The business world contains many different industries and many different companies. No matter how similar two companies might be – there will always be differences in how they handle their day-to-day operations. One thing, however, that rarely changes is the fact that companies must adhere to federal and state regulations regarding how they conduct their business. With the globalization of integral business and corporation expansion, has come the increased focus on corporate compliance. Companies cannot do as they please; there are regulatory factors that balance ethics with rationality. For example, simply because a company can make a product cheaper by polluting the environment, does not give it the right to do so. Compliance means following the law.
The importance of EEO regulations is they are a means of supporting the employment aims and aspirations of all people regardless of gender, ethnicity, culture, disability, sexual orientation, family responsibilities, age, religion and family status (Cascio, 2003). The importance of EEO accountability among managers and supervisors in the business world continues to be emphasized by senior managers (Cascio, 2003). A high number of companies had to deal with allegations regarding EEOC complaints in the past several years, including some high profile names
In 2006, the EEOC alleged that Walgreen’s used race as a factor to place managers and pharmacists in low-performing stores and in locations in African-American communities (Schoeff, 2007). Walgreen’s quickly refuted the allegations. In April 2006, the EEOC issued guidelines for employers that warned against subtle forms of bias, such as a boss not inviting minority workers to an office lunch or a happy hour. This kind of exclusion undermines networking opportunities. It also urges companies to expand their recruiting efforts to include nontraditional sources of talent and not to rely solely on word-of-mouth referrals (Schoeff, 2007).
A sexual harassment lawsuit was filed against Denny’s, Inc by an 18-year-old female former employee at a restaurant in Carbondale, Illinois (“EEOC,” 2007). The EEOC also alleged that Denny’s retaliated against its former employee after she complained about unwelcome harassment by reducing her scheduled hours and terminating her employment. Denny’s fought the allegations, but was forced to pay its former employee $135,000, terminate the employment of the general manager and co-worker named in the EEOC charge of discrimination, provide sexual harassment training to all employees of its Carbondale restaurant, and provide additional training for management on the handling and investigation of sexual harassment complaints (“EEOC,” 2007).
Unfortunately, there are even more problems for companies. In 2006, at Toyota Motors, a female assistant to the highest-ranking North American executive sued the executive, Hideaki Otaka and the auto firm for over $150 million (“Citizens,” 2006). Allegedly, the CEO of Toyota Motor North America subjected his assistant to unwelcome advances less than six months after she took a position as his executive assistant (“Citizens,” 2006). At the time of the lawsuit, Toyota Motors had record sale in North America and were on the brink of overtaking General Motors Corp as the world’s largest automaker. After the fallout from this lawsuit, Otaka (the CEO) was sent to Japan to become an auditor and Jim Press, the first American president of Toyota U.S., replaced him.
Employee physical safety and wellness are other areas of concern for businesses. A top priority for any employer should be to take the time and initiative to help protect their employees (Cascio, 2003). If an employee becomes injured at work, the business may suffer (Cascio, 2003). The locomotive engineers, trainmen and maintenance of way workers are among the most affected by safety issues, with H.R. 2095 goes a long way towards addressing the unsafe conditions on the nation’s railroads. The bill seeks to amend the Hours of Service Act, and act that has been manipulated by the rail industry for years and causes rail workers to experience fatigue. Employees become fatigue by lengthy assignments, irregular scheduling and interruptions while off duty, has been the number one contributing factor of many rail accidents in recent years. Harassment b employers against rail employees who give information to government agencies about unsafe or unsecured tracks, engines, and bridges have been well-know fact in the railroad culture. The bill proposed by Reps. Oberstar and Brown gives protection for workers reporting problems.
