Investigating complaints of sexual harassment in the workplace needs to be done promptly and sensitively. As discussed in this month’s Newsletter article concerning workplace culture, it is extremely important to examine an employer’s environment to ensure an emphasis on investigating all complaints as soon as practicable. If the employer knew or should have known about the harassment, it may be liable. Put another way, if the employer is negligent about preventing or stopping harassment of an employee, it will be liable for such harassment.
Recent incidents involving Uber demonstrate the importance of workplace investigations. In February 2017, Uber’s practices were revealed to the public when a female employee blogged that her supervisor sexually harassed her and that her complaints were ignored by Human Resources. Covington & Burling LLP was hired to investigate the company’s workplace culture. On June 6, 2017, Uber disclosed that it fired 20 employees for harassment, discrimination, and inappropriate behavior. These terminations followed a separate internal investigation, which focused on allegations raised from Uber’s confidential hotline. Several of the terminated employees were senior executives. The firings were allegedly aimed at combatting deeply rooted management and cultural issues.
New York Times reported that the investigation uncovered that more than 215 cases of workplace violations had been investigated by Uber, which resulted in no action taken in 100 cases. 47 cases were sexual harassment allegations and 54 involved some type of discrimination. The remaining cases fell within categories such as retaliation, bullying, unprofessional behavior, physical security and non-sexual forms of harassment.
Uber is taking a step in the right direction. Following the investigation and terminations, 31 employees are undergoing some type of workplace training, and seven employees have been given final warnings. Further, there are 57 complaints currently under review.
Uber has also made a series of personnel changes. Since February, numerous executives parted ways with Uber. Amit Singhal, Uber’s Senior Vice President for Engineering, abruptly departed the company due to his failure to disclose prior sexual harassment charges against him, which occurred during his tenure with Google.
In addition, Uber hired several new executives and was searching for a Chief Operating Officer (“CEO”) to assist Mr. Kalanick after he admitted that he needed more leadership assistance. This followed an incident where he was caught on video berating an Uber driver earlier this year. On June 13, 2017, Mr. Kalanick announced that he would be taking a leave of absence. On June 20, 2017, Mr. Kalanick resigned from his CEO position after major investors demanded that he step down immediately. The investors stated in their letter to Mr. Kalanick that Uber needed a change in leadership.
The Uber dilemma renewed questions surrounding how women and employees are treated in the tech industry. On June 13, 2017, Arianna Huffington, the board’s only woman, spoke to employees about adding more women to the board of directors. She told the employees that when there is one woman on the board, it is more likely that another will be appointed. In response, Director David Bonderman stated “[a]ctually, what it shows is that it’s much more likely to be more talking.” Bonderman’s comment was disclosed to the public from a recording of the meeting published by Yahoo. As a result, Bonderman resigned from Uber.
Nonetheless, Uber’s Special Committee of the board recently approved recommendations suggested by Covington to address the recent issues. These recommendations included: leadership changes; improving oversight of the Board; enhancing internal controls; improving employee training; enhancing the Human Resource Department and the complaint procedures; improving diversity and inclusion; editing employee policies and practices; addressing employee retention; assessing Uber’s pay practices; and reformulating cultural values.
With respect to Uber’s pay practices, on June 13, 2017, a New York Department of Labor Administrative Law Judge held that Uber drivers are employees and not independent contractors. The Judge supported her holding by explaining that Uber did not apply an arms-length approach to employees that would satisfy an independent contractor status. However, there were only three claimants before the Judge, but she granted the status to all “similarly situated” drivers. Uber is appealing this decision and requesting a new hearing.
In order to prevent similar issues, there are several things an employer can do to gauge culture. One way is by distributing questionnaires and/or surveys with questions that are sensitively drafted. Another method is to create a poll for employees to take. A third way is through a risk culture analysis. Risk culture describes the beliefs, knowledge, values, understanding and attitudes about risk within an organization. An efficient risk culture enables and rewards employees for taking the correct risks in an educated manner. These analyses may provide feedback from employees in connection with the company’s workplace culture and reveal issues that were unknown to the employer.
These methods allow employers to investigate workplace issues early on, in order to avoid an incident similar to Uber’s dilemma. Once issues are revealed through these proactive steps, employers are advised to immediately investigate and rectify them. These steps can help prevent sexual harassment incidents and can help strengthen the workplace culture.
It is recommended that employers ensure proper investigation of every allegation of sexual harassment in the workplace. As demonstrated by Uber’s experience, ignoring complaints can backfire for the employer. Thus, an employer should utilize methods to prevent sexual harassment. While it seems obvious, it is critical that upon receipt of a sexual harassment complaint, a proper and timely investigation be conducted without delay.