Angeles University Foundation

Angeles City

Corporate
Scandals
Bulan, Gerome G.
Reyes, Nelerry Jane
Santiago, Noelle
Alvaro, Vanessa Grace
Dajab, Dhalia
Alfonso, Anthony Marc

March 2019
 21st Century Fox and Bill O'Reilly Scandal
1. Identify the most important facts surrounding the case.

- The scandal at Fox began in July 2016 when former anchor Gretchen
Carlson filed a lawsuit accusing Ailes of harassment. O’Reilly lost his job
in April after being accused of harassment, and has denied
wrongdoing.
- Ailes died the next month. Fox faces other private civil litigation tied to
the scandal.
- Twenty-First Century Fox Inc has reached a $90 million settlement of
shareholder claims arising from the sexual harassment scandal at its Fox
News Channel
- The settlement, which requires a judge’s approval, resolves what are
known as “derivative” claims against Fox officers and directors,
including: Rupert Murdoch and his son Lachlan, who are Fox’s executive
chairmen; James Murdoch, another son and its chief executive, and
Ailes’ estate.
- Settlement calls for insurers of Fox officers, Fox directors and Ailes’ estate
to pay the $90 million to the New York-based company for the benefit
of shareholders.

2. Identify the key issue or issues.

- 21st Century Fox in $90 million settlement tied to sexual harassment

scandal between its employees.

3. Specify alternative courses of action.

A. Adopt a clear sexual harassment policy.

In your employee handbook, you should have a policy devoted to

sexual harassment. That policy should:
o define sexual harassment
o state in no uncertain terms that you will not tolerate sexual
harassment
o state that you will discipline or fire any wrongdoers
o set out a clear procedure for filing sexual harassment complaints
o state that you will investigate fully any complaint that you receive,
and
 o state that you will not tolerate retaliation against anyone who
complains about sexual harassment.

B. Train employees, supervisors and managers

At least once a year, conduct training sessions for employees. These

sessions should teach employees what sexual harassment is, explain
that employees have a right to a workplace free of sexual
harassment, review your complaint procedure, and encourage
employees to use it. At least once a year, conduct training sessions
for supervisors and managers that are separate from the employee
sessions. The sessions should educate the managers and supervisors
about sexual harassment and explain how to deal with complaints.

4. Evaluate each course of action.

A. Adopt a clear sexual harassment policy.

Pros:
Managing legal risks

An employer has various legal obligations with respect to work

health and safety and the prevention of certain types of behavior in
the workplace, including discrimination, harassment and workplace
bullying. An employer, and its senior officers, may face severe
penalties for failing to comply with work health and safety duties.
Clarifying expectations and ensuring consistency

Policies can be used to provide employees with clarification

regarding the employer’s expectations. By way of example, an
employer may have policies regarding appropriate workplace attire
and attendance at work.
Cons:
Limiting employer’s discretion

An employer will often have a significant amount of discretion

when issuing instructions to employees and managing issues in the
workplace (provided the employer complies with the relevant laws).
Legal risk associated with failure to comply

An employer may face legal action from employees if it fails to

comply with its own policies. The main avenue of legal redress is for
an employee to allege that the policy in question was incorporated
into his or her contract of employment, meaning that a breach of the
policy amounts to a breach of contract for which (unlimited)
damages may be awarded.

B. Train employees, supervisors and managers

Pros:

It can reduce employee turnover rates

Employees that are properly trained are workers that will feel
more confident about their job. This confidence can translate into a
lower employee turnover rate, especially if competitive pay and
benefits are involved.
It gets everyone onto the same page.

There will always be employees who “go rogue” on a

company’s policies and procedures because they think their way is
better.
It’s an easy way to set clear expectations.

A good training session will outline all expectations for an

employee and require them to sign off on the fact that they
understood what was conveyed to them in some way – through
testing, attendance records, or similar documentation.
Cons:
The costs of training never go away.

A general rule of thumb when it comes to training costs is that

it will be 50% of that employee’s salary for the first year to get a new
worker up to speed.
 Improper training creates improper results.

If an employee is not properly trained the first time around,

then you’ve got to spend the money to properly train that worker a
second time.

5. Recommend the best course of action.

As an employer, you have a responsibility to maintain a workplace that

is free of sexual harassment. This is your legal obligation, but it also makes good
business sense. If you allow sexual harassment to flourish in your workplace, you
will pay a high price in poor employee morale, low productivity, and lawsuits.

There are several steps an employer should take to emphasize to

employees that sexual harassment will not be tolerated in the workplace. An
employer's managers and supervisors play an important role in implementing
each of these steps. One of the most important things an employer can do is
to adopt an effective sexual harassment policy, including a procedure for
employees to raise complaints about harassment.

