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A Year After #MeToo Scandal, Wynn Resorts Faces Regulators

Written by:
Associated Press
Published on:
Apr/02/2019

BOSTON (AP) — Wynn Resorts has taken laudable steps to transform a culture that allowed sexual misconduct complaints against its founder to remain hidden for decades, women’s rights advocates and business experts say.

And while the company is making progress more than a year after casino mogul Steve Wynn became the first prominent CEO to resign over allegations of sexual misconduct in the #MeToo era, experts say the company could do more to create a new workplace environment.

The experts praised Wynn Resorts for elevating more women to key leadership posts, including its board of directors. They also applauded the company for ousting every executive who knew about allegations but failed to report them, and creating an independent committee to review sexual harassment claims led by a former Boston police commissioner.

“That sends a message that you’re not going to tolerate enablers. That being silent is going to come back and haunt you,” said Kabrina Krebel Chang, a business law and ethics professor at Boston University’s Questrom School of Business.

The company’s new controls are summarized in an 18-page document Wynn Resorts submitted to Massachusetts casino regulators ahead of a critical series of public hearings this week.

Under the new reforms, Wynn Resorts no longer enforces confidentiality in sexual harassment claims, meaning current and former employees can now go public with their claims.

Chang said that’s a move in the right direction, but noted Google, Facebook, Microsoft and other prominent companies now give employees the choice to resolve their case publicly in court rather than through the private arbitration process typical at many companies, including at Wynn.

Private arbitration is problematic because the company tends to have the upper hand, she said.

“There are very few rules in arbitration, and research has shown that the business wins the majority of the time,” Chang said. “Payouts are also usually lower than awards in court, so the victim will not get as much in damages most likely.”

Wynn Resorts spokesman Michael Weaver acknowledged the company’s approach differs from those other companies but believes it will be “equally effective.”

“Our goal of not protecting sexual harassers is the same,” he said.

The experts said Wynn Resorts should also spell out how it will be measuring and assessing its new policies — and make those findings public.

Gambling regulators could even require Wynn and other casino companies file regular reports, suggested Jason Schloetzer, corporate governance expert at Georgetown University’s McDonough School of Business.

Weaver said the company has enlisted Great Places To Work, a firm that conducts workplace surveys and research, to evaluate its progress on improving the workplace environment and employee satisfaction.

He also said the company has received 22 substantiated cases involving employees or guests, which were resolved through some form of disciplinary action or removal since it conducted sexual harassment trainings in June.

To be sure, the experts said Wynn Resorts should be commended for new efforts meant to encourage more female leaders in the company, such as launching an internal “women’s leadership council” and commissioning studies to analyze pay differences between male and female workers.

But it also should take other steps, such as making sure women have access to key “stepping stone jobs” that can lead to leadership roles, said Jennifer Chatman, a management professor at the University of California-Berkeley business school.

“The hospitality business doesn’t have some of the gender pipeline inequities of other domains like high tech and investment banking,” she said. “This should be a place where women should have been excelling for some time.”

Weaver noted a third of the company’s executives are women, compared to the 25 percent average for other major companies listed on the S&P 500 stock market index.

And as it makes internal reforms, Wynn Resorts should make sure it’s not addressing sexual misconduct in isolation, but tackling other common workplace problems, such as racial discrimination, said Maya Raghu, of the National Women’s Law Center, which helped create a legal fund to help women litigate sexual misconduct complaints in the wake of the #MeToo movement.

“These things are connected,” she said. “They’re symptoms of a larger workplace culture problem.”

Weaver said Wynn Resorts recently brought in an outside expert to conduct separate trainings on “unconscious bias,” or discrimination based on a person’s race, gender, sexual orientation or religion.

Starting Tuesday, the Massachusetts Gaming Commission is holding hearings to release and discuss findings from its months-long investigation into how the company handled the misconduct allegations, which Steve Wynn has strongly denied.

The hearings have implications for the company’s state casino license and the $2.6 billion luxury resort just outside Boston it’s slated to open in June.

Wynn Resorts recently went through a similar process in Nevada, where it was handed a record $20 million fine but allowed to keep its license.

Regardless of what happens in Massachusetts, only time will tell how much the company has truly changed, said advocate Gina Scaramella.

As director of the Boston Area Rape Crisis Center, she was among the prominent local voices calling for the company to remove Steve Wynn’s name from its Massachusetts casino. The company ultimately did, re-christening the Everett development Encore Boston Harbor.

Since the scandal broke, Scaramella’s organization has hosted harassment trainings and helped review internal harassment policies for Wynn’s local casino staff. She said she’s encouraged by what she’s seen so far.

“I get the sense that they want to do this right,” Scaramella said. “The proof will be in how it’s implemented. We’ll be watching.”

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