Ford Settles Racial, Sexual Harassment Claims for $10M

​A large, recent settlement of harassment claims reminds employers of the importance of finding ways to root out all forms of harassment, management attorneys say. Ford Motor Company allegedly allowed racial and sexual harassment at two of its plants, resulting in a $10 million settlement with the Equal Employment Opportunity Commission (EEOC).

Employers wishing to remove harassment from the workplace may need to do some things differently, attorneys recommend, such as reconsidering whether anonymous hotlines are a help or a hindrance, alerting managers to pay attention to gossip, and requiring two people to interview witnesses.

[SHRM members-only toolkit: Managing Equal Employment Opportunity]

Settlement Terms

The EEOC concluded that there was racial and sexual harassment at two Ford plants in the Chicago area that occurred against female and black employees. The agency also determined that the company retaliated against employees who complained about the harassment.

The settlement was reached during voluntary conciliation, so details about the alleged harassment are private and not subject to public review.

Ford chose to voluntarily resolve the issue with the EEOC without admission of liability to avoid an extended dispute, the agency announced Aug. 15.

In addition to the $10 million to be distributed among the claimants, the settlement ensures that during the next five years Ford will conduct regular training at two of its Chicago-area facilities. Ford also will:

• Continue to disseminate its anti-harassment and anti-discrimination policies and procedures to employees and new hires.
  
• Report to the EEOC about formal employee complaints of harassment and/or related discrimination.
  
• Monitor its workforce for issues of alleged sexual or racial harassment and related discrimination, to include monitoring by managers.
  

A three-person panel will monitor distribution of funds to eligible class members, review training for managers and oversee how all complaints of discrimination are handled, said Julianne Bowman, the EEOC's Chicago district director. 

There will be stronger oversight from corporate headquarters in Dearborn, Mich., and managers will be held accountable for how they respond to complaints. The training for managers will focus on how to handle complaints if they are brought to their attention or if the managers see harassment in the workplace, she noted. Mutual respect training will be provided as well in addition to more traditional anti-harassment training. 

"Ford Motor Company has worked with the EEOC to address complaints of harassment and discrimination at these two facilities and to implement policies and procedures that will effectively prevent future harassment or provide prompt action when harassment complaints arise," Bowman said.

"Ford does not tolerate harassment or discrimination of any kind; we are fully committed to a zero-tolerance, harassment-free work environment at all facilities and to ensuring that Ford's work environment is consistent with our policies in that regard," said Kelli Felker, Ford's manufacturing and labor communications manager, in a company statement. "Ford conducted a thorough investigation and took appropriate action, including disciplinary action up to and including dismissal for individuals who violated the company's anti-harassment policy."

The EEOC's Chicago office has acted aggressively to stamp out harassment, noted Barry Hartstein, an attorney with Littler in Chicago. In 1998, the office secured $34 million against Mitsubishi Motors, the highest sexual harassment settlement ever. In 2010, it recovered $10 million for 250 black employees of Roadway Express. In 2012, the Chicago office settled with Yellow Freight for $11 million on behalf of 309 black employees who allegedly had been subjected to such hostile displays as nooses and racist graffiti.

Anonymous Hotlines May Not Be the Answer

So, how can employers remove racial and sexual harassment from the workplace without the EEOC's involvement?

Don't rely on anonymous hotlines as the only way for employees to report problems. Don Livingston, an attorney with Akin Gump in Washington, D.C., and former general counsel with the EEOC, said that despite some good reasons for having anonymous hotlines for reporting harassment, there are some compelling reasons for not having them, too.

On the positive side, an employer is likely to draw in more complaints and be able to conduct investigations sooner during the harassment if there is an anonymous hotline. Employees also may feel freer to step forward without fear of retaliation if there is a hotline.

But it's far more likely that an employer won't be able to corroborate an anonymous complaint, compared to complaints that are made to HR or a manager in person.

If the complainant is anonymous, the employer cannot question him or her. The employer does not know who to question and how to get details about the complaint. Without details, it's difficult to know if the person making the complaint is being honest, he said.

While it's smart for employers to set up complaint procedures to stamp out harassment and limit employer liability, anonymous hotlines don't have to be a part of that process, he noted.

An employer's complaint procedures should be specific about who individuals ought to report harassment to, whether that's the director of HR, the vice president of operations, and/or an employee's immediate supervisor, noted Mark Fijman, an attorney with Phelps Dunbar in Jackson, Miss. The policy also should allow employees to bypass reporting to their immediate supervisor if the supervisor is the alleged harasser.

Pay Attention to Gossip

"Managers often don't fully appreciate they are the eyes and ears of the employer," said Amy Bess, an attorney with Vedder Price in Washington, D.C.

When information comes to a manager's attention, even if it's just gossip, the manager needs to act on it, she said. "It's not sufficient to say, 'No one came forward with a complaint,' " she noted. If employees are talking about a situation and a manager hears about it, that's "a big red flag, and the employer needs to take action," she said. Tell managers to get HR professionals involved so they can initiate a prompt and thorough investigation.

Interview Witnesses in Teams of Two

It's often helpful to have more than one person from HR sit in on interviews with witnesses if possible, Fijman said.

Sometimes an employer will get different perspectives on the credibility of witnesses that way. If an employee makes a statement and just one person interviewed him or her, the witness may later claim he or she never said something, and the witness statement then becomes one person's word against another's. 

However, if an employee is too nervous, embarrassed or reluctant to talk in front of more than one person, it's important to remember that the priority is to obtain the information. Having two interviewers present in the room may be seen as aggressive or intimidating.

Provide Examples During Training

Don't rely exclusively on the policies in an employment handbook to prevent harassment, he said. "Smart employers have regular training and tell employees, 'This is how the harassment policy works, this is how you are supposed to report harassment and these are examples of harassment.' "

Fijman noted that early in his career, he used to think that it was silly to provide specific examples, since surely everybody should understand what constitutes sexual harassment.  However, he now knows that providing specific examples is a valuable component to an effective harassment policy. Too often, he said, what untrained employees think is "just kidding around" actually constitutes harassment.

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