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Tipping the Scales

Experts say the outcomes of three gender-bias lawsuits filed in Silicon Valley could affect HR organizations across the country.

Employers beware.

That’s the message that three Silicon Valley court cases are sending to companies nationwide after social-media giants Twitter and Facebook—along with Kleiner Perkins Caufield & Byers, a venture-capital firm—were hit with gender-discrimination lawsuits.

Although Ellen Pao—plaintiff and former partner at Kleiner Perkins—recently lost her suit, her case still called nationwide attention to employer discrimination, prompting many HR professionals to take a deeper look inside their own workplaces.

Pao, now interim CEO at Reddit, a social-media news site, claimed she was not promoted at Kleiner Perkins because of her gender and that the company retaliated against her for complaining by firing her in 2012. Tina Huang, a former software engineer at Twitter, alleged her ex-employer denied promotional opportunities to women due to arbitrary policies that favored men.

Likewise, Chia Hong, who is of Taiwanese descent, is suing Facebook for sex discrimination, harassment and race/national origin discrimination. According to several news reports, Hong has made multiple claims, including that she was ordered to organize parties and serve drinks to male colleagues.

[Editor’s note: Several global HR consulting firms, along with the National Organization of Women and the American Business Women’s Association, were invited to comment but either declined or never responded.]

Perhaps the handwriting is already on the wall.

Mark Rogers believes this is the beginning of an avalanche.  A Laguna Beach, Calif.-based HR attorney at TR Anton, Rogers says hundreds of cases like these have already been filed across the country.

“Despite the unfavorable verdict in the Pao case, it may open the door for other women in the industry to come forward with their own allegations of discrimination,” he says. “Employers need to be aware that these cases are alive and well.”

Others share his opinion, among them Professor Joan Williams of UC Hastings Law School in San Francisco, who was recently quoted on the topic by Bloomberg Business. She says the cases filed against Twitter and Facebook in California state court during Pao’s trial “may indicate the thin edge of the wedge.”

Sexual-discrimination complaints filed in California’s Office of Civil Rights soared 61 percent from 2011 to 2014, Rogers says, citing published data by the state’s department of fair employment and housing. He believes the reasons for the increase involve the state’s outsized population (38.8 million in 2014) as well as its current 6.7 percent unemployment rate.

“There are so many cases that California’s department of fair employment and housing has focused a lot of its energy or efforts on conciliation and mediation so it can go after bigger cases, bigger companies,” he says.

What was most startling about the Pao case was not so much the verdict, he says, but that based on trial testimony, the firm didn’t support an onsite, HR presence. He says many companies underestimate HR’s role, especially as an employer’s “first line of legal defense.”

The takeaway from these cases, he says, is that HR needs to take a good look at its company’s salary trends, market data, application process and promotion policies and processes. Are decisions for hiring and employee promotions arbitrary and subjective? Are they transparent? Are job postings written without bias?

Surprisingly, he says one practice that some employers still don’t follow is documenting the reasons behind hiring decisions or employee demotions, dismissals and promotions. Lack of documentation, he explains, tends to fuel the fire for discrimination cases.

“These cases should act as a wakeup call for (HR),” he says. “They bring to the forefront an issue that has always been there and needs to be brought forward again. Light needs to be shed on these types of cases.”

Tech companies such as Facebook and Twitter are well known for their casual workplace atmosphere and wide range of onsite employee perks. Yet, there’s no amount of pool tables, big screen TVs or free food that will ever replace employees’ need to feel respected, valued and appreciated.

Many tech companies with a young workforce assume that their employees grew up in a multicultural environment and view them as being more culturally mature or aware, says Brad Federman, COO at F&H Solutions Group, an HR consulting firm in Memphis. But that’s not always the case.

“The reality is that young people are also much more open and casual and there are less lines between [their] personal [life] and work,” he says. “That creates a lot more openings for misunderstandings, people’s feelings being hurt and issues like sexual harassment come up.”

He says it’s important for HR to ensure that all employees are “inclusion-literate” to avoid causing problems related to discrimination – gender or otherwise. He says many people may not be aware of how their comments impact others.

Perhaps employee insensitivity is bred in homogeneous environments.  According to self-reported figures from tech employers that include Facebook, Google and Twitter, on average, 70 percent of their employees are white males.

“There’s a difference between what their core numbers look like at a given time and what an organization is trying to do and accomplish,” Federman says. “What I don’t see them fixing are the cultural attributes where people feel appreciated, valued and treated with respect and dignity on a daily basis.”

However, all lawsuits need to be judged on their own merit. The exception, adds Federman, is if a series of discrimination lawsuits are filed against the same company. Then a pattern of discrimination may be established.

Although all companies typically comply with federal or state laws that require anti-discrimination training, Federman says this only helps HR “dice and splice” employee behavior based on what the law says people can and can’t say or do. He explains that preventing employee discrimination is less about being legally compliant and more about building a culture of inclusion where all employees are respected and valued.

If employees treat each other that way, then HR doesn’t need to worry so much about compliance or even lawsuits. “Everything else comes into play,” says Federman.

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Bringing Young Leaders Forward
At Five Star Bank, we are always looking for ways to further our employees’ talents and invest in their strengths. It is part of bringing the best service we can to our customers. A prime example is Five Star Bank employee Stephanie Petrakos, who started at the bank eight years ago fresh out of college as a management trainee and worked her way up. Currently she is the Vice President and Credit Administrator. In her position she is required to have a leadership role in the bank’s credit department. As such, she was sent to a leadership development conference through Independent Community Bankers of America. What she also found was that Five Star Bank could be ahead of other organizations when it comes to ushering in the next generation of its leadership.
“Recently, I was given the opportunity to attend ICBA’s Leadership Development Conference at the famous Peabody Hotel in Memphis, TN. I expected to meet people my age holding similar capacities at their banks; however, I was much younger than the average attendee.  Keynote speaker, Jason Dorsey, spoke to this very situation. He said there is a generational gap in the workplace whereby far more baby boomers, who hold leadership roles in their organizations, are retiring than there are qualified professionals to replace them. I am extremely fortunate to work for an organization that is committed to developing their young professionals. 
Another interesting aspect was the idea of “What Got You Here Will Not Get You There.” According to Brad Federman, Chief Operating Officer at F&H Solutions Group, in the life span of our careers, we start as sponges absorbing all there is to know about our new job. With time, we become problem solvers, or masters in our particular field. Then, typically, we are promoted to leaders. However, many people fail to realize the skill sets required of an expert for the field or a problem solver are significantly different than the skill sets required for a leader.  Federman says 70% of people fail within their first two years of becoming a leader for this very reason.  That’s why it is so important to promote people who have leadership qualities, and invest in developing their “leadership” skills.
I’m proud to work for a company willing to invest in me, and look forward to making a difference at the bank for years to come; Five Star Bank is laying the groundwork to serve the community for a very long time.”
-Stephanie Petrakos
Vice President, Credit Administrator
Five Star Bank   |   
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In this article, Jerry Glass, FHSG labor expert discusses the minimum wage raise of $15.00 per hour in Seattle.

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