The Dangers of Failing to Effectively Combat Workplace Harassment

A series of recent verdicts, settlements, and case filings not only evidences a disturbing trend, but also highlights the need for businesses of all sizes to take a hard look at what they are doing to combat workplace harassment. In just the past month we have seen hundreds of thousands of dollars paid out just via EEOC conciliation and litigation alone. This alarming trend is simply the tip of the iceberg for these organizations, many of which are faced with reputational damage and morale issues that they may never recover from.


Harassment Incident Costs Tapioca Express $102,500


California restaurant chain and tea dealer Tapioca Express (via two of its franchises) settled a recent complaint by two Filipino females (aged 17 and 23) on July 29, 2019. The employees claimed the franchise owner made unwanted sexual advances and physical contact with them. According to the lawsuit, many employees of Tapioca Express were compelled to quit their jobs due to this franchise owner’s inappropriate conduct.


After an EEOC investigation revealed merit to the employees’ complaint, the company agreed to pay $102,500 to settle the case, which the agency found the parent company primarily responsible for failing to prevent harassment and creating a hostile culture via its franchises. In addition to the monetary damages, Tapioca Express was ordered to conduct harassment training for all employees and hire an external auditor to monitor its compliance efforts.


Piggly Wiggly Forced to pay $50,000 to settle Harassment and Retaliation Lawsuit


On July 26, 2019, grocery chain Piggly Wiggly agreed to pay $50,00 to settle a harassment lawsuit filed by the EEOC. According to the filing, a male employee made horrific comments and sexual advances to two female employees in Georgia. The lawsuit alleged the employees complained to the store manager, who “laughed at them and dismissed their complaints.” Furthering the issues, Piggly Wiggly allegedly cut both employees hours in the days immediately following their conversations with the store manager.


As with the Tapioca Express case discussed above, a critical element of the EEOC’s investigation centered on Piggly Wiggly’s lack of effort to prevent ongoing harassment. In addition to paying the $50,000 the company was forced to post notices of the incident in its workplaces and conduct mandatory sexual harassment training for all of its employees. 


Blackwater Protection Agrees to Pay $35,000 to Settle Harassment Lawsuit


Less than one month ago, on July 18, 2019, detective agency Blackwater Protection settled a harassment case filed by the EEOC against the owner of the company for $35,000. The lawsuit alleged the company’s CEO routinely subjected one of its employees to inappropriate comments and retaliated when the employee rejected his overtures.


 The CEO also asked the employee if she was gay and “whom she found attractive at work.” He also petted the employee’s hair and asked her to engaged in sexual acts with him after she had been employed by Blackwater for only one week. 


In addition to the monetary relief Blackwater has agreed to pay, it also was ordered to conduct mandatory harassment training and provide a written program detailing how it will seek to combat harassment in the future. 


Each of the cases discussed above concern company cultures where harassment prevention was not emphasized. In each lawsuit, the EEOC argued that the companies involved had not done enough to prevent incidents of harassment from occurring. Not surprisingly, none of these organizations had done any training, and none of them had programs to prevent harassment. In each case the organization was ordered to (or agreed) to provide harassment training as part of the settlement. 


There is simply no reason why an organization can justify the non-existence of a training program given the number of orders for training issued today. Whether your organization is operating in a state where training is mandatory or not, as you can see every settlement of a case filed by the EEOC orders training as part of the remedy. Rather than wait until the day invariably comes when an incident occurs, now is the time to do all your organization can to stop these incidents from occurring before it is too late.

New York Governor Signs Sexual Harassment Bill Into Law

On August 12, 2019 New York Governor Andrew Cuomo signed into law a bill that greatly expands protections for employees and impacts the New York sexual harassment training prevention law going forward.

Specifically, the law signed on August 12 changes the standard by which claims of workplace harassment are evaluated. Complainants are no longer required to prove that the misconduct at issue was severe and/or pervasive. Instead, the new law changes the statutory definition of harassment to include conduct that rises “above petty slights and inconveniences”.

According to the New York Post, the New York State legislature opined that it felt the need to end the “absurd” (their words) legal standard “that sexual harassment needs to be ‘severe or pervasive’ and making it easier for workplace sexual harassment claims to be brought forward, [the legislature is] sending a strong message that time is up on sexual harassment in the workplace and setting the standard of equality for women.”