A wellness program is a combination of activities that focus on employee health promotion and disease prevention. Businesses with wellness programs have shown substantial health-related cost savings, such as decreases in employee absences and turnover and reduced insurance premiums (Violette, 1991). Johnson & Johnson is consistently ranked as one of the best companies to work for. By offering a variety of different programs, such as stress management and interactive screening, Johnson & Johnson achieved great results. The company saved on average $8.5 million annually from 1995 to 1999 after integrating the health and wellness programs and estimated it was able to reduce medical costs for each employee of the Johnson & Johnson operating companies by about $224 each year (“Johnson,” 2005).
Other companies are not doing so well at employee safety. In 1998, OSHA inspected the scene of an accident that occurred at an automobile dealership – McKie Ford – when an employee rode a vertical conveyor that was used as a freight elevator (“Conveying Safety,” 1999). McKie Ford maintained that company personnel did not know the hazard and since it was not a recognized hazard, the citations classified as willful should be dropped permanently (“Conveying Safety,” 1999). The dealership has lost its bid to overturn the $20,000 OSHA penalty stemming from an employee’s on-the-job death. A federal appeals court unanimously upheld a U.S. Labor Department finding that McKie Ford Inc. of Rapid City willfully violated its legal duty to provide a safe work place.
The law for corporations comes in many forms: federal laws, state laws, agency law, and industry standards. Breaking any of these regulations could have disastrous consequences for a company. According to Gentiva “The initial purpose of compliance was to act as a mitigating factor to reduce liability under the law. Over the years, compliance has evolved into a more integral business component with its focus on maintaining the company’s status as a good corporate citizen.” This emphasis and new standard has caused many companies to create a corporate compliance officer position where the sole duty of this individual is to maintain and monitor the company’s state of compliance. Some of the main concerns with corporate compliance are ethics, financial statements, equal opportunity / fair hiring practices, sexual harassment, and environmental preservation.
Company’s that maintain vigilance on these fronts are normally safe when it comes to compliance issues. Maintaining a good record of compliance is not only beneficial, but more times than not will make or destroy a company. The main point is that non-compliance can affect a company’s bottom line.
Companies Benchmarked
Abbott
The Situation:
Abbott is facing issues in regards to performance in governance and compliance; environment, health and safety; global workforce; social environment; and key issues, such as expanding access to health care.
The Response:
Global citizenship is fundamental to earning and deepening the trust of the people we serve—and an integral part of our commitment to improve lives, “said Miles D. White, chairman and chief executive officer, Abbott. “That’s why global citizenship is simply inseparable from our business; it’s a matter of competitive fitness and a business discipline we apply throughout our operations.” One of the most pressing issues facing the global community is expanding to health care for patients in need. As a global health care company, Abbott is focused on working with government, health care providers, patients, nongovernmental organizations and many other stakeholders to develop solutions to improve affordable access to awareness, to investing in health care systems in developing countries.
The Outcome:
Abbott’s citizenship report highlights progress in helping to address this critical issues in 2006, which include advancing patient safety by redesigning all pharmaceutical product labels to better highlight critical product information for pharmacist; expanding tired pricing of Kaletra (R) (known as Aluvia ™ in developing countries) from 69 developing countries to 114 low and low-middle income countries; Investing nearly $300 million in grants and product donations from Abbott and Abbott Fund, reaching millions of people worldwide, including providing product donations to support medical mission and increasing clinical trials transparency, including company sponsored trials on the publicly available database. Improving employee’s safety is important to Abbot’s operations, which include the company’s 2010 goal for reducing lost workdays by 10 percent three years early. Abbott is committed to the protections of human health and safety. In the area of health and safety, the company focuses on eliminating and reducing harmful and substances and waste from manufacturing processes, training employees on health and safety issues. Their goal is for 2010 is to reduce waste, injury, and accidents, is an integral part of the overall management system which will help improve performance. The company will achieve these goals by devoting significant resources to health and safety programs over the past several years. Abbott’s health and safety policies and programs, which drive performance improvements, include the following objectives:
• Support the business through efficient and responsible HS (Health and Safety) management.
• Create a culture that strives for HS performance excellence at all levels of the company.
