Mitigate risk. Protect your business or investment.

Mitigate risk. Protect your business or investment.

Mitigate risk.
Protect your business or investment.

Mitigate risk. Protect your business or investment.

Are you aware of the risks and costs of overlooking workplace misconduct in your investment, operations, and exit decisions?

Are you aware of the risks and costs of overlooking workplace misconduct in your investment, operations, and exit decisions?

Are you aware of the risks and costs of overlooking workplace misconduct in your investment, operations, and exit decisions?

Don't Become a Statistic

Don't Become a Statistic

Big Companies

Big Companies

Big Companies

There have been many high-profile cases where CEOs faced workplace misconduct allegations that negatively impacted the valuation of their companies. Here are a few notable examples:

There have been many high-profile cases where CEOs faced workplace misconduct allegations that negatively impacted the valuation of their companies. Here are a few notable examples:

There have been several high-profile cases where CEOs faced workplace misconduct allegations that negatively impacted the valuation of their companies. Here are a few notable examples.

Misconduct: In 2018, John Schnatter, the founder and CEO of Papa John’s, stepped down after using a racial slur during a conference call. This followed previous controversies where Schnatter blamed declining sales on NFL protests against racial injustice.

Impact: The backlash was swift. Papa John’s lost significant market value, with its stock dropping 30% after Schnatter’s comments became public. Major partners, including the NFL, cut ties with the company, and Papa John’s faced a PR crisis, leading to a prolonged brand recovery effort.

Misconduct: In 2018, John Schnatter, the founder and CEO of Papa John’s, stepped down after using a racial slur during a conference call. This followed previous controversies where Schnatter blamed declining sales on NFL protests against racial injustice.

Impact: The backlash was swift. Papa John’s lost significant market value, with its stock dropping 30% after Schnatter’s comments became public. Major partners, including the NFL, cut ties with the company, and Papa John’s faced a PR crisis, leading to a prolonged brand recovery effort.

Misconduct: In 2018, John Schnatter, the founder and CEO of Papa John’s, stepped down after using a racial slur during a conference call. This followed previous controversies where Schnatter blamed declining sales on NFL protests against racial injustice.

Impact: The backlash was swift. Papa John’s lost significant market value, with its stock dropping 30% after Schnatter’s comments became public. Major partners, including the NFL, cut ties with the company, and Papa John’s faced a PR crisis, leading to a prolonged brand recovery effort.

Misconduct: Dov Charney, the founder and CEO of American Apparel, was repeatedly accused of inappropriate behavior, including sexual harassment and misconduct, over several years.

Impact: The board finally ousted Charney in 2014, but by that time, the damage was already done. The company’s brand image had deteriorated, and American Apparel’s finances were in shambles. The negative publicity surrounding Charney contributed to the company filing for bankruptcy in 2015.

Misconduct: Dov Charney, the founder and CEO of American Apparel, was repeatedly accused of inappropriate behavior, including sexual harassment and misconduct, over several years.

Impact: The board finally ousted Charney in 2014, but by that time, the damage was already done. The company’s brand image had deteriorated, and American Apparel’s finances were in shambles. The negative publicity surrounding Charney contributed to the company filing for bankruptcy in 2015.

Misconduct: Dov Charney, the founder and CEO of American Apparel, was repeatedly accused of inappropriate behavior, including sexual harassment and misconduct, over several years.

Impact: The board finally ousted Charney in 2014, but by that time, the damage was already done. The company’s brand image had deteriorated, and American Apparel’s finances were in shambles. The negative publicity surrounding Charney contributed to the company filing for bankruptcy in 2015.

Misconduct: In 2018, Les Moonves, CEO of CBS, faced multiple allegations of sexual harassment spanning decades. The revelations were part of the broader #MeToo movement, which saw

Impact: CBS’s board initially stood by Moonves, but as the allegations mounted, he resigned. The scandal hurt CBS's public image and its stock price dropped. The situation also led to internal strife, with other executives and board members being implicated, further destabilizing the company. This uncertainty likely contributed to a lower market value in the near term.

