Lessons From Regus: Their $4.6 Million Employee Misfire

Throughout the world, Regus is a name synonymous with success; 1,500 locations constituting millions of square footage, moving centers and coworking spaces into every nook and cranny. Yet for all their shock-and-awe marketing moves, their occasional missteps in the personnel arena continues to plague them and occasionally take some of the shine off their brand luster.

Is this most recent scrape just another Regus faux pas — or something more?

Their latest brush with the scales of justice comes in the form of an assault from an ex-manager that cost Regus a whopping $4.6 million to settle. For your convenience we’ve reprinted the article below. But lest you think this is just a little back handed swipe at our industry leader, take heed of the deeper message. HR departments are becoming much more than way stations to employment and keepers of the house rules of conduct. They must juggle an ever broadening range of employee issues. And some can be serious, if not taken seriously. The fact that Regus has had to pull millions out of their coffers to protect itself should give business center owners and operators pause for thought. There is often a thin line between corrective action with employees and actions that are clearly punitive and cross over employees’ rights boundaries.

As always, we respect Regus and we also learn from them. It might be time to revisit the (ever changing) ethics codes and employment laws and keep them on top of our minds instead of in the bottom of our desk drawers.
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By Hadsell, Stormer, Richardson & Renick LLP posted in Wage & Hour Laws

On Friday, March 22nd, a federal court jury in San Diego awarded over $4,646,252 to Denise Steffens. Ms. Steffens (represented at trial by Cindy Panuco and Dan Stormer of HSRR and Susan Guinn) was employed as a building manager by the office rental company Regus Group PLC, but was fired in July of 2007 after reporting wage-and-hour violations. The verdict is especially monumental since it comes out of the usually conservative San Diego area.

“This is a great victory,” said Cindy Panuco. “It shows that jurors will not accept hollow excuses for abusing workers.”

In October 2006, Steffens complained that Regus’ staffing plan didn’t allow her to give her staff legally required lunch and rest breaks. Immediately after this, the regional vice president of the company gave the order to “Get rid of her,” according to testimony from her former supervisor.

Her 11 years of prior employment records were unblemished, but in April 2007 she was put on a performance improvement plan intended to result in her termination, including impossible sales goals, as well as supposed weaknesses in performance which her supervisor testified been copied almost directly from an improvement plan previously given to another Regus employee. In July of 2007, Steffens was terminated.

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Regus, however, argued that Steffens was fired because of her declining attitude toward her work.

After four days of trial, the jury found Regus liable for wrongful termination in violation of public policy – a tort claim which prohibits retaliation for whistleblowing. The jury returned a verdict for $4,646,252, including $3.5 million in punitive damages after finding that Regus acted with fraud, oppression, or malice when it terminated Ms. Steffens.

Denise Steffens v. Regus Group PLC

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