Oct. 21, 2009 – About the time Merri Jo Gillette joined the Securities and Exchange Commission, the agency was making history – but not in the law of finance.

“Let me first say that our agency is responsible for the concept of a hostile work environment [as an independent cause of action],” Gillette said during her presentation entitled “From Microinequities to Positive Micromessages” at the Annual Diversity Counsel Program in Milwaukee on Oct. 2. The conference was sponsored by the State Bar Diversity Outreach Committee in collaboration with the Association of Corporate Counsel, Wisconsin Chapter.

Gillette referred to Broderick v. Ruder, 685 F.Supp. 1269 (D.D.C. 1988), in which the federal court found a Title VII violation arising out of the workplace behaviors that marginalized women who did not fit within the culture of a predominantly male agency. Specifically, Catherine Broderick demonstrated a pervasive atmosphere of sexual harassment in which women were rewarded for having sexual relationships with their managers, In the wake of Broderick, Gillette said that the agency was “not really responsive” to the court ruling.

“In fact, I think they went in exactly the wrong direction,” she said. “They became afraid. They tried to do token sorts of things so they could say, ‘Well, wait a minute, we’ve got X number of women, X number of Pacific Islander people.’ But they weren’t really tackling what this meant to people day-to-day.”

Indeed, Gillette recalled that when she began working at the SEC’s Division of Enforcement, “I was told point-blank to my face more than one time in the first three years that I worked there, ‘You’ll never make it here’ [and] ‘Women can’t make it in the Division of Enforcement.’”

Today, as a director of the SEC’s Chicago Regional Office, Gillette has worked to institute changes in her agency’s workplace environment, focusing on an inclusive tone created by daily interactions. But the SEC is not alone in these struggles. Gillette explained that many law firms and other organizations should take the time to recognize the kinds of common, but hurtful, behaviors which – even if not a Title VII violation – can harm the individual employee and the company’s bottom line.

Microinequities

The term “microinequities” refers to the “subtle and routine workplace indignities that are experienced by employees,” Gillette explained. While not arising to the level of overt discrimination and harassment, these workplace slights and insults have a cumulative effect that demoralize the employee and reduce his or her productivity. Gillette noted that the U.S. Supreme Court has begun to recognize this issue in AMTRAK v. Morgan, 536 U.S. 101 (2002), and Burlington Northern v. White, 126 S. Ct. 2405 (2006).

Citing the work of Dr. Mary Rowe, a professor at the Massachusetts Institute of Technology, Gillette said that a classic example of a “microinequity” workplace snub is a supervisor skipping over the one nontraditional person in the room while passing out assignments. Another is an offensive joke or a phrase used in informal interactions. More often than not, Gillette said, the employee’s reaction goes “completely unnoticed” by those who engage in the insulting behavior.

Gillette cautioned that “we are all human beings” and that it is impossible never to offend. But, she said, the important goal is to become aware of the issue and address it. Creating a “safe forum” where these kinds of messages can be acknowledged and addressed is critical to that effort, she said.

“The bad news is that left unaddressed, we know the impact. It leaves employees marginalized, excluded, trivialized,” Gillette said. “And what options do employees have if we do not provide an environment within the workplace to address it? They can internalize it which almost always results in a negative outcome for both the individual and the organization … They can go to an external system such as a grievance procedure or the filing of a lawsuit. Or they can just go altogether.”

Organizations are not all the same

As a firm or other organization sets out to work on these issues, Gillette cautioned that not every workplace starts at the same place.

Some organizations could be characterized as “monocultural,” Gillette said. “I don’t mean everyone is demographically homogeneous,” she said. “[Rather,] I’m talking more about a culture that can exist with any mix of people, where there is a culture of ‘this is the way we do it, period’ – not a culture where new ideas [and] new approaches are encouraged or affirmed.”

“The second type of organization is one that has acknowledged there is a need to at least talk about and take some steps [toward] diversity and inclusion issues,” Gillette continued. “But [these types] are primarily motivated by compliance. So what they are asking is, ‘What do we need to do to stay out of trouble?’ For these types of organizations, they are only marginally further along on the continuum. They may get what is overt Title VII discrimination, but they have not really embraced or possibly acknowledged the more subtle things that can have tremendous impact on individuals and the organization.”

