ANALYSIS: Employee lawsuits can hurt regardless of the outcome

Wal-Mart escalated its PR efforts in the face of a discrimination suit, as winning public opinion can be just as important as winning in the courtroom.

Wal-Mart escalated its PR efforts in the face of a discrimination suit, as winning public opinion can be just as important as winning in the courtroom.

When Wal-Mart discovered in late April that a group of employees who had been suing the company planned to file for class-action status, the company took the PR offensive, mobilizing executives and female managers to respond to accusations raised in the suit. Such a major PR effort would have been unthinkable a few years ago, but those who specialize in litigation PR say Wal-Mart's move is the latest sign that times are changing. "There's a greater reason to engage the media," explains Karen Doyne, SVP and director of Ketchum's litigation communications practice. "These cases aren't just about an employee; they're about a company's reputation. They're about integrity." Companies that once would have issued a "no comment" in employee-discrimination or harassment suits are now taking a much different tack. Rather than staying silent, they are making their case to the public. "It's something that more and more companies are doing, and doing well," Doyne says. For years, corporations worried about winning discrimination lawsuits, but they missed the point that the legal battle is only half the challenge, says Mike Paul, president of MGP & Associates in New York. "Some would argue that these cases are more about public opinion than law," says Paul. "If the public doesn't believe the verdict, then you're still in a damaged state." Such a lawsuit can paint a corporation as a bad citizen whether or not it wins if the suit leaves negative public opinion in its wake. That can drive away customers and cripple relationships with key community groups that a company has worked years to establish. The bottom-line impact of a lawsuit can extend far beyond any settlement or judgment costs. Says Bruce Rubin, senior crisis counselor with RBB Public Relations in Coral Gables, FL, "Plaintiffs' lawyers have understood for years that the hearts and minds of the public are essential. Too often, companies have let themselves be whipping boys for the plaintiffs' lawyers." The new communications blueprint in employee lawsuits is still being mapped out, and litigation PR people say that there's no one-size-fits-all approach. But they do point to several prime directives companies should follow in communicating during employee lawsuits. First and foremost is to not let the plaintiffs' attorneys set the tone of media coverage. "In the public eye, in an employee-discrimination lawsuit, corporations are inherently guilty until proven innocent," contends Richard Chernela, VP at Magnet Communications. "You're really in a very challenging situation. The best you can hope for is a fair and balanced story." Achieving that means telling the media what the company is doing to see if it is guilty of discrimination, what policies it has in place to prevent discrimination or harassment, and showing a track record of answering such charges, experts agree. "If you say nothing, it goes to your credibility," Chernela says. Dial's discrimination ordeal Scott Farrell, EVP and deputy MD with Golin/Harris International in Chicago, recalls that when his firm began working on an employee-discrimination suit with household-products maker Dial in September 2002, "the coverage at that time was driven totally by the EEOC" (Equal Employment Opportunity Commission). Scottsdale, AZ-based Dial, which makes Purex laundry detergent and Armour Star canned meats, was in the midst of a suit filed in 1999 by the EEOC on behalf of women workers. The women alleged that they were groped and told they should look at pornographic photos by male workers and supervisors. To decide how Dial should present its case to the media, Golin profiled the legal-affairs and women's-issues reporters covering the case to see what they'd written in the past. "You don't want to get into a shouting match with the EEOC, but you do want to look for chances to tell your story," Farrell advises. Dial made the points that the last complaint filed against it was seven years old, and that it had new senior leadership in place since then. Golin also helped the company prepare its communications strategy for each step in the legal process, such as pretrial motions, jury selection, and various pretrial hearings. "We were always playing this thing with Dial as a chess game, thinking three moves ahead and asking, 'What are your contingencies?' We were always ready with something," Farrell says. "Our overriding goal was to restore balance to the story and protect the integrity of the company and its leaders." Dial did not attack the EEOC during the suit, and never publicly gloated when it won motions during the pretrial process, Farrell notes. Golin also did research to gauge public opinion. "Research is a critical component before and after with your stakeholders," Farrell says. In late April, Dial agreed to a settlement in which it will pay $10 million to the roughly 100 workers involved in the suit. It also agreed to have a three-person team monitor an Illinois plant where the alleged conduct took place, and hear appeals of employee complaints. Dial did not admit to the allegations in signing the consent decree. Farrell feels he achieved his goal of getting balanced coverage by the time the settlement was announced. He also thinks Dial did a good job communicating with employees, an audience often overlooked in such matters. "They need to feel that management has this under control," Farrell says. Bob Matha, partner at Chicago-based Matha MacDonald, agrees that employee communications is a top concern during employee lawsuits. Just talking about a company not discriminating isn't enough, he says. "Pretty much every company has the [antidiscrimination] poster on the wall," he says. "We've got to put a focus on actions rather than words. Employees know if there's discrimination or not." Companies involved in lawsuits need to take a careful look at whether there is discrimination going on. If they find it, they should say so, and then outline how they will correct the problem and measure progress, Matha recommends. Companies also need to make sure employees feel they can report incidents of discrimination and have alternatives to going to their direct superior - who may be the one they have a complaint against. "You've got to have different routes for employees to take," he says. While HR departments often set up such routes, PR should get involved as well, Matha argues. "You can work through the turf battles, but any way you look at it, corporate PR should be involved," he says. Keeping community ties strong Other key audiences to communicate with during a suit are community groups and other concerned third parties, says Ketchum's Doyne. "It's very important what you say, but it's more important what others say about you," Doyne says. Coca-Cola, for example, built ties with minority organizations over the years, but when it was involved in a discrimination suit, support from such groups faded, Doyne recalls. "Clearly, they weren't engaging effectively," she says. Coke agreed to pay $192.5 million to settle a racial-discrimination suit brought by African-American workers. The time to reach out to community groups and thought leaders is before a suit surfaces, not once it's in the headlines, Doyne says. "It's very important to build a base of support - to have strong relations before a suit is filed," she says. It's also important to keep communicating with that base when a suit surfaces, and answer questions groups might have at that point. "Is the suit tapping into a perception by some audience important to you as a company? If so, that's the issue you need to engage in," Doyne says. It all comes back to publicly discussing the positive things a company has done and will continue to do. That will counter public perceptions raised by a suit, and may even help in a courtroom as jurors decide a verdict. Says Rubin, "It's your responsibility to level the playing field before you walk into court." Saying, "no comment" won't make that happen.

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