Learning From SHRM's Legal Challenge: Compliance Lessons for Employers

Author: Robert S. Teachout

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December 11, 2025

On December 5, 2025, a Colorado jury found the Society for Human Resource Management (SHRM) liable in a lawsuit accusing it of racial discrimination and retaliation. The jury awarded the plaintiff, a former instructional designer at SHRM, $1.5 million in compensatory damages and another $10 million in punitive damages. SHRM is the world's largest HR organization "dedicated to advancing the field of human resource management."

The plaintiff, who described herself as a "brown-skinned Egyptian Arab woman," alleged discrimination and retaliation, in violation of Title VII. Among her charges, she claimed that:

  • Her white supervisor systematically treated her less favorably than white colleagues, scrutinized her work more harshly, and excluded her from meetings and advancement opportunities;
  • SHRM retaliated by firing her three months after she complained to higher level managers, including organization leaders;
  • The HR investigator started drafting termination documents the same day that she complained about retaliation, before the investigation was completed; and
  • SHRM fired her allegedly for missing deadlines, despite other coworkers missing deadlines without being disciplined.

SHRM stated that the employee was terminated for poor performance, missed deadlines, and failure to complete two major projects.

In a statement, SHRM strongly disagreed with the verdict, "This claim has no merit. None. Today's decision does not reflect the facts, the law, or the truth of how SHRM operates. We have acted with integrity, transparency, and in full alignment with our values and obligations." SHRM said it intends to appeal the decision to the highest court.

Compliance Lessons for Employers

No matter how SHRM's appeal unfolds, the circumstances surrounding this case offer critical compliance lessons for employers of all sizes. By examining what happened, organizations can identify practical strategies to strengthen their own compliance programs and reduce the risk of costly litigation.

Proactively manage retaliation risk: Retaliation claims often succeed even when the core complaint fails due to causal links, such as when the timing of an adverse employment action or circumstantial evidence appears suspicious. Proper documentation is the most effective defense.

Document all employment actions thoroughly - especially after discrimination complaints - and train managers to only make adverse decisions based on well-documented, pre-existing reasons. Using timestamped records can help demonstrate that decisions are unrelated to any protected activity.

Align practices to policies: Discrepancies between stated policies and actual practice in the workplace can undermine compliance and expose an organization to legal and reputational risks. Employees want to see that organizational values and policies are matched by internal action - that the organization "walks the talk."

Organizations should regularly check that their everyday practices match their policies and offer training to keep everyone on track. Getting feedback from employees can also help to identify and fix any gaps between rules and real-life actions.

Ensure consistent performance management: Inconsistent application of performance standards or expectations can be perceived as discrimination or favoritism, increasing the risk of discrimination claims and litigation. To foster a level, unbiased playing field for all employees, employers should standardize performance expectations and communicate them clearly to all employees.

Objective criteria for reviews and ratings should also be established, and managers should be trained to apply them uniformly. Document all performance evaluations, feedback, and any deviations from standard procedures - making sure exceptions are justified and the rationale is recorded. Consistency aids compliance and increases employee morale.

Conduct thorough and credible investigations: A credible investigation process demonstrates fairness and can help to resolve issues before they escalate. It also provides critical evidence if the organization's actions are later challenged.

Investigation protocols should include prompt, impartial and comprehensive review of complaints and documentation, along with interviews with all concerned parties. Detailed records should be maintained to document the process and findings. At the end of an investigation, communicate the outcomes transparently to all parties to reinforce that the organization is committed to due process.

Maintain a transparent grievance process: Create clear, accessible channels for employees to raise concerns and ensure that procedures for handling grievances are well-publicized and easy to follow. Provide regular updates to keep complainants informed about the status and outcome of their cases.

If a complaint cannot be resolved in the employee's favor, explain the reasoning and answer any questions to ensure understanding. This level of transparency helps to build trust and demonstrates the organization's genuine commitment to fairness.

Takeaways 

These lessons, drawn from SHRM's experience, serve as a timely reminder that compliance requires constant, consistent effort. Implementing robust compliance practices requires:

  • Proper documentation;
  • Alignment between policies and actual behavior;
  • Consistent performance standards; and
  • Transparent and fair processes.

Avoiding key compliance risks - especially retaliation, inconsistency, poor documentation and misalignment - protects both the organization and its employees. This diligence demonstrates a genuine commitment to compliance and fair workplace standards.