SIX LESSONS THAT REDEFINE
FOCUSED COMPLIANCE TRAINING
Compliance training professionals often wrestle with how to
cover a multitude of risks with fnite budgets and limited seat
time. But, all risks are not created equal and focusing on lesser priorities diverts attention and
resources away from the biggest risks.
Data has revealed one category of risk is reported more often than all others combined. Charges
and fnes related to this category remain at all-time highs, calling into question the current
approach to training on these issues. Left on the back burner, these risks could undermine a
compliance program and expose an organization to legal or reputational damage.
The following six lessons will help you assess the focus of your compliance training program and
formulate a strategy to tackle your biggest training risks.
Are your biggest risks sitting on the back burner?
INTRODUCTION
2 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON I
Planning for 2014 is likely pressing on your mind,
or it will be in a short time. You will be faced with
answering a key perennial question--how should your
organization allocate it’s compliance training budget
and what topics should you focus on?
Opinions about which risks are most pressing are
often shaped by surveys on litigation, enforcement
trends, major scandals, new legislation,
and existing compliance requirements.
Add in stories told by vendors about
what you must be doing, and the picture
can get fuzzy.
The problem is that in the heat of a
media frenzy or uptick in enforcement,
it’s easy to lose sight of some of the most
prevalent and pressing compliance risks
facing organizations today—HR and
workplace respect issues.
These are risks that are common across
all your employees and when left
unaddressed can destroy your culture
and brand reputation. Don’t believe
it? Take a page out of the Paula Dean
cookbook – her very public racist
comments and slurs have caused some
real damage to her own brand and
the Food Network’s image. The Food
Network just publicly announced that it will not
renew Paula Deen’s contract when it expires at the
end of the month. And one of her largest sponsors,
Smithfeld Foods, is also calling it quits with
Paula Dean.
Most Pressing Compliance Risks Are HR Related
NAVEX Global’s proprietary database of hotline
reports is the largest in the world, providing the best
visibility into reported misconduct in thousands of
organizations across all industries and companies
of all sizes. For the last fve years running, by
a staggering margin, the most often reported
misconduct falls in the category of Human Resources,
Diversity and Workplace Respect—this category
includes fve key areas of risk:
1. Discrimination
2. Harassment
3. Retaliation
4. Diversity
5. Wage and Hour
So how do the numbers stack up? HR
tops the list and HR issues are raised
more often than all other categories
combined.
[1]
Here is how the numbers break down:
Human Resources, Diversity and
Workplace Respect
Business Integrity, Bribery,
Corruption, Fraud
Environment, Health and Safety
Misuse, and Misappropriation
of Corporate Assets
Accounting, Auditing, &
Financial
Making Sense of the Numbers
When it comes to HR issues, there’s a lot that
employees have to say. And the reality is that
employees are more likely to experience harassment,
LESSON I
FOCUS ON THE BIGGEST RISKS
The frequency with which
reporters cited HR issues was:
the rate of business
integrity issues like bribery,
fraud, or corruption,
the rate of
environmental, health, or
safety issues,
the rate of misuse
or misappropriation of
assets, and
the rate of
accounting, auditing or
fnancial reporting issues.
10X
10X
20X
4X
69%
17%
7%
3%
6%
3 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON I
FOCUS ON THE BIGGEST RISKS
discrimination, or a wage and hour violation, than they
are to be involved in a bribery and corruption scandal.
It makes sense that the frequency of reported
concerns would be higher for HR issues. The problem
is that many organizations discount the importance of
a holistic and comprehensive approach to compliance
training by leaving HR training out of the
compliance mix.
HR issues are not always small, insignifcant matters
that can be addressed quickly, or can be swept under
the rug. When insuffcient attention is paid to these
issues, when training is not effective,
policies and practices are allowed to
continue despite questionable legal
positioning, the compliance hit to an
organization can be enormous.
A couple major indicators suggest that
a focus on HR Issues is vital to a strong
corporate compliance program.
• EEOC Charge claims remain at
record highs, with retaliation
claims topping the charts.
[2]
» Retaliation appeared in 38.1%
of all charges, followed by
allegations of race (33.7%) and
sex (30.5%) discrimination.
» Workplace harassment flings
represented 24% of all charges
fled with the EEOC.
• The EEOC’s continued focus on systemic
discrimination puts increased pressure on
organizations to make sure that their policies
and procedures are legal.
• In 2012, 52% of companies cited being hit
with Labor and Employment class actions,
compared to 26% consumer, 14% securities,
10% mass tort, and 9% antitrust/competition.
[3]
• Wage and Hour class actions are the most
common employment law class action and
average settlements are around $4.8 million.
[4]
An Integrated Approach to Compliance Training
As the compliance function continues to evolve,
organizations will be pressed to incorporate a broader
array of organizational risks under the
compliance umbrella. Closer alignment
with HR or possibly greater oversight
over the most substantial HR risks is likely
to be part of the compliance department
of the future.
And like other pressing compliance
risks, on-line training can help mitigate
risks associated with harassment,
discrimination, and wage and hour.
Incorporating full-length training (that
complies with state laws on training and
that is rigorous enough to help develop
legal defenses at the state and federal
level) should be augmented with short
bursts of learning that periodically
remind employees about your organization’s
expectations. Developing a curriculum map (like the
example in the graphic on this page) will help you
spread the training throughout the year, and ensure
proper coverage of HR issues.
Nearly 25% of
companies in the
US and UK reported
discrimination as the
litigation area that
saw the greatest
increase in the past
12 months; they
expect claims to grow.
[1]
Benchmark Report - NAVEX Global 2013 Hotline Benchmark Report Download
[2]
Link - 2012 EEOC Discrimination Statistics Download
[3]
Survey - Fublright and Jaworski 2012 Litigation Trends Survey Download
[4]
Report - NERA Trends in Wage and Hour Settlements: 2012 Update (March 12, 2013)
RESOURCES
LESSON I
DOWNLOAD
INFOGRAPHIC HERE
References
1. 2013 NAVEX Global Hotline Benchmark Report
Data reflects the percentage of incidents reported across all industries in each of the five benchmark risk categories defined by NAVEX
Global. The sum of percentages is slightly exceeds 100% as reports may be filed in more than one category simultaneously.
2. 2012 EEOC Charge Statistics
3. 2012 EEOC Monetary Benefits All Statutes
4. 2012 EEOC Harassment Statistics
5. 2012 EEOC Retaliation Statistics
6. Fulbright and Jaworksi 2012 Litigation Trends Survey
7. 2013 NAVEX Global Harassment in the Workplace Survey
About NAVEX Global
NAVEX Global is the trusted ethics and compliance expert for more than 8,000 clients in over 200 countries – the
largest ethics and compliance community in the world. We provide a comprehensive suite of solutions for
managing governance, risk and compliance (GRC), providing critical cross-program insights through unmatched
expertise and actionable data
NAVEX Global Resources
Online Training Demo
Online Training Overview
Online Training Categories
Burst Learning
Online Training Catalog
Contact NAVEX Global
EMPLOYEES***
MANAGERS***
SENIOR
LEADERS***
COURSES YEAR 1 YEAR 2 YEAR 3 YEAR 4
FULL LENGTH
• Workplace
Harassment*30/60
• Wage & Hour30
BURST
• Reporting & Retaliation5
• Social Media5
Numbers in superscript adjacent to course titles represent the options for course length
*Best practice: employees typically receive between 30 and 60 minutes of harassment training
**Best practice: California and Maine have established a 2-hour training requirement for managers; outside of these locations, many employers
provide 2 hours but some provide between 45 and 2 hours.
***Organizations should also ensure that these critical employment topics are covered in annual code of conduct training.
ADDRESS YOUR HR RISKS WITH TRAINING
PERCEPTION OF RISK
News & Media Outlets
Rare events and headlines
about public figures
Public Opinion
Trending topics
Volume Vendors
Large training libraries
designed to drive sales
RETALI ATI ON DI SCRI MI NATI ON
In 2012 the EEOC reported 99,412 charges
and $365.1 Million in monetary benefits paid.
DI SCRI MI NATI ON RETALI ATI ON
WAGE & HOUR
SOCI AL MEDI A BULLYI NG
2012 EEOC STATISTICS
99,412 Discrimination Charges 2
$365.1 Million in Monetary Benefits 3
Wage and Hour Class Actions create
the most MONETARY EXPOSURE of
any employment claim. 5
Retaliation was alleged in
of all charges in 2012, making it the most
reported form of discrimination. 5
In 2012, 16% of employers saw an
increase in bullying complaints. 7
Social networks provide new mediums to
commit ‘old school’ forms of misconduct
like harassment and discrimination.
$
HR ISSUES DEFINED
REALITY:
One risk category accounts for more incidents than all others combined. 1
7% 3% 6%
69%
17%
WITH SO MANY RISKS...
HOW DO YOU
COMPLIANCE TRAINING?
Biased influences create a false perception of the greatest risks.
Environment,
Health, Safety
Accounting,
Finance, Audit
Misuse,
Misappropriation
of Assets
HR, Diversity,
Workplace Respect
Business Integrity,
Bribery, Corruption
HR, DIVERSITY, AND
WORKPLACE RESPECT
Data reflects the percentage of incidents reported across all industries in each of the five benchmark risk categories defined by NAVEX Global. The sum of percentages slightly exceeds
100% as reports may be filed in more than one category simultaneously. 1
HARASSMENT
2011 EEOC AND FEPA STATISTICS 4
30,512 Harassment Charges
$100 Million in Monetary Benefits
38.1%
A simple multi-year plan, like the one below, will ensure that everyone in your organization receives periodic
training. Combining full-length courses with burst learning (5-8 minute training segments) will help build
powerful legal defenses. Ensure that these topics are also addressed in annual Code of Conduct training.
FULL LENGTH
• Discrimination-Free
Workplace30
BURST
• Harassment5
• Wage & Hour5
FULL LENGTH
• Workplace
Harassment*30/60
BURST
• Bullying5
• Wage & Hour5
FULL LENGTH
• Discrimination-Free
Workplace30
• Wage & Hour30
BURST
• Harassment5
FULL LENGTH
• Workplace
Harassment**45/120
• Wage & Hour60/90
BURST
• Reporting & Retaliation5
• Social Media5
FULL LENGTH
• Discrimination-Free
Workplace45
OR
• Reporting & Retaliation45
BURST
• Harassment5
• Wage & Hour5
FULL LENGTH
• Workplace
Harassment**45/120
BURST
• Bullying5
• Wage & Hour5
FULL LENGTH
• Discrimination-Free
Workplace45
OR
• Reporting & Retaliation45
• Wage & Hour60/90
BURST
• Harassment5
FULL LENGTH
• Workplace
Harassment**45/120
• Wage & Hour60/90
BURST
• Reporting & Retaliation5
• Social Media5
FULL LENGTH
BURST
• Discrimination5
• Harassment5
FULL LENGTH
• Workplace
Harassment**45/120
BURST
• Bullying5
• Wage & Hour5
FULL LENGTH
• Discrimination-Free
Workplace45
OR
• Reporting & Retaliation45
BURST
• Harassment5
© 2013 NAVEX GLOBAL. ALL RIGHTS RESERVED. +1-866-297-0224 | [email protected] | www.navexglobal.com
RECORD HIGH
RECORD HIGH
RECORD HIGH
4 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON II
Compliance training is one of your organization’s
largest compliance investments in terms of both time
and money. Training programs can be expensive to
build or purchase, and the reality is that seat time
is precious and expensive. With tight budgets and
limited training time allocated to compliance, it’s
important to make sure you’re making the most of
your investment.
Compliance training impacts every one of your
employees and high-quality training can help build a
more ethical and compliant culture and drive business
success—so it’s vital to make the right investment.
