Climbing TheLadders: One Rung Short For A Lawsuit?

Some time back in 2011, then CEO and founder Marc Cenedella for TheLadders snuck in a brand reversal. Instead of focusing on premium jobs, the niche job listing site opted to expand its services to everyone.

“We’re expanding, and today we say ‘bye bye’ to helping only those over $100,000 and ‘hello’ to helping all career-minded professionals," he wrote. "TheLadders now takes all salary levels and shows the right jobs to the right person.”

Back when it happened, the announcement drew 139 comments. Most of them were negative. And the entire story, that TheLadders had decided to become another job site, was mostly over. Or was it?

TheLadders faces a lawsuit that could shutter it. We'll see.

Lurking largely behind the scenes was the next chapter in crisis for the company. TheLadders is now facing a class action lawsuit in New York federal court. Specifically, the lawsuit doesn't look at 2011 as a rebranding expansion. It looks at an old post as an admission by TheLadders.

According to the suit, many of the jobs offered on TheLadders were scraped from other sites with no attempt at verifying how much they paid or even if they were current before the company made the switch in 2011. You can read the complete lawsuit filing here, but the crux of it is that the company simply changed its language in 2011 to match what the service had been all along — a premium payment job site (and not necessarily a premium salary job site).

The suit, filed by the New York class action firm of Bursor & Fisher, was also reported by recruiting consultant and blogger Nick Corcodilos. I recommend this read, as Corcodilos has posted a summary. There is another interesting piece by the ERE here, especially because it reads like a foreshadow to the September surprise (even if David Manaster stopped short of calling the service a scam).

Loud complainers want to be customers. Watch out for everyone else.

Manaster then went on to dismiss the ruckus by saying something he has said before. "When people have a beef, they can be counted on to complain loudly. When people are satisfied, they tend to … well, be satisfied." He seems to have been wrong on that point then and remains equally wrong today.

When people have a beef, they tend to leave quietly because they've already given up. The complainers, on the other hand, tend to be people who still want to be your customers, even if your company is built on a questionable model. And then there are those who will be heard, not with words but with actions — like anyone who piled on with the class action lawsuit that alleges fraud.

Interestingly enough, it wasn't only the people who were paying for "hand-screened" job selection that have been frustrated by TheLadders. Employers weren't really happy either. Along with mapping out most of the history, the article sources a direct quote by Cenedella, admitting that as many as half of all listings were culled from the web. Basically, staffers guessed at salaries as opposed to verifying that the listings truly paid $100k or more.

Exposure is good, unless it leaves you exposed to unnecessary risk.

Several years ago, I wrote a story about a company that hoped to go head to head with TheLadders public relations machine. At the time, both wanted to dominate a subscription-based job site niche that focused on jobs starting at $100k. The other company, RiseSmart, eventually shifted its focus to outplacement because it couldn't really compete in a niche against a competitor that possibly cheated.

Those stories were written more than five years ago. Even then, people were saying what they are saying today. Most (if not all) premium job listing sites aren't worth the money they charge. Ironically, in one of the articles I sourced then, executives from TheLadders said that $100k jobs weren't listed on free sites but only premium payment sites like TheLadders. This "fact," it seems, couldn't have been true if 50 percent or most of the postings were culled. Culled jobs had to be listed somewhere.

And therein lies the rub. TheLadders unquestionably dominated the space and ran others businesses out of the niche with an overwhelming barrage of paid television commercials and public relations. But, at the same time, the crisis that TheLadders may face next is being framed up by all that coverage.

Every quote by company spokespeople that reinforces an overinflated marketing statement prior to 2011 carries the potential to become an exhibit. And although I'm not sure, the company seems to know it. Its current strategy seems to be burying lawsuit stories with anything and everything from Spring Cleaning job searches to launching a new ELITE program to JobMobile, an event that will bring industry thought leaders together in Atlanta, Chicago, New York City, and San Francisco.

That might not be all that surprising for the public relations heavy site. But what is surprising is that the company isn't talking about the suit. It hasn't made a statement anywhere on the site to date, but did issue a statement about the lawsuit to The Business Insider, making this a living case study.

Accepting Leadership: ERE Network

If there is one “most important” lesson to be learned from an ERE Network dispute that became a public dispute, it is that those who begin to assume leadership roles, even within social media, must be willing to embrace the responsibilities of leadership no matter how unpleasant they may seem.

Neither David Manaster nor Karen Mattonen, the two most public parties who have participated in this dispute, perceive themselves to be leaders, yet I keep seeing the term continually attached to their names within the recruiting industry. Manaster is CEO of a network that is comprised of 50,000 members and Mattonen operated four discussion groups within that network.

“A leader is an individual who influences, motivates, and enables others to contribute toward the effectiveness and success of the organizations in which they are members.” — R.J. House

This could include any number of organizations, ranging from families and fan clubs to companies and industries. Based on varied responses and comments from other members, I would say both qualify.

They are not alone. Hundreds and thousands and millions of people all over the world, online and off, proliferate the idea that somehow they are not leaders while assuming roles that clearly have leadership responsibilities. And yet, somehow, they fool themselves into believing that if they exempt themselves from the title, they are somehow excused from the accountability of being effective.

