SHRM Liable for $11.5 Million in Discrimination Suit: What Went Wrong and How HR Can Avoid It
Understand the $11.5M verdict against SHRM for racial bias and retaliation. Learn how to safeguard your company from similar lawsuits.
In a verdict that has sent shockwaves through the human resources profession, the Society for Human Resource Management (SHRM) was ordered to pay $11.5 million earlier this month after a federal jury in Colorado found the organization liable for racial discrimination and retaliation.
The case, Mohamed v. Society for Human Resource Management, centers on allegations that SHRM — the world's largest HR professional association — failed to uphold the very standards it teaches to its 340,000 members. For HR professionals observing from the sidelines, the verdict offers a stark lesson in the costly consequences of flawed investigations and retaliation.
The Verdict: A Reputational and Financial Blow
On December 5, 2025, a jury awarded plaintiff Rehab Mohamed, a former instructional designer for SHRM, $1.5 million in compensatory damages and a staggering $10 million in punitive damages.
Mohamed, an Egyptian-Arab woman, alleged she was fired in late 2020 shortly after reporting that her supervisor treated white employees more favorably than non-white staff. The jury found that SHRM not only discriminated against Mohamed based on her race but also retaliated against her for raising the issue.
What Went Wrong: A Case Study in HR Failures
Court documents and testimony revealed several critical missteps that contributed to the plaintiffs victory. Legal experts point to three specific areas where SHRM's defense crumbled.
1. The "Sham" Investigation
Perhaps the most damaging evidence involved the handling of Mohamed's internal complaint. Testimony revealed that the SHRM employee assigned to investigate her discrimination claim had attended only a single training session on investigations and could not recall key details of that training.
Furthermore, the investigation lacked neutrality. Evidence presented at trial suggested the investigator was simultaneously helping management draft Mohamed's termination paperwork while the investigation was supposedly still ongoing. This conflict of interest allowed the plaintiff's legal team to characterize the investigation as a "sham" designed to cover up a predetermined firing.
2. The Retaliation Risk
Timing played a crucial role in the verdict. Mohamed was fired weeks after escalating her complaints to senior leadership, including SHRM CEO Johnny C. Taylor Jr. While SHRM argued she was terminated for missing deadlines, the close proximity between her protected activity (complaining of bias) and her termination (adverse action) created a strong inference of retaliation. Retaliation claims are often easier for plaintiffs to prove than the underlying discrimination, and in this case, the jury found SHRM liable for both.
3. Inconsistent Documentation
SHRM's defense was undermined by its own performance records. Mohamed had received ratings of "Solid Performer" and "Role Model" in her reviews prior to her complaint. The sudden shift to negative performance claims only after she alleged discrimination appeared pretextual to the jury. When documentation does not support the stated reason for termination, credibility is lost.
The "Model Employer" Double Standard
A unique aspect of this case was the judge's ruling that SHRM's status as an expert body was relevant. The court denied SHRM's request to exclude evidence of its industry expertise, ruling that as an organization that "trains people on how to do HR tasks," it could be held to a higher standard.
This "expert" status likely contributed to the high punitive damages. Jurors may have felt that an organization dedicated to HR excellence should have known better than to commit fundamental errors in compliance and employee relations.
How HR Professionals Can Avoid Similar Outcomes
The SHRM verdict serves as a $11.5 million warning label for employers. HR leaders can implement specific safeguards to prevent similar legal disasters.
Ensure True Independence in Investigations. Never allow the same individual to advise on termination and conduct the investigation into the employee's grievance. If an employee raises a high-risk claim involving senior staff or systemic bias, consider retaining a neutral third-party investigator. This removes the appearance of bias and ensures the findings can withstand court scrutiny.
Document Performance Issues Before Complaints Arise. The "sudden incompetence" defense rarely works. If an employee has performance issues, they must be documented in real-time. If an employee with a clean record files a complaint and is fired shortly after for "poor performance" that was never previously recorded, a retaliation finding is almost guaranteed.
Train Investigators Rigorously. Investigation requires specific skills. Assigning a junior or untrained HR generalist to handle complex discrimination claims is a liability risk. Ensure your investigators have current, specialized training and understand the legal nuances of interviewing witnesses and weighing credibility.
Enforce a Strict Anti-Retaliation Window.When an employee engages in protected activity, any subsequent disciplinary action must be scrutinized by legal counsel. Even if the discipline is warranted, the timing alone creates legal exposure. HR must ask: "Would we take this exact action today if the employee had not just filed a complaint?" If the answer is murky, pause.
Conclusion
SHRM has announced plans to appeal the decision, with CEO Johnny C. Taylor Jr. describing the verdict as a "blip." However, for the broader HR community, the case is far more than a blip. It is a reminder that knowing the law is not enough; organizations must rigorously practice what they preach.
