Technip to Pay $338 Million to Settle Bribery Case- Bloomberg Businessweek

According to the article, Technip SA, the second largest provider of oilfield services in Europe, has agreed to pay a settlement to the tune of $338 million, in order to avoid U.S. prosecution for violating the FCPA. It had been claimed that the company paid bribes of more than $182 million to gain $6 billion in contracts from Nigerian officials. Just another example of the steep fines companies are facing for violating the FCPA and committing fraudulent acts.

Over the past three years, the number of workplace retaliation charges has significantly increased. The EEOC reported 22,555 retaliation related charges in 2006, jumping all the way to 33,613 charges in 2009. Most organizations include a statement of non-retaliation in their corporate policies and outline a zero tolerance rule towards discrimination, harassment and other misconduct in the workplace. However, I’ve always wondered what measures companies use to protect those who have reported workplace misconduct from retaliation. Do companies expect employees to come forward when they feel retaliated against? Are organizations taking action themselves and developing programs to detect possible issues of retaliation?

For many companies, developing a plan to deal with retaliation is still a work in progress. At KPMG, they have developed an industry leading program to address retaliation in the workplace.

KPMG’s Proactive Approach

 This week I attended a very informative webinar hosted by the Society of Corporate Compliance and Ethics (SCCE). The webinar was titled “Monitoring for Retaliation: An Essential Part of Your Compliance and Ethics Program,” and was presented by Vicki Sweeney, Principal at KPMG and Carrie Penman, V.P. at the Ethical Leadership Group. Vicki Sweeney provided insight into a proactive approach deployed at KPMG for monitoring retaliation against those who are known to have raised an issue requiring further investigation.

Sweeney stated that at KPMG, they monitor past cases to better identify issues of retaliation. When an employee reports workplace misconduct to a supervisor or through a hotline system, the risk of retaliation increases as the employee is no longer reporting the issue anonymously. Retaliation can come from peers in the workplace, as well as supervisors. At KPMG, they encourage employees to report issues involving all forms of workplace misconduct. By asking this of employees, KPMG acknowledges the vulnerable state this leaves employees in when it comes to the possibility of facing retaliation. The retaliation monitoring program at KPMG tracks those who raise issues by evaluating and analyzing data related to the investigation and the nature of the complainant’s job in order to determine the likelihood of retaliation.

Signs and Symptoms

In the webinar, Sweeney mentioned the typical monitoring period is a minimum of one year and can continue on for 2 or more years if necessary. A key factor to the success of the program at KPMG is the direct access to HR systems containing employee information. Access to these systems is critical for receiving information when it is needed, as well as reducing the number of information requests sent to the company’s HR department. Some examples of job related data to gather for review that Sweeney mentioned consists of:

• Employee Performance- Review employee performance appraisals conducted before and after an investigation. If an employee consistently scored high on their reviews and is now receiving negative feedback, find out the root cause. Has the employee’s performance actually decreased or is a resentful supervisor attempting to have the employee demoted or located to another department? Understanding reporting relationships is extremely important in identifying potential sources of retaliation.
• Termination- It’s important to understand why an employee is leaving their position. Sweeney mentioned that with the effects of the recession, new jobs can be difficult to come by. If an employee suddenly gives their two weeks notice, it’s best to find out if they are moving on to bigger and better things, or do they find the existing workplace intolerable due to acts of retaliation?
• Improvement Plans- Find out the reasoning behind placing an employee on additional training or an improvement plan. Does the employee actually lack some of the skills and competencies for completing the tasks associated with their job or are they being placed on training as a form of retaliation?
• Job/ Task Assignments- Is the employee receiving tasks and assignments that are at the same level they were prior to the investigation?
• Personal Observation- Remain on the lookout for changes in the complainant’s behaviour. Sweeney mentioned that changes in social patterns, attitude, attendance and other factors usually signal that something isn’t right.
• Interviews or Meetings- Chances are, it’s going to be difficult for an employee to reach out and report retaliation once they have already com forward with a previous issue. It’s advised that the department handling investigations and reports reach out to the employees they are monitoring for potential retaliation. Sweeney recommends meeting at a time and place convenient for the employee, as discussing the issue may be difficult to do in the workplace. Removing them from the environment allows them to speak more openly and they may likely respond better to questions related to retaliation.

