What Does HR Has to Do with Good Corporate Governance?

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By S. A. Kohan

In many companies, the group that is directly connected to bringing the money receives the most attention. Since the human resources team is not an income generating body of a company, it is often perceived as a burden – a cost center.  In reality, many human resources teams are burdensome and do not contribute much to the governance of their organizations except for endlessly shuffling garden variety of legal papers and filing them away in black-hole like archives. Let’s name this model of human resources as the Mindless HR Practices. Smart companies need good governance which needs HR teams that have mastered Mindless HR Practices and are decision scientists as well as management experts.

A human resources team with advanced college education in management and human resources coupled with extensive management experiences should be the go-to center for all supervisory employees on all matters relating to organizational and human capital management. Let’s name this human resources model as the Management Science Experts. Boudreau and Ramstad make the point that, “in the same way that marketing is the decision science of sales, and finance is the decision science of accounting, HR can be thought of as having two components: a professional practice and a decision science centered on talent management and organization capability” (Boudreau & Ramstad, 2005).

In multifaceted companies, the executive team is not always the best vehicle for addressing all issues. The executive leadership of smart companies do steer their management teams to collaborate closely with their Management Science Experts. This knitting of the company’s teams ensures that the right perspectives are present at the decision-making meetings to balance competing objectives and establish priorities.

Most managers are not educated in the art and science of management. Often they are experts in the subject matter of the department or the business they operate and by default are tasked to perform management duties. For example, a physician who opens up a private practice may not have management experience but because practicing medicine will produce income the practice becomes a viable business; however, the physician in charge is tasked with management duties without the benefit of having the knowledge of management expertise which can make governance of the clinic a chaotic matter. We see this lack of management expertise across industries where a social worker becomes a director of social services without having management training, or a chef becomes a restaurant operator or a baker opens up a bakery with no organizational management or corporate governance expertise, or a computer program developer suddenly stumbles upon a fortune and ends up managing a business and people without understanding the basics of the corporate governance. Common sense and high intelligence will ultimately fall short of serving the non-management professionals who are required to manage businesses. That where the human resources team should come on board to assist the managers with the corporate governance. 

Considering the significance of the role human resources team can play, it is essential for the HR team to have been formally trained in management and organizational leadership.

Successful Entrepreneurship Does Not Equate to Good Governance

Many entrepreneurs suffer from a fallacy of being good corporate governors, while they are not. Somehow producing impressive profit margins gives a false notion to some entrepreneurs, executives, and managers that they are good at corporate governance. Although good corporate governance can contribute to sustainability and profitability of a for-profit company, a profitable company may not necessarily have a good corporate governance. For example, there are many companies that are plagued with poor management, hostile work environment, high employee turnover, legal issues, but continue to operate because of the demand for their services or products. Such companies can reach higher profits margins and experience less difficulty operating if their incorporate good corporate governance practices. The professional human resources team can pave the road for good corporate governance.

Antonella’s Restaurant & Pizzeria to Pay $50,000 to Settle EEOC National Origin Discrimination Suit

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Dutchess Co. Pizzerias Subjected Hispanic Employees to a Hostile Work Environment Because of Their National Origin, Federal Agency Charged

NEW YORK –  A small group of pizzeria restaurants based in Wappinger Falls and Fishkill in Dutchess County, N.Y., will pay $50,000 and provide other relief to settle a national origin discrimination lawsuit, the U.S. Equal Employment Opportunity Commission (EEOC) announced today.

According to the EEOC’s lawsuit, Antonella’s Restaurant & Pizzeria, Inc., JTA, Inc., and Dellicap, LLC, doing business as Grand Centro Grill (collectively Antonella’s) discriminated against Hispanic employees by subjecting them to name calling, slurs, and creating and maintaining a hostile work environment because of their national origin. Antonella’s also unlawfully demanded that the workers speak only English in the workplace without a business reason for this requirement, the EEOC said.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit in U.S. District Court for the Southern District of New York (Case No.7:15-CV-07666) after first attempting to reach a pre-litigation settlement through its conciliation process.

The consent decree settling the suit, entered by U.S. District Judge Kenneth M. Karas on June 22, 2017, provides that Antonella’s will pay $50,000 for the discrimination victims. Also, the decree provides for extensive safeguards to prevent future discrimination by implementing anti-discrimination policies, training and problem-solving procedures.

“We are pleased that because of this settlement, Antonella’s will institute policies that were previously missing and may assist in preventing future discrimination,” EEOC Regional Attorney Jeffrey Burstein said.

