SHRM Hit with $11.5 Million Verdict in Racial Discrimination Lawsuit: Egyptian Employee Wins After Alleging Systemic Favoritism and Retaliation
A Colorado jury awarded $11.5 million to a former SHRM employee in a racial discrimination and retaliation case on December 6, 2024. The verdict—$1.5 million in compensatory damages and $10 million in punitive damages—represents one of the most significant employment discrimination verdicts against an HR organization and raises critical questions about workplace accountability when the defendant is the world’s largest HR membership organization.
Rehab Mohamed sued SHRM in 2022 after working as an instructional designer from 2016 to 2020. She alleged her white supervisor systematically favored white employees, then retaliated when she complained to leadership. SHRM plans to appeal, stating the decision doesn’t reflect how the organization operates.
What Is the SHRM Lawsuit?
The case, Mohamed v. Society for Human Resource Management (Case No. 1:22-cv-01625), was filed in October 2022 in the U.S. District Court for the District of Colorado. Mohamed, a “brown-skinned Egyptian Arab woman,” claimed her manager “systematically favored white employees” over non-white direct reports.
After Mohamed reported issues to leadership, she alleges SHRM began “setting her up to be fired within weeks”. The case proceeded to trial after U.S. District Judge Gordon P. Gallagher denied SHRM’s summary judgment motion in October 2024, calling it a “messy employment discrimination case.”
The trial began December 1, 2025, and lasted five days before the jury returned its verdict.
What Were the Discrimination Allegations?
Mohamed’s lawsuit detailed several specific claims of racial discrimination and retaliation:
Systematic Favoritism: Mohamed claimed her supervisor, Carolyn Barley, systematically discriminated against non-white employees. She alleged being micromanaged and excluded from meetings while white colleagues received preferential treatment.
Arbitrary Performance Standards: Mohamed contended project deadlines were arbitrary and used as pretext for dismissal. Colleagues testified they never met major project deadlines but were never disciplined or coached for missing them.
Retaliation After Complaints: Mohamed complained to her manager’s supervisor in June 2020. She met with SHRM CEO Johnny C. Taylor Jr., who acknowledged SHRM was struggling with “people manager” and diversity issues. The CHRO initially stated he would explore moving her supervisor to a different role.
Flawed Investigation: Instead of addressing her concerns, Mohamed was assigned coaching sessions where the Director of Talent Development accused her of causing low morale. The internal investigation closed in late August 2020 with a letter determining her complaints were unfounded. She was fired the next day after missing a deadline.
Who Is Rehab Mohamed?
Mohamed worked for SHRM from 2016 to 2020 as a senior instructional designer. Throughout her tenure, she earned positive performance reviews and two promotions.
Her most recent performance review rated her as a “Solid Performer” or “Role Model” on all criteria and raised no concerns about deadlines—contradicting SHRM’s later claims that she was terminated for performance issues.
What Is the $11.5 Million Verdict?
The jury found SHRM liable for both racial discrimination and retaliation under federal law. The breakdown:
- $1.5 million in compensatory damages: To compensate Mohamed for harm suffered
- $10 million in punitive damages: To punish SHRM and deter similar conduct
The court allowed punitive damages because a jury could reasonably conclude SHRM acted with “reckless indifference” to Mohamed’s federal rights.
Alice K. Jump, an employment attorney, said “The optics are bad because they’ve held themselves out as an authority on best practices”.
What Did the Court Find?
Judge Gallagher’s October 2024 order denying summary judgment revealed troubling evidence:
Flawed Investigation Process: SHRM put forward no facts indicating it engaged in a meaningful investigation of Mohamed’s retaliation complaint. The judge noted a jury could reasonably conclude the investigation was a sham given the HR representative’s failure to discuss the retaliation complaint with Mohamed and his involvement in drafting emails setting deadlines.
Termination Paperwork Prepared Early: Evidence suggested SHRM began drafting termination documents the same day Mohamed complained about retaliation.
Disparate Treatment: Colleagues testified they witnessed similar disparate treatment of non-white workers and that missed deadlines were commonplace but had never been a disciplinary issue.
Punitive Damages Justified: The judge found a reasonable jury could conclude SHRM maliciously discriminated and retaliated with reckless indifference to Mohamed’s rights, specifically pointing to allegations that HR “provided [the manager] cover with a flawed investigation and orchestrated [Mohamed’s] termination in concert with [the manager]”.
Trial Testimony and Evidence
The five-day trial included revealing testimony:
CEO Testimony: CEO Johnny C. Taylor Jr. testified December 4 that he wasn’t involved in Mohamed’s termination.
