The Employee Handbook - A Human Resources Podcast by 2 Lawyers
"The Employee Handbook - An Human Resources Podcast", hosted by attorneys Arta Wildeboer and Ryan Ellis, offers expert insights into human resources issues and their legal implications, providing valuable guidance for navigating the complex intersection of HR practices and employment law. This informative series is essential for HR professionals and business managers seeking to understand and prevent legal challenges in the workplace.
The Employee Handbook - A Human Resources Podcast by 2 Lawyers
Hello, Pot? This is Kettle... SHRM Moves from HR to Irony Industry
The world's largest HR organization just paid $11.5 million for violating its own rules.
SHRM—the Society for Human Resource Management—literally writes the certification exams, publishes the best practices, and trains HR professionals worldwide on how to handle workplace discrimination complaints. Then they got sued for racial discrimination and retaliation by one of their own employees. And lost. Badly.
In this episode, Arta and Ryan break down Muhammad v. Society for Human Resource Management, a federal case out of Colorado where a jury awarded $1.5 million in compensatory damages and slapped on $10 million in punitives after deliberating for just four and a half hours.
The facts read like a checklist of what not to do:
- Complaints escalated through proper channels while the company's response became evidence against them
- The "investigator" had never conducted a discrimination investigation before and couldn't recall his training
- That same investigator was simultaneously ghostwriting emails for the accused supervisor
- A Black employee who raised similar complaints was terminated 17 days later
- The plaintiff was suddenly hit with "non-negotiable" deadlines for the first time—right after complaining
- The court found SHRM "produced no facts showing that it actually investigated"
We cover what employers should actually do when facing discrimination complaints, why company size matters for determining "reasonable" responses, how California's new intersectionality law changes the analysis, and the brutal irony of an HR company becoming a case study in exactly what they teach others to avoid.
Hello and welcome to the third episode in like a week that we've recorded of uh the Employee Handbook and HR podcast by two lawyers featuring attorneys Arta Wildebor and Ryan Ellis. And speaking of, here's Ryan Ellis.
Ryan Ellis:Hey everybody, glad to be part of this uh 2026 podcast reform movement we are making. Don't know what that means, but it sounded good.
Arta Wildeboer:Yeah, I think it was that's very dramatic. I like it. Um, I think that's what people want that. They like outrage, they like drama. That's what we got to give them. That's what I've learned from Googling ways to make uh millions on a podcast.
Ryan Ellis:Um I have a quote for this. Uh what I said was not just dramatic, it was also provocative. It gets the people going.
Arta Wildeboer:Oh, that's right. Nobody knows what it means, but it's provocative. Um, so we want to talk about how we were basically gifted with mana from heaven um recently because we were looking for topics and we never know what we're gonna talk about um until three minutes before. And today uh we were Googling around and we found um this article on Sherm, the uh HR organization that does all the certifications and puts on all these uh conventions and stuff about HR every year and tries to be like the leading HR company, even though they're not a professional organization.
Ryan Ellis:Just to add, Sherm is the Society for Human Resources Management. It is the world's largest, again, world's largest professional organization for HR professionals. It offers resources, networking, research, advocacy, and it offers also certifications, the SHRM CP and the SHRM SCP to advance the HR field. So it is a world-leading. Clearly, I didn't write that. It was a Google response. Uh, but now my my actual response is it is an industry leading juggernaut of HR. Um, and I say that I have presented for Sherm in the past. Uh they hold enormous conventions around the country and maybe around the world. Um, it is huge. I mean, they're they're they have a keynote speaking room that holds probably 10 to 15,000 people. It's it's it is huge. So I'm I'm saying all of this to let everybody know how big Sherm is, if you don't have any idea um what it is.
Arta Wildeboer:Yeah, it's give you some context. And um yeah, and it's all it's all bullshit. Uh, you know, this it nothing is real. This is just a company that has fashioned itself. Well, you know what, in in this is all my opinion, of course, so don't sue me. Um, but this is a company that's taken upon itself to declare uh themselves the HR standard in America and and the world. And so it's just the a delicious irony, a delicious, satisfying irony that they just got hit with a$11.5 million verdict for racial discrimination against one of their employees.
Ryan Ellis:Uh an HR company getting, I mean, I like Sherm um because they I present for them, and it's a lot of fun to do that. So um asterisk that and if they're listening or anybody is listening, uh, that I'll I'd I would like to come back and present again. But um the the whole, like artist said, irony here is the world's largest HR organization that provides HR training to HR professionals, um, who writes the certification exams and provides certification for people that are are accepted in the industry if you're applying for an HR job, who publishes the best practices and how to do things, just as we'll explain today, just forgot everything that it knew and and had a had a moment that is reflected in in an$11.5 million verdict, uh, 10 of that being punitive damages uh for racial and and uh and discrimination, race discrimination.
Arta Wildeboer:And retaliation.
Ryan Ellis:And retaliation.
Arta Wildeboer:Yeah, well, I want to give a little context on that$11.5 million number. It it it should have never gotten there. They should have settled this a long time before. And I think the um the verdict is kind of a reflection of how stubborn they were um and how stupid they were just throughout the whole process. Boting investigation, uh botching the trial, botching attempts to to settle the case, um, just botching everything.
Ryan Ellis:Yeah, let me let me shed some light onto that. I agree with Arta from a plaintiff's perspective, that's how it looks. But I I personally embody that remark of being stubborn to settle, um, only because a lot of times when you are faced with a case that you might not think is legitimate and you might think you can get a good jury to make, you know, to to give you a few votes to to not make this uh a verdict against you, that um the the demands are too high. So, like again, not saying it's right because the verdict obviously refle reflects what what happened. But in cases like this, the settlement offer from plaintiff might have been five million dollars, which again, in hindsight, perfect, great idea. Pay the five million and run away. But at the time when your attorneys who hear they have very good attorneys, um, Littler Mendelssohn, uh, very good attorneys, I'm sure they did a great job. But when their attorneys are telling them, look, you have a valid chance here to beat this, given the facts, as we'll go over later, that um they don't want to pay something like that. So I agree that this absolutely should have been settled. Um, but just letting the people out there know if they've never been part of a lawsuit, that sometimes that settlement, despite being wanted by both sides, you know, has unrealistic expectations as to what that can meet at in the middle.