Misconduct: In 2018, Les Moonves, CEO of CBS, faced multiple allegations of sexual harassment spanning decades. The revelations were part of the broader #MeToo movement, which saw

Impact: CBS’s board initially stood by Moonves, but as the allegations mounted, he resigned. The scandal hurt CBS's public image and its stock price dropped. The situation also led to internal strife, with other executives and board members being implicated, further destabilizing the company. This uncertainty likely contributed to a lower market value in the near term.

Misconduct: In 2018, Les Moonves, CEO of CBS, faced multiple allegations of sexual harassment spanning decades. The revelations were part of the broader #MeToo movement, which saw

Impact: CBS’s board initially stood by Moonves, but as the allegations mounted, he resigned. The scandal hurt CBS's public image and its stock price dropped. The situation also led to internal strife, with other executives and board members being implicated, further destabilizing the company. This uncertainty likely contributed to a lower market value in the near term.

Misconduct: In 2011, the EEOC sued Bass Pro Shops for a pattern of race and national origin discrimination, alleging that Black and Hispanic applicants were denied jobs based on their race, violating Title VII.

Impact: Bass Pro Shops settled for $10.5 million in 2017 and agreed to modify its hiring practices and implement training. The settlement damaged the company’s public image, drawing negative attention to its recruitment practices and leading to increased scrutiny.

Misconduct: In 2011, the EEOC sued Bass Pro Shops for a pattern of race and national origin discrimination, alleging that Black and Hispanic applicants were denied jobs based on their race, violating Title VII.

Impact: Bass Pro Shops settled for $10.5 million in 2017 and agreed to modify its hiring practices and implement training. The settlement damaged the company’s public image, drawing negative attention to its recruitment practices and leading to increased scrutiny.

Misconduct: In 2011, the EEOC sued Bass Pro Shops for a pattern of race and national origin discrimination, alleging that Black and Hispanic applicants were denied jobs based on their race, violating Title VII.

Impact: Bass Pro Shops settled for $10.5 million in 2017 and agreed to modify its hiring practices and implement training. The settlement damaged the company’s public image, drawing negative attention to its recruitment practices and leading to increased scrutiny.

Misconduct: Uber's co-founder and former CEO, Travis Kalanick, was embroiled in multiple scandals, including allegations of fostering a toxic work culture, sexual harassment claims within the company, and internal disputes. These issues were brought to light by a former employee in a public blog post in 2017, sparking a broader investigation.

Impact: The company's valuation took a hit, and investors called for a leadership change. Kalanick was eventually forced to resign as CEO. Uber’s public image suffered, and the company faced regulatory scrutiny. The negative press impacted Uber’s market valuation before its IPO, and it had to make significant efforts to rebuild its reputation.

Misconduct: Uber's co-founder and former CEO, Travis Kalanick, was embroiled in multiple scandals, including allegations of fostering a toxic work culture, sexual harassment claims within the company, and internal disputes. These issues were brought to light by a former employee in a public blog post in 2017, sparking a broader investigation.

Impact: The company's valuation took a hit, and investors called for a leadership change. Kalanick was eventually forced to resign as CEO. Uber’s public image suffered, and the company faced regulatory scrutiny. The negative press impacted Uber’s market valuation before its IPO, and it had to make significant efforts to rebuild its reputation.

Misconduct: Uber's co-founder and former CEO, Travis Kalanick, was embroiled in multiple scandals, including allegations of fostering a toxic work culture, sexual harassment claims within the company, and internal disputes. These issues were brought to light by a former employee in a public blog post in 2017, sparking a broader investigation.

Impact: The company's valuation took a hit, and investors called for a leadership change. Kalanick was eventually forced to resign as CEO. Uber’s public image suffered, and the company faced regulatory scrutiny. The negative press impacted Uber’s market valuation before its IPO, and it had to make significant efforts to rebuild its reputation.

