An Ounce of Prevention: Could Your Organization Benefit from an Environmental Assessment?

When faced with subtle workplace disturbances, like claims of a "toxic" work culture or signs of low morale, many employers assume no formal action is necessary, especially in the absence of legal buzzwords like "discrimination" or "harassment." But in these scenarios, an ounce of prevention is worth a pound of cure. That is the power of an environmental assessment.

An environmental assessment scans the broader work environment to catch issues early, before discontent evolves into a serious investigation or lawsuit, disrupts operations, or generates bad publicity. It can also help differentiate innocuous workplace "drama" from real, actionable problems. From brief morale dips to deeper systemic concerns, environmental assessments can help leaders spot problems and fix them now—before they become costly and complex.

Some companies seek to elicit this information through anonymous surveys or group roundtables, but the most effective approach involves conducting one-on-one interviews with a cross section of employees in the organization, spotting areas of potential business disruption or liability, and asking pertinent follow-up questions. A review of prior complaints, hotline submissions, investigation reports, exit interviews, and entries on workplace review websites like Glassdoor.com may offer additional insight.

While HR may be able to conduct the assessment internally, an external attorney investigator brings several advantages to the table, including legal expertise, objectivity, and greater neutrality both in appearance and in practice. Participants often feel safer and share concerns more freely with an external investigator than they would with HR or another company employee who ultimately reports up to the CEO. Hiring a neutral outside investigator also signals to employees that the company takes their concerns seriously and wants to do the right thing, making participants more likely to share their concerns openly.

This article presents a few scenarios to illustrate how employers in various situations could benefit from an environmental assessment.

Complaints That May, or May Not, Present Legal Exposure

Scenario: The "Toxic" Work Environment

Imagine you receive an email from an employee claiming the work environment is "toxic." The employee says his supervisor sets unrealistic deadlines and occasionally yells, causing everyone to feel anxious and stressed. This supervisor has previously told you he is just "old school" and thinks this type of management style gets the best work out of employees.¹

You may feel relieved when the employee does not tie the manager's behavior to a legally protected class, such as age, race, or gender. But that employee (or others) could very well make such a claim down the road. Legal claims often start out as bullying cases before escalating into complaints of unlawful harassment or discrimination.

Even if you dodge a lawsuit, negative publicity from a toxic work environment claim can be even more detrimental. Consider the recent revolution in the entertainment industry, where bullying was historically tolerated on TV and film sets but now receives highly negative front-page coverage and even the "cancellation" of industry elite.²

How an Assessment Can Help

An environmental assessment can help pinpoint the warning signs of a ticking time bomb in your workplace. It also may provide insight as to how pervasive the behavior is and its impact on productivity. Is the behavior confined to one employee, or is it common in this department? Does higher management know about it, and are they tolerating it or even participating in it?

Beyond that, an environmental assessment can preemptively evaluate whether a manager's behavior is motivated by an inappropriate, legally protected factor. For example, does the manager yell at everyone equally, or does he have a shorter fuse with females? Is the yelling worse, or more aggressive, towards females (perhaps indicating the manager feels less constrained from abusing them)? Does the yelling impact female employees more than others, such as with lower productivity, higher attrition, or worse morale? Is there any other problematic behavior involved?

Even if the manager's behavior does not seem motivated by gender, race, or other protected characteristics, it still can have serious negative impacts on the workplace. Early interventions, such as coaching or training for the manager, can head off more complaints before they arise.

Complaints from Unknown Sources

Scenario: The Anonymous Complaint

Your HR team receives an anonymous complaint alleging that "favoritism" permeates a particular department, but the complaint does not provide specific details or examples. You may think there is not much you can do about the situation. Not so fast. The California Civil Rights Department's Harassment Prevention Guide for California Employers provides that employers should investigate anonymous complaints in the same manner as complaints made by identified individuals.

Although you do not know exactly what the concern is or who raised it, you also cannot rule out unlawful harassment or discrimination. You need more facts to decide how to proceed.

How an Assessment Can Help

An environmental assessment can help evaluate the veracity of the complaint, who is involved, and what the underlying conduct (if any) entails. Environmental interviews may reveal concerns about sexual favoritism, or favoritism toward individuals of a particular ethnicity. A review of personnel records may show a concerning pattern of employees with certain characteristics receiving higher bonuses than others. Or perhaps employees within the named department have heard hallway gossip or complaints about management's "favoritism," potentially leading to the source of the anonymous complaint. The investigator can then conduct a proper intake interview of that person to ask for details and supporting evidence.

Even if the environmental assessment yields no concrete evidence of a serious workplace issue, it still creates a valuable record showing you took reasonable steps to ensure a workplace free of discrimination or harassment. If you later must defend your actions in litigation, you will start from a much stronger position if you did what you could to investigate, despite the lack of specificity.

Employee Dissatisfaction or Low Morale

Scenario: The Disgruntled Workforce

Imagine that over the last six months, several female employees have resigned from your organization, all from the same department. Exit interviews have mostly suggested they were leaving for "better company culture" and better opportunities. HR brushes them off as simply being "disgruntled" employees. After all, women in other departments have not said anything about company culture. But then, one employee confides to you that people are leaving because of a particularly tough manager. Since no one has formally complained, you do not believe the company has a legal duty to investigate anything, particularly because having a "tough manager" is not typically grounds for a lawsuit.