• Implement a uniform approach to risk assessments, management systems and metrics
• Incorporate information technologies to improve efficiency and support global programs.
• Integrate health, safety and environmental concepts into operations planning and decision-making.
• Educate and engage employees to optimize health, safety, and environmental performance.
• Comply with all applicable laws, company policies and standards designed to protect human health and safety.
Web site at http://www.abbott.com
The Situation:
The locomotive engineers, trainmen and maintenance of way workers are among the most affected by safety issues, and H.R. 2095 goes a long way towards addressing the unsafe conditions on the nation’s railroads. The bill seeks to amend the Hours of Service Act, and act that has been manipulated by the rail industry for years and causes rail workers to experience fatigue. John Tolman, Vice President and national Legislative Representative of the Brotherhood of Locomotive Engineers and Trainmen (BLET) testified I support of the Railroad Safety and Improvement Act of 2007 before the U.S. House of Representatives subcommittee on Railroads, Pipelines and Hazardous materials. This movement was introduced by Reps. James Oberstar (D-MN) and Corrine Brown (D-FL), and would provide much needed reforms to railroad safety regulations and would greatly improve the quality of life to all railroads workers. Employees become fatigue by lengthy assignments, irregular scheduling and interruptions while off duty, has been the number one contributing factor of many rail accidents in recent years. Harassment b employers against rail employees who give information to government agencies about unsafe or unsecured tracks, engines, and bridges have been well-know fact in the railroad culture. The bill proposed by Reps. Oberstar and Brown gives protection for workers reporting problems.
The Response:
The elimination of camp cars, essentially rail boxcars that have been converted to sleeping quarters for maintenance of way workers, is another provision in the Oberstar/Brown bill. The Brotherhood of Maintenance of Way Employees Division has been pressuring legislators for some time to get rid of these below standards lodging. This has changed nearly all of the major railroads in North America provide hotel lodging for railroad crews, except Norfolk Southern. However, the victory in the state of Indiana does hold some promises. Months to come, communities in Indiana will have the right to inspect Norfolk Southern camp cares for cleanliness and other factor following guidelines being written by the state board of health.
The Outcome:
The Teamsters Rail Conference strongly supports the inclusion of ‘whistleblower protection’ in the legislation. The key factor is that Railroad workers should not and cannot be subjected to dismissal when they provide information regarding unsafe issues to government agencies responsible for promoting safety and enforcing safety laws and regulations. H.R. 2095-whistleblower protections are needed to stop employers from harassing and intimidating employees to report safety and security risks.
Web site at
proquest.umi.com/pqdwebdid=653737981&sid=2&Fmt=2&clientld+2606RQT=309&VName=PQD
Johnson & Johnson
The Situation:
A wellness program is a combination of activities that focus on employee health promotion and disease prevention. Businesses with wellness programs have shown substantial health-related cost savings, such as decreases in employee absences and turnover and reduced insurance premiums (Violette, 1991). Johnson & Johnson is consistently ranked as one of the best companies to work for. For many years Johnson & Johnson has recognized the importance of their employee’s health and well-being. Recently Johnson & Johnson has included safety to the health and wellness programs that are offered. The Employee Assistance Program, or EAP, offered at the Johnson & Johnson operating companies is in line with the company’s approach that the health of the individual cannot be separated from the health of the corporation (http://www.mentalhealthscreening.org).
The Response:
Although Johnson & Johnson is not facing a problem with employee wellness, the company does recognize the importance of maintaining and updating the programs that are offered. Adding safety to the health and wellness program is one of the more recent updates. In January 2004,
Johnson & Johnson merged its Health & Wellness Program into its Worldwide Health & Safety Division. Johnson & Johnson’s Health & Wellness Program had already integrated disability management, occupational health, employee assistance, work-life programs, and wellness and fitness with positive results (http://www.mentalhealthscreening.org). By merging the two programs into one, Johnson & Johnson showed the employees how much they are valued.
