Karen Yarborough, a recruiting manager for Pleasanton-based PeopleSoft, complained to her supervisors that the company’s affirmative action hiring data was false. Then, just two days before an on-site audit of the software maker’s employment data by the Office of Federal Contracts Compliance Programs, Yarborough was fired. Now an Alameda County jury’s multimillion-dollar verdict for Yarborough demonstrates the high cost of firing employees who raise compliance issues.
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Manager Disputes Minority Hiring Data
Yarborough claimed company officials inflated numbers of female and minority employees to keep government contracts worth about $50 million. The company allegedly reported that 60% of its employees were women and 21.7% were minorities, but the real figures were more like 45% and 13%, respectively. PeopleSoft’s hiring records were under OFCCP review because it had previously failed to comply with affirmative action guidelines for government contractors, according to Yarborough’s attorney, Phillip Kay.
The jury ordered the software maker to pay Yarborough $5.4 million dollars, including $3.5 million in punitive damages. PeopleSoft maintains that it has continuously complied with state and federal laws and is considering an appeal.
Don’t Penalize The Messenger
California’s whistleblower law protects employees from retaliation for informing government agencies about noncompliance with state or federal laws. Other state and federal statutes, such as health-and-safety and anti-discrimination laws, contain their own anti-retaliation provisions shielding workers who report illegal conduct directly to their employers. And retaliation against whistleblowers may also violate public policy.
If an employee notifies you about a possible error in your affirmative action data or about other possible legal violations, never retaliate against the person. Firing a whistleblower is likely to encourage them to go public and could lead to expensive legal disputes. Investigate employee complaints quickly and, if you uncover a problem, remedy it immediately. If you have a legitimate reason for disciplining an employee who has complained about wrongdoing, document the problem thoroughly and follow your procedures to the letter.