The Role of Diversity, Equity, and Inclusion at the Workplace

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"silent diversity" by DryHundredFear is licensed under CC BY 2.0

Diversity, equity, and inclusion comprise the modern workplace mantra, yet discrimination, disparity, and oppression remains widespread in professional settings. Despite the fact that many employers claim that diversity, equity, and inclusion are the foundation of their business, the reality isn’t even close. Many of them do not fully comprehend the terms, while the rest are more focused on putting on a show rather than actually incorporating those values in their organization. Old habits die hard, which is why business owners are not as broadminded and accepting as they claim to be. 

People of color and other minority groups in society repeatedly find themselves at a disadvantage. Racism and stereotyping are two major obstacles that prevent them from personal growth and professional success. The United States is one of the most culturally diverse countries in the world, thus it is not surprising that there are so many contradicting opinions all around. While the Millenials and Generation Z are actively participating in campaigns promoting equal rights, the older generations are reluctant to let go of traditional bigotry and sexism. 

What is Workplace Diversity?

Diversity in the workplace means that people from different origins and cultural backgrounds come together. The employer must hire individuals on the basis of their skill, rather than what meets the eye. Diversity is not limited to skin color, religion, and ethnicity, but also includes people of all ages, genders, and sexual orientations. Diversity in the workplace promotes innovation and creativity, which is ultimately beneficial for the business. Collaboration and merging of contrasting ideas gives rise to new and promising prospects.  

Photo by Amy Elting on Unsplash

How To Establish Equity and Inclusion at the Workplace?

Hiring a diverse workforce is only the first step; many business owners fumble with what comes next. There is no point in increasing the number of female, disabled, LTBTQ, Black, Asian, and immigrant workers if you are not ready to treat them fairly. Every employee at your firm needs to feel included and respected, regardless of who they are and where they come from. Their input is as invaluable as everyone else, and they deserve equal opportunities for advancing in their career. They are entitled to same pay scale, employment incentives, and worker’s compensation policy as everybody else.

When an employer implements equity, inclusion develops automatically. When all employees are treated as equals, none of them will feel singled out. Equity and inclusion eliminate the possibilities of favoritism and victimization. Companies that abide by the principles of diversity, equity, and inclusion are 30% more likely to outperform competitors who do not share these values. When employees from all walks of life feel welcomed and appreciated, they are encouraged to perform optimally and exhibit loyalty. 

A workplace that discourages all sorts of discrimination is less susceptible to legal claims and lawsuits filed by employees. Diversity, equity, and inclusion eliminate in-house conflicts, and ultimately protect the business from litigation costs. Every employer and employee should be aware of his/her rights and responsibilities at the workplace. While an employer does not need a reason to fire a worker, there are situations where it can be considered as wrongful termination. If the employee presents proof of discrimination, harassment, or retaliation, the company may have to face harsh legal consequences. If you have been wronged by a figure of authority or person of power in the workplace hierarchy, Personal Injury Lawyer in Philadelphia can help you attain justice. 

Call the experienced team at McEldrew Young Purtell Merritt today at 1-866-333-7715 or fill out our form for a free consultation on your case.

 

The High Price of Attempted Whistleblower Retaliation

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The High Price of Attempted Whistleblower Retaliation

Barclays fined $15 Million for CEO’s Attempt to Identify Whistleblowers

The New York Department of Financial Services (DFS) issued a press release this past December  announcing a $15 million penalty against Barclays Bank PLC for violations of New York state banking laws. The sanctioned conduct involved Barclays CEO, James E. Staley, who attempted to discover the identity of an anonymous whistleblower or whistleblowers.  The saga began in 2016 when an anonymous person or persons sent two letters to a senior member of Barclays’ management.

Senate Considering Antitrust Whistleblower Protections Again

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competition law

The bipartisan bill promoting whistleblower protections for individuals reporting antitrust violations, the Criminal Antitrust Anti-Retaliation Act (“CAARA”), is back in the Senate.