Obviously not contemplated by the New York legislature is the significant impact and burden this new law will place on harassment jurisprudence in that state. Indeed, years’ worth of case law analyzing harassment claims under the now repealed standard have been rendered obsolete, and it remains to be seen how judges interpret the new “petty slights and inconveniences” standard (although the new law instructs judges to be liberal in their interpretation of the new standard). It remains to be seen what impact this will have on employers, but the outlook is certainly very employee-friendly.

Lastly and perhaps most significantly to those employers not facing a current charge of harassment, this new law impacts the now-existing obligation for employers to provide annual harassment prevention training to all of their employees. Those employers who have already complied with their 2019 obligation need not worry, but employers who have yet to train should confirm that their training reflects the new definition of harassment in order to be compliant. Syntrio has anticipated this change and has its New York courseware up to date and fully compliant with changes to the law.

Governor Pritzker Signs IL Harassment Training Bill into Law

Late on Friday, August 9, 2019, Illinois Governor Pritzker signed SB 75 into law. Among other changes, this law amends the Illinois Human Rights Act to require employers of all sizes to provide annual training on the prevention of sexual harassment in the workplace. The new law takes effect January 1, 2020, and training will be required to be completed sometime in the calendar year 2020.

As Syntrio reported in July, the best course of action for employers to take is to train their employees in the summer of 2020. This is because there are likely to be regulations clarifying the exact needs of the training program that will be available by that time. The parameters of the training include the standard issues common to all these laws:

  • Explanation of sexual harassment
  • Examples of conduct that constitutes sexual harassment
  • Summary of federal and state statutory provisions
  • Summary of the responsibilities of employers for prevention, investigation, and corrective measures of sexual harassment

That said, we have experienced several new laws of this nature since the beginning of the #MeToo movement, and in each case the state administrative agency involved has expanded the requirements via post-legislation regulation. We expect the same in Illinois and recommend staying tuned to Syntrio for further information.

What we know is true is that employers now have an obligation beginning January 1, 2020 to train all of their employees on this very important topic. Syntrio is of course ahead of the curve and well into the development process on its course. You can be assured that we will have fully compliant courseware on or before the effective date of the law and will be ready and willing to meet the needs of your organization with cutting edge courseware that exceeds the requirements of the law.

And the Beat Goes On – Part 2

New DOJ Antitrust Guidelines on Corporate Compliance Programs

On homage to Sonny & Cher’s anthem to continuing change, let’s look at some new and some updated expectations in the new DOJ Antitrust Division’s July release of its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.

The Antitrust compliance guidelines reinforce the DOJ’s updated guidelines in its Criminal Division’s recently-updated (April) Evaluation of Corporate Compliance Programs. The Antitrust guidelines mirror the Criminal Division’s focus on three key questions:

1) Does the company’s compliance program address and prohibit criminal antitrust violations? 

2) Did the antitrust compliance program detect and facilitate prompt reporting of the violation? 

3) To what extent was a company’s senior management involved in the violation? 

The following Antitrust guidelines outline does not exactly mirror but largely tracks the Criminal Division’s guidelines:

  • Design and comprehensiveness
  • Culture of compliance
  • Responsibility for the compliance program
  • Risk assessment
  • Training and communication
  • Periodic review, monitoring and auditing
  • Reporting
  • Incentives and discipline
  • Remediation and role of the compliance program in the discovery of the violation

Generally, the Antitrust guidelines follow the Criminal Division’s guidelines but tailored specifically to antitrust compliance. For instance, the Antitrust guidelines want to know whether policies and procedures, training and communication and other program elements exist specific to antitrust rules.

What’s specific about the Antitrust guidelines are how they focus a business’s attention to antitrust-related issues, such as the following:

  • Cooperation with competitors in cartels
  • Communication with competitors at trade shows and trade associations, or whether as part of legitimate collaborative arrangements
  • Retention and destruction of documents that may indicate antitrust violations
  • Toleration of antitrust violations in pursing new business, greater revenues, customer retention
  • Staff that oversees recruitment and hiring (as an example, in hiring from competitors or others who may share a competitor’s trade secrets).
  • Contract bids for possible bid rigging and market allocation
  • Pricing authority for making pricing changes for possible price fixing
  • Involvement of leadership, “high-level personnel”, or “substantial authority personnel” or others with authority to negotiate or set prices or approve significant contracts (This is particularly important to antitrust compliance because violations typically are due to the types of decisions that more senior individuals can make, such as agreements, contracts, and pricing decisions.)