EEOC New York District Director Kevin Berry added, “This case exemplifies the EEOC’s commit­ment to enforcing our laws when employers discriminate against any employees, including especially vulnerable, low-wage workers in a restaurant kitchen.”

Eliminating discriminatory policies affecting vulnerable workers who may be unaware of their rights under equal employment laws or reluctant or unable to exercise them is one of six national priorities identified by the agency’s Strategic Enforcement Plan. These policies can include disparate pay, job segregation, harassment and trafficking.

Facts About Retaliation

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The EEO laws prohibit punishing job applicants or employees for asserting their rights to be free from employment discrimination including harassment.  Asserting these EEO rights is called “protected activity,” and it can take many forms.  For example, it is unlawful to retaliate against applicants or employees for:

  • filing or being a witness in an EEO charge, complaint, investigation, or lawsuit
  • communicating with a supervisor or manager about employment discrimination, including harassment
  • answering questions during an employer investigation of alleged harassment
  • refusing to follow orders that would result in discrimination
  • resisting sexual advances, or intervening to protect others
  • requesting accommodation of a disability or for a religious practice
  • asking managers or co-workers about salary information to uncover potentially discriminatory wages.

Participating in a complaint process is protected from retaliation under all circumstances. Other acts to oppose discrimination are protected as long as the employee was acting on a reasonable belief that something in the workplace may violate EEO laws, even if he or she did not use legal terminology to describe it.

Engaging in EEO activity, however, does not shield an employee from all discipline or discharge. Employers are free to discipline or terminate workers if motivated by non-retaliatory and non-discriminatory reasons that would otherwise result in such consequences.  However, an employer is not allowed to do anything in response to EEO activity that would discourage someone from resisting or complaining about future discrimination.

For example, depending on the facts, it could be retaliation if an employer acts because of the employee’s EEO activity to:

  • reprimand the employee or give a performance evaluation that is lower than it should be;
  • transfer the employee to a less desirable position;
  • engage in verbal or physical abuse;
  • threaten to make, or actually make reports to authorities (such as reporting immigration status or contacting the police);
  • increase scrutiny;
  • spread false rumors, treat a family member negatively (for example, cancel a contract with the person’s spouse); or
  • make the person’s work more difficult (for example, punishing an employee for an EEO complaint by purposefully changing his work schedule to conflict with family responsibilities).

For more information, Questions and Answers: Enforcement Guidance on Retaliation and Related Issues, https://www.eeoc.gov/laws/guidance/retaliation-qa.cfm.

El Chaparro to Pay $20,000 to Settle EEOC Sexual Harassment Suit

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ATLANTA – El Chaparro, Inc., a Tex-Mex restaurant in Covington, Ga., will pay $20,000 to settle a sexual harassment lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

The EEOC filed suit in 2016, charging that El Chaparro violated federal law when one of its owners sexually harassed four female servers at its Greensboro, Ga., restaurant location in 2013 and 2014. According to the EEOC’s complaint, El Chaparro’s general manager and co-owner showed the four servers pictures and videos containing sexual images, talked about the servers’ sex lives, and showed the servers shirtless photos of himself on a regular, sometimes daily, basis. The servers complained about the sexual harassment to the restaurant’s other owner, but the company failed to take any action to stop the harassment, the EEOC said. The Greensboro restaurant location is now closed and the four women no longer work for El Chaparro.

Such conduct violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit (Civil Action No. 1:16-cv-4118-RWS-CMS) in U.S. District Court for the Northern District of Georgia, Atlanta Divi­sion, after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to providing monetary damages to the servers, the consent decree settling the lawsuit requires El Chaparro to create and disseminate a handbook containing policies prohibiting sexual harass­ment. The decree also requires that the company provide annual equal employment opportunity training to its owners, managers and employees. The five-year decree further requires the company to post a notice to its employees about the lawsuit and to provide periodic reporting to EEOC about sexual harassment complaints.

“The harassment of female employees in the restaurant industry is far too common an occurrence,” said Bernice Williams-Kimbrough, director of the EEOC’s Atlanta District Office. “Employees should be able to go to work without fear and without being subjected to any kind of abuse.”

Antonette Sewell, regional attorney for EEOC’s Atlanta District Office, added, “The agency is pleased that El Chaparro agreed to resolve this case. The women will be compensated monetarily, and the training and monitoring provisions in the consent decree will contribute to the agency’s mission and hopefully ensure this will not happen to any other employees of this company.”