HR and compliance professionals are scrutinizing
training curriculums and trying to make them more
effective and effcient. Large libraries of outdated
courseware that aren’t engaging or updated are no
longer acceptable; they don’t change behavior and
often go unused.
So how do you make the most of your investment?
What should you consider when evaluating your
options? The following tips will help you do just that.
Step 1:
Assess the Current State of
your Training Program
It’s not uncommon for an organization’s leaders to
have a fuzzy picture about the current state of training
in their workplace. Divided ownership and segmented
budgets often help drive this phenomenon. But
getting a clear picture of what you are doing, and
what is working, is critical if you want to make your
program better.
The frst step in this process is to gather critical
information such as:
• Your organization’s greatest risks (legal, cultural
and reputational); if you are not sure, conduct a
risk assessment to fnd out
• Map out current training efforts, including
audience, method and frequency
• Ask employees whether the training is engaging
and effective
• Assess the age of your current training courses
• Evaluate the cost of delivering training in its
current format; include seat time and travel time/
expenses, as well as internal costs to develop
and maintain
• What other training pressures are placed
on learners
Whether you are
focusing on HR risks, or
you have responsibility
for broader compliance
training, gathering this
information will help
you properly assess the
current state.
4 STEPS TO A MORE EFFECTIVE
TRAINING PROGRAM
5 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON II
Step 2:
Explore New Trends and
Approaches
There is a furry of activity in the training world right
now that has resulted in a variety of trending training
approaches—everything
from gamifcation to
mobile enabled courses.
Some of these tools and
strategies can enhance
your training program.
But just because
something is hot now,
does not guarantee that
it is effective or a good
investment. You still need
to be critical about the
trends you incorporate
and whether they will work
in your culture and in the
context of your program.
Even if a trending method or tool works in your
environment, use it wisely. Too much of a good thing
can backfre. Just because it works for some purposes
does not mean that it will be an engaging or useful
learning experience for other purposes. One example
of this is mobile learning.
Some of the hottest trends right now include the
following:
• Shorter courses that really get to the point
and cover “need to know” information for your
audience.
• A laser focus on key risk areas, rather than
massive libraries of courses that
are outdated
• An expectation of true engagement
and entertainment
• Continuous learning, including short bursts, to
ensure the message stays top of mind.
• Mobile enabled training
• Social/collaborative learning such as blogs,
video-casting,
Step 3:
Focus on the Topics that
Matter Most
You could train on everything, every topic and every
risk area… but that’s not effective or practical. No
organization has the bandwidth to consume that
much training. Rather, the key is to focus on the topics
that matter most and make sure that what you are
delivering and how it is being delivered is as good
as it can be. Maintaining a strong focus can help you
really add value and create impact for
your organization.
So when you are considering where to make an
investment, focus on the topics that:
• Drive the greatest risk
• Can change behavior and impact the culture
• Are critical to your organization’s culture
and values
• Are vital for protecting your
organization’s reputation
• Help establish key legal defenses
What topics do NAVEX Global
clients seek out and focus on;
it aligns with general industry
practice. The top 12 topic
areas include the following:
1. Ethics and code of
conduct
2. Harassment (all forms, not
just sexual harassment)
3. Bribery & corruption
4. Data privacy
5. Technology use and
security
6. Reporting and retaliation
7. Wage and hour
8. Discrimination
9. Antitrust & competition law
4 STEPS TO A MORE EFFECTIVE TRAINING PROGRAM
6 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON II
10. Conficts of interest
11. Insider trading
12. Protecting Confdential information
These are the topic areas
that impact the largest
number of employees
and that should refect
your organization’s
commitment to high-
quality training. For some
industries, especially
highly-regulated ones,
this list will include several
additional topics, as the
volume of expected or
mandated topics is
more extensive.
Step 4 :
Chart Your Course –
Curriculum Mapping 101
Once you know what you want to cover, you need to
fgure out how and when you will do it. Commonly
called curriculum mapping, this process will help
you establish the cadence and methodology for
deployingcontinuous compliance learning. A well
designed map will help ensure proper coverage of
your organization’s key risk areas, help avoid learner
fatigue, and give you a big picture assessment of
methodology and deployment strategies.
If you want to learn more about this process and how
to build a curriculum map, click here. In this webinar,
my colleague, Mary Bennett, and I walk you through
the basics and cover considerations and training
methods.
Some of the very high-level questions you must
ask about your organization to make this process
successful include:
• What are my key training goals?
• What key risks am I trying to manage?
• What support do I have for my initiative; is
training mandatory or optional?
• What format is most effective for my employees?
• How much learning can employees
realistically consume?
• How much seat time is available for training?
• Are there time periods where training will
be best received based on demands on the
business (for example, busy periods)?
• How often should I train to build valuable
legal defenses?
• How can I maximize my budget spend without
sacrifcing key goals?
• Do I need to create special training for certain
audiences or people in key roles?
The curriculum map document you create can
ultimately take many different forms; it can be a
simple overview or a detailed spreadsheet that
provides extensive detail about your training
program. The right form, depth, and content will
depend on the complexity of your program, the
nature of your organization and its risks, and
your goals.
4 STEPS TO A MORE EFFECTIVE TRAINING PROGRAM
7 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON III
Strategies for Managing New Forms of
Old-School Misconduct
Social media has altered everything about the way we
work, interact, and stay connected. Just think back
10, even 5 years ago. Things were different—really
different.
Today, more than 75% of all employees have at least
one social media account, according to a survey
recently released by the Ethics Resource Center called
National Business Ethics Survey of Social Networkers:
New Risks and Opportunities at Work.
And that means it’s not just the youngest generation
that is using social media. In fact, 72%
of all social networkers are over the
age of 30. Below are employee social
network usage rates by age group:
of employees age 30-44
of employees age 18-29
of employees 45-63
In light of these statistics, it’s not
surprising that employers are wrestling
with employee issues that seem to
be a product of this information age
revolution. It’s also not surprising that
when it comes to conduct employees
continue to push the boundaries of
what is appropriate and what is not.
What is the Scope of the Problem?
Social networking is here to stay. And the reality is
that for many employers, managing social media risk
is a bigger problem than anticipated. According to
the ERC survey:
72
% of social networkers spend
time each workday on social
networking sites.
28
% of social networkers spend
more than 1 hour per day on
networks.
Most of the time employees spend on
social networks is for personal reasons.
What Does Social Media
Misconduct Look Like Today?
We don’t know how often and what
percent of employees are engaging
in online misconduct, but we do
know that employees are spotting
many different forms of online
misconduct. Below is an excerpt from
the appendix of the NBES Survey
of Social Networkers detailing the
observation rates of various types of
social networking misconduct:
NEW FORMS OF OLD SCHOOL MISCONDUCT
81%
85%
67%
8 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON III
If you can imagine it, your employees have probably
done it, said it, or messed with it online. And a quick
search of the internet and popular networking sites
will reveal a whole host of misconduct that you may
not have even contemplated. Examples include:
• The manager who harassed an employee after
learning that the employee had “liked” a social
networking group called Two Dads.
• The manager who accidently sent out a picture
of himself naked (waist down) to about 20
employees. He was quickly terminated.
• The manager who accessed confdential
customer data, and then sexted a customer. He
too was fred of course.
• The barista who was fred after blogging about
diffcult customers.
• The group of Australian miners who were fred
after they posted a video of them doing the
Harlem Shake.
• The many and varied employees who mistreat
and abuse products like food or packages, and
then post the videos online.
• Or the politician, who just can’t stop sending
raunchy photos and text messages, even though
it’s devastating his public image, reputation
and campaign.
Managing the New Reality
The challenges presented by social media are not
entirely new; rather technology has merely provided
employees and managers with a new vehicle for
engaging in old school misconduct such as sexual
harassment and discrimination. What has changed
dramatically is the speed at which misconduct
impacts others, and the scope of the harm that
can occur.
Employers need to be more proactive and more
vigilant than ever before if they want to mitigate risks
STRATEGIES FOR MANAGING NEW FORMS OF OLD-SCHOOL MISCONDUCT
APPENDIX B: Observation Rate of Social Networking-Related Misconduct: NBES-SN
NBES-SN
OVERALL
NON-WORK
(NSNS) AND
MODERATE
(MSNS)
WORK-DAY
USERS
ACTIVE
WORK-DAY
USERS
(ASNS)
Social Networking Interfering with Work Duties 29% 28% 37%
Sharing TMI (Too Much Information) 28% 27% 36%
Degradations About Company 13% 12% 17%
Degradations About Peers 10% 9% 16%
Posting Improper Political Statements 11% 10% 14%
Cyber-smearing (Defamation of a Person or Entity) 7% 6% 13%
Posting Improper Religious Statements 7% 6% 13%
Cyber-bullying (Hostile Communication Directed at
or about an Individual)
5% 4% 12%
Posting Inappropriate Photos of Coworkers 8% 7% 12%
Breach of Employee Privacy 6% 5% 10%
Sexual Harassment 3% 3% 8%
Improper Pro?ling of Applicants or Customers 3% 3% 8%
Misuse of Company’s Con?dential Information 3% 2% 6%
Breach of Customer Privacy 4% 4% 6%
Note: For de?nitions of ASN, MSN and NSN, see “Key Terms” on page 13.
9 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON III
associated with social media use. Below you will fnd
four suggestions for managing social media risk in
your organization:
• Be Informed: The law and technology are not
always in sync; the law often lags far behind.
Practices that may be okay today may become
big risks tomorrow if you don’t stay on top of
changes in the law. And because social media
is a global activity, it’s often important to be
informed about international laws. A short
sampling of U.S. laws and regulations that
employers should be aware of include:
» Federal Trade Commission
(FTC) rules and regulations
» Copyright, trademark,
and intellectual property
protections
» Health Insurance Portability
and Accountability Act (HIPAA)
» Gramm-Leach-Bliley
» SEC Regulations relating to
insider trading
» Anti-discrimination laws such
as Title VII
» Anti-harassment laws such as
Title VII
» The National Labor Relations Act
» Whistleblower laws
» The Stored Communications Act
» The Computer Fraud Abuse Act
» The Electronic Communications Privacy Act
• Be Realistic: Social media is here to stay.
Employees no longer need your network or your
equipment to access social networking sites
while at work. They simply use their own devices.
When you think about establishing and enforcing
rules, be realistic about what is allowed,
and enforceable.
• Be Prepared: Start with a really solid social
media policy that refects your organization’s
culture, and is properly communicated (via
training) and enforced. An effective policy and
training will actually help curb misconduct—as
confrmed by the ERC survey noted above. For
some tips on how to develop a policy, check
out the NAVEX Global Social Media Toolkit. In
addition, develop a social media crisis response
plan—so when you have to deal with something
big, you can respond properly and quickly.
• Be Trusting: Most people are well intentioned—
they actually want to protect and improve their
organizations. Employers need to let go a bit,
and trust that the social networking community
(which includes their employees) will
impose some guardrails and help keep
people in check, just like coworkers
do in a more traditional workplace. If
you want to seize the opportunities
presented by social media, train
employees about how to use it
properly and productively to help your
organization.
Harassment and discrimination
remain pressing risks – not because
policies and training are ineffective
in addressing these issues, but rather
because many employers fail to adopt
policies and adequately implement or
communicate training.
So if you are thinking, “good we already have a
policy” – you should carefully evaluate how effective it
is. An enormous gap may be undermining
your efforts.
This 30-point gap suggests a big problem. And the
problem is that a policy really isn’t much good if it’s
not communicated to employees in a way that
is memorable.
One thing is certain. Employees will make mistakes
online. In some cases they will simply embarrass
themselves, but some may cause damage to your
reputation. The key is to not sit back and do nothing.
Establishing clear policies and educating employees
are proven methods for increasing sensitivity and
awareness, curbing behavior, and ultimately reducing
the likelihood of misconduct.