Don't be an Example

Don't be an Example

Small Companies

Small Companies

Small Companies

While the examples of CEO misconduct from large corporations often grab headlines, there are also numerous cases involving smaller companies where similar issues had serious negative impacts on the business. Though these companies may not be as widely known, the consequences can be just as damaging in terms of valuation, reputation, and operational disruption. Here are a few examples from smaller firms:

While the examples of CEO misconduct from large corporations often grab headlines, there are also numerous cases involving smaller companies where similar issues had serious negative impacts on the business. Though these companies may not be as widely known, the consequences can be just as damaging in terms of valuation, reputation, and operational disruption. Here are a few examples from smaller firms:

Company Background: Nasty Gal was an online fashion retailer founded by Sophia Amoruso.

Misconduct: Nasty Gal faced multiple lawsuits from former employees who alleged wrongful termination, particularly when employees were fired after becoming pregnant, which raised serious ethical and legal concerns about workplace discrimination.

Impact: The allegations, along with broader operational issues, contributed to a tarnished brand reputation, especially in a marketplace where ethics and social responsibility are crucial to many consumers. Nasty Gal eventually filed for bankruptcy in 2016. While Amoruso left the company before the bankruptcy, her leadership and the company culture were implicated in the brand’s downfall.

Company Background: Nasty Gal was an online fashion retailer founded by Sophia Amoruso.

Misconduct: Nasty Gal faced multiple lawsuits from former employees who alleged wrongful termination, particularly when employees were fired after becoming pregnant, which raised serious ethical and legal concerns about workplace discrimination.

Impact: The allegations, along with broader operational issues, contributed to a tarnished brand reputation, especially in a marketplace where ethics and social responsibility are crucial to many consumers. Nasty Gal eventually filed for bankruptcy in 2016. While Amoruso left the company before the bankruptcy, her leadership and the company culture were implicated in the brand’s downfall.

Company Background: Nasty Gal was an online fashion retailer founded by Sophia Amoruso.

Misconduct: Nasty Gal faced multiple lawsuits from former employees who alleged wrongful termination, particularly when employees were fired after becoming pregnant, which raised serious ethical and legal concerns about workplace discrimination.

Impact: The allegations, along with broader operational issues, contributed to a tarnished brand reputation, especially in a marketplace where ethics and social responsibility are crucial to many consumers. Nasty Gal eventually filed for bankruptcy in 2016. While Amoruso left the company before the bankruptcy, her leadership and the company culture were implicated in the brand’s downfall.

Company Background: Binary Capital was a small venture capital firm known for investing in tech startups.

Misconduct: In 2017, Justin Caldbeck, a co-founder and managing partner of Binary Capital, faced multiple accusations of sexual harassment from women in the venture capital and startup community. Several women came forward, accusing Caldbeck of inappropriate behavior during business interactions.

Impact: The scandal led to the unraveling of Binary Capital. Caldbeck took a leave of absence and eventually resigned. The fallout was swift: investors withdrew their commitments, companies distanced themselves from Binary, and the firm ultimately shut down. This is a stark example of how misconduct at a smaller firm can lead to its complete collapse, especially when the business model depends heavily on trust and reputation in a tight-knit industry like venture capital.

Company Background: Binary Capital was a small venture capital firm known for investing in tech startups.

Misconduct: In 2017, Justin Caldbeck, a co-founder and managing partner of Binary Capital, faced multiple accusations of sexual harassment from women in the venture capital and startup community. Several women came forward, accusing Caldbeck of inappropriate behavior during business interactions.

Impact: The scandal led to the unraveling of Binary Capital. Caldbeck took a leave of absence and eventually resigned. The fallout was swift: investors withdrew their commitments, companies distanced themselves from Binary, and the firm ultimately shut down. This is a stark example of how misconduct at a smaller firm can lead to its complete collapse, especially when the business model depends heavily on trust and reputation in a tight-knit industry like venture capital.

Company Background: Binary Capital was a small venture capital firm known for investing in tech startups.

Misconduct: In 2017, Justin Caldbeck, a co-founder and managing partner of Binary Capital, faced multiple accusations of sexual harassment from women in the venture capital and startup community. Several women came forward, accusing Caldbeck of inappropriate behavior during business interactions.

