PAULA DEEN: Failure to Manage People Ops In a Small Section of Her Business Led to Downfall…

Kris Dunn Bad HR, Current Affairs, Kris Dunn

By now, most of you know the Paula Deen story. Lawsuits fly around, and Deen gets caught in a deposition admitting she’s used racial slurs in the past. Media feeding frenzy ensues, and Deen’s on the verge of losing everything.  Welcome to today’s media culture.

It’s easy to look at that and wonder, “what was she thinking?”

It’s probably more important to understand that all the bad stuff came from a management issue that could have been easily avoided and involved a business line that was very secondary to Deen’s media empire.  The whole thing serves as a great case study on how failure to take action when people aren’t being treated well can bring brands and companies to their knees.  It’s a perfect way to spice up your harassment training with some real world fodder, which is why I’m sharing it here.

Here’s the rundown of the origin of Deen’s problems from BusinessWeek:

“On Jan. 31, 2012, Wesley Woolf, a lawyer in Savannah, Ga., wrote a letter to the attorney for Paula Deen, the city’s best-known restaurateur. In addition to her flagship, the Lady & Sons, Deen and her brother co-owned a sprawling seafood restaurant called Uncle Bubba’s Oyster House. The venue was located on the outskirts of town and on the periphery of Deen’s business empire—which over the last decade and a half has expanded into television, books, kitchenware, home furnishings, and pharmaceuticals. She rarely set foot in Uncle Bubba’s in recent years.

Woolf explained that he was writing on behalf of a client named Lisa Jackson. For five years, Jackson had worked as general manager at Uncle Bubba’s. During that time, she alleged, she had been subjected to a hostile work environment full of sexual impropriety, boorish behavior, and racist remarks. Woolf offered Deen a choice. She could pay Jackson $1.25 million or face a lawsuit. If Deen chose not to settle, Woolf explained, he would seek maximum news coverage. “Exposure of the racist and sexist culture of her corporate and personal life is going to permanently, and irreparably, damage the value of her brand,” Woolf wrote.”

That’s right – failure to create a decent work environment at restaurants that are at best rounding errors in the Deen empire caused it to come crashing down.  The work environment included nepotism, which obviously contributed to boorish culture at the center of the original claim. More from BW:

“Over the years, Deen grew accustomed to looking after her younger brother, Bubba Hiers, 59. Their father had died while Hiers was still in high school, and Deen and her then husband took in Bubba and their ailing mother. “He was 16 at the time, and no one was taking care of him—such a young boy and just eaten up by all the pain and fear around him,” Deen wrote in her memoir. “He wouldn’t talk about anything to anyone, just ran wild.”

In late 1999, Hiers was in limbo. His wife had left him, and he was wondering what to do next. Deen offered him a job. He moved to Savannah from Albany, Ga., and began working for his sister. In 2004, Deen and Hiers opened Uncle Bubba’s Oyster House. According to court documents in the Jackson case, Deen, who owned 51 percent of the restaurant, more or less stayed clear of its day-to-day operations. Hiers came to work there most days.

Two top managers and an outside human resources firm all recommended that Hiers be removed from such involvement, according to court documents from the lawsuit. Even so, Deen never forced him out. She stood by him defiantly. “Paula’s the alpha and the omega, the beginning and the end,” Hiers is quoted as saying in his sister’s memoir. “There ain’t nothing ever going to separate us but death.”

But wait, what did Bubba do that was so bad? Read on:

“According to the lawsuit, Uncle Bubba’s was losing money until Jackson took over managing the restaurant in 2005. Within six months, she claims, the restaurant started to show a profit. For her money-saving abilities, according to Jackson, Hiers called her “my little Jew girl.” Jackson, who is white and Buddhist, says she spent much of her time trying to save the restaurant and its staff from Hiers and his bullying. She alleges that he began every workday at 10 a.m. by pouring himself a Styrofoam cup of whiskey. According to Jackson, he would then begin viewing pornography on restaurant computers, sometimes instructing Jackson to take a look and leaving a kitchen computer screen open to raunchy sites.

Hiers denied these allegations but in a deposition admitted to boorish behavior. According to the plaintiffs’ lawyer’s account of the deposition, Deen’s brother also admitted to invoking the n-word at work, including in reference to President Obama. While he denied alcohol addiction, he confirmed he had been in rehab for cocaine and alcohol abuse in the past and that he drinks at work. He testified that at home he consumes a gallon and a half of Jack Daniel’s each month. He also confirmed that he’d taken money from the restaurant—some $30,000—that Jackson later discovered and reported to the corporate accountant. Hiers’s and Deen’s lawyers didn’t respond to phone calls seeking comment. Hiers and Deen have denied all liability.

Jackson said she had no problem with Deen until shortly before resigning in 2010. Her gripe is that Deen didn’t intervene to keep Hiers from harassing his own employees. By not acting, the complaint alleges, Deen “ratified” and “actively enabled” her brother’s obnoxious conduct.”

Deen had two opportunities to fix it before it brought her down. One was when some complaints rolled in and managers and HR consultants recommended getting Bubba out. The second was when the lawsuit came.

Instead of doing the smart thing, Deen decided to fight. Looks like the result of that was a foregone conclusion before the depositions began.

Add this case study to your Harassment training.  It’s better than your lame video.

Kris Dunn
Kris Dunn is a Partner and CHRO at Kinetix, a national RPO firm for growth companies headquartered in Atlanta. He's also the founder Fistful of Talent (founded in 2008) and The HR Capitalist (2007) – and has written over 70 feature columns at Workforce Management magazine. Prior to his investment at Kinetix, Kris served in HR leadership roles at DAXKO, Charter and Cingular. In his spare time, KD hits the road as a speaker and gives the world what it needs – pop culture references linked to Human Capital street smarts.