STRATEGIES FOR MANAGING NEW FORMS OF OLD-SCHOOL MISCONDUCT
• Only 43% of
employees think
their organizations
have a social
media policy
• While 73% of
employers say they
have a social policy
in place.
10 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON IV
Avoiding Four Fatal Mistakes
Using training to build a legal defense is a topic that
receives signifcant coverage. It’s also a topic that is
often not well understood. Unfortunately, mistakes
happen and they can be costly.
A complex web of federal and state laws and agency
guidance impose EEO, and compliance and ethics
training requirements on employers of all sizes. Some
are mandatory, and some are basically mandatory. But
what’s the difference and does it matter?
• Mandated training: Training is
actually mandated by law.
• Business Essential Training:
When laws and regulations
require employers to
demonstrate that they have
acted in good faith to establish a
legal defense.
Most training obligations in the
employment law arena fall under the
second category. (To see a summary
of the key legal defenses click here).
The reality is, however, that either
way, an organization is Mandatory
Training Lawsexposed if they fail
to train employees or if they take a
check-the-box approach to training.
Because, let’s face it, at some point every employer
will be faced with lawsuit where having a defense
will make all the difference. In Bains v. ARCO Prods.
Co., employees were originally awarded $1 million
in compensatory damages and $5 million in punitive
damages for failing to train on harassment. See
405 F.3d 764 (9
th
Cir., 2005). Similarly, in Swinton v.
Potomac Corporation, an employee was awarded
a punitive damage award of $1 million because the
employer did not provide managers with training. See
270 F.3d 794 (9
th
Cir., 2001).
An Unexpected Twist—You Failed to Train Me!
Typically, employees groan and moan when told they
need to take a compliance course or attend a training
session. But here’s a training twist
that relatively new. An employee (or in
this case a mayor) actually claims that
he engaged in harassment because
he wasn’t trained.
San Diego Mayor Filner is accused of
sexual harassment (eight women say
he sexually harassed them). In August
of 2013 the mayor’s lawyer made the
outlandish claim that it’s the city’s
fault that he harassed these women…
because the city did not provide the
mayor with harassment training. As a
result, the lawyer claims, the city and
not the Mayor should be liable for
damages that fow from his sexually
offensive behavior.
So now, you not only need to provide
training to build a legal defense against a plaintiff, you
may need it to protect yourself from an employee or
manager facing personal liability.
BUILDING A LEGAL DEFENSE
11 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON IV
Defense Fundamentals
While legal standards may vary (and they do!) building
a compliance-based defense boils down to some
common techniques and strategies. Courts and juries
are looking to reward organizations that make a real,
good-faith effort to comply with the laws and get
their employees to do the same. Good faith is not a
one-time push exercise – it’s really a push, interact,
pull, and push again exercise.
Some of the most commonly accepted
techniques include:
1. Have robust, organization-
specifc policies
2. Ensure that policies are
distributed (to everyone in
your organization) on a regular
basis and employees attest
to them
3. Provide robust and periodic
training that is topic specifc
4. Have a reporting mechanism
that really works
5. Consistently and fairly enforce
the rules
6. Be vigilant against retaliation
7. Regularly monitor, audit, and improve
your program
Giving it a good effort, is not enough. These
obligations are ongoing and evolving. Missing one of
these steps can be catastrophic for your organization.
Learn From The Mistakes of Others
Many employers have tried to build a defense
relying on a “good enough is enough” mentality.
Unfortunately, their efforts are not well rewarded
by juries or judges. And mistakes can lead to jury
verdicts in the millions of dollars.
So what are some of the most common mistakes? I
highlight 4 key ones below.
Mistake 1: Assuming That A Policy Alone
is Enough
When it comes to policies, the game has changed.
Employers cannot rely on a policy grabbed from the
internet. The policy needs to be customized to ft
their organization and it must be current. An outdated
policy from 1938 just won’t cut it. And once you have a
solid policy, you have to actually tell people about it.
It seems so simple, but employers do miss this
important step. In Miller v. Kenworth of Dothan (11
th
Cir., 2002), the employer paid out $25,000 for “malice
and reckless indifference” because
of ineffective employment policies
and because they failed to tell their
managers about the policies. In
Griffn v. City of Opa- Locka, et al. (11
th
Cir., 2001), the result was even worse
for the employer. A jury awarded
$ 1.5 million plus $ 500,000 of
additional damages to a former
employee because the city had no
policy and no training.
Mistake 2: Assuming That All
Training Is Created Equal
Training is another area where
missteps can cause huge problems.
Employers sometimes think that it doesn’t matter
what the training is like; they just need to check-the-
box. But don’t make this mistake—don’t assume that
all training is created equal. It’s not. Training that
helps you check-the-box will not curry favor with juries
or judges, or enforcement agencies, or help you build
a legal defense.
One employer learned this lesson the hard way. In
EEOC v. Management Hospitality of Racine, Inc. d/b/a
International House of Pancakes, et al., No. 10-3247
(7
th
Cir. Jan. 9, 2012), the court let stand a jury verdict
of $ 5,000 in compensatory damages, and $ 100,000 in
punitive damages in part because the employer used
canned, generic videotaped harassment training. The
court made clear that poor quality training does not
qualify for a good-faith defense under federal law.
BUILDING A LEGAL DEFENSE
12 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON IV
When vetting training options, ensure that the
content and how it is being delivered is contemporary
and interactive, and legally vetted. And ensure that
managers receive specialized training that teaches
them about their unique responsibilities.
Mistake 3: Assuming that Silence Is Golden
Many organizations still fear employee reports,
assuming that chatter about inappropriate behavior
is a bad thing. The reality couldn’t be further from
the truth. Employers should encourage employees
to speak up, and should have a formal and well-
communicated process for doing
so. It’s much easier and more
effcient to handle an issue when it
is small and manageable. And the
stats tell us, that even if you aren’t
hearing about harassment (or for
that matter other employment
law issues) nearly 30% of your
employees have experienced it.
Set up a complaint process,
and allow employees to come
directly to HR or corporate with
their concerns. Don’t be afraid to
encourage employees to use your
ethics or help line. Today, most
of the calls coming into employer
ethics lines are HR related calls. In
fact, 69% of helpline calls are related to HR, diversity,
and workplace respect issues. And make sure that
Managers have a true open door policy, and they
know how to properly handle an employee complaint.
If your process breaks down and isn’t effective, you’ll
have a hard time establishing a defense under federal
and state law. A Texas jury (Waffe House, Inc. v.
Williams, 314 S.W.3d 1 (Tex. App., 2007)) awarded an
employee $ 400,000 in past compensatory damages,
$ 25,000 in future compensatory damages, and
$ 3,460,000 in punitive damages (eventually lowered
to $ 425K by judge per law) after she was sexually
harassed by her manager. A key fact that led to this
verdict, despite the employee’s repeated reports,
management failed to handle her complaints
properly. And because her complaints weren’t
processed properly, her issues never made it to
corporate headquarters.
Mistake 4: Assuming That You Only Have to
Train 1 Time
Training is a large budget item. It’s not just the cost
of the program, but also the seat time costs that add
up. Assuming that it’s okay to deliver training one
time, however, is a monumental mistake. Employees
and managers need periodic reminders about your
policies, procedures, and how to make complaints.
Periodic training for managers has been
the law in California since AB1825 was
adopted. It has also long been the
position of the EEOC that Employers
should provide employees and
managers with periodic training. See
EEOC Enforcement Guidance: Vicarious
Liability for Unlawful Harassment By
Supervisors, No. 915.002, June 18, 1999).
And in Romano v. U-Haul International,
punitive damages were available
because the employer did not have
“an active mechanism for renewing
employees’ awareness of the policies
through... specifc education programs.”
233 F.3d 655 (1
st
Cir. 2000).
In fact periodic training is becoming the norm rather
than the exception in the broader compliance space.
See 2004 Federal Sentencing Guideline, Section
8B2.1(b)(4)(A). Morgan Stanley was rewarded with a
non-prosecution agreement, in part because of its
robust compliance program which included regular
electronic and other training.
Establishing a smart cadence to your training is vital
to building a successful defense. Today you have
many options, which include full-length courses, short
5-7 minute bursts, and communication and awareness
programs that keep issues top of mind. Plan your
efforts out carefully (example curriculum map) and
make the most of the training time you have.
BUILDING A LEGAL DEFENSE
13 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON V
Why Tone from the Middle Matters
The Importance of Middle Managers to Your
Compliance Program
When it comes to managing risk and building a
culture of ethics and compliance every employee
plays a part. Senior leaders establish the priority,
tone, and vision for an ethical culture. Rank and
fle employees give life to the vision when they
consistently choosing to embody the standards. But,
this vision cannot be realized without the critical role
and infuence of the supervisors who sit between
these two layers.
Middle managers are the
vital link, the connective
tissue between the
tone set by your senior
leaders and your non-
supervisory employees
who implement core values
on a routine basis. If the
link is dysfunctional or
non-existent attitudes and
behaviors will not refect
a culture of ethics and
compliance.
Supervisory employees
are on the ground
implementing strategy,
advancing the goals of
the organization, and
most importantly having day-to-day interactions
with your employees. As a result, direct supervisors
have the greatest infuence on the adoption and
implementation of values communicated by leaders
of the organization. Managers shape employee
perceptions about the importance of respect, ethics,
and a commitment to doing what is right.
Managers May Not Be As Highly Regarded As
You Assume
It is not uncommon for senior leaders and employees
to have very different perspectives about the culture
of ethics in their organization. Senior leaders often
see employees on their best behavior and tend to
have a rosier perspective of corporate culture. Non-
supervisory employees see the world unfltered
through the day-to-day
interactions with their
colleagues and their
manager. When employees
witness their managers
behaving unethically it can
be particularly damaging to
their attitude toward ethics
and compliance and their
resultant level of conduct.
The 2011 National Business
Ethics Survey indicated a
rising trend in the number
of employees who perceive
their supervisors as unethical
(Chart 1).
It is an alarming trend considering employees who
view their manager as unethical tend to view their
organization as unethical and are also less likely
TRAINING MIDDLE MANAGERS
14 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
to demonstrate ethical behavior like sticking up
for others or reporting observed misconduct. On
the other hand, companies with strong ethics and
compliance programs are characterized by less
pressure on employees to
compromise standards, lower
rates of observed misconduct,
a greater employee willingness
to report misconduct and less
retaliation (Chart 2).
In a parallel trend to the rising
rates of unethical conduct by
middle managers, a survey
conducted in the UK (ILM survey
Added Values: The Importance
of Ethical Leadership) found
that they are increasingly having
their personal and organizational
values put to the test. The next
chart shows an astonishingly high
number of managers reported
that they had been asked to do
something unethical or even
illegal (Chart 3).
In order for middle
managers to be allies for
the cause of creating a
culture of respect and
compliance, they must
have the knowledge,
skills, values and attitudes
that leadership wants to
see refected in
all employees.
Equipping Your Middle
Managers
Manager misconduct is
not always the product of
intentional wrongdoing.
In many cases, misconduct is the result of managers
acting without necessary information or knowledge
about what is expected or appropriate.
You must arm your managers with the knowledge
and skills that can really help them support your
organization’s overall ethics and compliance goals.
Consider these steps:
1. Lead From the Top
Ethical lapses and legal missteps
have a disastrous impact
on culture, and employee
engagement. When managers
respond improperly to allegations
of misconduct, allow misconduct
to continue, or they themselves
engage in the misconduct the
consequences for your culture can
be severe.
When engagement levels
decrease, employee productivity,
retention, and your bottom-line
often follow suit.
Don’t assume that managers
know what is expected of them.
The reality is they may not
fully understand their
responsibilities. This is
particularly true if they
have been trained using
outdated programs or
check-the-box eLearning
solutions.