Arta Wildeboer:Well, yeah, I I mean it it's hard to put yourself in in someone else's shoes in a case like this and then criticize. Well, actually, it's easy to do. Oh, it's very easy to criticize them out. Yeah, it's very difficult to be there at the time trying to make a decision on what the best thing to do is, because so much of the information um doesn't come to a light until afterwards. Yeah.
Ryan Ellis:And I'm willing to bet too. Sorry to cut you off again. I I I'm willing to bet that if we called the attorneys um for either side and they expected a verdict, like realistically expected a verdict for greater than a couple million dollars, I think they would have both been surprised. Um again, the plaintiff's attorney would tell you they absolutely expected this, and it was absolutely going to be this, and it's a travesty that it's only 11 and a half million. But a defense attorney would give you a like, no, this should have been X, you know, much lower than the 11.5.
Arta Wildeboer:So agreed. I agree. Well, let's let's give some perspective here. The median federal discrimination lawsuit, um, I think the verdict was 150 grand. Um, so this is quite a bit more than that. I think jury here is obviously trying to make a point uh to Sherm uh and uh use them as an example, which uh you're not really supposed to do, but anyway, that's that's what happened. Um, and we're gonna now get into the details of the case. Um, but just to give you some more fun context on Sherm, this I think the incidents first started in like 2016 that were covered in the lawsuit. But um, just to give some perspective uh on this business, even though they're growing, they're doing very well financially, it seems. Um, September 11th, 2025, after 9-11 commemoration remarks uh with 75 employees present, a uh Marilyn Monroe uh impersonator sang a sultry happy birthday performance for an executive, which is really weird. And uh they also have an attendance policy now that they've started. And these are all just kind of like backstabby articles or things, uh gossip that was fed to business insider and stuff like that, but it's fun to read anyway. Um, so if you're one minute late, you must go to security and check in and get escorted back to your desk by an executive, which that doesn't sound like a good idea. Um anyway, so they've had a lot of layoffs recently as well. And um, you know, they have a lot of people coming out of the woodwork uh to make all these comments about how they're so bad and um, you know, they're uh a fear-based work culture and all this kind of stuff. So um let's get into the actual complaint um and find out is it a fear-based work culture that retaliates and discriminates against their employees? And uh just a spoiler here, they do.
Ryan Ellis:We kind of gave away the ending uh starting out, but yeah, it's uh it's pretty interesting.
Arta Wildeboer:Okay, so um we're gonna stop here and then start again with part two, where we will start with the complaint. Um, so um we'll be right back. And we're back. Let's get right into it. The case is called Muhammad versus Society for Human Resource Management. It's a U.S. district uh court case out of Colorado. Uh verdict date was December 5th for 11.5 million. Uh main claims were racial, racial discrimination and retaliation. Um, so just to give you a little bit of background, uh again, this is the world's largest HR organization, is the defendant, the one that trains HR professionals, writes the certification exams, publishes best practices, takes all your money so you can get a little thing that says you're a member of Sherm. Um and uh they're being sued, or they were being sued, by a 34-year-old Egyptian Arab woman named Rehab Muhammad. Uh, she was hired by SHERM in April 2016 to do uh product specialist work and promoted twice, solid performer, role model, which was on her performance reviews, and uh a remote employee based in Denver. So um from there, uh Ryan, you want to kind of give a little bit more background here?
Ryan Ellis:Yeah, so uh plaintiff Miss Mohammed was terminated in September of 2020, which interestingly was eight months after her last promotion. Uh, but moving to, and we'll talk about that in a minute, moving to SHURM, uh as Artus said, they're the world's largest HR organization, uh, just shy under 350,000 members, uh, headquartered in Virginia. They administer the certifications we spoke about earlier and publish those best practices. I'd like to note that sometimes plaintiffs, when they file complaints, put kind of the kitchen sink in there and alleging everything they can to make it look good. Um, here, the first line of the complaint are the first few lines of the complaint under the caption, you know, where it identifies the parties in the court. The first few lines is a quote uh that plaintiff put put in there from Sherm's CEO, Johnny Taylor Jr., uh, regarding how to dismantle racism. And it says that Sherm literally sells courses on how to conduct um workplace investigations. Uh, and they published articles titled How to Defend Retaliation Claims. It just became a case study on how not to do that. That's not the quote, that's just my comment. So interestingly, the complaint uh contains this quote from Johnny Taylor Jr., the president and CEO of Sherm. Uh, and it's just out there in the front of the complaint. First thing it's the complaint says is this quote workplace bias and racial inequity bloom in the dark. If we continue to be silent, unable to speak kindly about our uncomfortable experiences and those of others, nothing will change, and businesses will pay the price. That is literally the a quote, and again, I haven't verified the quote, it's in the complaint, but that's a quote from the president and CEO of Shurem, which again is hilarious to me because if that is true, which again I'm going to assume, because uh an attorney put it in there, uh, and a pleading under the penalty of perjury or are is subject to a federal rule 11, which requires that we don't lie to courts. If that's true, then it's just pretty funny to start the case with that quote of essentially Shurem, the business is gonna pay pay the price.
Arta Wildeboer:Uh let's see. Well, so let's start. Oh, how do we start this out? Okay, so we want to talk about um what happened here, the alleged discrimination that happened.
