Ford did their investigation, so what went wrong? Result: $10M Settlement.

When a company is in the news for paying out at large harassment discrimination settlement, the first thought is that they did not conduct an appropriate investigation. But that is not always the case. Last week the EEOC ended an investigation into claims of harassment by employees in two Ford facilities in the Chicago area. (https://www.eeoc.gov/eeoc/newsroom/release/8-15-17.cfm) Based on the findings, Ford agreed to settle the claim for $10.125M in monetary relief to multiple female and African-American employees who had claimed sexual and racial harassment. Ford chose to voluntarily resolve this issue with the EEOC, without admission of liability, to avoid an extended dispute.

A spokesperson for Ford provided a statement that, “Ford does not tolerate harassment or discrimination of any kind; we are fully committed to a zero-tolerance, harassment-free work environment at all facilities and to ensuring that Ford’s work environment is consistent with our policies in that regard. Ford conducted a thorough investigation and took appropriate action, including disciplinary action up to and including dismissal for individuals who violated the company’s anti-harassment policy.” As such, it appears that they met the legal requirements. So that may have you wondering what went wrong.

It is simply not enough to conduct an investigation once an employee or group of employees comes to HR and files an official complaint. A company must be able to prove that their managers are trained regularly on what behaviors to look and listen for, in order to stop the behaviors before they become systemic or egregious. And take prompt action to investigate immediately at the first sign of a problem. It is equally important to ensure appropriate follow up post investigation to ensure the improper behaviors have stopped and no retaliation is taking place.

In the Ford Motors case, there was reasonable evidence that employees and managers were aware of the behaviors which were claimed to meet the definition of harassment, and that they did not address the issue in a timely manner. Their excuse was that no official complaint was made, even though there was open discussion by employees in the workplace, so no investigation was required. This resulted in the improper conduct continuing, and affecting more employees, until an actual complaint was filed. By the time a formal investigation was conducted, the EEOC found that the company had retaliated against employees who complained about the harassment or discrimination.

In addition to the $10 million to be distributed among the claimants, Ford will be under the scrutiny of the EEOC for a period of five years and will be required to report any employee complaints of harassment and/or related discrimination. They must also provide documentation that they are continuing to disseminate their anti-harassment and anti-discrimination policies and procedures to employees and new hires. And provide proof that they are constantly monitoring their workforce for issues of alleged sexual or racial harassment and related discrimination, to include monitoring by managers.

To prevent this from happening to your company, take the following steps:

 Institute a walking management policy. This type of policy requires all supervisory employees to spend a required amount of time each day observing and interacting with their workforce, and noting conversations and behaviors that may signal problems.

 Train supervisory, HR and executive employees on what signs to watch for. For example, the absence of conversation when managers walk in the room, changes in absentee patterns and physical rigidity or avoidance when interaction with a specific employee or employees are required.

 When it is noticed that an employee is acting differently, start a conversation. Even if it only includes small talk to begin with, it will increase the comfort level of the employee in coming forward with a complaint.

 Prove that the company/HR open door policy is effective by making it a priority to stop what you are doing to allow employees to come in and talk. It can be difficult for an employee to come forward, and if they are shut down on the first attempt they will generally not try again. Then follow up on the information you receive, even if there is no formal action to be taken.
For more tips and guidance on Investigations, sign up for the HR Investigator’s Blog and the Workplace Investigations Quarterly Newsletter at www.investipro.com.

KPMG Settles with the OFCCP to Pay $420K to Asian Applicants.

Last week, KPMG (one of the big four accounting and audit firms) agreed to pay $420,000 to 60 qualified Asian applicants who were allegedly not hired due to their race/ethnicity. The firm entered a conciliation agreement with the DOL/Office of Federal Contract Compliance Programs (OFCCP) after applicant and hiring data was found to have had a disparate impact on the hiring of Asians for the associate audit positions in the Short Hills, New Jersey location.  The settlement not only includes back wages and interest, but also allows class participants to be considered first for employment in open associate audit positions until six are hired or the list of interested class members is exhausted.

I have heard discussion that this is not a huge expense to such a large, world-wide company. And that is likely true. However, the bad publicity and continuing exposure due to the case will be far reaching. Not only is there bad press, but claims of this type will likely cause a significant reduction in the applicant pool for open positions at KPMG.  The cost of expanding the search for appropriate staff can be significant. In addition, the OFCCP is requiring the firm to revise their hiring practices, policies and procedures, and monitor the selection process through every step for every open recruitment to ensure selection procedures are not having an adverse impact. This information will need to be reported and provided for audit upon request. The legal defense fees alone, which have accumulated since the inception of this case in 2011, make this a very expensive oversight on the part of KPMG.

