Sexual harassment spoils a dream - Family Business Case Study

Nation's Business, May, 1995 by Fowler Dean

Georgia Marsh's "dream" job is becoming her worst nightmare. When she was hired as a financial analyst at Ryan Manufacturing Co. six weeks ago, Georgia, 30, thought she had made the best move of her career. Her new job gave her more responsibility, more money, and what she thought would be a pleasant family-business environment.

Last week, however, Paul Ryan, 52, the company's founder, asked her to visit an out-of-state facility that was having forecasting problems. Georgia jumped at the chance to demonstrate her competence. When she got to her hotel, she found a message to call Paul as soon as she arrived.

"I was unaware that Paul was also going to visit the plant," says Georgia. When she contacted Paul, he suggested that they discuss matters over dinner. Georgia accepted and quickly began assembling the financials to review with him. But during dinner, Paul seemed more interested in her than in forecasting problems. It made her uncomfortable when he told her how pretty she was and kept touching her on her arm or hand. Her discomfort increased at the plant the next day when she found Paul staring at her during meetings.

That evening when he again suggested dinner, Georgia declined but gave in when Paul persisted. After dinner, Paul insisted on escorting Georgia to her room. When he escalated his advances, Georgia told him to leave.

On her flight home, she questioned the wisdom of her decision. She remembered her excitement the day Paul's wife and brother, both key managers in the company, had interviewed her. They seemed pleased with not only her experience but also her professionalism. "I don't want to quit this job," she says, "but what recourse do I have?"

Take A Strong Stand

This month's case was presented for comment to 23 members of the Wisconsin-based Forum for Family Business. The group includes both men and women; all are members of the successor generation and are actively involved in their families' businesses. Their discussion was led by Dean R. Fowler, of Dean Fowler Associates, a family-business consulting firm in Elm Grove, Wis. Here is their collective response, as compiled by Fowler. (For further reading, see "Sexual Harassment: Reducing The Risks," in the March issue.)

Georgia needs to take a strong position for the sake of her own integrity and determine precisely the boundaries that she feels are appropriate in her working relationship at this or any other company. Because of the difference in power between Paul and Georgia, however, she needs to document at once the events that occurred, either with a personal attorney or with a representative from the Equal Employment Opportunity Commission.

Finally, Georgia needs to confront Paul and be assertive in stating her commitment to keeping their relationship strictly professional. Politeness will not work. She must be clear so there is no confusion or misinterpretation on Paul's part.

Usually, a strong, assertive response stops offenders "dead in their tracks." If Paul makes a commitment to a professional relationship, no further action on Georgia's part need be taken. However, if confronting Paul does not solve the problem, it becomes clear that Paul's behavior represents a long-term pattern--one that Paul is unlikely to change. In that event, Georgia can explore several options:

* Speaking to Paul's brother for a resolution inside the company. In most cases, employees would be too intimidated to go to a chief executive's relatives, who may too easily protect him and his position. However, Paul's brother may be a resource for support, depending on his personal values and financial stake in the company. Recognizing the moral and legal implications of Paul's actions, the brother may have enough leverage to curb Paul's behavior.

* Pursuing legal action. She can explore instituting a suit under state law or filing a complaint with the Equal Employment Opportunity Commission.

* Resigning with or without taking legal action. She may think life is too short and integrity issues too important to continue working where she does not feel personally safe or respected as a professional. Fortunately, she is marketable enough to land another job as good as the one she would leave.

There is a larger lesson here for family-business owners. Executives who behave like Paul not only flout the law but also perpetuate the prejudiced view that family businesses are not professionally managed.

Wise business owners take an active role in dealing with sexual harassment and other employee issues by developing clear policies and procedures for resolving problems. Both male and female ombudsmen should be available to employees who have concerns about their relationships in the workplace.

Correspondingly, before accepting employment, nonfamily job candidates should evaluate the corporate environment of a family business not only by interviewing key family members but also by learning about the company's policies, procedures, protections, and values.

Male and female relationships--and, in their extreme form, sexual harassment-- pervade all corporate life. Although Ryan Manufacturing is a family business, sexual harassment requires a response that would be consistent in any type of work environment. The power of a family-business owner is no more or less disarming than the power of a high-ranking official in a nonfamily corporate setting. Like any business, a family business must be prepared to address adequately a situation like Georgia's.