EEOC Sues Applebee’s Grill and Bar for Sexual Harassment

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Assistant Manager at North Myrtle Beach Location Subjected Two Sisters to Sexual Comments and Touching, Federal Agency Charges

FLORENCE, S.C. – Green Apple, LLC, dba Applebee’s Grill and Bar, violated federal law when it subjected two female employees, sisters, to a sexually hostile work environment, the U.S. Equal Employ­ment Opportunity Commission (EEOC) charged in a lawsuit filed on 3 May 2017.

According to the EEOC’s lawsuit, around September 2013, Tracy Frye began working as a server at Applebee’s Grill and Bar in North Myrtle Beach, S.C. The EEOC’s complaint charged that from around January 2014 until October of that year, one of the male assistant managers at the rest­aurant subjected Tracy to sexual harassment. The alleged abuse included comments about the size of her breasts, com­paring salad dressing to semen, and propositioning Tracy for sex.

Around June 2014, Cindy Frye, Tracy Frye’s sister, began working as a server at the same Applebee’s. The EEOC said that from June 2014 until October of that year, the same assistant manager sexually harassed Cindy as well. The alleged misconduct toward Cindy included comments regarding female genitalia and as well as propo­sitions for sex. The complaint further alleges that the assistant manager touched both women inappro­priately. According to the EEOC’s complaint, restaurant management was aware of the sexual harass­ment, but took no action to stop it until late October 2014, when a male relative of one of the women threatened to address the situation personally.

Title VII of the Civil Rights Act of 1964 prohibits employers from allowing a sexually hostile work environment to exist in the workplace. The EEOC filed its lawsuit in U.S. District Court for the District of South Carolina, Florence Division (EEOC v. Green Apple, LLC, dba Applebee’s Neigh­borhood Grill and Bar, Case No. 4:17-cv-01152-RBH-KDW) after first attempting to reach a pre-litigation settle­ment through its conciliation process. The EEOC seeks monetary relief, including compensatory and punitive damages for the harassment victims, as well as injunctive relief.

“This incredible case – where an abusive manager allegedly harassed one sister and then another – reinforces the crucial need for employers to take appropriate action to stop unwelcome sexual com­ments and misconduct in the workplace,” said Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District Office. “The EEOC takes a company’s disregard for the federally protected rights of its employees very seriously and will prosecute cases where this kind of abuse occurs.”

Hiatt & Mason Enterprises to Pay $35,000 to Settle EEOC Racial Harassment Lawsuit

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Black Employee Subjected to Racial Epithets Almost Daily, Federal Agency Charged

MOUNT AIRY, N.C. – Hiatt & Mason Enterprises, Inc., a structural steel erection services company, has agreed to pay $35,000 and provide other relief to settle a racial harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the federal agency announced today. The EEOC had charged that Hiatt & Mason violated federal law when it subjected a black employee to a racially hostile work environment.

According to the EEOC’s complaint, around March 2014, Paul Bowman began working as a laborer at Hiatt & Mason’s facility in Mount Airy, N.C. The EEOC said that starting in March 2014, Bowman’s white foreman and some of his co-workers subjected him to racial harassment for almost two years. The alleged misconduct included daily or almost daily use of the “N-word” and other racial epithets, as well as racial jokes about blacks. On more than one occasion, Bowman was threatened physically by one of the co-workers who engaged in racist name calling. The agency further charged that the company’s equal employment opportunity officer witnessed at least one of the incidents of harassment and received complaints about some of the abuse, but took no action to stop it. Bowman left the company around March 2016.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964, which prohibits employers from allowing a racially hostile work environment to exist in the workplace. EEOC filed its lawsuit in U.S. District Court for the Middle District of North Carolina (EEOC v. Hiatt & Mason Enterprises, Inc., Case No. 1:16-cv-01429), after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to providing monetary relief to Bowman, the company entered into a four-year consent decree requiring it to develop and implement a policy that prohibits race-based harassment, provides at least three alternative managers to whom employees can report harassment, and requires managers to notify the company president of all employee complaints. The decree further requires the company to conduct annual training for its employees, supervisors, and managers on Title VII and its prohibition against workplace harassment. Hiatt & Mason must also distribute a letter from its presi­dent to all employees, stating that any employee who engages in racially offensive conduct shall be subject to discipline, including possible termination. The decree further requires that Hiatt & Mason post an employee notice about the lawsuit as well as provide periodic reports to the EEOC.

