Among the challenges facing HR as organizations head into 2026 is a dynamic landscape that is driving up the risk for litigation. For instance, a Supreme Court decision earlier this year changed the threshold for ERISA lawsuits, paving the way for suits against major employers like JPMorgan Chase and Wells Fargo. At the same time, the influence of AI over employment decision-making is expected to enhance legal risk, while ongoing federal changes are quickly reshaping compliance.

When high-profile suits are filed, it not only puts the organization at risk of reputational and financial damage, experts say, but also spotlights already-existing workplace culture problems—which, unresolved, can create both short- and long-term talent challenges.

Leaders who ignore culture issues are risking more than employee satisfaction, writes Mahir S. Nisar, principal at employment litigation firm Nisar Law Group, opening their organizations up to discrimination lawsuits, wrongful termination claims and regulatory penalties.

“It creates ongoing legal liability that can devastate organizations,” he says.

What’s happening at SHRM?

The latest organization at the center of the conversation about litigation and culture is one known to HR communities.

On Friday, a jury in Colorado ruled in favor of a former employee of the Society for Human Resource Management, who sued the HR industry association for racial discrimination, awarding the Egyptian-Arab woman $11.5 million. The plaintiff, Rehab Mohamed, who worked as an instructional designer at SHRM from 2016-20, alleges her former manager consistently treated her differently than her white counterparts. She says she lodged formal complaints and was fired in September 2020.

For its part, SHRM contended Mohamed had ongoing communication issues with her supervisor and failed to meet deadlines and complete projects. Yet, in pre-trial proceedings, SHRM asked the judge to prevent Mohamed from referring to the organization as a “so-called ‘model employer,’ ” a move that critics say inadvertently acknowledged the link between litigation and culture issues.

In a statement released after the verdict, SHRM said it “strongly diagree[d]” with the verdict and will appeal, saying the case has “no merit.”

“Today’s decision does not reflect the facts, the law or the truth of how SHRM operates,” the statement said. “We have acted with integrity, transparency and in full alignment with our values and obligations. We remain steadfast in our mission, undeterred in our focus and resolute in our commitment to stand up for what is right.”

The suit wasn’t the first time SHRM has come under fire. It previously settled a disability class-action lawsuit that resulted in its services becoming more accessible to hearing-impaired members.

The latest trial opened just days after a Business Insider story highlighting ongoing “workplace tension” at the organization—stemming from a stated new “conservative” dress code, a stringent in-office policy, what a handful of anonymous employees deemed a sexually suggestive performance at a company event and alleged derogatory remarks about employees from CEO Johnny C. Taylor.

Taylor himself has faced backlash in recent years in HR circles for his work with President Donald Trump. Earlier this year, after SHRM’s much-publicized 2024 decision to drop “equity” from its DEI work, Taylor interviewed media pundit Van Jones alongside conservative activist Robby Starbuck—a leading figure in efforts to dismantle corporate DEI—at SHRM’s inclusion conference, a move that drew sharp criticism.

The cost of culture problems

The wave of public criticism and recent litigation has sparked widespread online chatter about potential culture issues at SHRM.

As one senior HR director wrote on LinkedIn: “The recent SHRM lawsuit sheds light on a deeper issue within traditional HR organizations: a tendency to prioritize compliance and cost management over culture and accountability.”

Consistent workplace tensions, another talent and operations leader wrote on the platform, suggest a deeper, systemic problem.

“At some point,” they said, “this stops being a controversy and becomes a pattern. And honestly, that pattern tells you exactly what an organization values.”

That was a sentiment echoed by workplace expert Laurie Ruettiman: “The message coming from SHRM right now feels pretty clear. Revenue matters. Profitability matters. Values are optional.”

Yet, values-driven leadership—carried out through a supportive culture—is critical, not just to stem public outcry but also to promote internal talent success, according to recent Monster research. The firm found that of workers who say they have “revenge quit” in the past—abruptly leaving a job they were dissatisfied with—culture improvement was the top-cited shift that would have prevented them from making that move.

All of the most common factors that pushed them to the door, Monster found, were culture-related: a toxic work environment, poor management and feeling disrespected.

“Most employees don’t walk out for money alone,” researchers wrote. “It’s culture, leadership and respect that matter most.”