Ryan Ellis:Well, before we do that, let's let's go into like a couple of the people that we're gonna mention here in as we discuss it. Um there's a person, Carolyn Barley, who is plaintiff's uh white supervisor, accused of giving a separate treatment, and we'll go through that to white employees. Um there's an Ebony Thompson, who is a black senior instructional designer, who allegedly also mistreated, excuse me, who was also allegedly mistreated by Miss Barley, who was terminated uh 17 days after um complaining about her issues with Miss Barley. There's a Carrie Mills, who is a white senior instructional designer, um who uh was, I guess I'm assuming from what we've read, was called by the plaintiff uh who testified at trial that she was never disciplined for missing deadlines, um, foreshadowing that um our plaintiff did and was disciplined. Uh there's a Mike Jackson who was the HR investigator who unfortunately got called out and allegedly, again, I wasn't there, so I'm just repeating what we've read, who uh allegedly had never conducted a discrimination investigation before. And then there's our CEO, Johnny Taylor Jr., who testified he played no role in that termination of the plaintiff. So sorry, I didn't mean to cut you off. I just want to give people some kind of a foresight of who the people are and and kind of why it matters.
Arta Wildeboer:Um, I I think uh that that's important to do because there's there's a lot of stuff going on here. Uh so basically, uh Miss Mohammed was sensing, I I guess just disparate treatment and and some uh I'll jump in on you there.
Ryan Ellis:It all started when Miss Mohammed was promoted in January of 2020 when she got a new supervisor, Miss Barley. Um, Miss Barley, as we said earlier, is white. And according to Ms. Muhammad's complaint, Miss Barley treated her differently than the white colleagues. For example, like Plain and F was required to ghostwrite emails for Miss Barley just to sign and send off. But with the white colleagues, um, they were they communicated directly with vendors and stakeholders. So uh allegedly, again, Ms. Barley trusted the white colleagues to communicate with vendors and stakeholders, but didn't trust Miss Muhammad. Um, another example given is that Ms. Muhammad was required to copy Miss Barley on all of the vendor communications when the white colleagues didn't have to. They had no oversight and operated independently. Um, another example, Ms. Barley uh allegedly took credit for Ms. Muhammad's work when the white colleagues actually received recognition for what they did. Um, so it was like it seems like a white, a white um, I guess, preferenced contribution recognition protocol that was put into place or wasn't in place.
Arta Wildeboer:I don't know. Well, um that doesn't sound like at this point, it doesn't sound like 11 and a half million dollars. So the the important thing here, and for the lessons to be learned from the listeners, is how Schirm just screws up every single step. So you have some testimony here, that's the strongest evidence that that this other lady uh who had a similar job or the same job as Muhammad, um, the Carrie Mills, testifying that um she didn't have any of these um uh limitations put on her work or or um qualifications of her work uh uh being done by the boss, Carolyn Barley. Okay, so uh again, we we have Muhammad's strongest evidence uh of this discrimination is testimony from another employee, Carrie Mills, that basically had the same job as her uh and was treated very differently than Miss Mohammed. Uh why does that matter? Well, this is how we prove discrimination. Uh Miss Mills uh was white and Miss Mohammed is Egyptian. Um so you know, we have a white versus brown situation here. Uh we also have a potential religious situation here uh that that could be inferred, uh, even though that wasn't part of the uh the discrimination complaint. But um Mills testified, I guess, that she unilaterally extended her own deadlines without any consequences, that she received stress accommodations, that she testified she was never disciplined or coached for missing deadlines. And uh on the morning that Mohammed was fired, the supervisor barley sent Ms. Mills a congratulatory email for completing a project that was still incomplete. That's hilarious. Same job title, same supervisor, same organization, but very different rules. But again, I don't think this adds up to anywhere uh near$11.5 million at this point. So we're gonna go through the complaint here and see where they screwed up and cost themselves all this money because they could have got out of this for like$100,000.
Ryan Ellis:Well, before we get there, do you think, like just from you personally, that there's anything that could have happened in this kind of context that that you think would justify a$11.5 million verdict?
Arta Wildeboer:No, I don't even know if I would want to take this case at this point. Um, you know what I mean? This this is a case where I'd be like, okay, we're gonna have to get somebody to testify for you that may or may not want to lose their job, um, that we might not be able to count on to give the type of testimony when when you know things get difficult, either going to trial or uh, you know, in a deposition that's gonna benefit our client. I don't know if I want to um just risk my entire case on somebody like Kerry Mills. So at this point, yeah, like I said, it's it's definitely not worth 11.5 million at this point. And um, it's it's definitely not a case that I want to take with these facts. But let's let's find out a little bit more what happened uh and uh why the uh jury decided to smack on um or tack on, stack on, tack on, I don't know what I can't think today,$10 million of punitives. So um uh let's let's go through the dates of what happened.
Ryan Ellis:Um Ryan's start. Yeah, I'll do it. So in 2020, this all happened in 2020, this chain of escalation, um, in that apparently Miss Muhammad didn't just complain once and and essentially fall on deaf ears, but she escalated her complaints through proper channels and Sherm's response at each kind of step just became evidence against them because they didn't do the right thing. So starting in June of 2020, Miss Muhammad contacted her uh vice president, Miss Morris, complaining specifically of race discrimination. Um, and then the next day, um the there was a three-way meeting with Ms. Muhammad and Miss Barley, and Miss Morris. Um and in that meeting, Miss Barley cried, became very defensive. Uh, and there was no and there was no trained facilitator kind of in that meeting. And there also, more importantly, big mistake, number one, there was no HR present at that meeting.
Arta Wildeboer:So, Ryan, let's just go into that. Why why would you want, as a defense attorney, if your client uh told you that they didn't have a uh HR person present, what would what would you counsel them? What would you tell them, like, is the problem with that?
Ryan Ellis:Well, the problem is that there has been a uh an explicit complaint of race discrimination. And when that happens, you need to have HR immediately involved and sometimes legal. And so if there was no HR kind of program, in my opinion, to to take this and start investigating, that that's a huge problem for for Sherm here. Because again, the this meeting could go anywhere. And and maybe maybe the VP, Miss Morris, was trying to quell the issue or kind of just kind of cut come contain it in such a way to see what really happened. Maybe. But it sounds like with the allegation specifically of race discrimination, that this was not handled at a level that it should have been.