“Employers must take appropriate action to stop their employees’ use of racial slurs in the workplace,” said Lynette A. Barnes, regional attorney for EEOC’s Charlotte District Office. “The EEOC takes a company’s failure to take appropriate action to stop racial slurs and racially offensive conduct very seriously and will prosecute cases where this kind of abuse occurs.”

Glaser Organic Farms Settles EEOC Suit for National Origin and Color Harassment and Retaliation

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Kitchen Workers Compensated for the National Origin and Color Discrimination by Management

MIAMI – Glaser Organic Farms, a Redlands-based retail farm owned and operated by Stanley Glaser, will pay two female kitchen workers $15,000 and implement important injunctive relief to settle a harassment and retaliation lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

According to the EEOC’s suit, Glaser Organic Farms violated federal law by subjecting Debora Velasquez, who separately intervened in the case, and a fellow kitchen worker to a hostile work environment based on national origin and color. Velasquez, one of the kitchen workers with the darkest skin color and the only one from Guatemala, was called “burro” and “negra” by the kitchen manager and referred to as the “chocolate one” by her supervisors. The kitchen manager regularly told kitchen workers that “Mexicans are stupid,” “Mexicans are lazy,” and that Mexicans were ignorant and could not read or write.

Finally, the EEOC said, the company fired Velasquez for complaining about the mistreatment.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964. The EEOC filed its lawsuit in U.S. District Court for the Southern District of Florida in September 2015, EEOC, et al. v. Stanley Glaser d/b/a Glaser Organic Farms, No. 1:15-cv-23642 (S.D. Fla.), after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to the monetary relief, Glaser Organic Farms will create and implement an anti-discrimination policy, and provide first-time bilingual training for its managers and all its agricultural workers on their federal rights against discrimination and retaliation. All the required training will be personally overseen by an independent third-party civil rights monitor for a three-year period.

The resolution also requires Glaser Organic Farms to post a notice in a prominent location so that all employees are aware of the outcome of this case and their federal protections against discrimination. Employees are encouraged to contact the EEOC should they have any questions and concerns regarding the workplace.

Glaser Organic Farms also agreed to maintain records of national origin and color discrimination and retaliation complaints and their investigation of such complaints. The decree highlights EEOC’s mission to protect and educate those who may not be aware of their rights against employment discrimination.

“This resolution was particularly important to the EEOC because of our mission to ensure that especially vulnerable workers are protected,” said the regional attorney for the EEOC’s Miami District Office, Robert E. Weisberg. “Employers have a responsibility to make sure that all employees are respected and treated fairly in the workplace regardless of their national origin or color.”

Michael Farrell, district director for the EEOC’s Miami District Office, added, “The Florida farmworker community should know that the EEOC has heard their concerns and will continue to be their voice in the federal courts, especially against employers who seek to silence their employees.”

Downhole Technology to Pay $120,000 To Settle EEOC Suit for Race-Based Harassment and Retaliation

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Fracking Company Fired Black Employee After He Complained That Coworkers Used a White Hood to Harass Him, Federal Agency Charged

HOUSTON -A Houston manufacturer of equipment used in hydraulic fracturing (“fracking”) has agreed to pay a former employee $120,000 and provide other relief to settle a retaliatory discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

In its lawsuit, the EEOC charged Downhole Technology, LLC with violating federal law when it retaliated against employee Kenneth Echols after he complained that he had been racially harassed. Echols, who is African-American, reported that his coworkers had used a white hood – evocative of the type used by the Ku Klux Klan – to intimidate, ridicule, and insult him. The EEOC alleged that in response to Echols’s complaint, the company told him that the incident was meant as a joke. The company then fired Echols for refusing to sign a declaration stating that it had adequately responded to his complaint regarding the incident. Before reporting the incident, Echols’s record with the company was unblemished, the EEOC said.

This conduct, the EEOC said, violated Title VII of the Civil Rights Act of 1964, which prohibits an employer from discriminating against – or allowing coworkers to harass – an employee because of the employee’s race. That act also prohibits an employer from retaliating against an employee for reporting discrimination, including harassment.

The EEOC filed its lawsuit (Civil Action No. 4:17-CV-00574) in the Houston Division of U.S. District Court for the Southern District of Texas after first attempting to reach a pre-litigation settlement through its conciliation process. Shortly after the lawsuit was filed, the EEOC and the company resolved the claim, which led to the two-year consent decree announced today.

