Friday, July 13, 2012

What Can the Freeh Report Teach Employers about Workplace Culture and Investigations?

Yesterday investigators, led by former FBI Director Louis Freeh, published their independent report concerning Penn State’s response to reports of suspected child abuse by former football coach Jerry Sandusky. Sandusky was arrested in 2011 and convicted last month of 45 counts of sexual abuse involving 10 boys over a 15-year period. 

Freeh’s 267-page report is scathing in its criticism of the University and its leaders. Freeh said in a statement that “[t]he most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized. Messrs. Spanier [Graham Spanier, former school president], Schultz [Gary Schultz, university vice president, now retired], Paterno [legendary football coach, Joe Paterno, who died in January] and Curley [Tim Curley, athletic director] never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky's victims until after Sandusky's arrest.” 

According to the report, Spanier, Schultz, Paterno, and Curley were aware of a 1998 criminal investigation of Sandusky relating to suspected sexual misconduct with a young boy in a Penn State football locker room shower. They did nothing to restrict Sandusky’s access to the facilities, and failed to address the situation internally. They again did nothing when an assistant football coach reported in February 2001 that he observed Sandusky sexually abusing a young boy in the football locker room shower. “Written correspondence”—emails from 2001—uncovered by the investigators revealed that school leaders initially planned to report these allegations to authorities, but changed course and decided not to. These failures violated the Clery Act, which applies to higher education institutions, as well as applicable child protection laws (not to mention a duty of conscience to protect vulnerable people like the kids Sandusky was abusing).

Not every employer has occasion to worry about minors on its premises and only institutions of higher educations are subject to the Clery Act. But the sobering revelations of the Freeh Report have applications for all employers.

First, CULTURE. According to Freeh’s statement, “Penn State’s ‘Tone at the Top’ for transparency, compliance, police reporting and child protection was completely wrong.” The report reveals that janitors at the school observed what is described as a “horrific” sexual assault of a child in the shower, but did not report it because they were afraid of being fired for reporting a powerful football coach. We often recommend that employers maintain an “open door” policy assuring that all employees have access to company leaders to express concerns, as well as a whistleblower policy offering protection from retaliation so that employees can come forward with troubling information. It’s possible (even probable) that Penn State had such policies. But policies aren’t worth the paper they’re written on if employees don’t believe in them, and employees won’t believe in them if senior leaders don’t follow them. Culture and practice often matter more than what is written in a handbook. Employers can take a peek at their handbooks to make sure that they have they the right things written down, but they should also take a good hard look at their practices to make sure the policies mean something.

Related to culture is OVERSIGHT. Although there was no evidence that the Board of Trustees of Penn State was aware of the allegations against Sandusky in 1998 and 2001, the report blasts the Board for failing in its duties of care and oversight. “[T]he Board – despite its duties of care and oversight of the University and its Officers – failed to create an environment which held the University’s most senior leaders accountable to it.” Sometimes organizations allow different standards to apply to individuals who are valuable to the bottom line. The events at Penn State leave little doubt that failing to hold everyone in an organization equally accountable can have catastrophic consequences.

Finally, PERSPECTIVE. The Freeh report concludes that leaders at Penn State concealed critical facts relating to Sandusky’s child abuse in order to avoid bad publicity. We wrote previously about whether an employer could be held legally responsible for harm that could have been prevented if the employer had used its access to employees’ electronic communications to identify dangerous conduct. We assumed that a situation like the one Penn State now finds itself in, where key leaders were aware of allegations of serious misconduct, and yet did nothing, would be likely to create liability for the employer. Emails recovered by the investigators of Penn State demonstrate that school leaders knew of the 2001 report and chose not to inform child protective services, choosing instead to tell Sandusky not to bring children to football locker room. According to the emails, “the only downside for us is if the message isnʹt ‘heard’ and acted upon, and we then become vulnerable for not having reported it. But that can be assessed down the road. The approach you outline is humane and a reasonable way to proceed.” Do you have counsel who can help you appropriately assess the risks associated with a course of action—or inaction?

The scandal at Penn State is more than just a cloud on the reputation of an institution. The inaction of school leaders gave a criminal an opportunity to victimize kids. The inaction of managers and supervisors can provide an opportunity for unlawful conduct in the workplace. Employers are wise to heed the lessons of the Freeh report and examine their culture, policies, and practices to make sure that inappropriate conduct is not tolerated.

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