Human rights win for fired city CFO shows importance of recognizing unconscious bias

In a case involving city councillors and staff and a human resources manager, a B.C. city CFO who was fired for misuse of his corporate credit card won his human rights tribunal claim that said the process that led to his termination involved unconscious bias and stereotyping.

The case, which drew public attention in 2017, saw the then-CFO of the City of Nanaimo, a Black man, being scrutinized by other staff due to his use of his corporate credit card. He was eventually fired after a misconduct report authored by an accounting executive was used as the basis for his termination. It was this document that was found to be discriminatory.

Arooj Tulli-Shah, employment lawyer with MLT Aikins, spoke with HRD about how HR leaders can try to combat unconscious bias and stereotyping in the workplace.

The key is understanding that the challenge lies with mitigating unconscious bias that is already there, rather than attempting to find whether it exists.

“If we dwell too much on identifying whether it's happening, if it's happening, it just not really a productive conversation,” said Tulli-Shah.

“Identification is really difficult, because the whole point of it is that it's unconscious, so it's not happening on a surface level, it's hidden underneath. I think we should all just assume that it's happening, that we all have biases, we all have different experiences, and we all approach the world and think about the world differently.”

Discriminatory misconduct report found to be motivated by unconscious bias

The CFO spent over $14,000 on his company credit card and was slow to repay the amount. After several requests from the accounting department and a bounced cheque, he eventually began a repayment plan, with $500 being deducted from each paycheque until it was repaid.

The City of Nanaimo’s policy for P-card spending stated that personal charges were not allowed, however the court noted that the rule had been flexible for years: “That policy has been modified in practice, but not in writing, to allow for personal expenses to be incurred on the P Cards on the understanding–again unwritten and in direct conflict with the written policy–that they will be identified as personal and be repaid in a timely manner.”

For example, such personal purchases included paying for a spouse’s attendance at a conference, the court stated.

While the CFO did spend far more than his colleagues, and did delay repayment, the money was eventually repaid and a third-party audit completed found no deliberate wrongdoing. Steps were being taken under a new city resolution to address the P-card spending policy.

It was a Misconduct Report that a senior accounting employee initiated and authored after the fact which was circulated and then used as the basis for terminating the CFO. In its decision, the Tribunal panel found the report was “inflected with racial bias and stereotype – likely unconscious – which ran through each of the key points”.

“By the time the misconduct report was even written, all the money had been paid back. They were instituting policies to address this on a going-forward basis,” said Tulli-Shah. “So, it's really that misconduct report, and what the tribunal found to be the stereotypes that were underlying it, that was what the tribunal found was discriminatory.”

Human rights tribunal recognizes unconscious bias against Black men

In its decision, the Tribunal panel recognized that the staff member who wrote the report was not aware of her bias, and was acting in what she thought was the appropriate manner. But evidence presented by witnesses and the CFO’s counsel showed a pattern of racialized bias towards the CFO and another staff executive who were the only two Black employees at the time.

“[The misconduct report’s author] sincerely believed she was acting in line with her training and ethical principles in respect of the expected behaviour of a CFO,” the Tribunal official wrote in her decision.

“I have reviewed above the insidious ways that racial bias lives in many of our subconscious. It lives there not necessarily because we seek it or choose to give it space but because, as courts and tribunals have recognized time and again, it is planted there by the systems in which we all exist.”

The CFO and one other staff member were identified in the third-party credit card audit as “outliers” who excessively used their cards for personal spending. It was noted that the CFO was the only employee who was questioned or cross-examined about his use.

On the basis of this double-standard, plus other racially charged behaviour, in July 2023 the CFO sued the City for breach of contract, breach of the duties of good faith and honest performance, intentional infliction of mental suffering, and wrongful dismissal. That case was rejected for summary judgement and is currently awaiting trial.

Make anti-bias action standard practice

Consistency is an important factor for HR to be aware of when considering unconscious bias in their workplace, Tulli-Shah said, pointing out that the Tribunal relied on a long list of examples of discriminatory behaviour leading up to the termination and the report, to make its final decision.

“There wasn't necessarily direct evidence of discrimination,” she said. “The Tribunal had to infer from everything that was going on that the motivation for pursuing [the employee], was discriminatory, and there were a couple of things that happened in the workplace that led the Tribunal to conclude that the workplace had a lot of systemic racism within it.”

Those instances included language such as “those people” being used in relation to the two Black employees, and the rescinding of an offer of employment to a Black woman, who testified she believed the action to be racially motivated.

This highlights the importance of taking proactive measures to address unconscious bias in the workplace, Tulli-Shah said.

“If you've got a bunch of people doing something that's in violation of the company's policies, one group shouldn't be able to get away scot-free while another individual is being targeted,” she said. “We need to constantly be working on ways to not act in a discriminatory way, and I think the best way to do that is just to make it standard practice.”