Inexperienced Investigator: Former SHRM employee Mike Jackson, who investigated the matter, told the court Mohamed’s was the only discrimination claim he had ever investigated. He underwent one training session on HR investigations just months before the events Mohamed cited, and couldn’t remember any specifics from the training when questioned.
SHRM’s Attempted Evidence Exclusion: In September, SHRM asked the court to bar Mohamed from introducing evidence that the organization is a specialist in HR best practices. Judge Gallagher denied the request, saying SHRM’s “asserted expertise in human resources is integral to the circumstances of this case and cannot reasonably be excluded”.
What Is the Current Status of the Case?
SHRM issued a statement December 5, 2025, strongly disagreeing with the verdict and announcing plans to appeal “to the highest courts in the land”. The organization stated: “This claim has no merit. None. Today’s decision does not reflect the facts, the law, or the truth of how SHRM operates”.
Mohamed’s lawyer, Ariel DeFazio, told Business Insider the jury “spent a week listening very closely to the evidence” and decided to hold SHRM accountable. DeFazio said the verdict would “send a message to workplaces in the entire country.”
The case remains pending as SHRM pursues its appeal.
What Are the Implications for Employers?
This verdict carries significant implications for workplace accountability:
Heightened Standards for HR Experts: Organizations that promote themselves as HR authorities may face higher scrutiny. The court’s decision to allow evidence of SHRM’s expertise means juries can consider whether employers who teach best practices follow their own advice.
Investigation Quality Matters: The judge emphasized that performance management should include coaching, offers of support, and consequences—all well documented. The same applies to internal investigations.
Temporal Proximity Red Flags: Evidence that termination paperwork was prepared the same day as a retaliation complaint proved damaging. Timing matters in discrimination cases.
Punitive Damages Risk: When employers act with reckless indifference to employee rights, punitive damages can multiply liability far beyond compensatory awards. The $10 million punitive award here dwarfed the $1.5 million compensatory damages.
Pattern Evidence: During discovery, SHRM revealed two other discrimination complaints—one filed with the EEOC in 2018 (settled) and another filed with a California regulator in 2021 (pending). Multiple complaints can establish patterns.
What Does This Mean for Employee Rights?
The verdict reinforces several key employee protections:
Retaliation Protection Is Broad: Employees who complain about discrimination cannot be punished for speaking up, even if the underlying discrimination claim ultimately fails.
Performance Pretexts Don’t Work: When recent reviews are positive and colleagues aren’t disciplined for the same conduct, employers cannot credibly claim performance-based terminations.
Access to Leadership Doesn’t Equal Protection: Mohamed met with both the CEO and CHRO, yet was still terminated shortly after. Complaining—even to top leadership—doesn’t guarantee fair treatment.
Substantial Jury Awards Possible: Federal employment discrimination law allows both compensatory and punitive damages. Unlike some state laws with damage caps, federal awards can be substantial when employers act with reckless indifference.
Legal Framework: Title VII and Section 1981
Mohamed’s claims arose under two federal statutes:
Title VII of the Civil Rights Act of 1964: Prohibits employment discrimination based on race, color, religion, sex, and national origin. Title VII also prohibits retaliation against employees who oppose discriminatory practices or participate in discrimination investigations. Employers with 15 or more employees are covered.
Section 1981: Unlike Title VII, there is no damages cap on race discrimination claims filed under Section 1981. This statute prohibits racial discrimination in contracts, including employment contracts, and allows unlimited compensatory and punitive damages.
Both laws require proving:
- The employee belongs to a protected class
- The employee was qualified for the position
- The employee suffered an adverse employment action
- The circumstances suggest discrimination
For retaliation claims, plaintiffs must show:
- They engaged in protected activity (opposing discrimination)
- The employer took adverse action against them
- A causal connection exists between the protected activity and adverse action
Timeline of Events
2016: Rehab Mohamed begins work at SHRM as instructional designer
2016-2020: Mohamed receives positive performance reviews and two promotions
June 2020: Mohamed complains to her manager’s supervisor about discriminatory treatment
Summer 2020: Mohamed raises concerns with CEO Johnny C. Taylor Jr. and CHRO
August 2020: Internal investigation closes, finding Mohamed’s complaints unfounded
September 2020: Mohamed fired after missing a deadline
February 2021: Mohamed files EEOC complaint
October 2022: Mohamed files lawsuit in Colorado federal court
October 2024: Judge Gallagher denies SHRM’s summary judgment motion, allows case to proceed to trial
December 1-5, 2025: Trial held in Colorado federal court
December 6, 2025: Jury returns $11.5 million verdict for Mohamed
December 2025-Present: SHRM announces appeal
Context: SHRM’s Recent Controversies
The verdict arrives amid mounting controversies at SHRM:
DEI Messaging Changes: In 2024, SHRM dropped “equity” from its “inclusion and diversity” messaging, setting off debate about language and HR’s role in fair treatment. CEO Taylor acknowledged the move during the annual conference, noting the legal precariousness of “equity” after the Supreme Court’s Students for Fair Admissions v. Harvard decision.