A third category is the “multicultural organization” in which there is “a really diverse mix of employees, a diverse mix of clients,” and although there is a sound understanding of the issues, the organization is “really struggling to optimize diversity in the business model,” Gillette said.

“The last category is ‘inclusive’ – an organization that has as a core value that is recognized at the highest level that this organization can and will be strengthened by input from all and variant perspectives,” Gillette said. “As a business model, it has consciously adopted one in which it communicates both through oral messages and behavior that then manifest that they value and cultivate and look to capitalize on the diversity of the firm.

“They make decisions with this as a variable; a conscious factor when assigning cases, how they do marketing, how to do recruiting, whether they sponsor things that recognize you need to reach far back in the pipeline to be able to recruit out of law school,” she said.

Not overnight

“Cultural changes take a long time to launch and can take even longer to achieve results,” Gillette said. An organization should appreciate that its efforts will require an ongoing commitment of money and time.

Moreover, Gillette said that even after an organization has achieved some success, the story doesn’t end. Efforts must stay current to account for the entry into the workplace of new people who bring different approaches and other changes.

An organization should have measurements of its results, she added. “In 16 or 18 months, what will the metric tell us about whether these were well-invested resources?” she said.

Customize

Although an organization is wise to look at what others have done for guidance, Gillette stressed the importance of adopting a strategy that makes sense for each particular workplace. Even within an organization, there may be need for more than one way to reach people, she said. For example, some people may be more comfortable with anonymous submissions to a suggestion box than face-to-face discussions within a safe, nonjudgmental forum, she said.

Recruiting

As part of its plan to transform the workforce, Gillette said that firms should study the way they bring in new people. She suggested a firm ask “what are we looking for when we recruit?’ and “are we asking the right questions [and] going to the right populations to get what we need?”

“Those are hard questions because organizations are made up of individuals and there may not be consensus of opinion,” she said. “Also, as human beings, we play tricks to rationalize our own behavior.”

Accountability

Efforts to transform a workplace require leadership dedicated to the task, Gillette said.

About five years ago, Gillette recalled, the SEC hired an outside vendor to conduct surveys and use focus groups to generate data identifying the agency’s problems. A wave of initiatives followed that were notably different from the SEC’s earlier efforts. Rather than various managers undertaking their own programs, Gillette said SEC Chair William Donaldson stood fully behind this program.

“Absolutely critical to making people pay attention and actually take some time out from doing what they thought of as their day job was that this came down from the chairman in no uncertain terms,” Gillette said. “Every single sub-initiative was led by someone at the senior officer level which is the highest designation within the agency.”

Gillette said the SEC wrote accountability for the equal employment and inclusion initiatives into its performance standards for all of its managers. But, crucially, she said the agency made sure this shift did not leave managers confused.

“We worked with an outside vendor to come in to do training with people because some managers were coming to me and saying, ‘OK, I only supervise four people and none of them might leave in the next year and the four people I have right now are white guys. So if at the end of the year, I don’t have a woman, am I going to fail?’” Gillette said.

Reassuring managers that was not the measure of success, Gillette said that managers were instructed in the many ways they could satisfactorily contribute.

“You can be doing mentoring, you can be doing outreach programs, you can be doing special emphasis programs that sensitize others within your organization to cultures and issues that they might not otherwise be exposed to,” Gillette said. “And we gave [managers] written guidance that at the early stage went so far as to say, ‘If you do these things, you will have performed as expected in this category.’”

Differences to address

Gillette said an organization should think broadly about the differences it might want to address within its workplace. Aside from sex, race and the other Title VII protected classes, she suggested marital and parental status as well as generational gaps.

“Then push out at least one more circle and think about things people might not immediately think of – differences in life experiences, work experiences, differences is educational background,” Gillette said.

Turning to her own situation, Gillette said she grew up in Long Island, New York, and now lives in Chicago. “Differences might even be regional,” she said.