As chair of the board of a nonprofit with 8 employees, I was recently made aware of ongoing abuse by our CEO. A Human Resources consultant conducted an inquiry with all employees, but they were so fearful of retaliation they would not allow their names to be used. This reduced the impact of the report to a point where we had nothing for which we could let the CEO go without huge sums of money as a payout. Our CEO has denied everything, of course, but suppression of employee initiative continues and the organization continues to lose relevancy and funding. Without change we will have to close our doors within a few months. The law seems to be on the side of the tyrant. What should we do?
It is obviously dangerous to comment on an employment situation without a full view of both sides of the issue and you ought to consult an employment lawyer for specific advice. But if you are going to have to close the operation in a few months if you don’t do anything, it seems logical to try to save the organization by firing the CEO and eliminating your major problem now.
You don’t indicate whether you have an employment contract, whether the CEO is an at-will employee, or why you would have to make a big payout. It isn’t clear from what you wrote why you think the law is on the side of the “tyrant.” It sounds, more likely, as though you have cause for termination, which ought to reduce the value of any claim the CEO might make. The employees may also be more willing to provide direct evidence if they know that their testimony will actually be used to get rid of their nemesis.
Check your D&O insurance to see if you have coverage for employment claims. If you take action to terminate the CEO and she sues, your defense, and potentially settlement costs, may be covered. But if the evidence is strong enough, you may even be able to resolve the issue without litigation.