US Garden Centre Settles EEOC Disability Discrimination Lawsuit
The United States (US) Equal Employment Opportunity Commission (EEOC) has announced that Homestead Gardens (Homestead) will pay US$50,000 to settle a disability discrimination lawsuit. When Homestead discovered that Richard Starkey had hemophilia, through a conversation with his mother, “[h]e was told not to return to work because of Homestead’s perception of his disability”. The EEOC stated that such conduct was in breach of the Americans with Disabilities Act. Homestead has signed a consent decree which requires it to, inter alia, implement an effective discrimination complaint process and “refrain from retaliating against any person because that person complained about, or participated in the investigation of, any charge of employment discrimination”, train its staff on anti-discrimination legislation and keep the EEOC informed on its compliance with the consent decree.
EEOC’s media release (6 June 2012)
(Source: EEOC; US Department of Justice)
US University Settles Sex Discrimination Lawsuit
The United States (US) Equal Employment Opportunity Commission (EEOC) has announced that Chapman University (Chapman) in California has agreed to pay US$175,000 to a former assistant professor to settle charges of sex discrimination. Lynn Hamrick filed a complaint with the EEOC in 2008 “alleging that in 2007 she was denied tenure – a promotion to the position of associate professor – because she is a woman”. An EEOC investigation “determined that there was reasonable cause to believe that Chapman’s decision to deny tenure to [Ms] Hamrick was linked to her sex, a violation of Title VII of the Civil Rights Act [of 1964]“. Chapman has agreed to promote Ms Hamrick to the position of associate professor for the purposes of future employment and has agreed to train its employees on sex discrimination.
EEOC’s media release (6 June 2012)
Australian Court Fines Resort AU$294,360 Over Sham Contracting
The Australian Fair Work Ombudsman (FWO) has announced that as a result of its investigations, the Federal Court in Melbourne has fined the former operators of a Tasmanian resort AU$294,360 “for deliberately exploiting employees by engaging in sham contracting”. Former operator of the Diamond Island resort at Bicheno, Maclean Bay Pty Ltd (Maclean Bay), was fined AU$280,500 and former co-owner of the resort, Wendy Ann Wells, was fined AU$13,860. Justice Marshall found that “Maclean Bay had embarked on an unlawful sham contracting campaign aimed at ‘converting’ Diamond Island resort employees into contractors to cut costs”. Maclean Bay dismissed four employees “because of the entitlements they enjoyed as employees under Australia’s workplace laws” and dismissed two employees “for refusing to become purported contractors under sham arrangements”. According to the FWO, “Maclean Bay was also found to have breached workplace laws for failing to pay thousands of dollars in superannuation and annual leave entitlements to a number of employees”. In total, nine employees were affected by the sham contracting, and are yet to be compensated by Maclean Bay. Justice Marshall said that if compensation “is not immediately possible from the resources of Maclean Bay, those who stand behind it should have the decency to attempt to remedy their corporate entity’s failure to comply with the law rather than cowering behind the corporate veil”.
FWO’s media release (31 May 2012)
Securities Company Fined and Barred for Fraud
The Financial Industry Regulatory Authority (FINRA) has announced that Brookstone Securities, its owner/chief executive officer Antony Turbeville and one of its brokers, Christopher Kline, have been found guilty by the FINRA hearing panel of “intentionally [making] fraudulent misrepresentations and omissions to elderly and unsophisticated customers regarding the risks associated with investing in [collateralized mortgage obligations (CMOs)]” in order to induce them to purchase unsuitable CMOs. The panel also found that despite being aware of the negative effect on CMOs caused by increasing interest rates, Mr Turbeville and Mr Kline “led customers to believe that the CMOs were ‘government-guaranteed bonds’ that preserved capital and generated 10% to 15% returns”, leading to customer losses of US$1,620,100. Furthermore, the firm failed to acknowledge or accept responsibility for the misconduct, and instead blamed the customers for their own losses. Brookstone Securities has been fined US$1 million and ordered to pay restitution of more than $1.6 million to customers. Additionally, Mr Turbeville and Mr Kline have been barred from the securities industry, while the firm’s former chief compliance officer David Locy has been barred from “acting in any supervisory or principal capacity” for two years and fined US$25,000.
FINRA’s media release (4 June 2012)
FTC Reaches Settlement in Deceptive Conduct Action
The United States Federal Trade Commission (FTC) has announced that it has reached a settlement with FDN Solutions, LLC (FDN) and Timothy Daniels regarding allegedly misleading advertising. According to the FTC’s complaint, FDN’s claims that they could reduce consumers’ debts by 40-60% were misleading “because they did not take into account the consumers who dropped out of the program, or the fact that the fees each client paid totaled 30% of the savings achieved”. The FTC also alleged that FDN violated “the Federal Trade Commission Act by making unsupported savings claims and by using a fake consumer testimonial”, as well as the “Telemarketing Sales Rule by misrepresenting the amount of money or the percentage of the debt amount that a consumer could save by using their services”. The settlement order imposes a judgment of US$3.3 million, suspended at $85,000 based on the defendants’ inability to pay, but will become fully due should it be later determined that the financial information provided by the defendants to the FTC was false.
FTC’s media release (6 June 2012)