SEC, CFTC Directors Speak on Whistleblower Programs

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The Chief of the SEC’s Office of the Whistleblower, Jane Norberg, and the Director of the CFTC Whistleblower Office, Christopher Ehrman, spoke recently at the Practicing Law Institute’s program on June 28, 2017, titled Corporate Whistleblowing in 2017. Their comments covered a wide range of hot topics in the field of whistleblower law and were relayed in a recent JDSupra article, so we thought them appropriate to briefly detail here for current and potential Dodd-Frank whistleblowers.

Supreme Court to Review SEC Internal Whistleblower Retaliation Protections

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supreme court

The Supreme Court will next term review a whistleblower retaliation lawsuit, Somers v. Digital Realty Trust, Inc., to determine whether the anti-retaliation protections of the Dodd-Frank Act protects employees who report misconduct internally. The Ninth Circuit, in a split decision, determined that the Dodd-Frank Act protected the employee from retaliation as a whistleblower in spite of the fact that he did not file a Form TCR with the U.S. Securities and Exchange Commission.

CFTC Completes Whistleblower Program Rule Changes

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Personal Injury Lawyers Philadelphia PA

The CFTC has issued final rules based on its previously proposed changes to the CFTC whistleblower program. The changes have left the core of the program intact while strengthening the whistleblower retaliation protections, harmonizing the rules with the SEC program and adding transparency to the process for reward claims.

How 700 Bank Whistleblowers Get Ignored

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wells fargo

Like much of America, we have been following the story of Wells Fargo’s sales tactics and the government response to it. We haven’t discussed this matter in depth yet here on our blog (just a brief comment about its implications for whistleblower retaliation), so I thought we would discuss it following the media reports that the Feds knew of 700 whistleblower complaints at the bank in 2010 regarding its sales practices.

Our whistleblower attorneys speaks regularly with employees and ex-employees of corporations of all sizes after the individual has internally reported suspected wrongdoing and the business has failed to adequately address their concerns. It is not surprising at all to us that tips would be ignored by a company. If large corporations corrected violations of the law after learning about them from their employees, we would not be in the practice of whistleblower law because there would be no need for us.

We also understand how these tips could be packaged together, explained away by the company and dismissed upon Government review. But we will discuss that more below.

Since we haven’t posted on this topic before, let’s briefly recap what has happened. Wells Fargo was fined $185 million, including a $100 million penalty by the Consumer Financial Protection Bureau, last September for fraudulently opening customer accounts. The practice involved as many as 1.5 million bank accounts and 565,000 credit card applications opened without the customer’s consent over a period dating back to at least 2011. Recently revealed evidence suggests it may have been going on since at least 2004 or 2005. It also agreed to settle a class action by consumers regarding the practices for $110 million.

After the practice became public, several ex-employees came forward to discuss their whistleblowing. Between 2009 and 2014, at least five former Wells Fargo employees notified OSHA that they were fired due to concerns about the opening of unauthorized accounts and credit cards. OSHA has recently ordered Wells Fargo to rehire one former manager and pay $5.4 million for its whistleblower retaliation, the largest award ever issued by the agency for an individual whistleblower.

There have been a great deal of investigations concerning the practices at Wells Fargo, both from government agencies and Wells Fargo. Two reports, one from Wells Fargo and one from the government regarding how to improve its regulatory oversite, have been released recently.

A few weeks ago, the Independent Directors of the Board of Wells Fargo put out a 113 page investigation report on sales practices. It examines in substantial detail the roles of numerous individuals and entities within Wells Fargo.

Unfortunately, there is so much evidence in the report that everyone knew Wells Fargo had a problem (at least as early as the December 2013 Los Angeles Times report), that it doesn’t spend much time on the issue of how it could improve its handling of whistleblower tips. Indeed, the most substantial examination of a whistleblower matter is on page 75 concerning a 2011 letter by a group of terminated bankers and tellers from a California branch to then CEO John Stumpf claiming they were unjustly terminated for practices condoned by branch management and happening across the bank.

