When Brand Reputation Confronts Employee Activism

Several household brands have been in the news for taking a stand on racism and confronting other offensive content in traditional and social media. That concern is also at work behind the scenes, within the enormous business-to-business (B-to-B) sector. A recent decision by the leading independent public relations agency Edelman provides an interesting example of that dynamic, because it illustrates how employee activism can have an influence on high-level decisions on matters of brand reputation and corporate responsibility.

Why this global P.R. firm dropped Geo Group

Edelman has been in the news recently after reports surfaced that it agreed to represent the for-profit prison company Geo Group last spring, only to disentangle itself from the relationship earlier this summer.

That decision is not difficult to understand from a brand reputation perspective. The field of for-profit prisons is not a particularly savory one, and Geo Group has earned notoriety in recent months for documented incidents of inhumane treatment of immigrants at some of its facilities.

Geo Group is not the first high profile name to be turned away by Edelman in concert with a broader social trend.

Back in 2015, The Guardian reported that Edelman cut its longstanding relationship with the American Petroleum Institute, spinning the business off to a former subsidiary, Blue Advertising. The decision followed upon a movement within the public relations field to stop representing climate change deniers.

As another indication that the Geo Group decision may have been carried out with brand reputation in mind, earlier this summer Edelman released a comprehensive survey titled, “2019 Edelman Trust Barometer Special Report: In Brands We Trust?” The report highlights a shift in the way consumers perceive brand reputation. Turning out a good product is no longer enough to protect a company’s reputation, Edelman's researchers have found (emphasis added):

“…consumers have many more reasons to question how much they trust a brand. Will it protect their data and privacy? Use automation responsibly? Tell the truth in this era of disinformation? In short: Can consumers trust a brand do the right thing?” 

The evolving role of employee activism

To be clear, it is possible that high-level executives at Edelman took the lead in terminating the relationship with Geo Group for reasons other than brand reputation. In an official statement provided to the media, an Edelman spokesperson explained the decision as an ethically neutral one.

However, last week the trade publication Ad Week reported at length on the episode and suggested that brand reputation did play a central role in the decision. Additionally, Ad Week suggested that employee activism was also at work.

Citing anonymous sources both inside and out of Edelman, Ad Week reported that "the firm opted not to work with The Geo Group because of internal pressure from staffers protesting the partnership and worries that the potential blowback could endanger relationships with other clients.”

Ad Week based its reporting partly on two insider sources at Edelman, who claimed that employees spoke up after receiving an internal email announcing Geo Group as a client.

The publication also noted the relationship between brand reputation and employee activism:

“Executives were concerned about employees’ objections to the business, the sources said, but they also feared public awareness of the relationship might damage Edelman’s reputation.”

Among other trade publications to carry the story, PR Week also cited a report in The New York Times, indicating that Edelman dropped Geo Group after several “employees were ‘disturbed’ by the work and asked not to work on it.”

Appearances, aside, employee activism works

Even where employee activism does not achieve immediate results, companies can still suffer reputational damage.

A worst-case scenario was recently offered up by the home furnishings company Wayfair, which suffered through a high walkout demonstration at its headquarters in downtown Boston when it failed to respond to employees’ concerns over the Trump administration’s treatment of immigrants.

The impact on talent recruitment can be especially concerning when other companies in the same field have taken steps to listen and respond.

The Edelman decision, for example, has thrown additional light on a reported “ethical crisis” over immigration issues at Ogilvy, another leading public relations firm.

That is no idle concern. In 2017 the research and consulting  firm Povaddo found that “more than half (57 percent) of those working in America’s largest companies feel that their employers should play a more active role in addressing important societal issues.”

Those findings have been borne out at Facebook, for example, where employees petitioned to take Peter Thiel off the company’s board of directors over his support for then-presidential candidate Donald Trump during the 2016 election cycle.

At Amazon, employees have been advocating for the company to step up its efforts on climate change. At Google and Microsoft, employees have been petitioning their companies over surveillance and immigration issues.

None of these instances have had a direct or dramatic impact on high level executive decisions — yet. As top firms compete for talent and loyalty, high level decisions about brand reputation will become increasingly entwined with the social concerns of employees.

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