Arta Wildeboer:Well, yeah, and uh it just I I don't I never see it as a good idea to have um these very emotionally charged meetings before reading with the people uh individually. I think that that's a huge mistake. I think the uh Morris, the VP, could add a uh much better handle on things and and uh if she would have spoken to them individually first. And um I I think one thing that I wanted to bring up was that you'd mentioned that there is no trained facilitator there, you know, for these types of um very emotionally charged meetings. And that's something that if you're an employer listening and you're like a small business, you don't necessarily have to worry about that. Um, the standards for reasonableness uh change with the size of your company for what you need to do to solve problems. So um something that's reasonable for a huge company, um, like bringing in HR staff, bringing in a facilitator who uh deals with conflict resolution, that's something that a huge company has the resources to afford. So it'd be more reasonable for them to do that. Uh, you know, a small business, let's say you own like a uh corner store, nobody is expecting you to have a trained facilitator brought in when two of your employees are are having issues with each other. But um uh moving on. Um I guess uh June twelfth, the next thing that happened is that Barley has a one-on-one meeting with Mohammed. Barley is the boss and um tells the alleged discriminator here. Yes, and and she accuses Mohammed of being wrong and misremembering uh the situation. Um, this is also a uh just a bad thing by a manager. I think one thing you have to understand as a manager is that it doesn't matter who's wrong or right or whatever. If you get to a point uh where you can find a resolution with you taking the blame or taking responsibility for something, just do it. The whole point is just to keep the machinery running of the company and not causing more friction. Uh, I think if you're the type of person that needs to prove to somebody else that you're right and they're wrong, that's something that's gonna hurt you a lot and management is gonna lead to situations like this.
Ryan Ellis:Yeah, and and to add on to that, like management, it just from like an objective standpoint, management is leading, supposed to be leading by example. Um, and then calling in as a manager, let's assume it, let's liken it to a military example. If a general calls, you know, um one of the the people under the general, again, my military reference is already bad now, but it calls them in and yells at them and berates them for something they did wrong. Maybe it wasn't with that. Maybe it's because it didn't teach them right, maybe the instructions were incorrect. But there has to be an uh because the general's boss will require the general to adopt that. And here, same with uh again, Barley telling Muhammad or insisting that she's wrong, if Barley has to go up the chain to whoever her boss is, that boss is gonna expect Barley to figure it out. And by going in, nothing ever got good comes in when a boss comes in, tells someone who complained about them that they're just wrong. That's not, I mean, again, I like to go back to objectiveness and um and common sense. No common sense would dictate that that response was gonna come any other way aside from this getting worse.
Arta Wildeboer:Yeah, especially when it comes to subjective things like people's feelings about how they're being treated. Um, you know, if the this is it's not legal advice, just normal advice. If you're in a management position and you're not listening and making people feel like uh what they're saying is heard and validated, um, then you're gonna have an issue. You're gonna create a seed of of resentment. And uh again, if following the law is not always um just the bare minimum of what you need to do. Sometimes you have to be uh understanding of people's situations um so uh you understand their situation. It's not about right or wrong. If if you have a chance to end something um by not making a move, that's that's what I would say to do. Like if you just take the responsibility, take the hit and go, you're the boss. That's part of what being the boss is or being the manager.
Ryan Ellis:Yeah, and I think I mean, on behalf of of Miss Barley, I mean, I don't think she would have admitted this, but maybe she did, but we didn't read testimony and all that stuff. But if this is where Miss Barley should have, I'm sorry, where Miss Barley seems to be defending what she did and protecting herself. And that is a common mistake made by managers because as a manager, you have to assume that your your superiors and your company will have your back if you make a mistake, then you'll be reprimanded for it. And that's just accepting responsibility. But here, going in and telling Mohammed that she's wrong is again, it just makes everything worse. Instead of accepting responsibility and kind of taking it in stride, now she's pointing fingers and making it worse.
Arta Wildeboer:Yeah, she's probably at this point worried, she she's gonna get fired herself, uh, and and seems to start doubling down. So uh June 3rd was the date that this all started. Now it's July 7th. Um, there's a quote unquote facilitated discussion between uh HR rep Mike Jackson, the aforementioned Mike Jackson with no history of um conducting discrimination investigations in the workplace. Barley is again a uh president in the meeting uh and denies everything. Jackson says he'll follow up. Uh he never followed up. Uh three weeks later, about or two weeks later, about there's another meeting with uh the um VP Genie Morris and Jackson, Mohammed and Thompson both raise discrimination claims. Uh Ebony Thompson, that's the black employee that we talked about earlier. And uh Thompson describes identical micromanagement compared to Kerry Mills. Uh micromanagement.
Ryan Ellis:Which should be a humongous red flag for anybody involved. Humongous. Because now you have corroboration and you have a record of now two people making the exact same claim about the exact same person.
Arta Wildeboer:So the next day, Mohammed decides to take things to the CEO, Johnny Taylor, via his open door policy. And Taylor admits that uh Sherm is struggling with people manager and diversity issues. Um and uh then refers her over to the uh chief HR officer, Sean Sullivan. Um in between all of uh this uh on August 6th, Ebody Thompson is terminated 17 days after complaining. On August 10th, Barley suddenly demands a non-negotiable August 31st deadline for two projects um from Ms. Muhammad. And this was the first time a firm deadline had ever been imposed. Uh Ryan, why is that a problem?
Ryan Ellis:Um well, it sounds like she that this is like classic setup retaliation. I mean, this is this is something had to have happened behind closed doors between the July 21st time when um when Mr. Taylor Jr. said that they're struggling with things and Miss uh Thompson being terminated, to now figuring out how to get rid of Plainiff. I mean, this is where I think or said the setup. This is where like the whole story comes together of like something happened in the background. Now the plan is to get rid of um plaintiff here and Miss Mohammed. And this is the first step of putting her, uh I guess holding her against uh deadlines that she either can't meet or whatever, but again, setting her up here. And and it's funny because this is the first time that again they uh SureM imposed a deadline. So interestingly enough, all these first coming out at times when after a retaliation and discrimination complaint has been made.
Arta Wildeboer:Apparently the next day, August 11th, an internal mediator tells Miss Mohammed the plaintiff to change how she interacts with Barley and tells her you better finish your projects by the end of the month.