Under that decree, Downhole Technology will pay Echols $120,000 in monetary relief and will provide a variety of other, non-monetary relief. For instance, the decree requires that Downhole train its employees, including its supervisors, on the requirements imposed by Title VII, and also educate them about the history of hate groups, their symbols and the harm they cause to others. Downhole will also revamp its anti-discrimination policy and establish a toll-free telephone number through which employees will be able to report discrimination and harassment.

“This settlement is both fair and just,” said Rudy Sustaita, regional attorney for the EEOC’s Houston District Office. “I’m confident that Downhole is now as committed as we are in ensuring that incidents of race-based harassment are treated with the seriousness and gravity the law demands.”

Decostar Industries Sued By EEOC For Religious Discrimination

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Carrollton Auto Parts Manufacturer Fired Employee Over Sabbath Request, Federal Agency Charged

ATLANTA – Decostar Industries, Inc., a manufacturer and supplier of automotive parts based in Carrollton, Ga., violated federal law by discriminating against an employee because of her religion, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today.

According to the EEOC’s suit, Decostar violated federal law by firing Dina Lucas Velasquez rather than accommodating her religious beliefs. Sometime in 2010, Decostar required all employees to work mandatory overtime hours on designated Saturdays. Line worker Velasquez requested that she be excused from working Saturdays due to her religious belief that she cannot work during her weekly Sabbath, which she observes from sundown Friday until sundown Saturday. The EEOC said that Decostar initially granted Velasquez’s request until January 2014, when a new supervisor took over her department and denied her ongoing request for a religious accommodation. Decostar subsequently discharged Velasquez on Oct. 27, 2014.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit (Equal Employment Opportunity Commission v. Decostar Industries, Inc., Civil Action No. 3:17-cv-00054-TCB-RGV) in U.S. District Court for the Northern District of Georgia after first attempting to reach a pre-litigation settlement through its conciliation process. The federal agency seeks back pay, compensatory damages and punitive damages for Velasquez, as well as injunctive relief designed to prevent such discrimination in the future.

“The EEOC remains vigilant in enforcing the mandates of federal law requiring employers to properly consider all requests and to grant accommodations to sincerely held religious beliefs,” said Antonette Sewell, regional attorney for the EEOC’s Atlanta District Office.

Bernice Williams-Kimbrough, district director for EEOC’s Atlanta District Office, added, “Unfortunately, employers refusing time off for religious observances has become an increasingly common issue affecting the workforce. We hope that suits like this will help educate employers on their responsibilities to respect workers’ religious needs.”

Better 4 You Breakfast Settles EEOC Lawsuit for Retaliatory Discrimination

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School Meals Provider Will Pay $62,500 to Settle Retaliation Claims and Provide Training to Employees on Retaliation

PHOENIX – A Commerce, Calif.-based company that provides prepared meals to schools has agreed to settle the claims against it in a lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.

The EEOC’s suit charged that Better 4 You Breakfast violated Title VII of the Civil Rights Act of 1964 by retaliating against five Phoenix employees who had opposed unlawful sexual harassment and participated in an EEOC investigation of that harassment. While Better 4 You Breakfast had no role in the harass­ment against these employees, the EEOC charged that the company refused to rehire the five emp­loyees because they had engaged in the protected activity.

“Retaliation for participating in protected activity in the workplace cannot be allowed,” said EEOC Phoenix District Office Regional Attorney Mary Jo O’Neill. “In this case, these employees were not allowed to return to work because they asserted their right to oppose harassment in the workplace. We are pleased that Better 4 You worked cooperatively with us to resolve the claims against them and to evaluate its policies and training on retaliation.”

The 24-month consent decree settling the suit provides that Better 4 You Breakfast will pay $62,500 to the five retaliation victims. In addition, the company will provide training to its supervisors and employees to ensure that they know what actions are retaliatory and how to prevent retaliation in the future. The decree also requires Better 4 You Breakfast to post a notice in the workplace explaining what retaliation is and what employees should do if they feel they have been retaliated against.

Elizabeth Cadle, the director of the EEOC’s Phoenix District Office, said, “The successful resolu­tion of these claims is part of the EEOC’s ongoing efforts to enforce federal laws prohibiting employ­ment discrimination. Retaliation is one of the most common forms of workplace discrimination; nearly 46 percent of charges allege it. The outcome here should encourage all employers to respect the rights of employees who engage in legally protected activity.”