Workplace Policies: SHRM implemented a new attendance policy penalizing workers who arrive even a minute after 9 a.m., issued a memo about a “conservative” dress code banning sequins, and held a meeting where Taylor called some staffers “entitled,” “complacent,” and “sloppy”.
Additional Discrimination Cases: The organization faces other pending discrimination complaints, raising questions about internal culture.
What Employers Should Learn
This case offers critical lessons for employers, especially those in the HR field:
Practice What You Preach: Organizations that advise others on HR best practices face heightened scrutiny when they fail to follow their own guidance.
Document Everything: Performance management decisions must be thoroughly documented with contemporaneous records showing coaching, support, and progressive discipline.
Conduct Real Investigations: Internal investigations must be thorough, impartial, and documented. Investigators should not simultaneously assist the accused supervisor or draft termination paperwork.
Take Complaints Seriously: When employees complain about discrimination, respond substantively. Don’t dismiss concerns or coach the complaining employee while leaving problematic behavior unaddressed.
Avoid Pretextual Reasons: When recent performance reviews are positive and similar conduct goes unpunished, juries see through pretextual justifications for termination.
Consider Pattern Evidence: Multiple complaints, even if settled or pending, can establish patterns that strengthen individual claims.
Understand Punitive Damages: Reckless indifference to employee rights can result in punitive damages that far exceed compensatory awards.
Frequently Asked Questions
What was the SHRM lawsuit about?
The lawsuit alleged SHRM racially discriminated against and retaliated against former employee Rehab Mohamed, an Egyptian Arab woman who worked as an instructional designer from 2016 to 2020. She claimed her white supervisor systematically favored white employees and that SHRM retaliated when she complained.
How much did the jury award?
The Colorado jury awarded $11.5 million total: $1.5 million in compensatory damages and $10 million in punitive damages.
What laws apply to this case?
Mohamed sued under Title VII of the Civil Rights Act of 1964 and Section 1981, both federal laws prohibiting racial discrimination and retaliation in employment.
Will SHRM pay the full verdict?
SHRM has announced plans to appeal. The appeal process could take months or years. If SHRM loses on appeal, it would be required to pay the full amount plus interest. Employers often negotiate reduced settlements during appeals.
What evidence was most damaging to SHRM?
Key evidence included: testimony that colleagues missed deadlines without discipline, evidence that termination paperwork was drafted the same day Mohamed complained about retaliation, testimony from the investigator who had minimal experience and couldn’t remember his training, and Mohamed’s recent positive performance reviews.
Can employees sue for retaliation even if their discrimination complaint is wrong?
Yes. Title VII protects employees who complain about discrimination in good faith, even if the underlying discrimination claim is ultimately unfounded. The law protects the act of complaining, not just complaints that prove true.
What should employers do when employees complain about discrimination?
Conduct a thorough, impartial investigation immediately. Document all steps. Don’t prepare termination paperwork before completing the investigation. Don’t coach the complaining employee on their communication style while ignoring the alleged discriminatory conduct. Take corrective action if warranted.
Does this verdict apply to all employers?
The verdict itself only applies to this specific case. However, the legal principles—Title VII protection against discrimination and retaliation—apply to all employers with 15 or more employees. The case serves as a cautionary tale about the importance of proper investigations and documentation.
What happens next in the SHRM case?
SHRM will file its appeal, likely to the U.S. Court of Appeals for the Tenth Circuit. The appeals court will review the trial record for legal errors. This process typically takes 12-24 months. Mohamed can also appeal if she believes the award was too low, though that’s less common.
Need Legal Guidance? Employment discrimination and retaliation cases involve complex federal and state laws. If you’ve experienced workplace discrimination or need guidance on employment practices, consult with an employment attorney who can evaluate your specific situation.
This article is for informational purposes only and does not constitute legal advice. Employment laws vary by jurisdiction and circumstances.
About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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