The Outcome:
By offering a variety of different programs, such as stress management and interactive screening, Johnson & Johnson achieved great results. The company saved on average $8.5 million annually from 1995 to 1999 after integrating the health and wellness programs and estimated it was able to reduce medical costs for each employee of the Johnson & Johnson operating companies by about $224 each year (http://www.mentalhealthscreening.org). Not only did the company reduce health care costs, an improvement in the employee’s productivity was noticed. The employee’s emotional well-being was noticed, which increased work performance, decreased absenteeism and health costs. Johnson & Johnson has shown that by continuously reviewing and updating the employee assistance programs that are provided, the company is able to improve financially and with the performance of the employees.
Coca-Cola Enterprises (UK)
The Situation:
By having many different international locations, Coca-Cola needs to make sure that all of the international locations follow the labor laws of those countries. A new age discrimination law in the UK will force Coca-Cola to become compliant with the new law, just like all other businesses in the UK.
The Response:
In order to be proactive, Coca-Cola created an “Age Diversity Project Team”. This team was responsible for researching the new legislation, communicate the changes with the HR staff and get the company started in the compliance process. All steps in the hiring, disciplinary and promotion processes need to be evaluated and adjusted to ensure compliance with the new legislation. The last step was training the staff on the procedures and how to avoid age discrimination. The project team essentially created an age positive culture within the business.
The Outcome:
Below is the new age discrimination legislation in the UK:
• Your employer isn’t allowed to treat you unfairly at work because of your age
• Your employer isn’t allowed to force you to retire before the age of 65
• Employers aren’t allowed to refuse to employ you because of your age
• There is no upper or lower age limit for getting redundancy pay
• Your employer isn’t allowed to dismiss you because of your age
([http://www.adviceguide.org.uk]).
By not focusing on the age of the applicant, Coca-Cola has been created a reputation of hiring based on skills, not on age. This makes a difference in the applicant pool that is available for Coca-Cola and helps improve the company’s reputation. A testament to our success lies in being recognized as an Age Positive “Employer Champion.” Employer Champions are organizations that can demonstrate exemplary approaches to age diversity policies and practices. By having this status, we can promote both within our company and to new starters our positive approach to age (Webb, 2006). By not focusing on the age of the applicant, Coca-Cola has been created a reputation of hiring based on skills, not on age. This makes a difference in the applicant pool that is available for Coca-Cola and helps improve the company’s reputation.
Denny’s, Inc.
The Situation:
A sexual harassment lawsuit was filed against Denny’s, Inc by an 18-year-old female formerly an employee at a restaurant in Carbondale, Illinois.
The Response:
The EEOC also alleged that Denny’s retaliated against its former employee after she complained about unwelcome harassment by reducing her scheduled hours and terminating her employment.
The Outcome:
In the lawsuit filed on September 3, 2002 (Civil Action No. 02-4179-JPG), the EEOC claimed that Denny’s general manager and a male co-worker sexually harassed a high school student, hired as a waitress in April 2000 at its restaurant at 1915 Sycamore in Carbondale, Illinois. The EEOC also alleged that Denny’s retaliated against its former employee after she complained about unwelcome harassment by reducing her scheduled hours and terminating her employment.
As provided in the Consent Decree submitted for approval to the Federal District Court in East St. Louis, Illinois, Denny’s will pay its former employee $135,000, terminate the employment of the general manager and co-worker named in the EEOC charge of discrimination, provide sexual harassment training to all employees of its Carbondale restaurant, and provide additional training for management on the handling and investigation of sexual harassment complaints. Ms. Hilliard, the former employee, is personally represented by the Carbondale law firm of Rhode and Jackson, P.C.
The EEOC enforces Title VII of the Civil Rights Act of 1964, as amended, which prohibits employment discrimination based on race, color, religion, sex or national origin; the Age Discrimination in Employment Act; the Equal Pay Act; Title I of the Americans with Disabilities Act which prohibits disability discrimination against employees in the private sector and state and local governments; certain prohibitions in the Rehabilitation Act against discrimination affecting individuals with disabilities in the federal sector; and certain sections of the Civil Rights Act of 1991. Further information about the
EEOC is available on the agency’s Web site at http://www.eeoc.gov.