Ryan Ellis:As a plaintiff's attorney, how do you what do you like? Is it are you are you starting to drool now? Like this to me seems like where again it's just getting worse and worse and worse as the time goes by.
Arta Wildeboer:Oh yeah, this is this is salivating time. I think before um this deadline, you have a you have a decent case, you have a shaky case. I think uh uh Ebony Taylor has a good case at this point for getting fired, you know, 17 days after complaining. Uh but Muhammad um she hadn't been fired at this point. You know, most most attorneys are not taking uh employment cases unless there's a termination that has already occurred. Um but uh this this is an obvious way, like you were saying, Ryan, for a company to set up an employee for being fired. It's somebody that you don't like, you just give them an impossible uh list of tasks under different circumstances where uh she hasn't just complained recently. Maybe this is something that's in normal business practices, but uh it certainly looks fishy now.
Ryan Ellis:Agreed. Okay, so I cut you off, but this is where I want because earlier we made a big to-do of this isn't a good case. And it seems to me like this is becoming and ramping up to a point of exploding. And I just wanted to get your your point as blow by blow as your comments. So yeah, so instead of again, there's nothing here about Barley being reprimanded or or talked to, but this is more on the plaintiff side of things. But again, I I would assume that not only would this internal mediator telling this Miss Muhammad to change how change how she interacts with Barley, you know, and and threatening her to finish her projects or you better finish them, um, that that same kind of tone and communication would go to go to Barley um to say, look, like you can't do this anymore, and and give her some guidance as to how she needs to handle herself. A week later, after that meeting happened in August, um, Muhammad again formally complained of retaliation. Excuse me, because she complained first of race discrimination. So now she in August of 2020 formally complains of retaliation um in a writing, uh, I'm assuming an email to the chief global development officer. Um and two weeks after that, or about 10 days after that, um, Sullivan sends a letter declaring the complaints unfounded. And again, Sullivan's the investigator.
Arta Wildeboer:Ryan, I want to ask you just a little bit of nuance here in general for for our listeners. If um let's say uh there is a retaliation claim uh brought by a plaintiff, but the underlying discrimination claim, let's say somebody discreet uh complained to their manager being racially discriminated against, there's an investigation done. It turns out that they weren't, and then they're fired. Is that retaliation now? Because there wasn't discrimination found.
Ryan Ellis:So this is federal law. And if you have a reasonable belief that you experience retaliation, you can make that complaint and cannot be retaliated against for it. I think that federally, I think there's a problem here. I think that there should have been, I mean, a lot more done, first of all. But second of all, because we know, as we said earlier, she's terminated in September. Um, about what a day or so after this report comes in. I think that there's obvious uh a causal nexus between these two things and and temporally related. So yeah, I think this is this is all wrong. All wrong.
Arta Wildeboer:You know, kind of uh unethical work life pro tip. Is there like an amount of time you could wait after let's say somebody complains? Like what what's your what do you do as a business owner? Do you just say screw it and like whatever, man? I'm I'm gonna have to just see if they if they decide to try to sue me.
Ryan Ellis:Well, the problem here is not this is what this is what I fail to understand regarding this lawsuit, is that the problem does not seem to be with the plaintiff. The problem does not seem to be with uh Miss Mohammed because of all the promotions and the glowing the glowing performance reviews. So I don't know what needs to be done here except possibly dealing with Miss Barley or their other HR or other professionals who have kind of marked people for termination. Because there's no, I mean, we don't have the report. I mean, I'm sure we can find it, but there's been a protective order um issued in the case. So I don't know what we can find or what we can't. But like there's there's gotta be more here that we're not knowing about. So Oh, sorry, let me answer your question really quick. Your the answer your question was is there a time you can fire somebody? I mean, probably, but not the day after. But again, though, you want to make sure you have legitimate business reasons for doing so. Uh, and again, the in California, employers can be employees can be fired for any reason that's not illegal. You got to make sure that there's no link to that of a plaintiff bringing that lawsuit.
Arta Wildeboer:So let's back up a little bit to one of the first screw-ups that uh the company made here, which was with uh getting this investigator guy, Mike Jackson, um, to come in and I guess try to investigate what happened. Um so if as a business, why do you want to investigate a claim like this? Why is it in your interest as a business to um have HR step in or your general counsel and have uh somebody uh uh come in and investigate to see what happened? Why is that important?
Ryan Ellis:Well, I mean, that's it's your legal duty to investigate complaints that are, you know, to determine whether they're founded or not. And then the investigation just protects everybody, right? If the investigation is unfounded, then you've done your job, again, proper investigation. You've done your job as an employer to and to figure out what's going on at work and to remedy those problems. If it's unfounded, maybe then you can guide guide the employees who made the complaint or um um give them, I guess, tools to work with or give them assistance in any way they meet might need, or even change the like change part of their work environment. Maybe they don't want to work with this person anymore. And if again, there's legitimate concern but no foul play, maybe that's something you can do. On the other hand of it, though, or other side of it, is if you conduct an investigation, you want to make sure you you punish the people that do something. So if you, I mean, crazy example, you never investigate things, then all these problems are gonna run rampant in your employee in your uh your company. And you don't want that because that puts you in in subject to additional legal issues. And this could have gotten way worse. With social media nowadays, this could have gotten way worse. We have no idea what this could have happened if they didn't mark uh seemingly mark plaintiff for termination according to the facts we know. So, I mean, it legal compliance is one, and two is making sure you actually have a workplace where people are being harassed all the time.
Arta Wildeboer:So um you mentioned dealing with things properly, and and I want to just bring it a little bit back to the reasonableness of uh what your company is expected to do when handling these situations. And this was something that the plaintiff's attorney really bit on in this case was Mike Jackson, who was the manager of employee experience, which I have no idea what that means. So he was the one doing the investigation. Now, in a small company, again, the standards for reasonableness on what you need to be doing are gonna be lower. You're not gonna be expected to hire, you know, an entire team of uh attorneys to come in and and do an investigation if uh two of your employees are are arguing over somebody eating somebody else's lunch. But um a reasonable response for a huge company like Sherm uh is gonna be sending a seasoned investigator uh to figure out what happened. In this case, they sent Mike Jackson. Uh Mike was uh doing the first case he'd ever handled uh when he was given uh this uh uh this opportunity, which he screwed up royally. He uh testified that he had one session on HR investigation training, completed just a few months before the events uh that happened with Ms. Mohammed, which is good, I guess, because at least it's fresh, right? Yeah.