Impact: The scandal led to the unraveling of Binary Capital. Caldbeck took a leave of absence and eventually resigned. The fallout was swift: investors withdrew their commitments, companies distanced themselves from Binary, and the firm ultimately shut down. This is a stark example of how misconduct at a smaller firm can lead to its complete collapse, especially when the business model depends heavily on trust and reputation in a tight-knit industry like venture capital.

Company Background: BetterWorks is a software company specializing in performance management tools.

Misconduct: In 2017, the CEO of BetterWorks, Kris Duggan, was accused of sexual harassment by a former employee. The accusations included inappropriate behavior at a company event, and the claims were made public in a lawsuit.

Impact: The scandal hurt the company’s image, especially in the competitive tech industry, where workplace culture and values are under increasing scrutiny. Duggan eventually stepped down from his role as CEO. BetterWorks faced challenges in raising additional capital and lost potential customers due to the reputational damage. It had to work hard to rebuild its credibility within the tech community.

Company Background: BetterWorks is a software company specializing in performance management tools.

Misconduct: In 2017, the CEO of BetterWorks, Kris Duggan, was accused of sexual harassment by a former employee. The accusations included inappropriate behavior at a company event, and the claims were made public in a lawsuit.

Impact: The scandal hurt the company’s image, especially in the competitive tech industry, where workplace culture and values are under increasing scrutiny. Duggan eventually stepped down from his role as CEO. BetterWorks faced challenges in raising additional capital and lost potential customers due to the reputational damage. It had to work hard to rebuild its credibility within the tech community.

Company Background: BetterWorks is a software company specializing in performance management tools.

Misconduct: In 2017, the CEO of BetterWorks, Kris Duggan, was accused of sexual harassment by a former employee. The accusations included inappropriate behavior at a company event, and the claims were made public in a lawsuit.

Impact: The scandal hurt the company’s image, especially in the competitive tech industry, where workplace culture and values are under increasing scrutiny. Duggan eventually stepped down from his role as CEO. BetterWorks faced challenges in raising additional capital and lost potential customers due to the reputational damage. It had to work hard to rebuild its credibility within the tech community.

Company Background: Sterling Jewelers operates retail jewelry stores under brands like Kay Jewelers and Jared. It is one of the largest specialty jewelry retailers in the U.S.

Misconduct: In 2008, Sterling Jewelers faced a class-action lawsuit alleging widespread gender discrimination. The allegations included unequal pay and promotions for women and a toxic work environment involving sexual harassment.

Impact: The lawsuit tarnished the company's reputation, leading to prolonged legal battles, negative press, and challenges with employee morale. While Sterling continues to operate, the Title VII lawsuit highlighted significant issues in their workplace culture and created ongoing financial and operational strain.

Company Background: Sterling Jewelers operates retail jewelry stores under brands like Kay Jewelers and Jared. It is one of the largest specialty jewelry retailers in the U.S.

Misconduct: In 2008, Sterling Jewelers faced a class-action lawsuit alleging widespread gender discrimination. The allegations included unequal pay and promotions for women and a toxic work environment involving sexual harassment.

Impact: The lawsuit tarnished the company's reputation, leading to prolonged legal battles, negative press, and challenges with employee morale. While Sterling continues to operate, the Title VII lawsuit highlighted significant issues in their workplace culture and created ongoing financial and operational strain.

Company Background: Sterling Jewelers operates retail jewelry stores under brands like Kay Jewelers and Jared. It is one of the largest specialty jewelry retailers in the U.S.

Misconduct: In 2008, Sterling Jewelers faced a class-action lawsuit alleging widespread gender discrimination. The allegations included unequal pay and promotions for women and a toxic work environment involving sexual harassment.

Impact: The lawsuit tarnished the company's reputation, leading to prolonged legal battles, negative press, and challenges with employee morale. While Sterling continues to operate, the Title VII lawsuit highlighted significant issues in their workplace culture and created ongoing financial and operational strain.

Company Background: Away is a direct-to-consumer luggage brand that gained significant popularity for its sleek, minimalist products.