Toyota
The Situation:
In 2006, Toyota Motors’ a female assistant to the highest-ranking North American executive sued the executive, Hideaki Otaka and the auto firm for over $150 million. Allegedly, the CEO of Toyota Motor North America subjected his assistant to unwelcome advances less than six months after she took a position as his executive assistant. According to the New York Supreme Court, Otaka sexually assaulted her and compared her to a breakfast cereal.
The Response:
When the executive assistant, Sayaka Kobayashi, complained to the human resources department and Toyota’s second-ranked executive, she was presented with a buyout offer. After refusal, she was then shifter to another position. The overall response by Toyota’s executives was to “settle the matter privately” (Citizens against Racism & Discrimination). Otaka was asked to take leave from Toyota due to the fact that his presence would be a distraction and not in the best interest of the company.
The Outcome:
At the time of the lawsuit, Toyota Motors had record sale in North America and were on the brink of overtaking General Motors Corp as the world’s largest automaker. Both Otaka and Kobayashi agreed to keep the terms of the settlement private. According to a statement issued by a spokesperson of Toyota Motor North America, “ We are very pleased to have resolved this matter in a way that all parties have agreed is fair, appropriate, and mutually satisfactory to all concerned” (Citizens against Racism & Discrimination).
After the fallout from this lawsuit, Otaka was sent to Japan to become an auditor and Jim Press, the first American president of Toyota U.S., replaced him.
Sexual Harassment: Civil Rights Act of 1964
Sexual Harassment is part of the Civil Rights Act of 1964 and applies to companies with 15 or more associates. It is defined as “Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment” (EEOC, 2007). The circumstances include but are not limited to:
• The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex.
• The harasser can be the victim’s supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee.
• The victim does not have to be the person harassed but could be anyone affected by the offensive conduct.
• Unlawful sexual harassment may occur without economic injury to or discharge of the victim.
• The harasser’s conduct must be unwelcome (EEOC, 2007).
Walgreen’s
The Situation:
In 2006 the Equal Employment Opportunity Commission launched an initiative to target systemic discrimination by pursuing pattern and practice cases and class actions. On March 7, the EEOC filed a class-action employment discrimination lawsuit against Walgreen Co., accusing the drug retailer of racial discrimination (Schoeff, 2007).
The Response:
The EEOC alleges that Walgreen’s uses race as a factor to place managers and pharmacists in low-performing stores and in locations in African-American communities (Schoeff, 2007). Walgreen’s denied the charges straight up. Although the racism initiative, which emphasizes public education and outreach, is not directly tied to the Walgreen action, the EEOC is making an example of the company. The EEOC has been intensifying its campaign against racial discrimination for a while, says Lynn Lieber, an employment lawyer and CEO of Workplace Answers, a consulting firm.
Walgreen’s has quickly issued statements regarding the allegations. “As a company with a history of commitment to fairness, diversity and opportunity, we are saddened and disappointed by the EEOC’s decision,” said Walgreen’s spokesman Michael Polzin (Knowles, 2007). “Our commitment is to providing opportunity to all employees… we’re the nation’s best represented retailer in urban areas, and managers of all backgrounds are promoted to senior levels from those locations” (Knowles, 2007).
The Outcome:
In April 2006, the EEOC issued guidelines for employers that warned against subtle forms of bias, such as a boss not inviting minority workers to an office lunch or a happy hour. This kind of exclusion undermines networking opportunities. It also urges companies to expand their recruiting efforts to include nontraditional sources of talent and not to rely solely on word-of-mouth referrals (Schoeff, 2007). “They were very, very broad,” Lieber says of the EEOC guidelines (Schoeff, 2007). “The EEOC is very serious about race and color.” It also is intent on promoting class-action cases. Lieber says courts have become more inclined to certify class actions, a trend that could cost employers. A national chain, for instance, would want a case to focus on bias at individual stores rather than having it include every African-American employee nationwide. The damage awards in a class action can total billions of dollars. “It could really force a company to go under,” Lieber says.
