NJ employers have broad leeway when it comes to managing employees. Stray comments bordering on rude or racist may not form the basis of an employee’s EEO claim.  On the other hand, hurtful words are not permitted if they reinforce discriminatory bias. Judges don’t get involved in disputes between employers and employees — unless management is shown to have broken a statute, common law rule, or other strong statement of public policy.

Let’s take a look at the Netflix culture to illustrate the point.

A recent Wall St. Journal article details how the company’s chief executive Reed Hastings manages (or mismanages) his employees. Attention came to the company after its chief communications officer, Jonathan Friedland, used the N-word in a 2018 meeting with a group of employees and was fired months later.

That wouldn’t sound surprising at a time when companies are more sensitive about their language, but the firing violated at least the spirit of the radically transparent, over-the-top approach the company takes when it comes to employees talking to each other. The company’s culture, the “Netflix way,” features what it calls radical openness and transparency.

Friedland met with his roughly 60-person publicity staff to talk about a Netflix comedy special where a standup comedian said he missed the good old days when using the word “retarded” was acceptable. It caused an angry reaction from some viewers.

Friedland was used to a company culture that encouraged bluntness and speaking freely — so that’s just what he did. Friedland believed some of his staff didn’t appreciate how hurtful the word “retarded” could be — so he compared its impact on parents with mentally-challenged children to an African-American hearing the N-word.

Employee complaints followed, Friedland apologized to his employees, met with African-Americans on his staff as well as two in the company’s human resources department, again using the same, undisguised word. Two months later, Friedland “sunshined” (transparency in front of colleagues) the incident and apologized to the company’s top 90 executives.

The controversy continued, Friedland met another group of black employees a month later, and they were upset he didn’t discuss the matter. Anger within the company continued, and Hastings fired Friedland four months after the original incident.

Netflix takes its culture seriously, believing it’s crucial to its success and growth. But that culture can be ruthless, demoralizing, and so open it’s dysfunctional. The company emphasizes “freedom and responsibility,” so almost all employees can access sensitive company information. About 500 people in management can see the salaries of every employee. Blunt feedback to employees is encouraged. An employee will probably be fired if he or she doesn’t pass the “keeper test” (whether a manager would fight to keep the employee).

The keeper test is seen by many as a tool for office politics and some managers state if they don’t fire people, they risk looking soft. A Netflix spokesman stated they only fire employees for performance reasons. Getting fired, though disappointing, isn’t shameful, he stated, and former employees get a generous severance package and usually are quickly hired by another company.

How an employee is fired can be brutal in the corporate world, and Netflix is no exception. One former employee went from being a star employee for six years to being fired after getting negative feedback the month before being let go. Another stated she saw a woman who was just fired crying while packing up her boxes. The rest of her team avoided her without offering support because they feared they may suffer as a result.

After being fired, management believes in explaining to others why. Emails can reach hundreds of employees and be painfully specific, listing an employee’s flaws, while inviting more questions and gossip. One former vice president was present in a meeting with 40 to 50 in attendance when it was explained to the group why he was being fired. He said the meeting, though awkward for some, was consistent with company culture and ultimately beneficial.

Negative feedback should come as no surprise to an employee. Annually he or she gets ratings from other employees. At some team dinners and lunches, attendees give feedback and criticism about others at the table.

Whether because of its culture or despite it, Netflix has gone from delivering rented DVD’s through the mail to a worldwide entertainment powerhouse with more than 6,000 employees, a third of them added in 2018.

You may not like management’s approach, it may upset you, it may even cause you to be depressed or anxious, but that doesn’t automatically mean you have a valid basis to sue your employer. On the other hand, use of hurtful words, even in the service of “transparency”, are unlawful and actionable if they support a hostile and discriminatory work environment.

If you have questions or concerns about your job situation, contact the Kingston Law Group’s employment lawyers by calling us at 609-683-7400.

We will schedule you for a near-term and reduced fee initial consultation by phone or electronic media.  We are compassionate counsel and tough advocates.  We will listen to your facts, explain the law, and help you find a pathway to economic and social justice.  We will vindicate your rights if they have been violated. Call today. You will be glad you did.