Johnny C. Taylor, CEO of the Society for Human Resource Management, was heading to the trade group’s annual holiday party on December 5 when he received bad news.
In a video sent to SHRM staff, Taylor described learning that a Colorado jury had just hit the organization with an $11.5 million verdict in an employee discrimination and retaliation case.
“While as a lawyer, you all know, I respect the judicial process, we vehemently disagree with the decision,” Taylor said in the video, which was seen by Business Insider. He added that the case lacked merit and would go down as “just a blip in the history of SHRM.”
He also urged SHRM employees not to talk to the press about the case or any other company matters.
The case was filed by Rehab Mohamed, who worked at the organization as an instructional designer from 2016 to 2020.
SHRM’s holiday party was held at a Washington, D.C., restaurant called The Hamilton, according to two people, one of whom was an attendee.
SHRM said in a LinkedIn post that it plans to file an appeal “to the highest courts in the land,” a response that has since drawn more than 100 comments, many of them critical.
“An $11.5 million verdict doesn’t happen in a vacuum; it reflects patterns, dismissed concerns, and a lack of internal accountability,” one user wrote.
“We understand the heightened attention surrounding this case because SHRM exists to advance workplace excellence. A verdict like this can create questions, and we take those concerns seriously,” SHRM spokesperson Eddie Burke wrote in a statement to Business Insider. “As an employer, we are appealing this verdict because our employees trust us to walk the walk. We maintain that the defendant in this case was not discriminated against.”
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‘Staggering high figure’
Mohamed, whose lawyers have said she is Black and Egyptian, was awarded $1.5 million in compensatory damages and $10 million in punitive damages by the jury.
That amount meets the threshold of what is commonly known in the legal and insurance industries as a “nuclear verdict.”
The median federal race-discrimination verdict in a seven-year period ending in 2021 tracked by the legal data company Westlaw was $150,000. The largest such verdict in Westlaw’s dataset was less than $7 million.
The size of the verdict “is a staggering figure” for an employee-discrimination case, said Allison Williard, an employment lawyer with Washienko Law Group in Boston. “Getting a punitive damages award in and of itself is difficult because it is such a high bar to prove that the conduct at issue is extreme and outrageous.”
The extraordinary award likely speaks to the jurors’ understanding of how SHRM brands itself as an expert in HR best practices, Williard added.
“It’s not unreasonable to think that they want to punish SHRM,” she said. “SHRM, of all organizations, really should have known better.”
In September, SHRM asked the court to bar Mohamed from introducing evidence or argument that the organization is a specialist in HR best practices.
US District Judge Gordon P. Gallagher later denied SHRM’s request, saying its “asserted expertise in human resources is integral to the circumstances of this case and cannot reasonably be excluded.”
SHRM faces punitive damages
The jury deliberated for about four and a half hours before delivering its verdict, said Ariel DeFazio, one of Mohamed’s lawyers.
Court records show that jurors sent one note, asking two questions: “Who receives punitive damages AND is there a formula or max value for punitive damages?”
The impact of the case on SHRM’s reputation could have harmful consequences for its more than 575 local chapters around the world, said the president of a US chapter, who asked not to be named due to concerns about retaliation.
Describing the verdict as “mind-blowing,” this person said they worry the chapter could lose both members and sponsors — sources of income that local affiliates need to survive.
