Ford Investor Sues for Access to Records on Employee Harassment Allegations
The books-and-records suit, filed Monday afternoon in Delaware Chancery Court, alleged that Ford and its directors had failed to provide information related to allegations from Ford employees, which resulted in two multimillion settlements, including a $10.1 million payout in 2017 to resolve claims by women and black employees at its two Chicago plants.
January 29, 2019 at 02:46 PM
4 minute read
A Ford Motor Co. investor has sued for corporate documents to investigate the Dearborn, Michigan-based car maker's response to sexual and racial harassment allegations dating back to the 1990s.
The books-and-records suit, filed Monday afternoon in Delaware Chancery Court, alleged that Ford and its directors had failed to provide information related to allegations from Ford employees, which resulted in two multimillion settlements, including a $10.1 million payout in 2017 to resolve claims by women and black employees at its two Chicago plants.
According to the lawsuit, which was filed under seal, there was reason to believe that Ford and its board were aware of misconduct in the company's ranks but failed to enforce the Ford's harassment policies
Attorneys for plaintiff Robert Freedman first wrote to the company in January 2018, demanding access to company documents after the Detroit Free Press reported that Ford had agreed to settle claims at the two plants, which were under investigation by the U.S. Equal Employment Opportunity Commission.
The EEOC found reasonable cause to believe that Ford personnel had harassed female and black workers at the facilities and had retaliated against employees that complained about the alleged misconduct. Under the terms of the settlement, Ford was required to conduct regular training sessions for the next five years and to report any violations directly to the EEOC, according to court papers.
The demand letter also referenced a $22 million settlement Ford reached with workers and the EEOC to resolve similar claims in the 1990s and agreed to put an end to the behavior. The latest claims, Freedman said, indicated that Ford “may have broken this promise,” potentially exposing the company to heavy legal and reputational costs.
“The long history history of sexual and/or racial discrimination raises questions as to the effectiveness of the company's corporate governance and risk management practices, and the oversight of these matters by the company's board of directors,” Jeffrey W. Golan, a partner with Barrack, Rodos & Bacine in Philadelphia, wrote on behalf of Freedman.
Attorneys from Ford responded last February that nothing in the demand indicated that directors had acted disloyally or in bad faith. The “two separate controversies” cited in the letter had occurred decades apart, Ford said, and did not establish that a pattern of sexual harassment had persisted in the absence of board oversight following the settlements.
The company said it had implemented “serious measures” after the first settlement in the 1990s and more recently agreed to additional safeguards against harassment in the 2017 agreement with the EEOC. Though the document demand was “far too broad,” Ford said at the time that it was willing to discuss a more limited request with Freedman and his attorneys.
According to court papers filed Monday, Ford did provide some records, but none that related to the board's discussions regarding the two settlements or any reforms that may have been put into place.
A company spokesman did not immediately respond Tuesday to a request for comment.
Freedman has asked for expedited proceedings in the case. He is represented by Golan of Barrack Rodos and Peter B. Andrews, Craig J. Springer and David Sborz of Andrews & Springer in Wilmington.
The case, captioned Freedman v. Ford, has not yet been assigned to a judge.
An online docket-tracking service did not list counsel for Ford on Tuesday.
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