Just like other major
initiatives, the message
of ethical behavior must
come from and be fully
supported by senior
leaders. Leadership
must send the message
about what behavior
is unacceptable, how
managers are expected to respond, the prohibition
on retaliation, and that everyone will be held
accountable. Communicating in writing or even
speaking to employees is simply not enough. Senior
TRAINING MIDDLE MANAGERS
15 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
BUILDING A LEGAL DEFENSE
leaders must not only talk about expectations, they
must take appropriate actions to enforce them.
Share the message in multiple formats, throughout
the year. Some practical examples of the things
that have been successful for many
organizations include:
• Add a senior leader or CEO
introduction to all eLearning
programs.
• Ensure that senior leaders attend
manager meetings and talk
about expectations.
• Provide managers with written
communications from
senior leaders.
• Ensure that senior leaders attend
or take all required training
sessions programs.
2. Provide Middle Managers
with Context
Context is always important when
aligning managers and employees
around organizational values and
expectations. We all want to know
WHY something matters, and what
role we as individuals play in the
big picture.
When it comes to compliance it can
be easy to gloss over or forget to
communicate individual roles in the
big picture. When context is not
provided, employees and managers
may be less likely to get on board. So
no matter how you are communicating
with your managers about ethics and compliance,
always make sure that you include information about:
• The impact of the middle manager on
their employees
• That employees see their direct manager as a
role model for the culture and values
• The importance of the middle manager on
employee engagement
• Why compliance is good for business and how it
protects the bottom line and their own budget
3. Focus on Complaint
Management & Retaliation
Prevention
No matter how hard you try, you will
never be able to stop all misconduct
from occurring. Employees and
managers will make insensitive
comments, have lapses in judgment,
and your organization will periodically
make a poor hiring decision that
brings in a problem employee.
That’s why you have a process for
making complaints, right?
But many organizations make the
mistake of stopping after they have
implemented the process. They
assume that managers will handle
complaints properly. This is an
assumption that often comes at a
great cost to the organization.
When it comes to raising concerns,
employees by astonishing numbers
go to their manager or a manager one
level up? The Ethics Resource Center
(ERC) has been assessing this trend for
years as part of its National Business
Ethics Survey. In the most recent
survey released in 2012, ERC found
that when employees made a report
this is where they took their issue:
Managers make several common mistakes when it
comes to employee complaints, and these mistakes
can create real liability for your organization.
• They downplay the complaint (“It’s not that bad”
or “Is it really that big a deal?”)
• They say they will deal with it but don’t
16 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
BUILDING A LEGAL DEFENSE
• They tell the complaining employee to deal with
it on his or her own
• They tell the complaining employee that the
conduct does not violate policy (without doing
an investigation)
• They treat the complaining employee negatively
after he or she raises a complaint (classic
retaliation)
• They don’t really listen to the complaining
employee
• They receive the complaint but then forget to tell
HR about it
These mistakes are much more common than you
think. Whether intentional or not, they undermine
your complaint process and your culture. And the
consequences for poor complaint management are
clear. Retaliation claims are the number one charge
type received by the Equal Employment Opportunity
Commission (EEOC) and have been for the last 5
years. Even if many allegations are baseless, the
reality is that handling the situation poorly can
increase the liability.
Address this manager skill gap by providing your
managers with training on how to handle employee
complaints and how to avoid claims of retaliation.
Make sure that each course you deploy includes
instruction for complaint handling and retaliation
prevention. Consider a course that specifcally
addresses the topics of whistleblowing, reporting
and retaliation.
4. Use Realistic, Scenario-Based Training
Training will be much more effective if it involves
engaging and relevant scenarios. For the 10-12 key
ethics and compliance risks (including employment
law risk areas) it’s important to select training
methods and solutions that will actually drive the
right behavior.
Training should present realistic scenarios, where
managers actually see real people struggling with
relatable challenges. The information they review and
tips they obtain from the training should be easily
translatable into their own workplace.
This is where check-the-box training does very
little for your managers. Simply watching a video
or listening to someone talk about an issue does
not educate effectively, change behavior, or give
managers the tools they need to make a difference.
So when you are looking for tools that will really help
educate your middle managers consider the following
critical questions:
• Is the training really scenario based or are merely
a series of questions that include characters
with names?
• Does the training cover current trends and
contemporary challenges?
• Are the scenarios realistic and relatable or are
learners looking at cartoons and evaluating
simplistic or outlandish fact patterns?
• Is the learning passive (like watching a video) or
active (the learner must answer questions, get
involved, and think about the right thing to do)?
• Are the interactive questions assessing learning
in the right areas (like how to spot misconduct,
how to prevent misconduct, and how to talk to
employees about expectations) or are they being
quizzed on irrelevant information such as facts or
dates, like the legal defnition of Title VII and the
year it was passed?
Careful attention to training middle managers about
their role in preserving an ethical and compliant
workplace will help ensure that all of your employees
not only hear the message, but see it in action and
believe in its importance.
To learn about Online Training courses offered by
NAVEX Global, vist our course library.
17 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON VI
Ensure that Training Drives Desired Behaviors
and Great Results.
For years organizations have used training to
successfully build legal defenses and better position
their organizations against litigation and enforcement
actions. Increasingly though, training is intended to
serve a dual purpose which includes driving positive
cultural and behavioral changes in addition to
establishing legal defenses.
It’s no wonder that this dual focus has become more
important to organizations.
Training is the single largest compliance budget
category, and is one of the most visible program
investments. (See CEB: Increasing the Impact of Your
Training Investment). In a 2013 Corporate Executive
Board Survey on compliance training effectiveness,
respondents cited “improving the design, delivery,
and impact of compliance and ethics training” as their
highest priority (76% of respondents).
Accomplishing both facets of this dual focus require
employers to be more vigilant with the training
courses they select, how they are deployed and post-
training reinforcement. So, how do you know if your
training is driving behavioral and cultural change?
And, what can you do to make your training program
more effective?
Start With A Solid Foundation: Know Your
Organization’s True Culture
Culture, very simply put, is the way that things get
done in your organization. Culture is impervious to
policies and procedures—it does not matter how
strong these words are on paper if senior leaders
don’t set a consistent tone from the top, and middle
managers don’t refect that tone day-in and day-out.
If values and policies are not perceived as important
to leadership, and enforced accordingly, you will have
limited ability to shape the culture and it will take on a
life of its own.
Many organizations have a spoken culture that differs
widely from their “real” culture. The disparity is often
the result of a disconnect between the formal, verbal
communications about values by senior leaders and
the realities seen by employees on a day-to-day basis.
If middle managers are not completely committed to
living and enforcing the values and policies it erodes
the credibility of your efforts to establish a culture of
ethics and compliance. Corporate culture is indeed
the makeup of your organization as a whole, but
your managers have
the responsibility of
ensuring that each
and every employee’s
conduct aligns with the
tone from the top and
the words printed in
your core values
and policies.
Culture surveys are
great start; fnd out
what your employees
think about critical
compliance issues and
training effectiveness.
If you can, conduct
employee focus groups
and live feedback
MONITORING CORPORATE CULTURE
If you want to measure
effectiveness of training
(and see if it really is
changing employee
perceptions and
behaviors) you need to
be open to discovering
your organization’s “real”
culture and establishing
a baseline that you can
measure your progress
against.
18 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
MONITORING CORPORATE CULTURE
sessions; these sessions are
likely to result in more honest
responses, especially when
conducted by someone
outside your organization.
Establish Metrics and
Monitor Your Culture
You will also need to
determine the metrics you will
use to measure success of your
training efforts. The criteria
you use will of course depend
on the types of data your organization collects.
Organizations that have embraced technology will
have many more options as they consider
their success metrics.
Some of the metrics you may consider using to assess
effectiveness include:
• Acceptance of training (training
completion numbers)
• Number and frequency of training
repetition events
• Analysis of hotline and case management data
» Change in observed misconduct rates
» Change in reporting rates
» Change in substantiated claim rates
Changes in attitudes and culture metrics (via culture
surveys and/or employee focus groups)
Post-training surveys/quizzes designed to check
knowledge and assess effectiveness
Once you have selected your metrics, begin to
monitor on a regular basis. Watch for changes and
trends over time. Set goals and develop action plans
against your results so that over time you are able to
adapt and modify training events, methodology and
content to develop a stronger and more
effective program.
Make Training Mandatory and Track
Completion
You cannot expect to drive behavior and culture
change if employees aren’t expected to participate in
training or if your culture does not see it as a critical
part of business success. Ensure that senior leaders
support your training initiatives. Communicate that
support to every employee in your organization.
Middle managers must also see training as an
important part of protecting the business and driving
performance. If they don’t, your culture will not gain
measurable lift from a great training investment.
Make sure middle managers understand the value of
training—help them understand that companies that
build cultures of integrity and compliance outperform
those that do not. Need proof? Check out
this resource:
CEB’s Turning Ethics into Outcomes (2011)
Some additional tips to consider:
• Make training mandatory– training programs that
offer optional courses will not see the desired
participation or behavioral change.
• Ensure that everyone (at all levels of the
organization) actually participates and
completes the training.
• Provide managers with specialized training that
focuses on their unique responsibilities.
• Get feedback from managers and business
leaders about whether they think the training
is effective.
Make the Message Continuous
To be effective, training cannot be a one-time
event. Knowledge retention declines over time, and
memories of annual compliance training fade rather
quickly. Both adult learning theory and marketing
research confrm the effectiveness of repetition—
the more we are exposed to a message the higher
the rate of adoption. Here are a few examples of
19 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
MONITORING CORPORATE CULTURE
repetition you may be familiar with:
Some simple ways to keep the message
continuous include:
• Planning post-training refresher events and
follow-up sessions.
• Utilizing burst learning to reinforce key
messages in a format that different from other
training experiences.
• Providing managers with written and video-
based video resources they can utilize in regular
meetings.
• Utilizing social media tools to communicate with
and reach employees (and other stakeholders)
with ethics and compliance messages.
More and more organizations are leveraging Burst
learning to address the need to keep the
message fresh.
Burst Learning is designed to address single topic
areas, using engaging video scenarios and interactive
exercises, all in 5-8 minutes of time. These mobile-
ready learning modules can be accessed anywhere,
anytime and can be deployed through content
delivery networks or your organization’s LMS.
Listen To Your Employees
If you want to know how effective your training is
at driving cultural change, ask your employees.
Find out whether the training actually helped them
make better decisions, whether the information
was relevant to their job, or if they have used what
they learned. If it’s not particularly helpful, it will not
change behavior or attitudes and has no power to
change culture.
Carefully crafted surveys and employee focus groups
can be incredibly helpful. Some items you may want
to ask your employees include:
• Was the training relevant to your job?
• Did you fnd the training engaging
and enjoyable?
• Were the lessons clear and understandable?
• Has the training helped you make
better decisions?
20 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
MONITORING CORPORATE CULTURE
• Has the training improved your opinion about
our commitment to ethics and compliance?
• Would you make a report if you witnessed
misconduct? What types of misconduct?
• Do you fear retaliation if you make a report?
• Are you able to apply what you learned in
training on the job?
Get Employees Involved in Teaching
Others
One of the most powerful ways to improve training
effectiveness is to get employees involved in
teaching others. When employees are encouraged
to apply the lessons they have learned by teaching
others they focus and apply learning in ways that
improve retention.
In the CEB survey referenced earlier, employees who
received compliance and ethics training that had a
strong application value, saw the lowest observed
rate of misconduct, had the highest reporting rate,
and had the greatest retention of key lessons—by
astonishingly high margins.
If it works in your culture, empower employees and
managers to take the lessons learned in training and
apply them in the workplace. Compliance advocates
or champions can help teach other employees and
feld questions. Employees can help develop policies,
and they can help develop training materials that will
be relevant, powerful, and authentic to your culture.
doc_363255126.pdf
FOCUSED COMPLIANCE TRAINING
Compliance training professionals often wrestle with how to
cover a multitude of risks with fnite budgets and limited seat
time. But, all risks are not created equal and focusing on lesser priorities diverts attention and
resources away from the biggest risks.