Ryan Ellis:Yeah. Jumped right in just to jump right into the field work after taking the class. Could have been worse, could have been like 30 years ago. Maybe he testified that he stayed in a holiday in express last night.
Arta Wildeboer:So might have made it better. That would have changed everything. This we wouldn't even been here talking uh if he would have done that. But um he didn't stay at a holiday in express. Um I think we can infer that because uh when asked at trial what he learned during his investigation training, he could not recall any specifics. So that's not good. Uh he also left Shroom in 2021. So this is the person doing the investigation. And um, why is it not reasonable for somebody with so little experience to be doing this investigation, Ryan? What what was the whole point of what I was saying about the reasonableness?
Ryan Ellis:Well, because I I think that I mean there's a lot of things that that are issue here, but the reasonables, you need to have someone who knows what they're doing to do the job, um, especially someone who doesn't necessarily have a bias towards what um what you're doing here. Um, in this case, moving on to I guess not reasonable, but to a bias thing, I guess is unreasonable, is the fact that he wasn't neutral. Like he was an employee of Sherm, and he was the one investigating uh these complaints while at the same time he was writing emails for Barley to send to her with deadlines and drafting the paperwork on the same day or two days of receiving her complaint. So um there's a lot again. I just I can't get back to the fact, or I can't get over the fact that Sherm did this, like the same people cheat teaching you to do things the right way, just massive, massive pickup.
Arta Wildeboer:So I think you you just kind of glossed over that. Mike Jackson, the investigator, uh, while he was investigating the complaints by Mohammed simultaneously was ghostwriting emails for Mohammed's supervisor who was being accused of discriminating against Mohammed.
Ryan Ellis:Yep. It's insane. I mean, that's that's the thing that uh the jury can use to infer the investigation investigation was just sham. Like he did like I I we don't have all of the details of what they did, but did Jackson not discuss the retaliation complaint with her and his involvement in any of the things he did? Like if he's the one that's that drafted the email to say, hey Barley, just send this email with these deadlines, we'll be it'll be fine. Like if he actually said that and that actually happened, that is where we're starting to really get into this punitive slash retaliatory slash malicious and oppressive uh conduct that justifies punitive damages.
Arta Wildeboer:So, Ryan, here's the thing. As we know, HR uh human resources, it's it's a minefield, it's very complicated. One thing, if we could have like if there was an organization of professionals that got together and they made like uh guides and and like rules that that could be put in place at businesses for how to investigate, if there was only a company that could help businesses with their HR problems, um, you know, wait a minute.
Ryan Ellis:I was I think I think HR.com, I there's somebody that does this. I don't remember who it is.
Arta Wildeboer:Well, I just happened to find Sherm's own extensive guidance on how to conduct investigations of the workplace. This is what their materials say. Investigators uh investigators should be neutral and objective. Fail. Fail. Investigators should not have a stake in the outcome. Fail. Documentation should be thorough and contemporaneous. Double fail. The complainant should be interviewed about their claims.
Ryan Ellis:Yeah. Fifth fail. I mean it's insane. Insane. Go ahead, sorry.
Arta Wildeboer:The judge uh the judge found that uh Sherm actually produced no facts showing that it actually investigated.
Ryan Ellis:Pause pause right there. That it actually investigated. Period, hard stop, next line. Like that is that is the craziest thing. That's like I don't know, I'm gonna make a karate joke. That's like a taekwondo instructor teaching you Brazilian jujitsu. It just doesn't happen. Like that doesn't happen. They they know they know they're taekwondo, they don't know jujitsu, but somehow they just completely fail at Taekwondo. Makes no sense.
Arta Wildeboer:Is it like is it like uh instructor at a swim school drowning?
Ryan Ellis:I think Yeah, well not only yeah, an instructor at a swim school drow letting his other instructor drown while teaching a class.
Arta Wildeboer:On how to not drown. It's just it doesn't make any sense. I think but uh I think the greater lesson really here is that um it's so difficult to to kind of uh tuck in your human instincts when dealing with human resource uh problems. I think really what what was happening here behind the scenes is that uh you have this uh manager, Carrie Mills, uh, or not not Carrie Mills, I'm sorry, the Barley. Uh Barley, the manager, just not liking Muhammad, and uh gets together with uh this employee experience coordinator to figure out how they could fire her because they don't like her, because she's maybe doesn't have the same interests as her, doesn't get along with her, or whatever. Maybe Muhammad just wants to do her job and and not uh have any type of um back and forth about their personal lives. And they get together and they get this other idiot, Mike Jackson, to uh come up with some emails that are gonna set uh Muhammad up uh to get fired. And it's like you could you could be the best company on earth with the best intentions and the best uh programs and outlines and trainings and stuff like that, but people are not gonna put through your policies. That's just what it is. No matter what you do, somebody is gonna screw it up.
Ryan Ellis:Yeah, and yeah, and like you said, there could be a million reasons why this happened. I mean, it could be because Miss Mohammed was remote in Colorado and Miss Um Barley had to work physically in the office in in Virginia. I mean, it could be because she doesn't like working from or remote employees because she can't do it herself or whatever. Could be a lot of reasons. And maybe, maybe there's nothing. Maybe there was just a colossal F up by by Barley. I mean, who knows? Um, it's just it's insane though, because you cannot, no matter what who you are or what you do, from the top to the bottom, nobody can put away their personal proclivities and issues. And it just becomes to a bigger head when those people that need to put those aside for objective purposes, whether it be an organization or a person, um, in these situations, they just they can't. And it's worse when it's an organization like Sherm, who, again, um, I like Sherm. I will I will present for you in the future. Uh a shameless plug. And they it's a company that is responsible for it. It makes no sense. And you would think that all the money coming from rent the memberships and everything. Would go towards making sure you had a robust HR department.