This settlement effectively closes the OFCCP investigation and claim. But there are still other means of punishment and restitution that may come for KPMG such as the claim of systemic gender pay disparity and promotion discrimination still pending in the U.S. District Court for the Southern District of New York.

HR Manager Personally Liable: A Real Fear for HR Professionals

Personal liability is nothing new to HR professionals. Since 2012, it has been very clear that both managers and HR employees can be held personally liable for retaliatory measures related to discrimination and harassment claims. This information is generally included in our Discrimination and Sexual Harassment training. But in case you don’t know why here is the case that made it clear.

hr & employmentOn May 24, 2012, the Seventh Circuit Court of Appeals concluded that an employee who does not directly make the decision to terminate another employee, but who influences that decision on the basis of an impermissible bias, may be held individually liable under 42 U.S.C. § 1981 in a subsequent lawsuit. In this case, https://casetext.com/case/smith-v-bray, Darrel Smith was an African-American process technician who filed suit for discrimination and retaliation against his employer and two individual employees – his immediate supervisor and the HR manager.  By the time the suit was filed, the company had filed for bankruptcy protection and was discharged from liability. As a result, the suit proceeded against the supervisor and the HR manager, as individuals. Although individual employees cannot be held personally liable for discrimination or retaliation under Title VII, an individual may be held personally liable under Section 1981, which prohibits race discrimination in contractual relationships such as employment and under which Smith’s suit was brought.

Although this is a well-known fact, many HR professionals are still under the impression that if a claim was filed against the company, and them personally, the company would defend them and/or they would be protected under the corporate umbrella. This is not always the case. As in the Smith case, the company may file bankruptcy, may choose not to pay for the defense of the HR employee, or the Employer Professional Liability (EPL) Insurance doesn’t cover the HR employees’ personal charges. And, of course, 7 out of 10 businesses don’t even carry EPL insurance.

The good news is there are steps that can be taken to protect HR from personal claims.  The first and most important is to investigate all claims that have a potential relation to discrimination or harassment. Not just the blatant claims, but also the rumors, side remarks and observances that may be a precursor to a claim. If the company would rather avoid investigations, make it clear in writing to the CEO or GM that you are advising that an investigation be done.  The second step is to be involved in the investigation. If this is not possible, review every step to ensure that no bias has taken place and that every potential source of information needed to make a fair determination has been uncovered and reviewed. And finally, compare any potential corrective or punitive steps proposed against other outcomes for similar matters to ensure consistent and legally defensible adverse actions.

For this and other articles for HR professionals involved in conducting workplace investigations, see the  HR Investigations Newsletter Q2 2017.

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Workplace Investigations Improve Company Culture. Really?

Over the last few months, I have been speaking at regional HR meetings on the topic of “Using Workplace Investigations to Drive Employee Engagement and Improve Company Culture. And although I hear some skepticism on how this could be possible, attendance has been at very high levels. When talking to the attendees, I am hearing that HR professionals are very interested in finding a better way to handle sticky and serious employee relations issues. But there are numerous reasons why we are still doing the same old thing.

  1. There is no time to spend on research and implementation of anything that is not a daily process.
  2. Although investigations are costly and time consuming, most HR departments do not have a budget set aside for employee relations.
  3. The limited training resources available on investigations don’t provide information that transfers over well to actually conducting the investigation.
  4. Owners and/or executives are under the impression that avoiding investigations creates less liability than exposing possible problems in the workplace.

Now consider this. What if a workplace investigation was simply another standard business process that HR used to talk with employees and gather information, in order to find out what is really happening in their organization so that improvements can be made? When you think about it, you are likely doing this to resolve issues that arise and improve communications and actions between employees anyway.

Recent surveys show that employees often don’t bring forth issues of discrimination, harassment and bullying because they either don’t believe anything will be done about it if they do, or that they will get blamed and be treated poorly or lose their job. HR must clearly communicate a new initiative to investigate all workplace challenges in the same manner, in order to create a great place to work for everyone. And then stand by that promise. The good news is, they don’t even have to be called investigations. Maybe the “Better Workday Project” would fit well into your company culture. When employees start to see a positive impact, they will get on board.

There are several benefits that come from using the same “investigation” process for all forms of workplace conflict.