Data has revealed one category of risk is reported more often than all others combined. Charges
and fnes related to this category remain at all-time highs, calling into question the current
approach to training on these issues. Left on the back burner, these risks could undermine a
compliance program and expose an organization to legal or reputational damage.
The following six lessons will help you assess the focus of your compliance training program and
formulate a strategy to tackle your biggest training risks.
Are your biggest risks sitting on the back burner?
INTRODUCTION
2 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON I
Planning for 2014 is likely pressing on your mind,
or it will be in a short time. You will be faced with
answering a key perennial question--how should your
organization allocate it’s compliance training budget
and what topics should you focus on?
Opinions about which risks are most pressing are
often shaped by surveys on litigation, enforcement
trends, major scandals, new legislation,
and existing compliance requirements.
Add in stories told by vendors about
what you must be doing, and the picture
can get fuzzy.
The problem is that in the heat of a
media frenzy or uptick in enforcement,
it’s easy to lose sight of some of the most
prevalent and pressing compliance risks
facing organizations today—HR and
workplace respect issues.
These are risks that are common across
all your employees and when left
unaddressed can destroy your culture
and brand reputation. Don’t believe
it? Take a page out of the Paula Dean
cookbook – her very public racist
comments and slurs have caused some
real damage to her own brand and
the Food Network’s image. The Food
Network just publicly announced that it will not
renew Paula Deen’s contract when it expires at the
end of the month. And one of her largest sponsors,
Smithfeld Foods, is also calling it quits with
Paula Dean.
Most Pressing Compliance Risks Are HR Related
NAVEX Global’s proprietary database of hotline
reports is the largest in the world, providing the best
visibility into reported misconduct in thousands of
organizations across all industries and companies
of all sizes. For the last fve years running, by
a staggering margin, the most often reported
misconduct falls in the category of Human Resources,
Diversity and Workplace Respect—this category
includes fve key areas of risk:
1. Discrimination
2. Harassment
3. Retaliation
4. Diversity
5. Wage and Hour
So how do the numbers stack up? HR
tops the list and HR issues are raised
more often than all other categories
combined.
[1]
Here is how the numbers break down:
Human Resources, Diversity and
Workplace Respect
Business Integrity, Bribery,
Corruption, Fraud
Environment, Health and Safety
Misuse, and Misappropriation
of Corporate Assets
Accounting, Auditing, &
Financial
Making Sense of the Numbers
When it comes to HR issues, there’s a lot that
employees have to say. And the reality is that
employees are more likely to experience harassment,
LESSON I
FOCUS ON THE BIGGEST RISKS
The frequency with which
reporters cited HR issues was:
the rate of business
integrity issues like bribery,
fraud, or corruption,
the rate of
environmental, health, or
safety issues,
the rate of misuse
or misappropriation of
assets, and
the rate of
accounting, auditing or
fnancial reporting issues.
10X
10X
20X
4X
69%
17%
7%
3%
6%
3 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON I
FOCUS ON THE BIGGEST RISKS
discrimination, or a wage and hour violation, than they
are to be involved in a bribery and corruption scandal.
It makes sense that the frequency of reported
concerns would be higher for HR issues. The problem
is that many organizations discount the importance of
a holistic and comprehensive approach to compliance
training by leaving HR training out of the
compliance mix.
HR issues are not always small, insignifcant matters
that can be addressed quickly, or can be swept under
the rug. When insuffcient attention is paid to these
issues, when training is not effective,
policies and practices are allowed to
continue despite questionable legal
positioning, the compliance hit to an
organization can be enormous.
A couple major indicators suggest that
a focus on HR Issues is vital to a strong
corporate compliance program.
• EEOC Charge claims remain at
record highs, with retaliation
claims topping the charts.
[2]
» Retaliation appeared in 38.1%
of all charges, followed by
allegations of race (33.7%) and
sex (30.5%) discrimination.
» Workplace harassment flings
represented 24% of all charges
fled with the EEOC.
• The EEOC’s continued focus on systemic
discrimination puts increased pressure on
organizations to make sure that their policies
and procedures are legal.
• In 2012, 52% of companies cited being hit
with Labor and Employment class actions,
compared to 26% consumer, 14% securities,
10% mass tort, and 9% antitrust/competition.
[3]
• Wage and Hour class actions are the most
common employment law class action and
average settlements are around $4.8 million.
[4]
An Integrated Approach to Compliance Training
As the compliance function continues to evolve,
organizations will be pressed to incorporate a broader
array of organizational risks under the
compliance umbrella. Closer alignment
with HR or possibly greater oversight
over the most substantial HR risks is likely
to be part of the compliance department
of the future.
And like other pressing compliance
risks, on-line training can help mitigate
risks associated with harassment,
discrimination, and wage and hour.
Incorporating full-length training (that
complies with state laws on training and
that is rigorous enough to help develop
legal defenses at the state and federal
level) should be augmented with short
bursts of learning that periodically
remind employees about your organization’s
expectations. Developing a curriculum map (like the
example in the graphic on this page) will help you
spread the training throughout the year, and ensure
proper coverage of HR issues.
Nearly 25% of
companies in the
US and UK reported
discrimination as the
litigation area that
saw the greatest
increase in the past
12 months; they
expect claims to grow.
[1]
Benchmark Report - NAVEX Global 2013 Hotline Benchmark Report Download
[2]
Link - 2012 EEOC Discrimination Statistics Download
[3]
Survey - Fublright and Jaworski 2012 Litigation Trends Survey Download
[4]
Report - NERA Trends in Wage and Hour Settlements: 2012 Update (March 12, 2013)
RESOURCES
LESSON I
DOWNLOAD
INFOGRAPHIC HERE
References
1. 2013 NAVEX Global Hotline Benchmark Report
Data reflects the percentage of incidents reported across all industries in each of the five benchmark risk categories defined by NAVEX
Global. The sum of percentages is slightly exceeds 100% as reports may be filed in more than one category simultaneously.
2. 2012 EEOC Charge Statistics
3. 2012 EEOC Monetary Benefits All Statutes
4. 2012 EEOC Harassment Statistics
5. 2012 EEOC Retaliation Statistics
6. Fulbright and Jaworksi 2012 Litigation Trends Survey
7. 2013 NAVEX Global Harassment in the Workplace Survey
About NAVEX Global
NAVEX Global is the trusted ethics and compliance expert for more than 8,000 clients in over 200 countries – the
largest ethics and compliance community in the world. We provide a comprehensive suite of solutions for
managing governance, risk and compliance (GRC), providing critical cross-program insights through unmatched
expertise and actionable data
NAVEX Global Resources
Online Training Demo
Online Training Overview
Online Training Categories
Burst Learning
Online Training Catalog
Contact NAVEX Global
EMPLOYEES***
MANAGERS***
SENIOR
LEADERS***
COURSES YEAR 1 YEAR 2 YEAR 3 YEAR 4
FULL LENGTH
• Workplace
Harassment*30/60
• Wage & Hour30
BURST
• Reporting & Retaliation5
• Social Media5
Numbers in superscript adjacent to course titles represent the options for course length
*Best practice: employees typically receive between 30 and 60 minutes of harassment training
**Best practice: California and Maine have established a 2-hour training requirement for managers; outside of these locations, many employers
provide 2 hours but some provide between 45 and 2 hours.
***Organizations should also ensure that these critical employment topics are covered in annual code of conduct training.
ADDRESS YOUR HR RISKS WITH TRAINING
PERCEPTION OF RISK
News & Media Outlets
Rare events and headlines
about public figures
Public Opinion
Trending topics
Volume Vendors
Large training libraries
designed to drive sales
RETALI ATI ON DI SCRI MI NATI ON
In 2012 the EEOC reported 99,412 charges
and $365.1 Million in monetary benefits paid.
DI SCRI MI NATI ON RETALI ATI ON
WAGE & HOUR
SOCI AL MEDI A BULLYI NG
2012 EEOC STATISTICS
99,412 Discrimination Charges 2
$365.1 Million in Monetary Benefits 3
Wage and Hour Class Actions create
the most MONETARY EXPOSURE of
any employment claim. 5
Retaliation was alleged in
of all charges in 2012, making it the most
reported form of discrimination. 5
In 2012, 16% of employers saw an
increase in bullying complaints. 7
Social networks provide new mediums to
commit ‘old school’ forms of misconduct
like harassment and discrimination.
$
HR ISSUES DEFINED
REALITY:
One risk category accounts for more incidents than all others combined. 1
7% 3% 6%
69%
17%
WITH SO MANY RISKS...
HOW DO YOU
COMPLIANCE TRAINING?
Biased influences create a false perception of the greatest risks.
Environment,
Health, Safety
Accounting,
Finance, Audit
Misuse,
Misappropriation
of Assets
HR, Diversity,
Workplace Respect
Business Integrity,
Bribery, Corruption
HR, DIVERSITY, AND
WORKPLACE RESPECT
Data reflects the percentage of incidents reported across all industries in each of the five benchmark risk categories defined by NAVEX Global. The sum of percentages slightly exceeds
100% as reports may be filed in more than one category simultaneously. 1
HARASSMENT
2011 EEOC AND FEPA STATISTICS 4
30,512 Harassment Charges
$100 Million in Monetary Benefits
38.1%
A simple multi-year plan, like the one below, will ensure that everyone in your organization receives periodic
training. Combining full-length courses with burst learning (5-8 minute training segments) will help build
powerful legal defenses. Ensure that these topics are also addressed in annual Code of Conduct training.
FULL LENGTH
• Discrimination-Free
Workplace30
BURST
• Harassment5
• Wage & Hour5
FULL LENGTH
• Workplace
Harassment*30/60
BURST
• Bullying5
• Wage & Hour5
FULL LENGTH
• Discrimination-Free
Workplace30
• Wage & Hour30
BURST
• Harassment5
FULL LENGTH
• Workplace
Harassment**45/120
• Wage & Hour60/90
BURST
• Reporting & Retaliation5
• Social Media5
FULL LENGTH
• Discrimination-Free
Workplace45
OR
• Reporting & Retaliation45
BURST
• Harassment5
• Wage & Hour5
FULL LENGTH
• Workplace
Harassment**45/120
BURST
• Bullying5
• Wage & Hour5
FULL LENGTH
• Discrimination-Free
Workplace45
OR
• Reporting & Retaliation45
• Wage & Hour60/90
BURST
• Harassment5
FULL LENGTH
• Workplace
Harassment**45/120
• Wage & Hour60/90
BURST
• Reporting & Retaliation5
• Social Media5
FULL LENGTH
BURST
• Discrimination5
• Harassment5
FULL LENGTH
• Workplace
Harassment**45/120
BURST
• Bullying5
• Wage & Hour5
FULL LENGTH
• Discrimination-Free
Workplace45
OR
• Reporting & Retaliation45
BURST
• Harassment5
© 2013 NAVEX GLOBAL. ALL RIGHTS RESERVED. +1-866-297-0224 | [email protected] | www.navexglobal.com
RECORD HIGH
RECORD HIGH
RECORD HIGH
4 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON II
Compliance training is one of your organization’s
largest compliance investments in terms of both time
and money. Training programs can be expensive to
build or purchase, and the reality is that seat time
is precious and expensive. With tight budgets and
limited training time allocated to compliance, it’s
important to make sure you’re making the most of
your investment.
Compliance training impacts every one of your
employees and high-quality training can help build a
more ethical and compliant culture and drive business
success—so it’s vital to make the right investment.
HR and compliance professionals are scrutinizing
training curriculums and trying to make them more
effective and effcient. Large libraries of outdated
courseware that aren’t engaging or updated are no
longer acceptable; they don’t change behavior and
often go unused.