This anti-retaliation best practices example exercised at KPMG strongly raises the bar for other companies when it comes to protecting employees from retaliation. In many companies, they might focus on protecting the complainant while an investigation is taking place, however, many of the risks of retaliation remain the same for the complainant once the investigation has concluded. If there is a chance an employee will face retaliation for bringing an issue forward, monitoring programs are one of the best defenses for detecting and putting a stop to retaliation.

Yesterday, Monday June 28^th, 2010, the US Supreme Court voted on a decision in the Free Enterprise Fund and Beckstead and Watts, LLP v. Public Company Accounting Oversight Board and United States of America case. The vote rejected a challenge to the constitutionality of the Sarbanes-Oxley Act. The PCAOB was created under Sarbanes-Oxley in 2002, to oversee the auditors of public companies. The goals of the PCAOB are to protect investors and public interest through the promotion of informative, fair and independent audit reports.

In the New York Times article “Justices Uphold Sarbanes-Oxley Act,” Floyd Norris writes:

“The court turned aside a broad challenge to one part of the law, which established the Public Company Accounting Oversight Board (PCAOB) to regulate the accounting industry. Some commentators had forecast that the court might throw out the entire law because of problems with the way the accounting board is appointed, but the justices refused to do so. Instead, in a 5-to-4 split, the court found that the way members of the oversight board could be removed was unconstitutional.”

This case raises awareness of the issues surrounding separation-of-powers and accountability. As it currently stands, Sarbanes-Oxley continues to live on as a law. However, changes have been made to the removal process for members of the PCAOB. Prior to the decision from the Supreme Court, the Securities and Exchange Commission (SEC) had the ability to appoint 5 people to the PCAOB, and their removal could only be warranted if there was a good enough reason to do so. Now, the SEC can remove members as they please.

Yesterday’s decision allowed those within the accounting industry to breathe a sigh of relief, as accounting rules are important and help foster trust with investors. A lack of accounting rules (among other things) in the pre-Enron and WorldCom days lead to the need for standardized accounting rules.  Therefore, if Sarbanes-Oxley was to be eliminated in its entirety, what would the future look like for businesses and investors?

The Wall Street Journal article, “3rd Update: US Supreme Court Invalidates Part Of Accounting Board,” written by Brent Kendall and Fawn Johnson, provides an overview of the reactions to the Supreme Court’s decision, as well as the separation-of-power issue:

“Roberts said the structure of the accounting board violated constitutional separation-of-powers principles because it was too difficult for the president to remove board members. ‘The president cannot take care that the laws be faithfully executed if he cannot oversee the faithfulness of the officers who execute them,’ Roberts wrote. The court, however, refused to strike down the accounting board in its entirety, saying the board’s mere existence didn’t violate the Constitution. PCAOB said it will continue to run all programs as usual, and no legislation will be needed to bring it in line with the Constitution. ‘We are pleased that the decision allows the PCAOB to continue without interruption to carry out its important mission of overseeing public company audits,’ said PCAOB Acting Chairman Daniel L. Goelzer.”

Millennials Have Their Own Take on Ethics in the Workplace- Ethics Resource Centre Survey

The Ethics Resource Centre (ERC) has conducted a survey, gathering data from employees from a number of age groups in order to draw conclusions related to their thoughts on ethics. The information in this survey can be extremely useful for employers, as it provides them with the information they need to plan ahead. Understanding trends related to the ethical opinions of potential employees helps employers mitigate risk by developing policies and training programs that address ethical issues and communicate an appropriate message throughout the organization. Click to view the results of the “Millennials, Gen X and Baby Boomers: Who’s Working at Your Company and What Do They Think About Ethics?” research brief.

Everything from “locker room” style conversations to physical sexual advances can be considered workplace sexual harassment. Determining the boundaries of the “fine line” between what is and what isn’t considered sexual harassment can become a nightmare for HR departments and those responsible for creating workplace policies. To make things even more challenging, the stereotypical male-on-female sexual harassment is no longer a company’s only concern. As mentioned in our post “Sexual Harassment Against Men in the Workplace,” male-on-male and female-on-male sexual harassment is a growing concern in the workplace.

