHER
TO SETTLE OR APPEAL?
LATHAM: I’ve been told many
times by senior executives of major
companies that the most difficult
litigation ever to fight is against
your employees, because not only
are you wasting management time
and energy and effort, you’re engaging the people most important
to you continuing to be successful
in your business. Not only is management time lost but employee
time is lost, morale is injured, and
at the end of the day, even if you
were to win and be legally vindicated, you’ve still further alienated
your employees that you have to
ask to come back into the fold.
When an objective viewer tells you
it’s a close call, you could fight it,
but if you say, “The company would
be better off if we settle the case,
don’t fight it and improve our man-
agement practices to make sure
that the close case doesn’t happen
again,” that benefits the employees,
and the company’s image.
Where you have individuals
involved who are key players within
your organization where it’s a he-said/she-said situation is difficult,
because if you believe in your
senior managers and they honestly
tell you that they did not engage in
the conduct that they are being accused of, then you have a judgment
to make. If in fact you’re being subjected to frivolous claims, you need
to make a decision to do the right
thing and defend your people.
The downside to continue to
pursue a case that your lawyers tell
you is a loser is that you’re continuing to damage your reputation, and
people will not remember the fact
that maybe five years down the
road you got a technical victory.
They’ll remember the fact that
you had a major case against you.
Suppose it was a close case and the
court comes back and says, “You
were right on one count but wrong
on four others and you never
should have let this happen,” you’re
just better off to settle the case and
improve your business practices.
The best advice I’ve ever gotten
from some of the most effective
managers of major companies
is if there’s any possibility that
you were even partially at fault,
you’re better served by improving
management practices to prevent
a recurrence, settling the case, and
moving on.
—Compiled by Jennifer Millman
WELDON LATHAM is senior
partner in the Washington, D.C.,
office of Davis Wright Tremaine,
chair of the firm’s corporate-diversity-counseling group and Diversity
Advisory Board chair for Deloitte &
Touche, No. 19 on The DiversityInc Top
50 Companies for Diversity® list.
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