May 4, 2006 -- A California company's use of spanking and humiliation as sales motivation tools leads to a costly lawsuit and serious questions about what is right and wrong in the workplace.
Patrick Smith, COO of Alarm One Inc., isn’t apologetic about how he handled the shocking people management crisis involving "team-building" spankings at his now disgraced home security firm.
The behavior was wrong, and he stopped it. Speaking by phone this week from his office in Anaheim, California, the beleaguered executive said that in hindsight, he’d communicate a few things more specifically about "do’s and don’ts" to employees, but he wouldn’t change much else.
"Swatting is not camaraderie building," he noted. "You have to understand the sales mentality. Sales guys are just that way."
The real problems involving the sales team took place more than two years ago, he said. That’s when he heard a complaint from an employee about a woman on the sales team who was hit with a paddle. With the help of the HR director, he personally launched an investigation into employee reports of humiliation--by telephone and e-mail.
That inquiry, and the cultural values that supported it--including "camaraderie building" practices where sales team members were encouraged to compete and the losers were forced to eat baby food, wear diapers and endure public spankings with a rival alarm company’s yard signs--has cost the company dearly in dollars.
And its reputation is in the diaper pail.
On April 28, a jury in Fresno, where Alarm One has a facility, awarded former employee Janet Orlando $500,000. The jury found that she was subjected to sexual harassment and sexual battery at meetings where sales teams competed.
Katherine Hart, a Fresno attorney who represented the defendants, said during a phone interview on the day of the verdict that employee conduct at the security company was "reprehensible, but the intent was not to be malicious or sadistic.
"It was young people acting juvenile and engaging in juvenile behavior," Hart noted. "They didn’t have much supervision and the company promoted salespeople without enough training. One woman (a plaintiff in an earlier case against Alarm One) was bruised (with a metal paddle). It was meant playfully--slaps on the butt. Then catcalls. It escalated."
Before dismissing Smith and other company executives at the firm as smarmy or stupid or both, look straight into the mirror, leading human resources professionals say. Some version of the extreme spanking case could be happening at your company.
There are lessons you can and must take away from the case no matter how extreme it is, says Atlanta attorney Stephen Paskoff, who spoke about the consequences of allowing bad employee behavior and what to do about it in a keynote speech at a Society for Human Resource Management conference last month.
"People say, ‘Oh, that could never happen at our company,’ " Paskoff says. "I ask, ‘What makes them think this couldn’t happen?’ "
It’s a question Mark Keppler, professor of human resources management at California State University, Fresno, understands. He served as an expert witness in the civil suit, and estimates that he has spent at least 30 hours studying transcripts and other case documents.
"Alarm One was out of control--and they never got it," Keppler says. "It was only after a woman was hospitalized for being hit with a metal sign that the spankings stopped.
"Everything they did was wrong," he continues. "They had inconsistent policies. Their employees were relatively young--most were 18 to 22--and the company had insufficient policies and insufficient training. The human resources department declined to take a complaint from an employee seriously."
Alarm One’s human resources director at the time has since left the company and is now working for a financial firm in Southern California. She hasn’t returned several phone messages.