With more men speaking out than ever before, employers need to create policies that clearly define sexual harassment and provide training to all employees. Employers need to make it clear that any form of sexual harassment from either gender will be taken seriously, dealt with in the same manner and is strictly prohibited in the workplace.

Types of Harassment

The harassment men face in the workplace can present itself in forms different from those faced by women. Although men may face physical force from females or other males in the workplace, the most confusing area of male on male sexual harassment is related to “locker room humor.”

In the MSNNBC article, “Male Sexual Harassment is Not a Joke,” by Eve Tahmincioglu, she writes about some of the stereotypical responses given when men speak about sexual harassment, such as in the case below:

 ”Thomas, who works in academia but didn’t want his full name used, found himself in an office made up of mainly women who would routinely share and copy each other emailed jokes and emails about men. A few, he adds, ‘made fun of men’s unique anatomy, if you know what I mean.’ The behavior, he says, made him feel isolated. When he finally addressed the matter with the women in the office, ‘the women were stunned, generally with a ‘You’ve got to be kidding,’ kind of attitude. And they kept doing it’.”

Unfortunately, this response is all too frequent when it comes to men speaking up about situations that make them uncomfortable. Although this example isn’t exactly a form of sexual harassment, it depicts the very reality of some people’s opinions surrounding sexual harassment targeted at men.

According to the EEOC:

“Sexual conduct becomes unlawful only when it is unwelcome. The challenged conduct must be unwelcome in the sense that the employee did not solicit or incite it, and in the sense that the employee regarded the conduct as undesirable or offensive. When confronted with conflicting evidence as to welcomeness, the Commission looks at the record as a whole and at the totality of circumstances evaluating each situation on a case-by-case basis.”

This definition from the EEOC helps determine the barriers for “crossing the line” when it comes to actions that could potentially be considered sexual harassment. The fact that claims are handled on a case by case basis is extremely important, as the circumstances vary depending on the involved parties and their relationship to each other. The EEOC provides the public with guidance and examples of situations involving sexual harassment. An interesting example they bring forward, that I have slightly added to, is the fact that in some cases:

“The courts and the Commission have considered whether the complainant welcomed sexual conduct by acting in a sexually aggressive manner, using sexually-oriented language, or soliciting the sexual conduct. If the plaintiff regularly uses vulgar language, initiates sexually-oriented conversations with her (or his) co-workers, asks male (or female) employees about their marital sex lives and whether they engaged in extramarital affairs and discussed their own sexual encounters. In rejecting the plaintiff’s claim of ‘hostile environment’ harassment, the court found that any propositions or sexual remarks by co-workers were prompted by their own sexual aggressiveness and sexually- explicit conversations.”

Example from a Company Policy

It’s important that harassment towards both males and females is addressed in company policies. When preparing or updating policies, take into consideration the different forms of sexual harassment- as you can see from the examples above, sexual harassment spans much further than sexual advances and inappropriate gestures. Provide examples of each type of sexual harassment to help employees understand what is and isn’t acceptable behaviour.

Here is an example of an anti-harassment policy that can be found in the Tyco Guide to Ethical Conduct, available on the company’s corporate website:

“All of us have the right to work in a harassment-free environment. The company regards harassment as any behavior that may demean, intimidate or offend an individual. To promote a positive workplace, we must avoid the following behaviors:

• Unwelcome conduct – whether verbal, physical or visual, and whether committed in person or some other way (e.g., via e-mail) – that is based on a person’s protected status. Protected status includes, but is not limited to, race, color, religion, gender, age, national origin, disability, sexual orientation, genetic information and veteran status
• Racial, ethnic, religious, or sexual jokes
• Bullying, abusive language, physical aggression, intimidating or violent behavior, or disparaging comments
• Sexual advances or requests for sexual favors
• Any other actions that unreasonably disrupt or interfere with an employee’s work performance

Our Harassment-Free Workplace policy applies to all Tyco employees and contractors, plus anyone who does business with Tyco, including business partners, customers and suppliers. This policy also applies to work-related settings and activities outside of the workplace.”