Arta Wildeboer:Yeah, it's just people don't want to spend the money uh on the HR because it's not something that brings profit to the company. It's really hard uh to um quantify how much money potentially you've saved with good HR programs. How do you quantify? Well, we would have got sued 10 times if we didn't do this. You know, it's really impossible. But um, this really goes to show you the importance of it because uh if the jury doesn't like your attitude, um things can get very messy for you, as you could see. So um want to talk a little bit about uh the trial itself and and just a little bit about like the technical aspects of the trial. The verdict um uh came back. Um for but for her race, this was the jury question, but for her race, would Sherm have terminated Muhammad? Jury answer was yes. Uh race discrimination proven, but for her complaints, would Sherm have terminated Muhammad? Yes, retaliation proven. Uh they deliberated for about four and a half hours. Um, and one note that the jury sent was asking about punitive damages. So, what what does that tell you uh a little bit about what was going on in that jury room?
Ryan Ellis:It tells you that the jury hated Sherm and their witnesses, like it absolutely hated them. I mean, from the I looked at the verdict forum and it it just says what are the compensatories? 1.5 million. What are the punitives? 10 million. Like this is, I guess, incredible. And I say that in the true definition of the word. Um, and I think they only deliberated for like four and four and a half hours. Um yeah, which what's that? Yeah, that's what I should say. Yeah. No, I don't understand what you're talking about. Oh, I was I was formulating my response. But yeah, the four and a half hour thing kills me. Like it they didn't have to think a lot about that, right? I mean, they didn't have to think a lot about the jury, didn't have to think a lot about like punish like really punishing Sherm for this. And and if you think about it, I mean maybe if you think about it, an HR company being on trial for HR is going to be made an example of. I mean, that just makes I mean I think that makes sense. Like if this was Coca-Cola, the same stuff happened to, or again, insert company here that's large, maybe it wouldn't have been that big. Maybe because the the plaintiff really had that the meat on the bone of this is an HR company. Like no matter what they say, they should know better, right? Like they should know because they're the ones that are responsible for setting the rules and practices around the world for this. And the fact that they didn't do it just makes it worse. And I feel like maybe that's that's the basis for a lot of the punitives and for the jury to come back so quickly with such a large number.
Arta Wildeboer:And that's the important lesson. Is we we were talking about reasonableness of what you have to do as a company. And that's really what you have to think about when you're faced with these situations as an employer. What how big is my company? What is reasonable? What is like my revenue? Would it would uh a jury think you know$10,000 would be a lot for a company like mine to uh conduct an investigation? Yeah, if you have$50,$60 million in revenue as a company, you're damn right the jury is gonna expect you to spend$10,000 on an investigation. But if if you're a small, like if you're a small vendor somewhere at a uh farmer's market, um you're you're not gonna have the um same expectations for uh the rigor of your investigation process, say if there's a complaint like that. So, you know, keep in mind very much what your identity is as a business and and what people uh would would expect from a business like yours.
Ryan Ellis:I I agree. I mean, I agree. And it's just it's just crazy. It's just crazy. Like you this is the peak behind the HR curtain, right? This is you're seeing how movies are made now. Like you're seeing the four, what is it, the fourth wall. I mean, whatever reference you can make here, because this is what should never have happened. This never should have happened. This should have been something that the plane, I mean, again, if it was handled properly, this is something that Sherm should have presented something on.
Arta Wildeboer:So, yeah, exactly. I I mean the here's the thing people are gonna screw up in your organization, and you can pay uh those victims some money to settle and get out of it. It's it's it's just part of doing business. That that's something that you have to learn. And then you just buy your barley later and uh you hope that doesn't happen in your organization again. It's not time to like build a fort uh and and uh pretend like uh nobody's home uh when when people are complaining. So um just to give uh let's want to do wrap up a little bit with a list of things that um if you're an employer you should think about um if if you're faced with a situation like this. Um first thing is use trained neutral investigators. The the idiot that they brought in to do the investigation was uh also uh shadow uh supervising Mohammed as well while doing the investigation because he was giving the other the manager um you know ghosts writing her emails to Mohammed. So you can't do that. Um also don't have uh two people who are uh fighting with each other or having a uh a personal conflict with each other when they're still emotional and angry uh into a meeting with each other. It's it's not gonna go well, uh, especially if you don't have HR people there, if you don't have like a conflict uh de-escalator there, which is also, you know, the size of your company matters and actually investigate. You have to have a real investigation with notes.
Ryan Ellis:But the size of your company matters to an extent because there are, I'm sure, hundreds, if not thousands, of members of Sherm who would have come in, which actually might go to bias, but let's just pretend that didn't happen right now, who would come in and independently investigate, who get paid or not paid to come in and investigate this and to conduct de-escalation practices or conduct fairness interviews or whatever to handle. So there are a million different things they could have done um to to change, I guess, the bias and change um like how they specifically did it. So sorry, right? Going to your original point of it does it matters what size your company is, it does. But at the same time, as you should know better by hiring somebody to do something that I guess will assist the uh compla the accused uh in terminating as opposed to having a neutral investigation.
Arta Wildeboer:One other interesting thing is that if this would have happened today, um there is a there was a new law in 2025 of uh uh discrimination based on combination of protected characteristics. So um in this case, she would be able to claim uh discrimination on the combination of being Egyptian uh and a woman, uh, or Egyptian Arab and a woman. So that's an intersectionality. So that's something that uh the complaint, if it was filed today, could have been different in that sense. Um the other thing that I wanted to talk about is um oh, actually, you know what? No, I didn't want to talk about anything else.
Ryan Ellis:Well, that's cut, and just for record, that's California, right? The intersectionality?