Misconduct: In 2019, The Verge published an article that exposed a toxic work culture at Away, including accusations that CEO Steph Korey created an environment of fear, micromanagement, and public humiliation. Employees reported being overworked and criticized harshly in public forums.

Impact: Korey initially stepped down as CEO following the scandal but returned to a co-CEO role shortly afterward, only to leave again amidst ongoing public criticism. The negative media attention harmed Away’s brand image, particularly among its millennial and Gen Z customers who value companies with strong ethical workplace cultures. The company’s valuation and sales were impacted as it dealt with internal restructuring and external PR efforts to mitigate the damage.

Company Background: Away is a direct-to-consumer luggage brand that gained significant popularity for its sleek, minimalist products.

Misconduct: In 2019, The Verge published an article that exposed a toxic work culture at Away, including accusations that CEO Steph Korey created an environment of fear, micromanagement, and public humiliation. Employees reported being overworked and criticized harshly in public forums.

Impact: Korey initially stepped down as CEO following the scandal but returned to a co-CEO role shortly afterward, only to leave again amidst ongoing public criticism. The negative media attention harmed Away’s brand image, particularly among its millennial and Gen Z customers who value companies with strong ethical workplace cultures. The company’s valuation and sales were impacted as it dealt with internal restructuring and external PR efforts to mitigate the damage.

Company Background: Away is a direct-to-consumer luggage brand that gained significant popularity for its sleek, minimalist products.

Misconduct: In 2019, The Verge published an article that exposed a toxic work culture at Away, including accusations that CEO Steph Korey created an environment of fear, micromanagement, and public humiliation. Employees reported being overworked and criticized harshly in public forums.

Impact: Korey initially stepped down as CEO following the scandal but returned to a co-CEO role shortly afterward, only to leave again amidst ongoing public criticism. The negative media attention harmed Away’s brand image, particularly among its millennial and Gen Z customers who value companies with strong ethical workplace cultures. The company’s valuation and sales were impacted as it dealt with internal restructuring and external PR efforts to mitigate the damage.

Company Background: Thinx is a startup that makes period underwear and promotes itself as a progressive, feminist brand.

Misconduct: In 2017, founder and CEO Miki Agrawal was accused of creating a toxic work environment. Allegations included inappropriate physical contact, publicly discussing employees' personal lives, and creating a culture of fear. Despite the company’s progressive brand image, these internal issues painted a different picture.

Impact: While Thinx is still operational, Agrawal’s behavior led to her stepping down as CEO. The company's reputation took a hit, particularly among its core customer base of women seeking ethically sound products. Thinx faced negative press, and the brand had to work hard to distance itself from Agrawal and regain consumer trust.

Company Background: Thinx is a startup that makes period underwear and promotes itself as a progressive, feminist brand.

Misconduct: In 2017, founder and CEO Miki Agrawal was accused of creating a toxic work environment. Allegations included inappropriate physical contact, publicly discussing employees' personal lives, and creating a culture of fear. Despite the company’s progressive brand image, these internal issues painted a different picture.

Impact: While Thinx is still operational, Agrawal’s behavior led to her stepping down as CEO. The company's reputation took a hit, particularly among its core customer base of women seeking ethically sound products. Thinx faced negative press, and the brand had to work hard to distance itself from Agrawal and regain consumer trust.

Company Background: Thinx is a startup that makes period underwear and promotes itself as a progressive, feminist brand.

Misconduct: In 2017, founder and CEO Miki Agrawal was accused of creating a toxic work environment. Allegations included inappropriate physical contact, publicly discussing employees' personal lives, and creating a culture of fear. Despite the company’s progressive brand image, these internal issues painted a different picture.

Impact: While Thinx is still operational, Agrawal’s behavior led to her stepping down as CEO. The company's reputation took a hit, particularly among its core customer base of women seeking ethically sound products. Thinx faced negative press, and the brand had to work hard to distance itself from Agrawal and regain consumer trust.

Financial Impact

Workplace misconduct can devalue your portfolio company by reducing EBITDA/revenue multiples, leading to increased costs (legal fees, regulatory fines) and diminished investor confidence.