  • Employees get comfortable with the process and open participation increases.
  • Employees begin to see that brining issues to HR really does lead to resolution and a better place to work.
  • The relationship between managers and HR becomes more interactive.
  • Studies show that employees that trust upper management and HR, and feel they are treated fairly, are more productive and engaged with their peers.
  • When the serious accusations arise, investigations are more productive, and employees are less fearful. After all, they usually know what is happening in the workforce before management or HR.
  • It is much easier to get owners and executives on board for the serious investigations, when they have seen improvement by investigating the smaller employer relations matters.

One step forward:

The next time an employee relations issue arises, take the time before you act to plan out a means to deal with the issue that implements the standard steps of an investigation. Then work through the steps methodically to see how this application could reduce time spent and make the process more calm and respectful.

Don’t have a streamlined, compliant investigation process in place? Get a little help from InvestiPro.

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Will Your Investigator Spill The Beans? A Lesson From The White House.

Whether it’s your VP of HR, a department manager or an outside investigator, can you be sure your workplace investigator won’t jeopardize the investigation by sharing too much information? We all believe that our people know better than to share the details of an investigation with anyone who does not have a business need to know. But sharing information at the wrong time, even with the right people, can still jeopardize the investigation.Continue reading

When HR Does Something Good “Just Because”.

In work, as in life, it is often the little things that matter. Let’s face it, life isn’t perfect. And although we all try not to bring our personal lives into the workplace, there are times when it just can’t be helped. As HR professionals, we are often aware of employee’s personal situations when no one else in the company knows. For privacy reasons, we are required to keep it that way. But it’s important to remember that while keeping the workplace fair and compliant, we can also help keep the workplace human and do something good.Continue reading

Your Employee Called the EEOC. Now what?

Any employee who feels he/she has been discriminated against or harassed can file a complaint against her employer with the Federal Equal Employment Opportunity Commission (EEOC) or State Fair Employment Office.  Whether or not the complaint has merit, the employer must then spend time, effort, and often money to defend their position. Knowing what steps to take can help an employer show cooperation, while positioning themselves for defense if needed.

Once the EEOC receives a complaint, the employer will be notified by letter within 10 days. The letter does not imply findings against the employer. Rather, it is the first step the EEOC will use to determine whether there is reasonable cause to believe a violation has occurred. The letter will request a “Statement of Position” from the employer. This document is where the employer tells their side of the story. However, the information provided may be used for or against you. Therefore, there are three things to consider before submitting your position statement:

  1. If you have an attorney, it may be wise to notify him or her of the complaint and ask for a review of the position statement prior to sending it to the EEOC.
  2. If you have an Employer Professional Liability policy (EPL), chances are it requires you to contact the carrier prior to submitting the position statement.
  3. You must report only the facts. These facts will need to be verifiable, and opinion is not advised.

If you do not have or choose not to contact your attorney, I highly suggest reviewing the EEOC resource guide on effective position statements.

Next, the EEOC follows up with a formal Request for Information. The RFI may ask the employer to submit policies, the charging employee’s personnel files, the personnel files of other individuals and other relevant information, such as proof of training and contact information for potential witnesses. The EEOC may also request a visit to the workplace to view evidence and interview potential witnesses.  Although this can speed up the information gathering process, it can also be disruptive to the company and create an over-exposure of facts.  If the EEOC does not come on-site, they will likely still contact employees who may have pertinent information or may be witnesses to the case. They have the right to do this with non-management employees without the employer’s knowledge or permission.

It is important to provide all information requested by the deadline provided. In the case of unforeseen circumstances that make it impossible to meet the submission date, an extension must be requested from the EEOC Investigator. Once submitted, the EEOC will review the information to determine whether the complaint merits further action. One or more of the following actions will then take place.

  1. A Dismissal and Notice of Rights will inform the employee that the EEOC has dismissed the case, yet she still has the right to file a lawsuit with the federal court within 90 days.
  2. A Letter of Determination will state that there is reasonable cause to believe that discrimination/harassment has occurred and invite the parties to join the agency in seeking to resolve the charge through an informal process known as conciliation.
  3. If conciliation fails, the EEOC has the authority to enforce violations of its statutes by filing a lawsuit in federal court on behalf of the employee or issuing the employee a Notice of Right to Sue, and she may file a lawsuit in federal court within 90 days.

Although this process can be a time burden, preparing ahead by conducting and documenting prompt, thorough and impartial investigations can put a quick end to the fact-finding process, and limit liability exposure. InvestiPro can help. See our demo at www.goinvestiPro.com.