Business Ethics and Corporate Culture

EU Regulator Awaits Google Concessions on Charges of Market Abuse

Google has not addressed concerns from EU regulators regarding the company’s alleged abuse of its market dominance. Joaquin Almunia, EU Competition Commissioner, reached out to Google three weeks ago with a chance to settle the EU’s 18-month probe but the company has yet to respond. If Google does not formally offer concessions, it could face formal charges and face a fine that could be as high as ten percent of the company’s global turnover. Almunia believes the investigation indicates Google may have promoted its own search services over those of rivals and that the company’s advertising deals with websites could have blocked its competition and restricted advertisers from moving their campaigns to other search engines. In a statement released shortly after the commissioner’s comments, Google executive chairman Eric Schmidt said, “We disagree that we are in violation, until they are more precise on what area of the law we are in violation of. Give us the precise data, the precise problem.” The EU commission launched the investigation in November 2010 after Google’s rivals accused the company of manipulating search results to promote their own services over others. To date the commission has received 16 complaints.

New York Times: Google Keeps EU Regulator Waiting on Concessions (7 June 2012)
(Source: Reuters)

Study Finds Concern about Bribery Risk as Investment Increases

According to a new survey released by Kroll, compliance professionals have seen investing in compliance increase but continue to be concerned about their companies’ exposure to risk. 95% of respondents stated their company’s vulnerability to bribery risk has remained the same or increased over the past few years. 85% believe this risk will continue to increase or remain the same moving forward. More than 50% of respondents indicated their compliance budgets had increased over the past year and nearly half (49%) stated their compliance departments increased their hiring. Kroll found that most compliance professionals believe that third parties pose the biggest overall risk to their companies, noting that 2011 was the first year in which every FCPA enforcement action involved a third party. While 99% of those responding to the survey stated their company’s code of conduct contained anti-bribery provisions for their employees only 73% had the same provisions for third parties. Kroll also found that the pharmaceutical industry had the most exposure to bribery risk but also found the industry was the most prepared to manage the risk. For example, 100% of respondents in the pharmaceutical industry indicated they screen third parties while only 65% of respondents in other industries screened their third parties.

Wall Street Journal: Kroll Study Finds Concern about Bribery Risk as Investment Increases (6 June 2012)
(Source: Wall Street Journal)

Australian Building Company Signs EU After Disability Discrimination
Asia Pacific

The Australian Fair Work Ombudsman (FWO) has announced that building materials company James Hardie has signed an enforceable undertaking (EU) with the FWO and agreed to pay a prospective employee AU$30,000 in compensation, after it refused to employ him due to his disability. James Hardie offered the man the position of business development manager in 2010 “but failed to inform him at the time the offer was conditional on him satisfactorily completing a medical assessment”. Although “[t]he advertised position did not mention any physical requirements of the job”, the applicant “disclosed a long-term shoulder injury” and James Hardie withdrew the job offer based on a medical assessor’s report. However, James Hardie never showed the applicant this report, instead revoking the job offer “despite the [FWO's] concerns that physical work was not an inherent part of the business development manager’s position”. The FWO said that the company could have made minor adjustments to the position in order for the applicant to avoid physically strenuous work and added that “[e]mployers need to ensure that medical assessments are confined to assessing a worker’s ability to perform tasks that are an inherent part of the position”. As part of the EU, James Hardie will, inter alia, advertise its breaches and publicly apologise for them, implement anti-discrimination training for recruitment staff, “establish an ongoing anti-discrimination training program” and “review its recruitment and discrimination policies, in particular in relation to the use of medical examinations, and report the results of the review to the [FWO]“.

FWO’s media release (1 June 2012)
(Source: FWO)

US Justice Department Settles Government Employment Discrimination Case

The United States (US) Department of Justice (DoJ) has announced that Pierce County, Washington has agreed to enter a consent decree with regards to allegations that the county, through its agents at the Pierce County Assessor-Treasurer’s Office, had discriminated against administrative officer Sally Barnes because she had engaged in activity protected under Title VII of the Civil Rights Act of 1964. The DoJ alleged that Ms Barnes had suffered “multiple adverse employment actions’ between 22 January and 30 November 2009, “including the loss of her administrative officer and other supervisory duties, exclusion from important meetings and information necessary for the management of her division and an involuntary relocation to an undesirable work location”.

DoJ’s media release (1 June 2012)
(Source: DoJ)

US Rehabilitation and Nursing Company Settles Discrimination Case

The United States (US) Equal Opportunity Commission (EEOC) has announced that Health Partners, Inc., a Southfield, Michigan rehabilitation and nursing company, has agreed to a two-year consent decree that requires it to pay US$25,000 to an employee who could not work after her preliminary skin test was positive for tuberculosis. The EEOC claims that the test requirement violated the Americans with Disabilities Act (ADA) because Health Partners, Inc. regarded the employee as disabled despite her not being contagious and posing any health risk. The company has also agreed to provide training to hiring process employees on ADA requirements.

EEOC’s media release (30 May 2012)
(Source: EEOC; US Department of Justice)