McKie Ford
The Situation:
In 1998, OSHA inspected the scene of an accident that occurred at an automobile dealership – McKie Ford – when an employee rode a vertical conveyor that was used as a freight elevator (“Conveying Safety,” 1999). The employee’s head was crushed between the second floor landing and the ceiling of the vertical conveyor, and as a result of his injuries he died. OSHA determined that the freight elevator was never intended to carry passengers. Because of this lack of concern for employee safety, OSHA slapped the employer with a citation for violating Section 5(a) (1) of the OSH Act, the general duty clause (“Conveying Safety,” 1999).
The Response:
McKie Ford maintained that the hazard was not known to company personnel, and since it was not a recognized hazard, the citations classified as willful should be dropped permanently (“Conveying Safety,” 1999).
The Outcome:
The dealership has lost its bid to overturn the $20,000 OSHA penalty stemming from an employee’s on-the-job death. A federal appeals court unanimously upheld a U.S. Labor Department finding that McKie Ford Inc. of Rapid City willfully violated its legal duty to provide a safe work place. The citation followed an investigation by the Occupational Safety and Health Administration. In October 1996, Don Biegler, a parts department employee, was killed when his head was caught in a shear point of a freight elevator. Employees often used the elevator, designed to transport freight, rather than taking the stairs, the investigation showed. An 8th U.S. Circuit Court of Appeals panel in St. Louis found sufficient evidence to uphold McKie’s liability for the violation. For example, the configuration of the elevator and the lack of safety features such as a door, gate or interlock on the open side made “the risk plainly obvious,” the court said in an opinion by Judge Richard Arnold. “There is substantial evidence that McKie’s conduct demonstrated plain indifference. It had no meaningful safety program,” the court said.
References
Cascio, W. (2003). Managing Human Resources: Productivity, Quality of Work Life, Profits (6th Ed.). New York: The McGraw-Hill Companies.
Citizens against Racism and Discrimination (2006). Toyota settles US sexual
Harassment lawsuit. Retrieved on 8 May 2007, from http://card.wordpress.com/2006/08/09/toyota-settles-us-sexual-harassment-lawsuit/
Conveying Safety (1999). Safety Management, 431, 6. Retrieved on May 12, 2007 from
EBSCOhost Database.
EEOC Settles Sexual Harassment Lawsuit against Denny’s Inc. (2007). Retrieved
On 9 May 2007, from http://www.eeoc.gov/press/10-30-02.html
Employment in England. Advice Guide. [http://www.adviceguide.org.uk/index/life/employment/age_discrimination_at_work.htm#age_discrimination].
Johnson & Johnson Merges Health, Wellness and Safety and Likes the Results. American
Psychiatric Association and the American Psychological Foundation.
http://www.mentalhealthscreening.org/downloads/sites/docs/ISP/JNJ_Article_from_MHW.PDF.
Knowles, M. (2007). EEOC: Walgreen’s biased Against Black Workers. Chicago Sun-Times.
Retrieved May 12, 2007 from [http://www.suntimes.com/news/metro/288119],CST-NWS-walgreen08.article.
Schoeff, M. (2007). Walgreen Suit Reflects EEOC’s Latest Strategies. Workforce Management,
86(6), 8. Retrieved May 12, 2007 from EBSCOhost Database.
Violette, G. R. (1991). The Benefits of a Wellness Program. Journal of Accountancy, 171(6) 126-129. Retrieved May 11, 2007 from ProQuest Database.
Webb, C. (2006). Avoiding ageism and promoting diversity at Coca-Cola. Strategic HR Review, 5(5), 8-9. Retrieved May 11, 2007 from ProQuest Database.
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