Bye-bye, HR — Let’s hope Bolt Financial CEO Ryan Breslow starts a trend

Ryan Breslow, the brash CEO of Bolt Financial, made a splash last week when he announced that he’d quietly abolished his financial-technology firm’s entire Human Resources department earlier this year. 

Yep, the pink-slippers got their pink slips.

At Bolt, Breslow said, the HR team “was creating problems that didn’t exist,” as part of “a culture of not getting things done and complaining a lot.” 

“The problems disappeared when I let them go.”

Cubicle-dwellers across corporate America rejoiced. 

As the front-line enforcers of woke workplace DEI policies, HR departments are widely seen as bossy, interfering, censorious and just plain trouble. 

Few seem to think they do anything more valuable than the far less overweening “Personnel” departments they replaced.

Workers made to labor under voluminous HR rules and forced to endure tedious training sessions have come to doubt whether all those rules and trainings make any difference in the real world.

The answer, actually, is that they don’t — at least, not when it comes to stopping problems like workplace sexual harassment.

A US Equal Employment Opportunity Commission task force found a decade ago that “much of the [workplace] training done over the last 30 years has not worked as a prevention tool.”

In practice, researchers found, those boring yet vaguely demeaning HR trainings seem to make low-level employees feel nervous and less willing to engage with fellow employees who might make a complaint, whether justified or not. 

The process is the punishment, after all — and when it comes to sexual harassment complaints, even frivolous ones, there’s a lot of process.

Meanwhile, victims of sexual harassment don’t see HR as much of a savior, The Atlantic’s Caitlin Flanagan reported in a 2019 deep-dive on the topic.

From their perspective, HR’s role seemed to be more about protecting the company than about protecting employees.

In this, of course, they are entirely correct.

The whole apparatus of HR rules and “compliance” training with regard to sexual harassment — and race discrimination, too — is driven by corporate desires to avoid liability by demonstrating “good faith.”

In 1998, two Supreme Court cases, Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, changed the way courts address workplace harassment claims.

The court found that companies can be held liable for such behavior if they had “created a hostile work environment” for their employees. 

So HR training sets up a corporate-defense system, by instructing employees that they must report any misconduct they may observe bosses or fellow employees committing. 

If nothing is reported to HR, the company can argue it couldn’t be expected to have remedied the behavior. 

“This is why all of that training — the videos and online courses and worksheets — seems so useless,” Flanagan explained: “It’s designed to serve as a defense against an employment lawsuit.” 

Race-based DEI training falls under the same rationale.

The idea is to make it harder to sue the company for harassment, and to reduce the damages in the event the company loses, by showing that it made a good-faith effort to prevent it.  

The EEOC task force found “no evidence” that HR training actually reduces harassment.

But as they say, the purpose of a system is what it does — and the purpose of all that HR training is to guard the company’s bottom line.

Bottom lines matter, and companies are entitled to protect them. 

But it’s rather disturbing that a pair of judicial decisions can lead to the creation of enormous corporate bureaucracies that no one ever actually wanted. 

All these mandatory trainings take up (many would say “waste”) time, instill fear and encourage employees to view their coworkers through potentially hostile lenses of race and sex. 

The EEOC and the Justice Department have even warned that some training programs may create a “hostile environment” for workers, by perpetuating and amplifying racial and sexual stereotypes.

And it’s easy to believe that, as Breslow says, the HR bureaucracy might cause problems rather than solve them: When you’re paid to manage problems, you want there to be plenty of problems for you to manage. (See also “homelessness nonprofits.”) 

Experts say that it’s culture, not bureaucracy, that controls bad conduct — but city, state and federal regulators reward bureaucracy, and many companies have gone along.

Breslow may be taking a legal risk by jettisoning Bolt’s HR officialdom.

But his rebellion is an act of bravery — and a welcome signal that the days of DEI scolding are, mercifully, coming to an end.

Glenn Harlan Reynolds is a professor of law at the University of Tennessee and founder of the InstaPundit.com blog.