The policy at Tyco makes it clear that anyone involved in Tyco operations is held accountable for upholding the policy created by the company. By doing this, Tyco had broadened their policy to address sexual harassment of all types and from both genders.

Reputations Don’t Return When Prosecutors Drop Charges- Bloomberg

Following the stories of those who have been charged, only to have their cases dropped, this article takes a deeper look at the damage done to the reputations of business professionals that have been falsely accused of illegal acts, such as fraud and bribery. The article states that “the collapse of so many cases is surprising, legal experts say, because U.S. prosecutors are expected to have thoroughly investigated the facts and law before asking a grand jury to bring charges.” Even if the charges are dropped and innocence is proven, regaining one’s reputation may not be possible.

It seems to be that each week is busier than the last. Here are some of the things we blogged about this week- as well as some other pieces that caught our attention regarding internal investigation, human resources and ethics:

Monday:

• Blog Post- Investigation Software Benefits

“Workplace investigations require a significant commitment of both time and money. As the costs of lawsuit settlements and fines approach record breaking levels, organizations are finally beginning to understand the importance of conducting high quality workplace investigations. Response times, evidence management, investigation interviews and reporting are critical factors of an investigation that must be properly managed. Spreadsheets and other “home grown” solutions for managing case loads can be ineffective, as they are often time consuming to develop and maintain, expensive and inflexible. ”Home grown” solutions also make it difficult to integrate multiple business systems into a unified program.”

Tuesday:

• Blog Post- Corporate Sustainability Reporting

“With an increasing number of environmental tragedies occurring in recent years, many wonder what companies are doing to boost sustainability efforts. Growing concerns regarding the state of natural resources and their future availability must become a major focus for all corporations, as the future of their business relies heavily on the environment, and vice versa. Corporate sustainability reporting has been adopted by a number of industry-leading firms, in order to communicate their plans to the public. Reevaluating product sourcing, packaging, transportation, and other steps involved in product preparation are just a few of the changes companies have employed to reduce their environmental impact.”

Wednesday

• Blog Post- Rebounding From Allegations and Lawsuits with Compliance Programs

“Governance, ethics and compliance continues to be a growing concern for both business and government. It’s important for executives and other employers to understand that it’s becoming increasingly challenging to protect their company from a public ethics lapse. Even companies with the strongest ethics and compliance programs have faced lawsuits and allegations for violating policies and laws. Many people often refer to the Enron example: before the collapse of Enron, the company had been recognized and praised for creating and implementing one of the most comprehensive ethics and compliance programs at that point in time. Former CEO and COO, Jeffrey Skilling, is now in prison and the company is no longer. So how could a company with an outstanding ethics and compliance program fall victim to ethical lapses?”

Thursday:

• Blog Post- Sexual Harassment Against Men in the Workplace

“Sexual harassment in the workplace has continued to attract a lot of attention lately- and not for the reasons some may think. Sexual harassment towards males has been on the rise, and in the past year, a record number of sexual harassment reports have been made by men. This trend poses some new challenges for employers, as the types of harassment males face can differ from those faced by females. It’s important for employers to reevaluate company policies pertaining to sexual harassment to ensure they mitigate the risks surrounding any harassment that may be encountered by both male and female employees.”

When Workplace Bullying Gets Physical- Financial Post

This article answers a real life question submitted to the publication dealing with an issue involving workplace bullying. After making several complaints, a relative of the person experiencing bullying at work wrote in to the Financial Post (FP) for some advice. In the case mentioned in the article, the complainant has reported the issues multiple times, yet the company’s HR and corporate office have yet to take her legitimate concerns seriously. The suggestions made by the FP include referring to the rights of an employee under federal, state or local legislation, turning to human rights support centers, requesting a transfer, consulting a union (if applicable), as well as some other resources available to employees should they feel their company isn’t responding to their concerns.