So how do you make the most of your investment?
What should you consider when evaluating your
options? The following tips will help you do just that.
Step 1:
Assess the Current State of
your Training Program
It’s not uncommon for an organization’s leaders to
have a fuzzy picture about the current state of training
in their workplace. Divided ownership and segmented
budgets often help drive this phenomenon. But
getting a clear picture of what you are doing, and
what is working, is critical if you want to make your
program better.
The frst step in this process is to gather critical
information such as:
• Your organization’s greatest risks (legal, cultural
and reputational); if you are not sure, conduct a
risk assessment to fnd out
• Map out current training efforts, including
audience, method and frequency
• Ask employees whether the training is engaging
and effective
• Assess the age of your current training courses
• Evaluate the cost of delivering training in its
current format; include seat time and travel time/
expenses, as well as internal costs to develop
and maintain
• What other training pressures are placed
on learners
Whether you are
focusing on HR risks, or
you have responsibility
for broader compliance
training, gathering this
information will help
you properly assess the
current state.
4 STEPS TO A MORE EFFECTIVE
TRAINING PROGRAM
5 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON II
Step 2:
Explore New Trends and
Approaches
There is a furry of activity in the training world right
now that has resulted in a variety of trending training
approaches—everything
from gamifcation to
mobile enabled courses.
Some of these tools and
strategies can enhance
your training program.
But just because
something is hot now,
does not guarantee that
it is effective or a good
investment. You still need
to be critical about the
trends you incorporate
and whether they will work
in your culture and in the
context of your program.
Even if a trending method or tool works in your
environment, use it wisely. Too much of a good thing
can backfre. Just because it works for some purposes
does not mean that it will be an engaging or useful
learning experience for other purposes. One example
of this is mobile learning.
Some of the hottest trends right now include the
following:
• Shorter courses that really get to the point
and cover “need to know” information for your
audience.
• A laser focus on key risk areas, rather than
massive libraries of courses that
are outdated
• An expectation of true engagement
and entertainment
• Continuous learning, including short bursts, to
ensure the message stays top of mind.
• Mobile enabled training
• Social/collaborative learning such as blogs,
video-casting,
Step 3:
Focus on the Topics that
Matter Most
You could train on everything, every topic and every
risk area… but that’s not effective or practical. No
organization has the bandwidth to consume that
much training. Rather, the key is to focus on the topics
that matter most and make sure that what you are
delivering and how it is being delivered is as good
as it can be. Maintaining a strong focus can help you
really add value and create impact for
your organization.
So when you are considering where to make an
investment, focus on the topics that:
• Drive the greatest risk
• Can change behavior and impact the culture
• Are critical to your organization’s culture
and values
• Are vital for protecting your
organization’s reputation
• Help establish key legal defenses
What topics do NAVEX Global
clients seek out and focus on;
it aligns with general industry
practice. The top 12 topic
areas include the following:
1. Ethics and code of
conduct
2. Harassment (all forms, not
just sexual harassment)
3. Bribery & corruption
4. Data privacy
5. Technology use and
security
6. Reporting and retaliation
7. Wage and hour
8. Discrimination
9. Antitrust & competition law
4 STEPS TO A MORE EFFECTIVE TRAINING PROGRAM
6 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON II
10. Conficts of interest
11. Insider trading
12. Protecting Confdential information
These are the topic areas
that impact the largest
number of employees
and that should refect
your organization’s
commitment to high-
quality training. For some
industries, especially
highly-regulated ones,
this list will include several
additional topics, as the
volume of expected or
mandated topics is
more extensive.
Step 4 :
Chart Your Course –
Curriculum Mapping 101
Once you know what you want to cover, you need to
fgure out how and when you will do it. Commonly
called curriculum mapping, this process will help
you establish the cadence and methodology for
deployingcontinuous compliance learning. A well
designed map will help ensure proper coverage of
your organization’s key risk areas, help avoid learner
fatigue, and give you a big picture assessment of
methodology and deployment strategies.
If you want to learn more about this process and how
to build a curriculum map, click here. In this webinar,
my colleague, Mary Bennett, and I walk you through
the basics and cover considerations and training
methods.
Some of the very high-level questions you must
ask about your organization to make this process
successful include:
• What are my key training goals?
• What key risks am I trying to manage?
• What support do I have for my initiative; is
training mandatory or optional?
• What format is most effective for my employees?
• How much learning can employees
realistically consume?
• How much seat time is available for training?
• Are there time periods where training will
be best received based on demands on the
business (for example, busy periods)?
• How often should I train to build valuable
legal defenses?
• How can I maximize my budget spend without
sacrifcing key goals?
• Do I need to create special training for certain
audiences or people in key roles?
The curriculum map document you create can
ultimately take many different forms; it can be a
simple overview or a detailed spreadsheet that
provides extensive detail about your training
program. The right form, depth, and content will
depend on the complexity of your program, the
nature of your organization and its risks, and
your goals.
4 STEPS TO A MORE EFFECTIVE TRAINING PROGRAM
7 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON III
Strategies for Managing New Forms of
Old-School Misconduct
Social media has altered everything about the way we
work, interact, and stay connected. Just think back
10, even 5 years ago. Things were different—really
different.
Today, more than 75% of all employees have at least
one social media account, according to a survey
recently released by the Ethics Resource Center called
National Business Ethics Survey of Social Networkers:
New Risks and Opportunities at Work.
And that means it’s not just the youngest generation
that is using social media. In fact, 72%
of all social networkers are over the
age of 30. Below are employee social
network usage rates by age group:
of employees age 30-44
of employees age 18-29
of employees 45-63
In light of these statistics, it’s not
surprising that employers are wrestling
with employee issues that seem to
be a product of this information age
revolution. It’s also not surprising that
when it comes to conduct employees
continue to push the boundaries of
what is appropriate and what is not.
What is the Scope of the Problem?
Social networking is here to stay. And the reality is
that for many employers, managing social media risk
is a bigger problem than anticipated. According to
the ERC survey:
72
% of social networkers spend
time each workday on social
networking sites.
28
% of social networkers spend
more than 1 hour per day on
networks.
Most of the time employees spend on
social networks is for personal reasons.
What Does Social Media
Misconduct Look Like Today?
We don’t know how often and what
percent of employees are engaging
in online misconduct, but we do
know that employees are spotting
many different forms of online
misconduct. Below is an excerpt from
the appendix of the NBES Survey
of Social Networkers detailing the
observation rates of various types of
social networking misconduct:
NEW FORMS OF OLD SCHOOL MISCONDUCT
81%
85%
67%
8 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON III
If you can imagine it, your employees have probably
done it, said it, or messed with it online. And a quick
search of the internet and popular networking sites
will reveal a whole host of misconduct that you may
not have even contemplated. Examples include:
• The manager who harassed an employee after
learning that the employee had “liked” a social
networking group called Two Dads.
• The manager who accidently sent out a picture
of himself naked (waist down) to about 20
employees. He was quickly terminated.
• The manager who accessed confdential
customer data, and then sexted a customer. He
too was fred of course.
• The barista who was fred after blogging about
diffcult customers.
• The group of Australian miners who were fred
after they posted a video of them doing the
Harlem Shake.
• The many and varied employees who mistreat
and abuse products like food or packages, and
then post the videos online.
• Or the politician, who just can’t stop sending
raunchy photos and text messages, even though
it’s devastating his public image, reputation
and campaign.
Managing the New Reality
The challenges presented by social media are not
entirely new; rather technology has merely provided
employees and managers with a new vehicle for
engaging in old school misconduct such as sexual
harassment and discrimination. What has changed
dramatically is the speed at which misconduct
impacts others, and the scope of the harm that
can occur.
Employers need to be more proactive and more
vigilant than ever before if they want to mitigate risks
STRATEGIES FOR MANAGING NEW FORMS OF OLD-SCHOOL MISCONDUCT
APPENDIX B: Observation Rate of Social Networking-Related Misconduct: NBES-SN
NBES-SN
OVERALL
NON-WORK
(NSNS) AND
MODERATE
(MSNS)
WORK-DAY
USERS
ACTIVE
WORK-DAY
USERS
(ASNS)
Social Networking Interfering with Work Duties 29% 28% 37%
Sharing TMI (Too Much Information) 28% 27% 36%
Degradations About Company 13% 12% 17%
Degradations About Peers 10% 9% 16%
Posting Improper Political Statements 11% 10% 14%
Cyber-smearing (Defamation of a Person or Entity) 7% 6% 13%
Posting Improper Religious Statements 7% 6% 13%
Cyber-bullying (Hostile Communication Directed at
or about an Individual)
5% 4% 12%
Posting Inappropriate Photos of Coworkers 8% 7% 12%
Breach of Employee Privacy 6% 5% 10%
Sexual Harassment 3% 3% 8%
Improper Pro?ling of Applicants or Customers 3% 3% 8%
Misuse of Company’s Con?dential Information 3% 2% 6%
Breach of Customer Privacy 4% 4% 6%
Note: For de?nitions of ASN, MSN and NSN, see “Key Terms” on page 13.
9 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON III
associated with social media use. Below you will fnd
four suggestions for managing social media risk in
your organization:
• Be Informed: The law and technology are not
always in sync; the law often lags far behind.
Practices that may be okay today may become
big risks tomorrow if you don’t stay on top of
changes in the law. And because social media
is a global activity, it’s often important to be
informed about international laws. A short
sampling of U.S. laws and regulations that
employers should be aware of include:
» Federal Trade Commission
(FTC) rules and regulations
» Copyright, trademark,
and intellectual property
protections
» Health Insurance Portability
and Accountability Act (HIPAA)
» Gramm-Leach-Bliley
» SEC Regulations relating to
insider trading
» Anti-discrimination laws such
as Title VII
» Anti-harassment laws such as
Title VII
» The National Labor Relations Act
» Whistleblower laws
» The Stored Communications Act
» The Computer Fraud Abuse Act
» The Electronic Communications Privacy Act
• Be Realistic: Social media is here to stay.
Employees no longer need your network or your
equipment to access social networking sites
while at work. They simply use their own devices.
When you think about establishing and enforcing
rules, be realistic about what is allowed,
and enforceable.
• Be Prepared: Start with a really solid social
media policy that refects your organization’s
culture, and is properly communicated (via
training) and enforced. An effective policy and
training will actually help curb misconduct—as
confrmed by the ERC survey noted above. For
some tips on how to develop a policy, check
out the NAVEX Global Social Media Toolkit. In
addition, develop a social media crisis response
plan—so when you have to deal with something
big, you can respond properly and quickly.
• Be Trusting: Most people are well intentioned—
they actually want to protect and improve their
organizations. Employers need to let go a bit,
and trust that the social networking community
(which includes their employees) will
impose some guardrails and help keep
people in check, just like coworkers
do in a more traditional workplace. If
you want to seize the opportunities
presented by social media, train
employees about how to use it
properly and productively to help your
organization.
Harassment and discrimination
remain pressing risks – not because
policies and training are ineffective
in addressing these issues, but rather
because many employers fail to adopt
policies and adequately implement or
communicate training.
So if you are thinking, “good we already have a
policy” – you should carefully evaluate how effective it
is. An enormous gap may be undermining
your efforts.
This 30-point gap suggests a big problem. And the
problem is that a policy really isn’t much good if it’s
not communicated to employees in a way that
is memorable.
One thing is certain. Employees will make mistakes
online. In some cases they will simply embarrass
themselves, but some may cause damage to your
reputation. The key is to not sit back and do nothing.
Establishing clear policies and educating employees
are proven methods for increasing sensitivity and
awareness, curbing behavior, and ultimately reducing
the likelihood of misconduct.
STRATEGIES FOR MANAGING NEW FORMS OF OLD-SCHOOL MISCONDUCT
• Only 43% of
employees think
their organizations
have a social
media policy
• While 73% of
employers say they
have a social policy
in place.
