ETHICS: When Is a Workplace Relationship ‘Inappropriate’?

  • By David M. Kinchen 
Gary Friedman

Gary Friedman

I just read that the talented and highly successful chairman and co-chief executive officer of Restoration Hardware, based in Corte Madera, CA, north of San Francisco, has stepped down from his two jobs following charges that he had an “inappropriate” relationship with a young female employee in the company.
Link: http://dealbook.nytimes.com/2012/08/16/restoration-hardware-co-chief-steps-down-after-an-inquiry/?nl=todaysheadlines&emc=tha25_20120817

The story by Andrew Ross Sorkin says “Gary Friedman, the chairman and co-chief executive of Restoration Hardware, has stepped down from his positions after an internal inquiry into an intimate relationship he had with a 26-year-old female employee, according to people involved in the matter.

“The leadership change earlier this week comes at a significant moment for Restoration Hardware as it prepares for an initial public offering. Mr. Friedman, 54, often appears in the company’s catalogs in jeans and a T-shirt and is considered the driving force behind the company’s vision and aesthetic, which includes high-priced faux antique furniture and hardware accessories. Mr. Friedman started his career as a stock boy at the Gap in San Francisco and was plucked out of obscurity by Mickey Drexler, the merchant prince who built Gap and now runs J. Crew.

“Mr. Friedman worked his way up at Gap and later became the president and chief operating officer of Williams-Sonoma. He joined Restoration Hardware in 2001 when it was near bankruptcy and is widely credited with turning it into one of the nation’s most successful high-end furniture retailers.”

* * *

One of the commenters to the story suggested that the company ought to change its name to “Puritan Hardware” because both Friedman and the woman involved were single and there was no compulsion. Others might argue that subtle compulsion was present because the woman was a subordinate and relationships like this are frought with hazards. Another commenter cited the relationship in a Chicago law firm where subordinate Barack Hussein Obama dated Michelle Robinson, who outranked him. Another mentioned Bill Gates’s relationship with his future wife, Melissa, when she was at Microsoft.

 

I didn’t have any fixed opinions, so I turned to a good friend, who has both a law degree and a master’s in religion for his views on the ethics of the relationship. I’m a big fan of Randy Cohen’s “The Ethicist” column which ran for several years in the New York Times — until the Gray Lady of Eighth Avenue ended it under Cohen’s authorship in 2011.

 

Here’s the response:

 

It does seem to be a harsh penalty.

I suppose that anytime a boss dates a subordinate, it can send the signal that this is

the way to curry favor with the boss to the other employees. Or make them suspect

when the young miss gets a raise or other favors.

Would help to know more of the facts. I think it used to be more relevant if the

junior associate was a direct report (or in the same division) as the supervisor,

because, traditionally, there was at least SOME leeway in the name of “Hey,

people meet at work, so let’s not get TOO ridiculous about this….”

But perhaps it’s an example of too many others being asses, leaving this more

innocent pair high and dry.

* * *

Don’t cry too much for Friedman. According to Sorkin’s story:

 

“….Restoration Hardware has been publicly silent on the reasons for the chief executive change. This week, Restoration Hardware announced in a news release a “reorganization” of the company’s management and named the company’s co-chief executive Carlos Alberini, who joined the company two years ago from Guess, as sole chief executive.

“The company also said Mr. Friedman, who is the company’s largest individual shareholder, would be starting a new “incubator” company with ties to Restoration Hardware. It said he would be the nonexecutive chairman emeritus and continue in an “exclusive advisory role, serving as creator and curator for Restoration Hardware with a focus on strategy, creative, and design direction.”

* * *

I can understand the sensitivity of Restoration Hardware as it prepares to go public. Sorkin’s story notes that companies these days are aware of perceptions in relationships between (mostly) male bosses and (mostly) female employees.
Sorkin: “Mr. Friedman’s resignation comes at a time when corporate boards are taking a harder line when questionable personal conduct by top executives has been brought to their attention. In April, Brian Dunn, the chief executive of Best Buyresigned after the company’s board raised questions about an “inappropriate relationship” with a 29-year-old female employee.

“Mark Hurd, the former chief executive of Hewlett-Packard lost his job in 2010 after it came to light that he once had a personal relationship with a female marketing contractor who had been an actress in risqué movies. H.P.’s directors said that Mr. Hurd had violated the company’s code of conduct with misstatements on expense reports.”

 

* * *

 

OK, readers: What do you think? Did the board of Restoration Hardware overreact? Or did it act appropriately? Send me your brief comments, to david.kinchen@gmail.com, or post them below.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: