Can Corporate Hotlines be the Answer to the #MeToo Movement?

By Chelsea Binns – In the last five months, according to a New York Times report, 71 high-profile men have been accused of sexual harassment in the workplace. Many of these incidents actually occurred years ago. So why didn’t the victims report these incidents to their corporate hotlines?

Hotline Basics

Often known as fraud, ethics or whistleblower hotlines, employees use corporate hotlines to anonymously report workplace concerns. Such concerns include crime (like fraud), waste and abuse.

Anonymous hotlines have a long history in the workplace. They were first established in government offices in the 1970s. As a result of their success, the Sarbanes-Oxley Act of 2002 required all publicly listed companies to utilize an “anonymous reporting mechanism.”

Fraud hotlines thereafter became standard in most organizations. The most robust hotlines offer multiple avenues of reporting, including telephone, webform and e-mail.

In recent years, hotlines have gained recognition as an effective corporate tool for investigating financial crimes. The Security and Exchange Commission’s (SEC) Whistleblower Hotline, created in 2010 under the Dodd-Frank Act, is a good example. To date, the SEC reports “enforcement actions from whistleblower tips have resulted in more than $1 billion in financial remedies.” On March 19, 2018, a whistleblower earned $50 million in exchange for an actionable tip, the largest award ever.

Using Hotlines to Report Sexual Harassment at Work

According to a Harvard Business Review study, 75% of women have experienced workplace sexual harassment. The Equal Employment Opportunity Commission reports a third of the 90,000 charges they received in 2015 included an allegation of workplace harassment.

Despite these disturbing statistics, employees have seldom used corporate hotlines to report sexual harassment incidents. According to available data, around 10% of reports to hotlines are classified as harassment-related. Such incidents are embedded and unreported throughout the history of many company cultures.

Despite these disturbing statistics, employees have seldom used corporate hotlines to report sexual harassment incidents.

In the case of Harvey Weinstein, the allegations “stretched back decades.” Another example is Ford Motors, which recently settled sexual harassment claims with the Equal Opportunity Employment Commission (EEOC) for over $10 million. Ford ultimately apologized to employees for the harassment, which reportedly spanned “more than a quarter-century.

Employees Don’t Know About Hotlines

One substantial problem is that many employees are unaware of hotlines at their company. Evidence suggests hotlines are sometimes not well publicized by their employers. As a case in point, former Fox News staffers interviewed by The New York Times following the firing of Bill O’Reilly, said they were unaware of a hotline where they could have reported harassment. Yet Fox News said they have had an anonymous hotline since 2004. According to Fox, employees are required to electronically review their code of conduct on a regular basis, which includes information on the hotline.

Former Fox News staffers interviewed by The New York Times following the firing of Bill O’Reilly, said they were unaware of a hotline where they could have reported harassment.

The process utilized by Fox News’ process is quite common, and is recommended by experts. While these practices area a good start, it is likely that additional reminders are required. Research suggests that visual cues, such as posters displayed in the workplace, are highly effective in prompting tipsters to report. In fact, studies have found that a majority of hotline callers learned about their employer’s hotline via a poster.

Dod ig hotline

Dept of Defense hotline poster. Credit: http://pogoblog.typepad.com

Federal government agencies have been using hotline posters successfully for years. One example is the Department of Defense, whose hotline received 17,000 contacts in 2010 and recovered over $425 million since it was created. In 2011, the DoD implemented a rule requiring their contractors to display hotline posters as well.

Time Inc. is currently using posters to urge employees to report coworkers who commit fraud. According to The New York Post, those posters have been displayed prominently throughout their offices, and provide their ethics hotline number. The text of one poster reportedly reads as follows: “Fraud. Bribery. Harassment. Our integrity starts with you. One quick anonymous phone call keeps Time Inc. the workplace you deserve. CALL THE ETHICS HOTLINE TODAY.”

Employees are Talked Out of Reporting

Another problem is that many company hotline materials encourage potential tipsters to use the hotline as a “last resort.” Tipsters are often encouraged to report to their managers, and other executives, such as Human Resources professionals, before calling the hotline.

Many company hotline materials encourage potential tipsters to use the hotline as a “last resort.”

For instance, at ASICS, a sports equipment company, potential callers are told, “If you have a concern or suspect unethical, illegal or unsafe activity in our workplace, we encourage you to report it to your supervisor. Alternatively, you may call the ASICS EthicsPoint Hotline…”

In their Code of Conduct, Macy’s touts its “open door” policy. There is a list of reporting channels. First, “your supervisor” is promoted as a “good place to start.” Other channels listed are: “Your supervisor’s supervisor”; “Your store manager or the head of your Department or location”; “Your HR Department”; “The Office of Solutions InSTORE”; and “The Law Department”. Finally, the last option is ComplianceConnections, their anonymous hotline.

Sears Holdings takes a similar approach. In their Code of Conduct, they advise employees to report ethics concerns in the following order: “Your supervisor, department manager or any SHC officer”; “Your Human Resources Representative”; “The Office of Compliance and Ethics; Chief Compliance & Ethics Officer”; and finally, to “The SHC Business Ethics Hotline”.

Why would an employer only encourage hotline reporting as a last resort? Cost might be an issue because companies are charged, per report, for hotline submissions.
Legal concern is another issue because hotlines put companies “on notice.” Some employers may also genuinely believe that in-person reporting is best for the company. They think that a manager may deescalate a given issue before it becomes part of the record. Unfortunately, all of these reasons likely hinder hotline reporting.

Why would an employer only encourage hotline reporting as a last resort? Cost might be an issue because companies are charged, per report, for hotline submissions.

Employee anecdotes suggest that reporting to a supervisor is ineffective. Take the example of a former Comcast call-center employee. According to her account, she reported a sexual harassment issue to her supervisor. The supervisor said to “let her handle it.” However, the employee claims the issue was never addressed. Had the employee called the hotline, a record would have been created, a report number provided, and the employee could follow up regarding the status of her submission.

Fear of Retaliation

At Ford Motors, women reported retaliation that included physical harm.

Another problem is that employees fear they will suffer retaliation following their hotline complaint. Recent headlines serve to reinforce this notion. Although the data suggests that retaliation incidents are decreasing, potential tipsters are likely to heed the warnings.

Recently, two former employees of the Kentucky Labor Cabinet filed lawsuits wherein they said they were fired in retaliation for reporting sexual harassment on the part of the Cabinet’s director of apprenticeship.

At Ford Motors, women reported retaliation that included physical harm. One employee said following her complaint, she was pushed down on the ground outside the automotive plant, and “stomped on her back” in retaliation.

One employee said following her complaint, she was pushed down on the ground outside the automotive plant, and “stomped on her back” in retaliation.

At Wells Fargo, many workers over the years have claimed they were subject to retaliation for calling the company hotline. In many of the reported cases, the workers believed they were fired for reporting the bank’s “unethical sales practices.” The firing was proximate to their contact with the hotline, which raised suspicions. In one case, the worker was fired for “tardiness” only eight days after reporting his tip to the hotline.

Financial Incentive

Evidence suggests that employees will report when incentivized. Hotlines that offer money in exchange for tips, like the SEC’s Whistleblower Hotline (with over $1 billion in financial remedies, as discussed above), are indeed successful. The SEC offers rewards between 10-30% of their recoveries, in connection with a qualifying tip.

There are no existing hotlines that pay tipsters for sexual harassment claims. However, due to the SEC’s success with respect to financial crime tips, companies may want to further explore this concept to promote sexual harassment reports.

Recent Positive Developments

There have been recent positive developments in connection with sexual harassment hotline reporting.

Amazon is now urging employees to contact their ethics hotline to report sexual harassment. This is a very positive step by one of the world’s strongest companies.

In Miami-Dade County, victims of sexual harassment regarding the housing authority are urged to call their “fraud investigation hotline.” Westchester Medical Center also issued a reminder to employees, after a medical resident told NBC News she was sexually harassed. In South Florida, The Sun Sentinel reported employers are actively expanding their anti-harassment training and encouraging employees to report to their hotlines.

Amazon is now urging employees to contact their ethics hotline to report sexual harassment. This is a very positive step by one of the world’s strongest companies.

Workers get packages ready for transit at Amazon warehouse

Organizations are also creating new hotlines to hear such complaints. New sexual harassment hotlines, such as these in Chicago, IL, Henderson, NV and Reno, NV, have recently been created.

The film industry has also created distinct hotlines for events such as the Sundance Film Festival and CinemaCon. This industry is particularly affected by sexual harassment – as many as 94% of women have been subjected to it, according to a recent survey.

As a result, some hotlines have seen an increase in hotline complaints related to sexual harassment. One such example is this hotline in Bristol, VA. They credit the current sexual harassment cases in the news for empowering victims to come forward. Furthermore, hotline provider NAVEX Global reported a slight increase in their reports classified as “harassment-related” following October 5, 2017.

Although many hotlines are created due to a regulatory requirement, companies are not required to report their investigative findings to the public, making it difficult to definitively conclude that sexual harassment hotline claims are rising. Thus, it is unclear as to whether any victims of sexual harassment have attempted to contact hotlines. It is also unclear whether employees may have reported such issues, and their tips were ignored.

Conclusion

Today, there is a cultural shift taking place, empowering victims of sexual harassment to come forward. Corporate hotlines, historically designed to hear complaints about financial fraud and crime, are likely benefiting from this shift.

Emory Trustline Poster AUG 2010

A university poster advertises a hotline for various violations

Corporate hotlines are ideal for hearing sexual harassment complaints from workers. Companies recognize this, and some have changed their hotline names accordingly. Historically, hotlines were “fraud hotlines.” Today, names such as “speakup-line” and “ethics and compliance line” are common and demonstrate recent corporate efforts to market their hotlines to hear many types of issues from their workers.

Today, names such as “speakup-line” and “ethics and compliance line” are common and demonstrate recent corporate efforts to market their hotlines to hear many types of issues from their workers.

Organizations need to reconsider all the ways in which they advertise, encourage and incentivize employees to report sexual harassment. Ultimately, each company must put itself in the shoes of its employees and ensure an environment that will encourage them to report.

Chelsea Binns is Assistant Professor in the Department of Security, Fire, and Emergency Management. Her recent book Fraud Hotlines: Design, Performance, and Assessment was published in October 2017.

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