The Antitrust guidelines reinforce that cooperating organizations can benefit from the Antitrust Division’s Corporate Leniency Program:

“Corporations and individuals who report their cartel activity and cooperate in the Division's investigation of the cartel reported can avoid criminal conviction, fines, and prison sentences if they meet the requirements of the program.”

This is a specific issue in antitrust compliance regarding a business that works with competitors to limit or reduce competition through various activities: bid rigging, price fixing, and market allocation, for example. Generally, the first business to come forward to authorities receives the greatest leniency since regulators may not have been able to discover the criminal activity on their own.

All businesses should evaluate their risks specifically to antitrust violations. Certain industries, through their structure and history, are more susceptible to these problems, and their companies should be particularly vigilant regarding antitrust risks.

In the end, whether a business’s principal risks are antitrust, bribery, data privacy, harassment, or other compliance topics, the basic expectations for effective compliance management are largely the same, just with greater attention to and controls around the higher risk areas. 

As shown through the DOJ’s April and July releases, the US Government continues to push for strong compliance management practices through updated guidance…

…and the beat goes on.


Find the first part of this series And the Beat Goes On - Part 1 here

And the Beat Goes On – Part 1

New DOJ Antitrust Guidelines on Corporate Compliance Programs

For many, “And the Beat Goes On” awakens memories of Sonny & Cher’s anthem to changing times.

Perhaps not surprisingly, the words are just as applicable to business ethics—change keeps on coming.

This month, the US Department of Justice continued its push for change with release of its Antitrust Division’s Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.

This probably sounds familiar: didn’t the DOJ just release something like this? Yes, in April the Department’s Criminal Division released Evaluation of Corporate Compliance Programs, the broader guidance about how the DOJ will investigate compliance efforts of organizations that come to its attention.  These new Antitrust guidelines serve as companion guidance specifically to antitrust (or fair competition) cases—what the Antitrust Division will specifically examine.

While these new antitrust guidelines may be viewed as just one additional, small step in the DOJ’s larger efforts, here’s another perspective: The US Government through its various departments and agencies continues its march to define compliance management at a specific level. Organizations that run afoul of specific laws will find it difficult to argue that a generalized compliance effort is sufficient.

Consider these past government efforts to promote strong compliance management practices:

  • US Equal Employment Opportunity Commission (EEOC) regarding workplace harassment and discrimination
  • US Department of Justice (DOJ) and Securities and Exchange Commission (SEC) Foreign Corrupt Practices Act (FCPA) Resource Guide
  • US Health and Human Services (HHS) Model Compliance Program (for hospitals, nursing facilities, pharmaceutical manufacturers, ambulance suppliers, physician practices, Medicare choice facilities, clinical laboratories, etc.)
  • US Federal Acquisition Regulations (FAR) and associated government contracting standards for compliance management
  • US Sarbanes-Oxley Act (SOX) compliance management requirements for publicly-traded compliance
  • US Occupational Health & Safety Administration (OSHA) Recommended Practices for Safety and Health Programs
  • US Environmental Protection Agency (EPA) Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations
  • US Federal Energy Regulatory Commission (FERC) Policy Statement on Compliance
  • US Securities and Exchange Commission (SEC) Compliance Programs for Investment Companies and Investment Advisers
  • US Federal Deposit Insurance Corporation (FDIC) Compliance Management System requirement

In short, the US Government doesn’t simply want to see businesses try to comply with laws and regulations—it wants to see active compliance management efforts that seek to avoid violations and, when they occur, quickly identify, mitigate and report them.

This approach by the US Government serves two objectives:

  • It pushes businesses to identify their greatest legal and regulatory risks to focus compliance efforts there.
  • It encourages businesses to look broadly at compliance to find more efficient ways to promote it instead of managing several standalone topic-specific compliance efforts.

Keep in mind that the DOJ’s April release updated 2017 guidance from its Fraud Section, and the update is designed to broaden the guidance’s applicability to all criminal conduct. Any business that thinks it doesn’t need to address compliance holistically – but only through focus on specific areas – is likely to find that is efforts won’t meet regulators’ tests, and it certainly is not an efficient means to build a culture of compliance.

Part 2 of this blog will look specifically at expectations in the DOJ Antitrust Division’s Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations. 

Click here to read Part 2