News: Analysis & Commentary: INVESTIGATIONS
AFTERSHOCKS ARE RUMBLING THROUGH ASTRA
An EEOC sexual-harassment probe could be in the works
After 18 months as a sales rep for Astra USA Inc., Melanie J. Strobel, 27, had finally had enough of what she says was widespread sexual harassment and a bizarrely controlling culture. She quit on Mar. 31, hoping to erase the memory of what she calls "a sick company."
Then came BUSINESS WEEK's May 13 cover story exposing claims of rampant sexual harassment at Astra. Reading the claims of female former employees, who said they were fondled or required to accompany male executives to bars, nightclubs, and hotel suites, Strobel says her anger reached the boiling point. "There it was, in writing. It was exactly the company I worked for." Although she had feared taking on Astra because of what she saw as an intimidating management style, she's now thinking about suing or joining a class action. "They robbed me of a year and a half of my life. They caused me psychological trauma that I'm still struggling with."
BROKEN PACT? Strobel isn't the only former Astra employee looking for legal relief. The drug company, which suspended CEO Lars Bildman on Apr. 28 and two other top executives, George W. Roadman and Edward Aarons, on May 3, now may face a blizzard of lawsuits from former and current employees claiming sexual harassment and other wrongdoing. "Their exposure is probably immense," says Eric J. Wallach, a New York attorney who specializes in defending companies against harassment suits. It would be particularly damaging to Astra if the suits show that the company knew about the problems but did nothing, Wallach says. "That's what really triggers the big awards," he says.
What's more, the Equal Employment Opportunity Commission may already have launched its own investigation into Astra, a unit of Swedish drugmaker Astra AB. James L. Lee, chief attorney for the EEOC's Northeast region, won't directly confirm the investigation. But, he says, "when egregious cases of sexual harassment are brought to the attention of the agency, it's our practice to fully investigate the matter." Printed allegations suggest that, "on a scale of sexual harassment cases, this one seems to rank on up there," he says.
Even some former employees who have already settled cases against Astra are coming back for more. One is Pamela L. Zortman, a former sales rep who filed a claim charging that Bildman had kissed and fondled her while dancing at an Astra party. Zortman agreed to a $100,000 settlement from Astra in January. But on May 8, she filed a follow-up suit. Among her claims: breach of contract. In the original agreement, each party pledged not to disparage the other. Zortman's attorney, James F. Champa, says Bildman's lawyer broke that pact and cast doubt on her honesty by telling the press that an unnamed claim that sounded like Zortman's was baseless.
Legal experts say that reopening cases will be difficult. "It sounds to me like a desperate attempt to withdraw from a mutually bargained-for agreement now that the company is in the public eye," says Philip M. Berkowitz, an employment attorney at Epstein, Becker & Green in New York.
EERIE ATMOSPHERE. Even so, Astra could still suffer more fallout. Newly named top managers say a rigorous investigation is under way--and hint that more executives will be implicated. Harassment experts say anyone found to be directly involved clearly must go but that casualties should also include executives who simply allowed such behavior to continue. Bildman remains on suspension pending the probe's outcome, but insiders say the company has made it clear that he won't return. Bildman's attorney, Roderick MacLeish Jr., says "there is nothing independent about this investigation, and the results have been predetermined." He denies the allegations against Bildman. And on May 8, as this article was going to press, MacLeish phoned Astra to say that Bildman had just filed a lawsuit against the company.
The probe, which is also examining possible financial improprieties, already is taking some bizarre turns. On Apr. 29, two Astra lawyers went to the hotel room of consultant Lars Magnusson, who was helping Bildman respond to BUSINESS WEEK's investigation. Magnusson says they were seeking a missing Astra safe and computer about which he knows nothing. Jan Larsson, Astra USA's new CEO, confirms that "we have heard rumors of a safe or documents" being missing and says the lawyers "wanted to talk" to Magnusson about them.
Not long after new management took over, sources say, high-level staffers about to attend a meeting were suddenly warned not to use a conference room because it was bugged. One source says Astra then swept for electronic listening devices several times. They didn't find any. But the scare has added to the eerie, siege-like atmosphere at Astra's headquarters in suburban Westborough, Mass. The Astra saga is hardly over yet.By Mark Maremont in Boston