Congratulations! You’ve Been Fired

Is the tech startup employment model an incubator for employment discrimination and sexual harassment?

Boy, Black T-Shirt, Finger, Girl, Young

This is one of many observations in a great article in today’s New York Times bearing the title of this post.  Dan Lyons writes about what he experienced working at a “hot” tech company where, he says, employees are disposable and firing is known as “graduation.”

He calls this model a “digital sweatshop,” and agrees with me that it is also an invitation to employment discrimination and harassment.

Contrasting this employment culture which he says prevails in places such as Amazon, with “the 1980’s and early 90’s, when technology executives were obsessed with retaining talent,” he claims that “[t]reating workers as if they are widgets to be used up and discarded is a central part of the revised relationship between employers and employees that techies proclaim is an innovation as important as chips and software.”

He says that this “new” relationship “is actually the oldest game in the world: the exploitation of labor by capital.”  It may be a “digital sweatshop,” but it does have unlimited  snacks; but also “cult indoctrination” of the employees who have drummed into them that they are “changing people’s lives.”

This is a fascinating article to an old school guy, but what caught my eye was something I warn all of my “startup” clients about: his claim that “[b]ias based on age, race and gender is rampant, as is sexual harassment.”

In my long experience this is spot on – startups seemingly care little about — and know little about — HR “best practices.”  This unglamorous task is usually left to an overworked manager or assistant who has tons of other thinsg to do, and would rather be doing them.   And the usually very young workforce is left to behave or not – as long as they stay tethered to the shopfloor.

While in growth mode the worst of frat behavior may prevail at the company with an attendant increase in harassment claims.   While in “downsizing” mode there is generally an increase in discrimination claims as angry, fired employees file such claims whether meritorious or not.  And believe me, there is no shortage of anger, or of situations from which these claims spring.

Startups beware:  Unless you wish to encourage such discrimination, with its inevitable expensive and distracting EEOC charges and litigation, you better stop treating the workplace as your private “digital sweatshop” with its own disastrous “law of the jungle.”

You would be wise not to ignore or close your eyes to the very real discrimination and harassment that is likely to occur if you spend no time or resources on preventing it.

Monkey, Evil, See, Hear, No, Say

And you would therefore be wise to learn about and maintain a coherent, consistent and compliant corporate culture.





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Richard Cohen

Richard B. Cohen is a partner in the New York City office of FisherBroyles, LLP, a national law firm. Richard Cohen has litigated and arbitrated complex corporate, commercial and employment disputes for more than 35 years, and is a trusted advisor to business owners and in-house counsel both in the United States and internationally. His clients have included Fortune 100 companies, domestic and foreign commercial and investment banks, Pacific-rim corporations and real estate development companies, as well as start-up businesses throughout the United States. Email Richard at [email protected]