When Men Are Harassed- Workforce.com

Instances involving the sexual harassment of males in the workplace have continued to increase over the years. This article discusses how to recognize and address sexual harassment against males in the workplace. Every organization must adapt their harassment policies to include protections and consequences from the various forms of male on male or female on male harassment. This article provides advice on harassment policy adaptations, as well as training ideas that can be applied to any workplace. It’s also recommended to rethink reporting mechanisms, as men and women face different challenges when making the decision to come forward about sexual harassment in the workplace.

Sexual harassment in the workplace has continued to attract a lot of attention lately- and not for the reasons some may think. Sexual harassment towards males has been on the rise, and in the past year, a record number of sexual harassment reports have been made by men. This trend poses some new challenges for employers, as the types of harassment males face can differ from those faced by females. It’s important for employers to reevaluate company policies pertaining to sexual harassment to ensure they mitigate the risks surrounding any harassment that may be encountered by both male and female employees.

Some fail to respect the seriousness of male on male or female on male harassment in the workplace, however, it’s just as traumatic for men to deal with as it is for women.

Reasons for the Rise

There have been numerous ideas surrounding the reasons behind the increase in workplace sexual harassment towards males. According to the US Equal Employment Opportunity Commission (EEOC),  in 2009, 16% of the 12 696 sexual harassment incidents reported came from males. This is the largest number of sexual harassment related reports ever received by the EEOC from males. It remains unclear as to whether or not these numbers paint a clear picture of the reality of male sexual harassment in the workplace. Many feel that the number of cases reported to the EEOC is only a fraction of the actual number of incidents involving workplace sexual harassment towards males.  Others suggest that male sexual harassment may not be increasing in the workplace, claiming it’s simply a matter of males becoming comfortable in bringing these issues forward. Either way, many companies still lack the proper controls to deal with male on male or female on male sexual harassment in the workplace.

According to some experts, the recession is to blame for the increasing number of male sexual harassment claims. The HR Management article “Male Sexual Harassment Claims on the Rise,” reports:

“The recession has had more of a negative impact on men than women. From September 2008 to January 2010, 4.4 million American men lost their jobs, compared to just 2.3 million women, according to the Bureau of Labor Statistics figures. It has also been noted that the share of male sexual harassment claims rose more in the US, which had higher than average unemployment rates.

Greg Grant, an attorney with Shulman Rogers in Washington DC, believes that in the past, men would be more inclined to quit their job and find a new one if they were experiencing sexual harassment. Within the current economic climate, however, they are more likely to turn to the legal system. After all, points out Mr. Grant, these men still need to ‘pay the bills and support families’.”

Recommendations for Employers

Employers are responsible for providing their employees with a safe workplace, free of harassment- regardless of their gender. In order to address the issue of sexual harassment faced by males in the workplace, the article “When Men Are Harassed,” published by Workforce Management and written by Ron Chapman Jr., recommends that employers complete the following:

1.      Policy Revision- Policies must remain current to the risks faced by an organization. Many policies only provide examples of  male on female harassment. Elaborate on existing policies to include definitions and examples of male on male or female on male sexual harassment. This helps to communicate the message that all forms of sexual harassment are prohibited. The Workforce Management article also suggests that employers, “consider tightening restrictions on horseplay and other locker-room behavior in the workplace. Employees must understand the line between good-natured joking and unacceptable harassing behavior, as well as the consequences—sometimes severe—for crossing that line.”

2.      Employee Training- Employers must provide employees with training related to male sexual harassment, as many employees have a difficult time understanding what types of behaviours are considered as ”crossing the line”. The Workforce Management article suggests that “well-trained employees will not only avoid such conduct, but are also more likely to recognize and report it when they see it happening around them.”

3.      Reporting Systems- Employers must find new ways to encourage all employees to report instances involving sexual harassment. Both men and women tend to hesitate when it comes to reporting harassment, however, for men, reporting an act of sexual harassment can be difficult as they worry about the opinions of other men in the workplace. The Workforce Management article suggests that men “may be reluctant to come forward based on their fear of being labeled feminine, homosexual or oversensitive.” Whereas women usually tend to fear retaliation or physical violence for reporting sexual harassment.