10 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON IV
Avoiding Four Fatal Mistakes
Using training to build a legal defense is a topic that
receives signifcant coverage. It’s also a topic that is
often not well understood. Unfortunately, mistakes
happen and they can be costly.
A complex web of federal and state laws and agency
guidance impose EEO, and compliance and ethics
training requirements on employers of all sizes. Some
are mandatory, and some are basically mandatory. But
what’s the difference and does it matter?
• Mandated training: Training is
actually mandated by law.
• Business Essential Training:
When laws and regulations
require employers to
demonstrate that they have
acted in good faith to establish a
legal defense.
Most training obligations in the
employment law arena fall under the
second category. (To see a summary
of the key legal defenses click here).
The reality is, however, that either
way, an organization is Mandatory
Training Lawsexposed if they fail
to train employees or if they take a
check-the-box approach to training.
Because, let’s face it, at some point every employer
will be faced with lawsuit where having a defense
will make all the difference. In Bains v. ARCO Prods.
Co., employees were originally awarded $1 million
in compensatory damages and $5 million in punitive
damages for failing to train on harassment. See
405 F.3d 764 (9
th
Cir., 2005). Similarly, in Swinton v.
Potomac Corporation, an employee was awarded
a punitive damage award of $1 million because the
employer did not provide managers with training. See
270 F.3d 794 (9
th
Cir., 2001).
An Unexpected Twist—You Failed to Train Me!
Typically, employees groan and moan when told they
need to take a compliance course or attend a training
session. But here’s a training twist
that relatively new. An employee (or in
this case a mayor) actually claims that
he engaged in harassment because
he wasn’t trained.
San Diego Mayor Filner is accused of
sexual harassment (eight women say
he sexually harassed them). In August
of 2013 the mayor’s lawyer made the
outlandish claim that it’s the city’s
fault that he harassed these women…
because the city did not provide the
mayor with harassment training. As a
result, the lawyer claims, the city and
not the Mayor should be liable for
damages that fow from his sexually
offensive behavior.
So now, you not only need to provide
training to build a legal defense against a plaintiff, you
may need it to protect yourself from an employee or
manager facing personal liability.
BUILDING A LEGAL DEFENSE
11 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON IV
Defense Fundamentals
While legal standards may vary (and they do!) building
a compliance-based defense boils down to some
common techniques and strategies. Courts and juries
are looking to reward organizations that make a real,
good-faith effort to comply with the laws and get
their employees to do the same. Good faith is not a
one-time push exercise – it’s really a push, interact,
pull, and push again exercise.
Some of the most commonly accepted
techniques include:
1. Have robust, organization-
specifc policies
2. Ensure that policies are
distributed (to everyone in
your organization) on a regular
basis and employees attest
to them
3. Provide robust and periodic
training that is topic specifc
4. Have a reporting mechanism
that really works
5. Consistently and fairly enforce
the rules
6. Be vigilant against retaliation
7. Regularly monitor, audit, and improve
your program
Giving it a good effort, is not enough. These
obligations are ongoing and evolving. Missing one of
these steps can be catastrophic for your organization.
Learn From The Mistakes of Others
Many employers have tried to build a defense
relying on a “good enough is enough” mentality.
Unfortunately, their efforts are not well rewarded
by juries or judges. And mistakes can lead to jury
verdicts in the millions of dollars.
So what are some of the most common mistakes? I
highlight 4 key ones below.
Mistake 1: Assuming That A Policy Alone
is Enough
When it comes to policies, the game has changed.
Employers cannot rely on a policy grabbed from the
internet. The policy needs to be customized to ft
their organization and it must be current. An outdated
policy from 1938 just won’t cut it. And once you have a
solid policy, you have to actually tell people about it.
It seems so simple, but employers do miss this
important step. In Miller v. Kenworth of Dothan (11
th
Cir., 2002), the employer paid out $25,000 for “malice
and reckless indifference” because
of ineffective employment policies
and because they failed to tell their
managers about the policies. In
Griffn v. City of Opa- Locka, et al. (11
th
Cir., 2001), the result was even worse
for the employer. A jury awarded
$ 1.5 million plus $ 500,000 of
additional damages to a former
employee because the city had no
policy and no training.
Mistake 2: Assuming That All
Training Is Created Equal
Training is another area where
missteps can cause huge problems.
Employers sometimes think that it doesn’t matter
what the training is like; they just need to check-the-
box. But don’t make this mistake—don’t assume that
all training is created equal. It’s not. Training that
helps you check-the-box will not curry favor with juries
or judges, or enforcement agencies, or help you build
a legal defense.
One employer learned this lesson the hard way. In
EEOC v. Management Hospitality of Racine, Inc. d/b/a
International House of Pancakes, et al., No. 10-3247
(7
th
Cir. Jan. 9, 2012), the court let stand a jury verdict
of $ 5,000 in compensatory damages, and $ 100,000 in
punitive damages in part because the employer used
canned, generic videotaped harassment training. The
court made clear that poor quality training does not
qualify for a good-faith defense under federal law.
BUILDING A LEGAL DEFENSE
12 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON IV
When vetting training options, ensure that the
content and how it is being delivered is contemporary
and interactive, and legally vetted. And ensure that
managers receive specialized training that teaches
them about their unique responsibilities.
Mistake 3: Assuming that Silence Is Golden
Many organizations still fear employee reports,
assuming that chatter about inappropriate behavior
is a bad thing. The reality couldn’t be further from
the truth. Employers should encourage employees
to speak up, and should have a formal and well-
communicated process for doing
so. It’s much easier and more
effcient to handle an issue when it
is small and manageable. And the
stats tell us, that even if you aren’t
hearing about harassment (or for
that matter other employment
law issues) nearly 30% of your
employees have experienced it.
Set up a complaint process,
and allow employees to come
directly to HR or corporate with
their concerns. Don’t be afraid to
encourage employees to use your
ethics or help line. Today, most
of the calls coming into employer
ethics lines are HR related calls. In
fact, 69% of helpline calls are related to HR, diversity,
and workplace respect issues. And make sure that
Managers have a true open door policy, and they
know how to properly handle an employee complaint.
If your process breaks down and isn’t effective, you’ll
have a hard time establishing a defense under federal
and state law. A Texas jury (Waffe House, Inc. v.
Williams, 314 S.W.3d 1 (Tex. App., 2007)) awarded an
employee $ 400,000 in past compensatory damages,
$ 25,000 in future compensatory damages, and
$ 3,460,000 in punitive damages (eventually lowered
to $ 425K by judge per law) after she was sexually
harassed by her manager. A key fact that led to this
verdict, despite the employee’s repeated reports,
management failed to handle her complaints
properly. And because her complaints weren’t
processed properly, her issues never made it to
corporate headquarters.
Mistake 4: Assuming That You Only Have to
Train 1 Time
Training is a large budget item. It’s not just the cost
of the program, but also the seat time costs that add
up. Assuming that it’s okay to deliver training one
time, however, is a monumental mistake. Employees
and managers need periodic reminders about your
policies, procedures, and how to make complaints.
Periodic training for managers has been
the law in California since AB1825 was
adopted. It has also long been the
position of the EEOC that Employers
should provide employees and
managers with periodic training. See
EEOC Enforcement Guidance: Vicarious
Liability for Unlawful Harassment By
Supervisors, No. 915.002, June 18, 1999).
And in Romano v. U-Haul International,
punitive damages were available
because the employer did not have
“an active mechanism for renewing
employees’ awareness of the policies
through... specifc education programs.”
233 F.3d 655 (1
st
Cir. 2000).
In fact periodic training is becoming the norm rather
than the exception in the broader compliance space.
See 2004 Federal Sentencing Guideline, Section
8B2.1(b)(4)(A). Morgan Stanley was rewarded with a
non-prosecution agreement, in part because of its
robust compliance program which included regular
electronic and other training.
Establishing a smart cadence to your training is vital
to building a successful defense. Today you have
many options, which include full-length courses, short
5-7 minute bursts, and communication and awareness
programs that keep issues top of mind. Plan your
efforts out carefully (example curriculum map) and
make the most of the training time you have.
BUILDING A LEGAL DEFENSE
13 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON V
Why Tone from the Middle Matters
The Importance of Middle Managers to Your
Compliance Program
When it comes to managing risk and building a
culture of ethics and compliance every employee
plays a part. Senior leaders establish the priority,
tone, and vision for an ethical culture. Rank and
fle employees give life to the vision when they
consistently choosing to embody the standards. But,
this vision cannot be realized without the critical role
and infuence of the supervisors who sit between
these two layers.
Middle managers are the
vital link, the connective
tissue between the
tone set by your senior
leaders and your non-
supervisory employees
who implement core values
on a routine basis. If the
link is dysfunctional or
non-existent attitudes and
behaviors will not refect
a culture of ethics and
compliance.
Supervisory employees
are on the ground
implementing strategy,
advancing the goals of
the organization, and
most importantly having day-to-day interactions
with your employees. As a result, direct supervisors
have the greatest infuence on the adoption and
implementation of values communicated by leaders
of the organization. Managers shape employee
perceptions about the importance of respect, ethics,
and a commitment to doing what is right.
Managers May Not Be As Highly Regarded As
You Assume
It is not uncommon for senior leaders and employees
to have very different perspectives about the culture
of ethics in their organization. Senior leaders often
see employees on their best behavior and tend to
have a rosier perspective of corporate culture. Non-
supervisory employees see the world unfltered
through the day-to-day
interactions with their
colleagues and their
manager. When employees
witness their managers
behaving unethically it can
be particularly damaging to
their attitude toward ethics
and compliance and their
resultant level of conduct.
The 2011 National Business
Ethics Survey indicated a
rising trend in the number
of employees who perceive
their supervisors as unethical
(Chart 1).
It is an alarming trend considering employees who
view their manager as unethical tend to view their
organization as unethical and are also less likely
TRAINING MIDDLE MANAGERS
14 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
to demonstrate ethical behavior like sticking up
for others or reporting observed misconduct. On
the other hand, companies with strong ethics and
compliance programs are characterized by less
pressure on employees to
compromise standards, lower
rates of observed misconduct,
a greater employee willingness
to report misconduct and less
retaliation (Chart 2).
In a parallel trend to the rising
rates of unethical conduct by
middle managers, a survey
conducted in the UK (ILM survey
Added Values: The Importance
of Ethical Leadership) found
that they are increasingly having
their personal and organizational
values put to the test. The next
chart shows an astonishingly high
number of managers reported
that they had been asked to do
something unethical or even
illegal (Chart 3).
In order for middle
managers to be allies for
the cause of creating a
culture of respect and
compliance, they must
have the knowledge,
skills, values and attitudes
that leadership wants to
see refected in
all employees.
Equipping Your Middle
Managers
Manager misconduct is
not always the product of
intentional wrongdoing.
In many cases, misconduct is the result of managers
acting without necessary information or knowledge
about what is expected or appropriate.
You must arm your managers with the knowledge
and skills that can really help them support your
organization’s overall ethics and compliance goals.
Consider these steps:
1. Lead From the Top
Ethical lapses and legal missteps
have a disastrous impact
on culture, and employee
engagement. When managers
respond improperly to allegations
of misconduct, allow misconduct
to continue, or they themselves
engage in the misconduct the
consequences for your culture can
be severe.
When engagement levels
decrease, employee productivity,
retention, and your bottom-line
often follow suit.
Don’t assume that managers
know what is expected of them.
The reality is they may not
fully understand their
responsibilities. This is
particularly true if they
have been trained using
outdated programs or
check-the-box eLearning
solutions.