The report does announce a few organizational changes which may impact how whistleblower issues are treated. It highlights the creation of a new Office of Ethics, Oversight and Integrity (with oversight by the Board’s Risk Committee). It also notes on page 17 that the Board’s Human Resources Committee will increase its oversight of terminations and the EthicsLine implementation.

This may not be the only report put out by Wells Fargo so it is possible one will follow later about changes to its handling of whistleblower tips. Wells Fargo has undertaken efforts to review non-anonymous calls to its confidential ethics line over the past five years to determine whether the employees were terminated within a year of the call. It is not yet known whether it will release publicly the details of that investigation.

The report that triggered the media focus on 700 whistleblowers was issued by the Office of the Comptroller of the Currency (OCC). The OCC is the primary regulator of banks chartered under the National Bank Act and Wells Fargo falls within its Large Bank Supervision operating unit. The Office of Enterprise Governance and the Ombudsman at the OCC completed its internal report two days ago and provided its lessons learned in the aftermath of the revelations about sales practices at Wells Fargo. Much of that report focused on what went wrong with the handling of tips from whistleblowers. It was a shorter document however (13 pages if memory serves).

The OCC report found Wells Fargo had issues with the handling of both consumer complaints and whistleblower cases. Among other things, Wells Fargo failed to document resolution of whistleblower cases and failed to follow up on significant complaint management and sales practices issues. When asked in 2010 about a high number of complaints by the Government, a Wells Fargo Senior Executive Vice President said that company culture generated a high volume of complaints and then they are investigated and addressed.

The OCC itself received 14 whistleblower tips about sales practices from mid-March 2012 to early September 2016. Just over 50% had no documentation in the regulator’s system. Both whistleblower tips and consumer complaints at the OCC are taken in by the Customer Assistance Group (CAG).

The report made numerous suggestions to improve the OCC and prevent a similar situation from happening again. Among the suggestions were for periodic review and analysis of complaints and whistleblower cases, as well as greater efforts to inform the public how to communicate whistleblower information to the OCC.

After this somewhat long review, we are back at the central issue here: how and why whistleblowers get ignored.

1. They don’t consider it a material issue for the company.

Wells Fargo reported $88.26 billion in revenue in 2016. To resolve the allegations concerning what was a massive multi-year violation of the law cost roughly $300 million. At some point, perhaps it should be said (like at many Wall Street investment banks) that government fines like these are just a cost of doing business. Wells Fargo saw 1% of its staff was being dismissed every year for bad sales practices and thought that number was great because 99% were acting ethically.

2. Lack of focus.

We speak to a great number of people that feel every violation of the law, no matter how small, is a vital national issue. As a result, they lump together both important and unimportant matters when they blow the whistle. When highly speculative matters of minor importance get tossed out in the same breath as serious violations of the law, it makes everything less credible.

3. Poor articulation of the details.

The law is complex. So are the factual scenarios that can arise. When non-lawyers try to explain violations of the law, they often oversimplify the facts and the law. If it is not articulated properly, it can be unconvincing. There may be various shades of grey obscuring a black and white violation of the law.

4. No documentation.

In the electronic age, documents matter. If there is no evidence presented, it is harder to disprove witness statements to the contrary.

5. Aggregation of reports.

It sounds like the government was working from a company summary of the EthicsLine complaints. If there was a detailed accounting and investigation of each incident, it would not have been so easy to dismiss. Aggregation hides the severity and specificity of events where the details matter.

6. Many don’t have lawyers.

Would you take an anonymous call from a random employee as seriously as you would a complaint from a high powered attorney seeking money on behalf of a specific client? There is a reason that the EthicsLine is handled by HR and not the Legal Department. Those that do get lawyers are dismissed as disgruntled employees.

