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Panasonic suit offers cautionary tale for succession planning

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A lawsuit filed against Panasonic Corp. is showing some of the potential dangers of a succession plan that's perhaps too specific.

According to the lawsuit (embedded below), the electronics giant passed over qualified black women when awarding promotions, despite their talent and tenure with the company. And one of the plaintiffs says she has the succession plan that proves it.

In the amended complaint against Panasonic, filed in state Superior Court in June, Glorina Williams Cruz claims the company's succession plan — a document referred to as the "High Potential List," according to the suit — named her as next in line for the role of vice president of human resources.

Despite that, the lawsuit alleges, the company hired an underqualified white man.

"When white men were qualified for the job and were on the succession plan, they moved right into the position," said Nancy Erika Smith, an attorney with Smith Mullin P.C. who is representing all three women in the case. "So the succession plan in this case is pretty telling."

Panasonic did not respond to a request for comment. Its North American operations are being moved from Secaucus to Newark.

If that document exists, it serves as a cautionary tale for companies looking down the road, said Caroline Berdzik, a partner in the labor and employment group at Goldberg Segalla, in Princeton, who is not involved in the case.

"Things change. Business plans change. Anything in writing can come back and haunt you when it's that specific," Berdzik said.

"People leave their jobs. People move on to other opportunities," she said. "You can't necessarily be married to specific people … in specific roles, because it's a very fluid situation."

Instead, Berdzik said, executives can look at positions more generally — for instance, saying they would like to add a chief operating officer position in the next five years, or recognizing certain jobs will be eliminated over time.

If there are specifics in a succession plan, Berdzik said there should never be any surprises. Companies should use performance reviews to engage in meaningful dialogue with employees, and let them know whether they are being groomed for leadership. Higher-ups also should let those employees know of any shortcomings they might have, and ensure their goals for the next five years align with those of the company.

"Having a vision for the future and where you want to be is important for the economic health and well-being of a company," Berdzik said. "But I think they have to be very circumspect about how they do it."

Glorina Williams Cruz, et al v. Panasonic Corporation

Reporter Mary Johnson is @mjohns422 on Twitter.

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