As much as I like both Manaster and Mattonen, it seems to me that their unwillingness to apply some principles of effective leadership stems from being in denial that they were leaders, though perhaps in different ways. Had they seen themselves as leaders, I suspect the outcome would be very different.

Having spoken to both parties, it seems futile for me to attempt to explain the actions, events, and perceptions that led to this point. The simplest but somewhat debated summation is this: Mattonen, who led discussions on difficult topics such as ethics and law on the ERE Network, allowed herself to be baited into a personal dispute by another party or parties. The result of this, since she already received a warning for a similar dispute, was her dismissal from the ERE Network.

Any time a leader is banned from a network, whether that position is in title or by default through opinion or action, there are bound to be questions and disagreements over the decision. There were.

As a result, Manaster attempted to move these questions from the ERE Network to a different forum, his personal blog, where those who disagreed with the outcome could express their grievances rather than infuse their questions into discussion groups where perhaps they did not belong. While he achieved this outcome (to his credit), he misidentified several steps in crisis communication.

The most obvious of these was that he may have been better served by making it clear to Mattonen why the decision was made and then directing concerned members to her. As an alternative, he may have created a thread or group within the network and allowed Mattonen to temporarily participate. He may have benefited by keeping the message and focus on the outcome of the dispute rather than attempting to explain the decision for the ban, which shifted the focus from the original dispute onto Mattonen's ban. This created the appearance that Manaster had taken sides.

Truly, Manaster seems to have had the best intentions, but all too often the best intentions do not produce the desired outcomes. In this case, the impact of the communication made the dispute more public; expanded points of potential dissension about Mattonen’s dismissal; increased the number of participants in what became a perceived debate (those vocal and not vocal); created the perception that Manaster had taken sides (as the piece defends his reasoning for banning Mattonen rather than how he chose to handle the dispute); created consequences for Mattonen that extended beyond the ERE Network; and did not provide her any opportunity to respond (she can no longer post anywhere on the ERE Network). Mattenon did eventually respond on a new blog, elevating the crisis.

Fortunately, as with all crisis communication situations, the last step resets the process: collect feedback and adjust.

• There is an opportunity to recognize where the initial communication did not achieve the greater goal of bringing resolution to an unfortunate situation and unnecessarily focused on one individual in a dispute that involved several members. (All involved members, I am told, received warnings. As not all received a prior warning, not all have been dismissed.)

• There is an opportunity to reinforce the finer points of the initial message that seemed buried by comparison: Mattonen has made contributions within the recruiting industry and on the ERE Network specifically, and Manaster has every confidence that she will continue to make such contributions to the industry. Given the response, he may encourage other groups not to base their relationships with her on this network decision, which is isolated to ERE.

• There is an opportunity, it seems to me, that as leaders, both Manaster and Mattonen owe it to any respective followings to discuss, with an arbitrator familiar with the industry as needed and with a very narrow focus, how they may mutually and beneficially conclude the relationship so they may peacefully coexist within the industry. While this may not benefit either party per se, it will benefit those who know them and help prevent further polarization.

While this seems to be an isolated situation, the ERE Network might also review its terms of service, conflict resolution practices, and crisis communication policy. Quantified counts are not an appropriate measure to determine whether the policies that are in place may work or not. On the contrary, if the policies in place worked, there might not be a crisis today.

This leads me to the second “most important” lesson to be learned. There seems to be a trend in social media to push the concept of transparency onto every situation. This is a misconception. Conflict resolution for private matters is best conducted in private, with an arbitrator as needed, because once it is made public, it becomes even more difficult to resolve.

Publicizing Bans: ERE Network

Although I've always liked David Manaster, CEO of Electronic Recruiting Exchange (ERE) Network, which is the largest active community of recruiting professionals online, he recently published something on his blog that left me confused. There seems to be little communication logic behind publishing the banishment of a member from his organization.

"To date, I've avoided posting about this decision because I didn't want to needlessly embarrass anyone (which is also why I am not using her name in this post)," he wrote. "However, my lack of explanation and transparency in decision-making has resulted in a number of people publicly speculating about what happened, and that is further disrupting the experience of the silent majority on the ERE site — the exact opposite of the intended effect."

While the most obvious is that silence always leads to speculation, there are several other problems with his post from a communication perspective. Today, I'll share the first two. First, Manaster writes that "the other 49,990 members of the network don't care about these personal disputes." Yet, that didn't stop him from sharing this personal dispute with the rest of the world. Second, since everyone in ERE already knew who he was talking about, how does not mentioning her name make any difference?

Now it seems Karen Mattonen, the person Manaster referenced in his post, wants to know too. She posted several questions along with her side of the story, which includes, among other things, dated e-mails and several other names of those involved. One of the e-mails is from Manaster that says: "We can have any conversations that we need to via email, and they will remain private unless you choose to take our conversations public. What is it that you would like to discuss?"

Regardless of which side (if there are sides) people fall on, one thing is certain. It is never a good idea to publish someone's banishment (or loss of employment) on a blog because it broadens the debate and could potentially lead to other problems. In fact, companies might like to know that even journalists will respect "no comment" if the explanation would force the CEO to share a personal evaluation about a former member or employee. A better answer might have been: ask Ms. Mattonen.

Sooner or later, someone always comes forward with additional information that could cause a communication crisis, one that seems to lend itself to a case study. In this case, the person who came forward was Mattonen herself.