Financial Impact

Workplace misconduct can devalue your portfolio company by reducing EBITDA/revenue multiples, leading to increased costs (legal fees, regulatory fines) and diminished investor confidence.

Financial Impact

Workplace misconduct can devalue your portfolio company by reducing EBITDA/revenue multiples, leading to increased costs (legal fees, regulatory fines) and diminished investor confidence.

Financial Impact

Workplace misconduct can devalue your portfolio company by reducing EBITDA/revenue multiples, leading to increased costs (legal fees, regulatory fines) and diminished investor confidence.

Reputation Damage

Negative press and leadership instability can tarnish the company’s brand, making it harder to raise capital and retain customers.

Reputation Damage

Negative press and leadership instability can tarnish the company’s brand, making it harder to raise capital and retain customers.

Reputation Damage

Negative press and leadership instability can tarnish the company’s brand, making it harder to raise capital and retain customers.

Reputation Damage

Negative press and leadership instability can tarnish the company’s brand, making it harder to raise capital and retain customers.

Operational Disruption

Misconduct often leads to hiring and retention challenges, lost productivity, and internal instability that directly affects day-to-day operations. Addressing these risks early through effective due diligence and establishing your Affirmative Defense will better protect your investment and maximize ROI.

Operational Disruption

Misconduct often leads to hiring and retention challenges, lost productivity, and internal instability that directly affects day-to-day operations. Addressing these risks early through effective due diligence and establishing your Affirmative Defense will better protect your investment and maximize ROI.

Operational Disruption

Misconduct often leads to hiring and retention challenges, lost productivity, and internal instability that directly affects day-to-day operations. Addressing these risks early through effective due diligence and establishing your Affirmative Defense will better protect your investment and maximize ROI.

Operational Disruption

Misconduct often leads to hiring and retention challenges, lost productivity, and internal instability that directly affects day-to-day operations. Addressing these risks early through effective due diligence and establishing your Affirmative Defense will better protect your investment and maximize ROI.

Mitigate Risk

It is critical for companies to either have an established program in place or conduct a thorough and comprehensive assessment of their practices in managing workplace misconduct, which includes issues such as bullying, harassment, discrimination, and retaliation. 

In today’s corporate landscape, the risks associated with workplace misconduct extend beyond legal liabilities and direct financial costs; they can significantly impact a company's reputation, employee morale/retention/hiring, and ultimately its overall performance. Unaddressed or poorly managed incidents can lead to costly litigation, regulatory fines, and a loss of trust among employees and stakeholders.

It is critical for companies to either have an established program in place or conduct a thorough and comprehensive assessment of their practices in managing workplace misconduct, which includes issues such as bullying, harassment, discrimination, and retaliation. 

empathiHR

founded 2020

empathiHR

founded 2020

empathiHR

founded 2020

empathiHR

founded 2020

How We Do It

How We Do It

How We Do It

Our thorough approach is designed to identify potential gaps in your current solution and offer practical steps to help enhance your organization’s protection and compliance, covering areas such as policy reviews, analytics, and reporting.

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Policies and Procedures

Policies and Procedures

  • A review of all policies and procedures as outlined in the Employee Handbook, other documented sources, and past practices

  • Effectiveness of Policies and Procedures

  • Risk Assessment and Mitigation:

Training

Training

  • A review of the training provided to managers and employees

  • Preventive Measures Beyond Training

Communicate

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Employee Complaint Processes

Employee Complaint Process

Employee Complaint Process

  • A review of the methods of recourse available to all employees

Current & Past Employee Complaints

Current & Past Employee Complaints

  • A review of all complaints submitted by employees in the preceding three (3) years

  • Documentation and Record-Keeping Practices

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Current & Past Enforcement Action

Current & Past Enforcement Action

  • A review of all past enforcement actions by the Equal Employment Opportunity Commission, Department of Labor, State or Local Enforcement Agency, or other employment-related legal action

  • Organizational Response to Policy Violations

This process will examine key areas such as the company's policies, training programs, complaint resolution mechanisms, and past enforcement actions, providing a clear picture of the organization's commitment to maintaining a safe, and compliant workplace.