The CEO called me.
“Vanessa, we just settled an employee complaint for $75,000. Can you look over our HR policies so this doesn’t happen again?”
I asked what happened.
A manager had terminated an employee after the employee refused a work assignment.
The manager hadn’t followed the company’s progressive discipline procedure.
Two weeks earlier, another employee had reportedly refused an assignment and wasn’t terminated.
The CEO’s attorney had given him two options: fight or settle.
The organization decided to settle. Given what the CEO knew, that was a sensible business decision.
So I asked, “What did your investigation reveal?”
His response?
“Investigation? There was no need to investigate.”
That’s the part that stays with me.
Over 17 years, I’ve gotten some version of that call many times. And the manager who made the decision? Still managing.
What Nobody Asked
The check was written and the claim was closed. But the CEO still didn’t know:
- Was the employee treated unfairly?
- Was the termination justified?
- Was the company’s policy followed?
- Were comparable employees treated differently?
- Was HR involved?
- Could the same thing happen again?
A settlement may close the legal claim. It doesn’t necessarily fix the management problem behind it.
Why Inconsistent Discipline Gets Expensive
Treating two employees differently is not, by itself, illegal. But when employees who did the same thing are treated differently, and the difference connects to something protected, such as race, sex, disability, protected leave, or a prior complaint, courts can see it as evidence that the stated reason for the termination was not the real reason.
This is not theoretical:
- In Polanco v. City of Austin, 78 F.3d 968 (5th Cir. 1996), two police officers gave similar testimony. One was suspended indefinitely and the other received a written reprimand. A jury found the City’s explanation was a pretext, and the Fifth Circuit affirmed a judgment of roughly $290,000.
- In 2019, Stanley Black & Decker agreed to pay $140,000 to settle an EEOC lawsuit over an employee fired for attendance after requesting leave for cancer treatment. The EEOC alleged the attendance policy had no accommodation exception and that the company skipped its own progressive discipline step.
The lesson is the same in both: the other side will ask how similar employees were treated, and your answer needs to be ready before the claim arrives.
Questions Every CEO Should Ask Before Signing
- Has anyone established what actually happened? Not what the manager says. What the records and witnesses show.
- How were similar employees treated? Comparisons are typically the first thing the other side will look for.
- Was our own process followed? A skipped step in your own discipline policy can be evidence by itself.
- What changes so this doesn’t happen again? A settlement without a fix invites a repeat.
And if you’ve already settled, ask whether the underlying management problem has been corrected.
If You Settle the Claim, Remember to Correct the Problem.
Your attorney decides legal strategy. An independent workplace investigation or HR risk assessment gives you and your attorney the facts to make that decision well, and shows you where management practices need to change.
Sometimes the most expensive HR problems are the ones leadership never investigates until it’s too late.
Don’t just settle the claim. Correct the problem.
How I Can Help
At Expert Human Resources, I help CEOs and executive leadership teams identify HR compliance risks, investigate workplace concerns, and strengthen management accountability.
Before your next employment problem becomes a legal expense, let’s talk. Contact Vanessa for a confidential conversation.
Vanessa G. Nelson, CLRL, Executive HR Risk Advisor / Founder and President of Expert Human Resources www.experthumanresources.com
Protecting Your Leadership Decisions. Preserving Your Reputation.
Blog post for experthumanresources.com. Composite scenario based on consulting experiences; details are illustrative.
