Editorial: Sexual Harassment at PepsiCo: Will They Ever Learn?

We are committed to providing a workplace free from all forms of discrimination, including sexual and other forms of harassment.

PepsiCo’s “Worldwide Code of Conduct”

Pepsi-Cola General Bottlers agreed in February to pay out USD 400,000 in damages, back pay and legal fees to resolve a case of sexual harassment brought by the United States’ Equal Employment Opportunity Commission (EEOC). The lawsuit (EEOC, et al v Pepsi-Cola General Bottlers, Inc, NDIII, No 03 C 6576) involved ongoing sexual harassment of a female dispatcher at a Chicago facility over three years, repeated changes in her terms of employment after she brought the harassment to the attention of supervisors, and, finally, her termination of employment in retaliation for formal complaints.

In addition to the financial damages, under the terms of the settlement PepsiCo must provide training to all employees at the plant and report to the EEOC on how it handles future complaints of sexual harassment or retaliation.

In connection with the “consent decree” that settled the complaint, the Chicago District Regional Attorney for the EEOC stated “Sexual harassment and retaliation are a volatile and poisonous mix in any work place.” The EEOC attorney who handled the case, Diane Smason, added “In that kind of situation employers really need to be alert to what is going on and pay real attention to complaints. When that doesn’t happen, the result can be expensive.”

PepsiCo cannot claim lack of experience in dealing with sexual harassment issues in their workplaces. On December 23, 2002 the U.S. Equal Opportunity Commission (EEOC) found that a class of female employees had been subjected to egregious sexual harassment and retaliation at the South Beach Beverage Company (SoBe, a division of PepsiCo) sales and distribution facility in Norwalk, Connecticut. The judgement in this lawsuit fined PepsiCo and SoBe USD 1.79 million in damages. Equally important, the EEOC commended PepsiCo for agreeing, under the terms of the Consent Decree, to develop policies and practices aimed at preventing problems of sexual harassment and discrimination like those at SoBe.

It seems that PepsiCo never learns. Had this recommendation been effectively applied, PepsiCo wouldn’t be in the mess they are in Poland.

Some 100 women work as packers on the night shift At PepsiCo’s Frito-Lay snack food plant in Grodziesk, near Warsaw, with three male supervisors. Women had been reportedly called into the night shift supervisor’s office over several years and sexually abused under threat of dismissal if they reported the incidents. Towards the end of 2004, some of the women who had suffered from sexual harassment began to discuss the situation among themselves.

On 29 December 2004, the night shift supervisor and HR manager called in at least eight women one by one and threatened them with disciplinary dismissal unless they resigned. Five of them signed prepared letters of voluntary resignation under threat of discharge. Two other female employees and the husband of one of these women were also fired or resigned under threat.

On 3 January 2005, eight of these women filed charges of sexual harassment. Despite worldwide protests, the parent company has refused to act to reinstate the women and offer financial compensation. PepsiCo’s response has been to issue wooden denials of wrongdoing and follow these retaliatory dismissals with retaliation on a grand scale to destroy the union at the plant which is defending the women, the Solidarnosc Food Secretariat.

We obey all laws and regulations and respect the lawful customs of host countries.

PepsiCo’s “Worldwide Code of Conduct”

Local union leader Slawomir Zagrajek was sacked on December 14 last year in response to a dubious attack on the union in the tabloid “Super Express” which alleged that the union has fewer members than it claims and that the chairman therefore illegally benefited from his salary as a full-time union official. Owing to the anti-union climate in the plant, where management has refused for years to negotiate a renewal of the collective agreement and a climate of fear prevails, the union has regularly collected dues rather than relying on a check-off system. Management immediately responded to the tabloid article by bringing in a team to extract statements from all employees confirming their membership in the union. Though the statements have not been made available to union representatives (who contested the procedure because it is illegal and designed to intimidate workers), the company claimed the results were consistent with the “findings” of the tabloid article, and it promptly sacked Zagrajek.

The sacking of the union chairman and the mass intimidation of plant members were followed by more retaliation against the union. On January 13, management distributed a form letter to all employees to sign. The letter declared their immediate withdrawal from the union. Employees were instructed to sign the letters in the presence of witnesses and to return them within 5 days.

All of these procedures are flagrant breaches of Polish law and the Polish constitution (which guarantees workers the right of freedom of association), EU law, and Conventions of the United Nations’ International Labour Organization, which have the force of international treaty law and are legally binding. The Polish union and the IUF are challenging these illegal practices at each of these levels, including filing a formal complaint with the Freedom of Association Committee of the ILO.

Had PepsiCo corporate headquarters learned the lesson of the USD 1.79 million SoBe case, and taken seriously the task of implementing policies and practices to eliminate sexual harassment and all forms of retaliation, the company would not be the target today of growing international criticism. With ethical investment services and human rights organizations now tracking the case, it’s time once again to ask: Will PepsiCo ever learn?