Arta Wildeboer:Yeah, that's that's just California only. This was a federal claim, but it's California only. And and again, that's just something that makes things so confusing because California has now said that um there are kind of these reading in between the lines uh new classes of uh discriminatory classes um based on a combination of factors. So if you're a woman uh and uh you don't speak English, that could be two things. Uh if you're a man and you uh you know have medical problems, that that's a new category right there by itself. Uh it used to be you'd be a man uh and you were having sexual discrimination uh or gender-based, and then it would be medical discrimination. Now you're wrapped up into like one uh one big category, because I guess something like Asian women are discriminated against differently than Asian men. That's what the law is is trying to uh um trying to stop. But again, this is just gonna make things very difficult.
Ryan Ellis:And just to kind of tie that to California a little bit more, the failure to investigate properly is a violation of fiha itself or actionable, um, even if the underlying conduct isn't proven. So what you said earlier of well could have been different, could this have been prevented, yes. But under the fiha, failing to investigate could have been another remedy that that plaintiff could have sought in California. And also in California, I know Title VII caps compensatory and punitive damages based on how big the employee, excuse me, the employer is. Uh the FIHA does not. So, I mean, I don't know if this could have been this reaches a cap. I didn't I didn't look specifically as to what the cap was. Uh, but the point being is that this could have been even bigger in California. So it's just again basic day one stuff.
Arta Wildeboer:Yeah, I mean they screwed up so many ways here. Uh they they could have stopped this and and uh it probably wouldn't have been a lawsuit if they would have just been able to take care of this in a reasonable way uh and act like adults, but um that's not what happens at work. Yeah. Agreed, agreed. So yeah, 10 million, yeah, could have been much more than that. And and well, I want to ask you this. Do you think it's fair that there is this kind of like sliding scale of reasonableness? Do you think that uh a company like Sherm that holds themselves out to be an expert in in HR should be held to a higher standard?
Ryan Ellis:Absolutely, absolutely. Um, I mean, they're the ones that were in charge of building uh building the the essentially the industry and and built they specifically should have been the the cornerstone of how to build an investigation process that is actually neutral and not just on paper. So uh I mean I think that absolutely, absolutely is is right. I mean, is it a ground for appeal? Maybe. Um, but again, the they're the ones that establish the principle, they're the ones that established the the rules, they should be held to a higher standard. I mean, but then I guess turning it around to you, what are your thoughts? I mean, should as a plaintiff's attorney, should they have been punished more?
Arta Wildeboer:Oh, absolutely. Um, and uh I I think that this is the best uh way to show the rest of the larger business community uh that these types of things are not uh acceptable at all. There's gonna be uh people feeling like they're discriminated against, whether it's true or not, um, whether your personal feelings uh as a manager uh uh tend to uh be that you don't believe the employee. That's not uh really up to you. You have to really respect people and and take the responsibility as a business owner and or a HR person or a manager um to uh conduct these investigations because people really give their lives to their jobs and and it's the most important thing in their lives a lot of times. And and uh it can really, really uh um destroy people when uh they're kind of treated uh as expendable and and um you know as just kind of um you know uh incidental to larger plans uh of other people. So so what do we learn from this?
Ryan Ellis:Don't start a business.
Arta Wildeboer:Oh my god.
Ryan Ellis:If I remember correctly, somebody from Sure made a comment about how this was not a big deal.
Arta Wildeboer:Oh yeah, I think it was the CEO. It's not a big deal. I mean, when you're making that much money, 11 million is I guess it's not that big of a deal to him and he didn't get fired. But um yeah, uh again, we're a big shame society, but if we're I guess we're not necessarily a big consequence society uh because this guy still has his job, and it's just kind of weird that uh somebody fostering this type of uh atmosphere at a company uh can uh just be um lording over such just uh just unorganized, shitty procedures for um uh trying to guarantee that their their employees can work in a safe environment.
Ryan Ellis:Yeah, agreed. I mean, I um I have some closing remarks, but I want to jump to those unless you had more. No, I got nothing. I'm just rambling. That's okay. So I think this this all teaches us a lesson to make sure companies, if you're an HR professional or a CEO or whatever, to review your own investigation procedures and make sure that you actually follow them. Um, if you think there's any issue regarding neutrality or bias, hire an outside vendor. Um, the bias of paying someone to investigate is much less than hiring uh, you know, someone who might be getting paid monthly and worried about their job and actually helping invest in helping the accused of things. So make sure you hire outside if you need to. Again, lawyers are even better. It might cost you some money, but I guarantee you hiring a lawyer to perform this investigation would not have cost$11.5 million plus a new there was no no uh uh there was no references to general counsel, there was no references to you know anybody calling a lawyer.
Arta Wildeboer:And this is a legal issue. I think that's the biggest thing people don't realize. HR is is a quasi-legal department, if not an actual legal department.
Ryan Ellis:So it it absolutely is. I think we said a million times in the past, maybe less than a million, but a lot of times in the past that we're asking HR professionals to do the job of an attorney when a lot of times attorneys uh can't get things right. And I'm not and I'm saying that about myself sometimes. I mean, laws it's hard especially yeah, in California, things change all the time. It's very complicated, it's very nuanced. It depends on the change of case law from decisions in certain courts. I mean, it's very complicated. So asking somebody who's already overwhelmed as an HR professional to do legal work or to be held accountable for legal work is is not a good thing to do if you're a company.
Arta Wildeboer:Yeah, especially when they're busy planning pizza parties and and uh birthdays and like finding out where like the uh uh the uh filters for the air conditioning ducks are.
Ryan Ellis:Yeah, and Maryland and hiring Maryland and Roe impersonators to do solidity birthday parties. I mean, uh HR is is leaned on way too much for all these things. Well, we have an episode about that, so in case you haven't listened to it, go back to it.
Arta Wildeboer:It's December 23rd right now, it's almost Christmas. I want to wish everybody happy holidays, happy Christmas, Merry Christmas, happy Hanukkah, uh, and all that good stuff. Uh, hope you have a happy and healthy 2026. Um and uh yeah, thank you so much for for listening in. Um and uh take care. We'll we'll see you soon.
Ryan Ellis:Happy new, everybody.