Just like other major
initiatives, the message
of ethical behavior must
come from and be fully
supported by senior
leaders. Leadership
must send the message
about what behavior
is unacceptable, how
managers are expected to respond, the prohibition
on retaliation, and that everyone will be held
accountable. Communicating in writing or even
speaking to employees is simply not enough. Senior
TRAINING MIDDLE MANAGERS
15 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
BUILDING A LEGAL DEFENSE
leaders must not only talk about expectations, they
must take appropriate actions to enforce them.
Share the message in multiple formats, throughout
the year. Some practical examples of the things
that have been successful for many
organizations include:
• Add a senior leader or CEO
introduction to all eLearning
programs.
• Ensure that senior leaders attend
manager meetings and talk
about expectations.
• Provide managers with written
communications from
senior leaders.
• Ensure that senior leaders attend
or take all required training
sessions programs.
2. Provide Middle Managers
with Context
Context is always important when
aligning managers and employees
around organizational values and
expectations. We all want to know
WHY something matters, and what
role we as individuals play in the
big picture.
When it comes to compliance it can
be easy to gloss over or forget to
communicate individual roles in the
big picture. When context is not
provided, employees and managers
may be less likely to get on board. So
no matter how you are communicating
with your managers about ethics and compliance,
always make sure that you include information about:
• The impact of the middle manager on
their employees
• That employees see their direct manager as a
role model for the culture and values
• The importance of the middle manager on
employee engagement
• Why compliance is good for business and how it
protects the bottom line and their own budget
3. Focus on Complaint
Management & Retaliation
Prevention
No matter how hard you try, you will
never be able to stop all misconduct
from occurring. Employees and
managers will make insensitive
comments, have lapses in judgment,
and your organization will periodically
make a poor hiring decision that
brings in a problem employee.
That’s why you have a process for
making complaints, right?
But many organizations make the
mistake of stopping after they have
implemented the process. They
assume that managers will handle
complaints properly. This is an
assumption that often comes at a
great cost to the organization.
When it comes to raising concerns,
employees by astonishing numbers
go to their manager or a manager one
level up? The Ethics Resource Center
(ERC) has been assessing this trend for
years as part of its National Business
Ethics Survey. In the most recent
survey released in 2012, ERC found
that when employees made a report
this is where they took their issue:
Managers make several common mistakes when it
comes to employee complaints, and these mistakes
can create real liability for your organization.
• They downplay the complaint (“It’s not that bad”
or “Is it really that big a deal?”)
• They say they will deal with it but don’t
16 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
BUILDING A LEGAL DEFENSE
• They tell the complaining employee to deal with
it on his or her own
• They tell the complaining employee that the
conduct does not violate policy (without doing
an investigation)
• They treat the complaining employee negatively
after he or she raises a complaint (classic
retaliation)
• They don’t really listen to the complaining
employee
• They receive the complaint but then forget to tell
HR about it
These mistakes are much more common than you
think. Whether intentional or not, they undermine
your complaint process and your culture. And the
consequences for poor complaint management are
clear. Retaliation claims are the number one charge
type received by the Equal Employment Opportunity
Commission (EEOC) and have been for the last 5
years. Even if many allegations are baseless, the
reality is that handling the situation poorly can
increase the liability.
Address this manager skill gap by providing your
managers with training on how to handle employee
complaints and how to avoid claims of retaliation.
Make sure that each course you deploy includes
instruction for complaint handling and retaliation
prevention. Consider a course that specifcally
addresses the topics of whistleblowing, reporting
and retaliation.
4. Use Realistic, Scenario-Based Training
Training will be much more effective if it involves
engaging and relevant scenarios. For the 10-12 key
ethics and compliance risks (including employment
law risk areas) it’s important to select training
methods and solutions that will actually drive the
right behavior.
Training should present realistic scenarios, where
managers actually see real people struggling with
relatable challenges. The information they review and
tips they obtain from the training should be easily
translatable into their own workplace.
This is where check-the-box training does very
little for your managers. Simply watching a video
or listening to someone talk about an issue does
not educate effectively, change behavior, or give
managers the tools they need to make a difference.
So when you are looking for tools that will really help
educate your middle managers consider the following
critical questions:
• Is the training really scenario based or are merely
a series of questions that include characters
with names?
• Does the training cover current trends and
contemporary challenges?
• Are the scenarios realistic and relatable or are
learners looking at cartoons and evaluating
simplistic or outlandish fact patterns?
• Is the learning passive (like watching a video) or
active (the learner must answer questions, get
involved, and think about the right thing to do)?
• Are the interactive questions assessing learning
in the right areas (like how to spot misconduct,
how to prevent misconduct, and how to talk to
employees about expectations) or are they being
quizzed on irrelevant information such as facts or
dates, like the legal defnition of Title VII and the
year it was passed?
Careful attention to training middle managers about
their role in preserving an ethical and compliant
workplace will help ensure that all of your employees
not only hear the message, but see it in action and
believe in its importance.
To learn about Online Training courses offered by
NAVEX Global, vist our course library.
17 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECEMBER 2013
LESSON VI
Ensure that Training Drives Desired Behaviors
and Great Results.
For years organizations have used training to
successfully build legal defenses and better position
their organizations against litigation and enforcement
actions. Increasingly though, training is intended to
serve a dual purpose which includes driving positive
cultural and behavioral changes in addition to
establishing legal defenses.
It’s no wonder that this dual focus has become more
important to organizations.
Training is the single largest compliance budget
category, and is one of the most visible program
investments. (See CEB: Increasing the Impact of Your
Training Investment). In a 2013 Corporate Executive
Board Survey on compliance training effectiveness,
respondents cited “improving the design, delivery,
and impact of compliance and ethics training” as their
highest priority (76% of respondents).
Accomplishing both facets of this dual focus require
employers to be more vigilant with the training
courses they select, how they are deployed and post-
training reinforcement. So, how do you know if your
training is driving behavioral and cultural change?
And, what can you do to make your training program
more effective?
Start With A Solid Foundation: Know Your
Organization’s True Culture
Culture, very simply put, is the way that things get
done in your organization. Culture is impervious to
policies and procedures—it does not matter how
strong these words are on paper if senior leaders
don’t set a consistent tone from the top, and middle
managers don’t refect that tone day-in and day-out.
If values and policies are not perceived as important
to leadership, and enforced accordingly, you will have
limited ability to shape the culture and it will take on a
life of its own.
Many organizations have a spoken culture that differs
widely from their “real” culture. The disparity is often
the result of a disconnect between the formal, verbal
communications about values by senior leaders and
the realities seen by employees on a day-to-day basis.
If middle managers are not completely committed to
living and enforcing the values and policies it erodes
the credibility of your efforts to establish a culture of
ethics and compliance. Corporate culture is indeed
the makeup of your organization as a whole, but
your managers have
the responsibility of
ensuring that each
and every employee’s
conduct aligns with the
tone from the top and
the words printed in
your core values
and policies.
Culture surveys are
great start; fnd out
what your employees
think about critical
compliance issues and
training effectiveness.
If you can, conduct
employee focus groups
and live feedback
MONITORING CORPORATE CULTURE
If you want to measure
effectiveness of training
(and see if it really is
changing employee
perceptions and
behaviors) you need to
be open to discovering
your organization’s “real”
culture and establishing
a baseline that you can
measure your progress
against.
18 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
MONITORING CORPORATE CULTURE
sessions; these sessions are
likely to result in more honest
responses, especially when
conducted by someone
outside your organization.
Establish Metrics and
Monitor Your Culture
You will also need to
determine the metrics you will
use to measure success of your
training efforts. The criteria
you use will of course depend
on the types of data your organization collects.
Organizations that have embraced technology will
have many more options as they consider
their success metrics.
Some of the metrics you may consider using to assess
effectiveness include:
• Acceptance of training (training
completion numbers)
• Number and frequency of training
repetition events
• Analysis of hotline and case management data
» Change in observed misconduct rates
» Change in reporting rates
» Change in substantiated claim rates
Changes in attitudes and culture metrics (via culture
surveys and/or employee focus groups)
Post-training surveys/quizzes designed to check
knowledge and assess effectiveness
Once you have selected your metrics, begin to
monitor on a regular basis. Watch for changes and
trends over time. Set goals and develop action plans
against your results so that over time you are able to
adapt and modify training events, methodology and
content to develop a stronger and more
effective program.
Make Training Mandatory and Track
Completion
You cannot expect to drive behavior and culture
change if employees aren’t expected to participate in
training or if your culture does not see it as a critical
part of business success. Ensure that senior leaders
support your training initiatives. Communicate that
support to every employee in your organization.
Middle managers must also see training as an
important part of protecting the business and driving
performance. If they don’t, your culture will not gain
measurable lift from a great training investment.
Make sure middle managers understand the value of
training—help them understand that companies that
build cultures of integrity and compliance outperform
those that do not. Need proof? Check out
this resource:
CEB’s Turning Ethics into Outcomes (2011)
Some additional tips to consider:
• Make training mandatory– training programs that
offer optional courses will not see the desired
participation or behavioral change.
• Ensure that everyone (at all levels of the
organization) actually participates and
completes the training.
• Provide managers with specialized training that
focuses on their unique responsibilities.
• Get feedback from managers and business
leaders about whether they think the training
is effective.
Make the Message Continuous
To be effective, training cannot be a one-time
event. Knowledge retention declines over time, and
memories of annual compliance training fade rather
quickly. Both adult learning theory and marketing
research confrm the effectiveness of repetition—
the more we are exposed to a message the higher
the rate of adoption. Here are a few examples of
19 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
MONITORING CORPORATE CULTURE
repetition you may be familiar with:
Some simple ways to keep the message
continuous include:
• Planning post-training refresher events and
follow-up sessions.
• Utilizing burst learning to reinforce key
messages in a format that different from other
training experiences.
• Providing managers with written and video-
based video resources they can utilize in regular
meetings.
• Utilizing social media tools to communicate with
and reach employees (and other stakeholders)
with ethics and compliance messages.
More and more organizations are leveraging Burst
learning to address the need to keep the
message fresh.
Burst Learning is designed to address single topic
areas, using engaging video scenarios and interactive
exercises, all in 5-8 minutes of time. These mobile-
ready learning modules can be accessed anywhere,
anytime and can be deployed through content
delivery networks or your organization’s LMS.
Listen To Your Employees
If you want to know how effective your training is
at driving cultural change, ask your employees.
Find out whether the training actually helped them
make better decisions, whether the information
was relevant to their job, or if they have used what
they learned. If it’s not particularly helpful, it will not
change behavior or attitudes and has no power to
change culture.
Carefully crafted surveys and employee focus groups
can be incredibly helpful. Some items you may want
to ask your employees include:
• Was the training relevant to your job?
• Did you fnd the training engaging
and enjoyable?
• Were the lessons clear and understandable?
• Has the training helped you make
better decisions?
20 ©2013 NAVEX GLOBAL ALL RIGHTS RESERVED. DECENBER 2013
LESSON V
MONITORING CORPORATE CULTURE
• Has the training improved your opinion about
our commitment to ethics and compliance?
• Would you make a report if you witnessed
misconduct? What types of misconduct?
• Do you fear retaliation if you make a report?
• Are you able to apply what you learned in
training on the job?
Get Employees Involved in Teaching
Others
One of the most powerful ways to improve training
effectiveness is to get employees involved in
teaching others. When employees are encouraged
to apply the lessons they have learned by teaching
others they focus and apply learning in ways that
improve retention.
In the CEB survey referenced earlier, employees who
received compliance and ethics training that had a
strong application value, saw the lowest observed
rate of misconduct, had the highest reporting rate,
and had the greatest retention of key lessons—by
astonishingly high margins.
If it works in your culture, empower employees and
managers to take the lessons learned in training and
apply them in the workplace. Compliance advocates
or champions can help teach other employees and
feld questions. Employees can help develop policies,
and they can help develop training materials that will
be relevant, powerful, and authentic to your culture.
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