A few months later, three former female employees sue the company for gender discrimination, alleging that their manager favored male employees and gave them higher performance ratings, which translated into higher compensation and a higher rate of promotions. Because the company dismissed so many women's exit interview complaints, these plaintiffs concluded their concerns would fall on deaf ears, leaving them no choice but to quit. The women assert the company knew or should have known that gender bias was at play, so it should have taken action sooner.

How an Assessment Can Help

Some organizations fall into the trap of not fully recognizing the risks that come with poor company culture or low morale. Employers may be especially inclined to downplay discontent coming from employees on their way out the door, on the assumption that the problem has now effectively gone away—but this could be a serious misstep.

Former employees may be more likely to take legal action because they have nothing to lose and no longer fear retaliation. More importantly, the root cause of the issue may still exist. If more employees give up and depart in a short span of time, the company could suffer a major loss of institutional knowledge and disruption to business operations.

Here, the fact that women in other departments never complained about company culture understandably blindsided HR. But quickly writing off the rapid departure of several females overlooks potential gender discrimination. Through an environmental assessment, you can better understand why the female employees actually left the company. Precisely why is the grass greener elsewhere? Are females being adversely impacted by a particular company policy or practice? Were the former employees all working with the same supervisor? How do current female employees feel, and do male employees feel similarly? Armed with this information, you can address these issues before they become more serious or widespread.

Post-Investigation Monitoring

Scenario: Retaliation After an Investigation

Consider an investigation that concludes a younger (under 40) supervisor used derogatory language that specifically targeted older (over 40) employees. You issue the supervisor a written warning, and the inappropriate behavior seemingly stops. You may think that because your company just concluded the investigation, you are in the clear. Again, not so fast.

Over time, the supervisor starts to subtly retaliate against the older individuals who participated in the investigation. She assigns them unrealistic deadlines and undesirable work assignments, setting them up to fail. Productivity appears to be increasing at first, so you do not think much of the supervisor's tough approach. Plus, no one has complained.

As time goes on, the older employees start to believe that the company did not take their initial complaints seriously and failed to protect them from retaliation. They are left to believe that raising another complaint would be useless, so their only option is to file a lawsuit.

How an Assessment Can Help

Many employers will conclude an investigation, take action to address the problems identified, then assume everything has been resolved. But after a lawsuit or investigation has concluded, workplace dynamics often shift. Respondents may subtly retaliate against complainants—or inadvertently create that perception. Even if the employer genuinely believes all is well, employees could still argue that the company should have known or should have anticipated retaliation.

Here, a follow-up assessment likely would have helped the company avoid such an argument. Through one-on-one confidential interviews, the affected employees may have shared retaliation concerns early, allowing you to act before they decided to sue. Even if you could not avert the lawsuit, these efforts would at least limit your legal exposure for failure to properly remedy workplace discrimination or harassment.

Overlooked Rumors and Unreported Complaints

Scenario: A Culture of Silence

Imagine you are in the entertainment industry, and a few months into your company's filming of a new movie, you hear rumors from several media sources that your lead actress engaged in inappropriate behavior on prior productions. From your perspective, she has been easy to work with thus far, and no one has raised any complaints about her. You brush the rumors off as tabloid gossip.

By not inquiring further, you never hear that behind the scenes, she has been making inappropriate remarks to other actors, who are too afraid to speak out. They are newer to the industry and assume this is just part of the Hollywood experience. They also fear being blacklisted from future projects.

You complete filming without any issues, but just before the premiere, a group of actors from the movie comes forward with sexual harassment claims against the actress. If the facts show the company knew or should have known about the actress's propensity to abuse and harass, but did not take reasonable steps to prevent that conduct, it can face serious liability. More pressingly, these claims have created negative PR that has detracted from the movie.³

How an Assessment Can Help

Although an assessment is usually not necessary when everything appears to be going smoothly, there can be exceptions. Here, the complaining actors may claim the company was on notice of the actress's misconduct, based on the circulating rumors, and it should have taken proactive measures.

In this scenario, knowing the industry, even an internal environmental assessment may not be sufficient if all the players fear retaliation that could ruin their careers. As the #MeToo movement has shown, this fear kept many employees in the entertainment industry quiet for many years. If the actress is very famous and well connected, not only could the witnesses balk at sharing concerns, but an internal investigator who wants to stay in the industry may also hesitate to ask too many pointed questions. Arguably, an external investigator may be the only reasonable approach to determine whether the actress's misconduct extends to your set. Although this process can add upfront costs, it is not nearly as costly or detrimental as a PR crisis or lawsuit after the fact.

Conclusion

As illustrated through these scenarios, there are many situations that may not warrant a formal investigation but would deeply benefit from an environmental assessment. Toxic work environment claims, vague or anonymous complaints that hint at legal issues, a spate of resignations, or other indications of workplace discontent could all be symptoms of bigger crises waiting to happen. Most of the time, an ounce of prevention far outweighs the fallout of inaction.