7. The tone at the top is wrong.

When the focus is always on meeting advancing sales targets, compliance takes a back seat. This includes investigations of high performers accused of wrongdoing.

8. There’s no fear of the consequences.

“Everyone is doing it.” This isn’t a big deal.

9. Too many excuses.

The report details how Wells Fargo was overrun by individual wrongdoers to the point where it became a systemic and widespread problem. It failed to change the underlying causes of this behavior or the systems that allowed it to happen. Instead, they ended up firing more than 5,000 bad apples before the Government stepped in to say enough is enough.

A Proposed Solution

There is a way to get rid of the excuses and put more power in the hands of whistleblowers. It is not mentioned by the OCC report. But it is what happened at the SEC. Congress passed the Dodd-Frank Act to reward whistleblowers that come forward. It created a department within the SEC to ensure that whistleblowers had advocates. This program has been a success, paying out more than $100 million in rewards in the first six years.

This was the result of the ponzi scheme by Bernie Madoff. Despite a whistleblower tip, the SEC missed it. So, Congress gave whistleblowers a monetary incentive to come forward. Now, investment banks are well aware of the SEC whistleblower program. If they are not taking internal employee whistleblower tips seriously, they do so at their peril.

There has been much discussion about rewarding bank whistleblowers. Former NY Attorney General Eric Schneiderman even proposed legislation in New York State to protect and reward banking, insurance and financial service whistleblowers in 2015.

FIRREA would be one mechanism for the federal government to do so. FIRREA is the Financial Institutions Reform, Recovery and Enforcement Act. It currently provides rewards of up to $1.6 million for whistleblowers providing information about fraud against federally insured financial institutions. Before leaving office, former Attorney General Eric Holder told an audience at New York University School of Law that lifting the cap would significantly improve the Justice Department’s ability to gather evidence of wrongdoing in complex financial crimes. FIRREA has been getting increasing usage both as a tool against mortgage fraud and even cases of consumer fraud involving auto loans. It makes sense to expand it.

It should come as no surprise that we would support this solution. When Congress wanted to put a stop to delayed product recalls, it gave the Transportation Secretary the power to pay auto whistleblower rewards and increased potential fines from the NHTSA. Doing the same for bank whistleblowers would give the OCC a substantial incentive to take control of its whistleblower process and employees to gather the evidence needed to put a stop to Wells Fargo type practices earlier.

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Barclays Whistleblower Process Disappoints

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Personal Injury Lawyers Philadelphia PA

The Justice Department is reportedly investigating efforts by Barclays CEO Jes Staley to unmask a whistleblower who sent two anonymous letters to the bank’s board of directors complaining about the hiring of a mid-level executive. Barclays reportedly asked the U.S. Postal Service for assistance in tracking down the sender of the letters, though it claims that it never learned the identity of the individual. It is now being investigated for possible criminal charges and/or violations of the Dodd-Frank Act. The New York State Department of Financial Services is also investigating.

IRS Whistleblower Retaliation Protections Proposed in Senate

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tax

Senators Chuck Grassley and Ron Wyden have proposed the IRS Whistleblower Improvements Act of 2017 in the U.S. Senate today. If adopted, the law will provide for (1) enhanced communications between the Internal Revenue Service and whistleblowers, and (2) anti-retaliation protections for tax whistleblowers. Both would be significant improvements to the IRS whistleblower program created a decade ago.

9th Circuit: Internal SEC Whistleblowers Can Sue Under Dodd-Frank Anti-Retaliation Provision

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On a 2-1 decision, the Ninth Circuit has affirmed the right of internal whistleblowers to sue under the Dodd-Frank Act after they are retaliated against for informing their company of suspected violations of federal securities laws. The circuit split on anti-retaliation protections for internal SEC whistleblowers now consists of the Second and Ninth Circuits in favor and the Fifth Circuit against.

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