Every employer should have a written policy specifically prohibiting

sexual harassment. The policy should be included in the employee handbook,
distributed to all new employees, posted, redistributed on a regular basis, and
communicated to employees often. Training an employees, supervisor or any
officials of the company will not ensure the abolishment of sexual harassment
but building a clear policy may force everyone to do the right things because
of its consequences.
 Bre-X Scandal
1. Identify the most important facts surrounding the case.

- Bre-X Minerals Ltd. was a Canadian gold exploration company that

perpetrated one of the biggest mining scams and frauds in Canadian
history.
- Bre-X Minerals was formed by former stockbroker David Walsh in 1988.
In 1993, at the behest of Walsh's partner, geologist John Felderhof, the
company commenced gold exploration near the Busang River in
Indonesia, with geologist Michael de Guzman hired as the exploration
manager.
- By 1996, Bre-X was estimating that the Busang property contained 47
million ounces of gold and the company's market capitalization had
exceeded $6 billion.
- The scam unraveled rapidly in March 1997, after de Guzman reportedly
fell to his death from a helicopter over the Indonesian jungle, shortly after
potential Busang project partner, Freeport-McMoran, said that its due
diligence had revealed only insignificant amounts of gold at the
property.
- Bre-X plunged on the news and was delisted in May 1997, and in the
process wiped out billions of dollars for its hapless investors, including
major Canadian pension plans.
- With the deaths of Michael de Guzman in 1997 (under suspicious
circumstances) and David Walsh, who died of a brain aneurysm in 1998,
John Felderhof was the only remaining principal character in this
debacle. While charges of illegal insider trading were brought against
Felderhof in 1999, he was acquitted of these charges in 2007.

2. Identify the key issue or issues.

- The Bre-X mining easily trusted it’s, one of the employees, geologist John
Felderhof saying unreliable data, not validating the information about
the true ounces of gold and overlooked the regulation on professional
geology and protection of investors from unsubstantiated mineral
project disclosures.
3. Specify alternative courses of action.
A. Always Verify the Accuracy of Your Information

In every case you should verify that the information someone is giving
you is accurate and factual. In every case you need to determine what
fact is and what opinion is. Sometimes the information presented will be
extremely incorrect and misleading, especially where politics or products
are concerned.
B. Employee Background Checks

Research the person who is making the statement. Learn who s/he is
and what their agenda has been previously. Does any respected source
list them as a credible authority or expert on the subject they are
commenting on or promoting?

Do not assume anything. Never assume that because someone is

well known that they are being factual. Do not assume that someone who
is not considered a well-known expert or authority in a particular area is not
informed. Take a few seconds or minutes to research the facts.

4. Evaluate each course of action.

A. Always Verify the Accuracy of Your Information

Pros:
Increased security

It’s one of the best ways to make sure your field employees
aren’t in danger
More transparency

Every manager struggles to keep their team in-sync; after all,

ten heads are only better than two if every head is looking in the
same direction.
Cons:
Effect on morale

It’s understandable why monitoring employees might cause

those employees to think you don’t trust them. Unsurprisingly, this
 feeling of distrust and suspicion can harm the relationship between
manager and their workers.

B. Employee Background Checks

Pros:
Increased Quality of New Hires

When job applicants know that they will be screened, it tends

to work as a natural filter, and you can often weed out unsavory
individuals. In turn, this improves the quality of your talent pool, and
you’re more likely to find employees who are ethical and have clean
backgrounds.
Create a Safer Working Environment

If you hire a person with a criminal background or a history of

substance abuse, it’s likely to result in a more dangerous working
environment for your other employees. This could have disastrous
consequences like an increased likelihood of workplace violence or
internal theft. However, running employee background checks
should reduce the chances of this type of activity happening.
Reduce Liability

If you run a business where employees have access to sensitive

information, care for children/elderly people or handle hazardous
materials, you could find yourself in hot water if you hire someone
with a checkered past. Screening new applicants should help you
avoid hiring the wrong person and therefore reduce your liability.
Cons:
Cost

Perhaps the biggest drawback is the added expense of

running employee background checks.
Potentially Flawed Data

Another issue is that you can’t always be 100% certain that the
results are accurate. Whether it’s because of a misspelled name,
 incorrect birth date, a mistake in the verification process or any other
factor, there’s always the potential for flawed data.
Potential EEOC Complications

One problem that may not be so obvious involves the Equal

Employment Opportunity Commission (EEOC) and the federal laws
that are in place to prevent workplace discrimination. If you’re ever
suspected of rejecting an applicant on an unfair basis, it can open a
can of worms and potentially result in litigation

5. Recommend the best course of action.

Verifying the accuracy of data is the best alternative action to consider.

Believing that a statement or common belief is accurate just because a lot of
people believe it or accept it as truth. Again, verify the statement or belief. It takes
only seconds in many cases.

Nowadays with the Internet and first class search engines, it often takes only
seconds to determine the truth of statements and accusations. Learn what
sources (people or institutions or periodicals) have credibility and which ones are
simply spreading their own opinions based on misinformation and distortion of the
facts for their own benefit.