SueCycle: Where was HR?

JUST FIRE HER! So what if over the 7 years at the company she grew in her role, and she's responsible for 400 people, AND SHE'S PREGNANT. After all, she knows she hasn't been performing well lately. But does she really know that? The recent SoulCycle lawsuit shows us a worst case scenario for terminating her. It's a great example of how a company's wants and needs, legalities, and organizational culture converge into a recipe for disaster. But it doesn't have to be that way! Working with HR early and frequently helps mitigate these situations.

Word cloud on SoulCycle's "Our Story" page. [1]

Let's start from the beginning

While on maternity leave, Jordan Kafenbaum, a Senior Director of Talent Management at SoulCycle was terminate under questionable circumstances. The factual allegations outlined in the court filing [2] demonstrate a lack of formal feedback, inconsistent messaging, inappropriate and unlawful conduct by leadership, and a Pandora's box of other employee complaints that point towards an overall toxic culture.

They WANTED to let her go

It's unclear who wanted or needed to let Kafenbaum go. In the nine months leading up to her exit, she claims that her supervisor, Gary Gaines, promised her a promotion overseeing more people, including direct supervision of an underperforming employee, Blake Ballard. Gaines went so far as telling Kafenbaum that he actually disagreed with negative feedback he got about her from the Chief People Officer, Adrienne Gemperle. In the lawsuit, Gaines is also quoted saying that he didn't manage her performance because she "didn't deserve it." But in January 2020, Gaines and Sunder Reddy (CFO and interim CEO) embarked on a "roadshow" to solicit feedback from Kafenbaum's instructors. A few weeks later Kafenbaum met with Gaines and another supervisor to discuss her impending Leave of Absence ("LOA"), where they also informed her that her team "needs a new leader." Was this based on her past performance, on feedback from the "roadshow", or because she was pregnant? SoulCycle's messaging was inconsistent, as they shifted their justifications between a layoff (due to COVID), position elimination (the role is no longer needed), and performance (fired because "the team needs a new leader"). All three of which are handled differently. The final answer: Kafenbaum was terminated due to financial constraints caused by COVID-19.

"Managing" the risk

Terminating Kafenbaum due to financial constraints sounds legit, right? Sure, until you find out that SoulCycle promoted the "underperforming" male employee, Blake Ballard, into Kafenbaum's exact role and title only three months later. As a seasoned HR professional, my head exploded when I read this part. Forget any legal risks that were ignored and subsequently manifested from this decision, the optics alone are bad enough! (click here for a list of the laws mentioned in this lawsuit) When a person is on a protected LOA, they are entitled to return to their original position or one that is equivalent in pay, benefits, responsibility, and authority. So, if her role still existed, why was Ballard promoted into it instead of Kafenbaum coming back? SoulCycle used financial reasons as a justification but exactly how much money did they gain by replacing her with Ballard? Was it a $50,000 annual salary savings? $20,000? None? They'll have to speak to this "financial" decision in court.

The SOUL of SoulCycle

What is culture? Organizational culture consists of shared beliefs, values, and behaviors that set the tone for how a company and its employees do business. A company's culture can help mitigate risk or make challenging situations even harder. Not only does a company's culture shape perception internally, but it can also affect how external stakeholders perceive a company's operations. We don't know how it feels to be a SoulCycle employee, but the lawsuit does describe a couple of noteworthy points that speak to the employee experience.

First, Gemperle (the head of HR), announced Kafenbaum's pregnancy at a Miami conference with around 100 other employees without her consent. Gemperle joked with the group that Kafenbaum got pregnant as soon as she heard about the company's new and improved leave of absence policy. Kafenbaum directly addressed the situation with Gemperle, but the only thing that came out of it was what she perceived as Gemperle's retaliation. This complaint, among others, went unanswered, and she was terminated shortly thereafter.

For SoulCycle, 2020's social justice movements and global pandemic added even more layers of complexity to their case. The lawsuit also references social media posts made by the company (pertaining to Black Lives Matter and a Donald Trump fundraiser), and posts by disgruntled employees about SoulCycle's culture and responses to the current events.

Shoulda, woulda, coulda - HR Revolution's Advice

So what can we learn from this lawsuit? First, a good HR team is your friend. They are pros in navigating and balancing legal requirements, employee experience, the respective employee's manager's needs, and communication.

Managing LOA's

Managing LOA's is not easy, which is why some companies outsource it! In addition to keeping up with government deadlines and required documentation throughout the leave of absence, there are other items to consider:

• Employee experience - HR needs to be the primary point of contact with the employee before, during, and after the LOA. For the most part, only communication between the employee and the team should be unrelated to work.

• Managing the Manager - HR will work with the manager to make sure the employee's tasks are covered during the LOA, to set boundaries and expectations between the employee and their team (i.e. don't make the employee work while on LOA, etc.), and helping the manager to communicate appropriately with the employee and the team.

Layoffs & Position Eliminations

HR should conduct an adverse impact analysis, especially if there are several employees affected. The Society for Human Resources and Management ("SHRM") defines adverse impact as, "Employment practices that appear neutral but have a discriminatory effect on a protected group."[4] An adverse impact analysis shows whether there are a disproportionate amount of protected classes that are more affected in a layoff than others.

Performance Management

We owe it to employees to provide honest and timely feedback. If an employee doesn’t know that they’re doing well, how do they know to keep doing it? Likewise, if an employee doesn’t know they’re underperforming, how do they know to correct it? Not only can impulsively firing an employee be risky, it can also create mistrust, fear, and costly turnover among remaining employees. Involve HR early. We frequently hear from managers who have, for one reason or another, reached their limit with an employee. Managing someone's performance starts early, and as performance issues escalate, get HR's help to document performance feedback in writing to the employee. We are doing you, the employee, and the company a disservice by arbitrarily dismissing employees.

---

Managers and HR professionals can be personally named in a lawsuit. The SoulCycle lawsuit names two executives in addition to the company: Sunder Reddy (CFO and interim CEO) and Adrienne Gemperle (Chief People Officer). It's rare, but as you can see, IT HAPPENS! Read more on how and why this happens. [3]

---

1. https://www.soul-cycle.com/our-story/

2. SoulCycle Complaint

SoulCycle-Complaint.pdf

Download PDF • 394KB

3. https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/individual-liability-is-common.aspx