Wynn Resorts has agreed to pay a fine as part of a settlement with Nevada gaming regulators in which the company admitted that high level executives were aware of serious allegations of sexual misconduct against its founder Steve Wynn but failed to take action.
In a pending agreement signed by Nevada Gaming Control Board members on Friday, the company largely agreed to the allegations in the complaint, including that top Wynn employees were aware of allegations that Wynn raped and impregnated an employee who worked at the hotel salon, pressured a cocktail server into a non-consensual sexual relationship, and sexually harassed employees while receiving massages. The allegations came to light last winter, prompting Wynn to resign his post and give up his ownership interests, and triggering a shakeup in the company.
“Respondents’ past failures to appropriately address allegations of sexual harassment by executives and high level employees of Respondents resulted in negative articles published in widely disseminated media publications, including, but not limited to, The Wall Street Journal,” the complaint says. “Thus, the Board, in order to protect gaming in the State of Nevada; to protect the welfare of the inhabitants of the State of Nevada, including gaming industry employees; and to attempt to mitigate the discredit caused by Respondents to the State of Nevada and the gaming industry, has had to file this Complaint.”
In agreeing to the settlement, the company waives its right to a public hearing that would be akin to a trial. The Nevada Gaming Commission will determine the amount of the fine at a future hearing, but the agreement also notes that it is not seeking to revoke or limit the company’s casino license.
Nevada Gaming Commission Chairman Tony Alamo Jr. expects the commission to take up the matter at a February hearing, according to CDC Gaming Reports. The commission has handed down multimillion-dollar penalties in the past, hitting the sportsbook operator formerly known as Cantor Gaming with a record $5.5 million fine in 2014 for allegedly allowing $34 million in illegal wagers.
The agreement involving Wynn Resorts was signed by Gaming Control Board Chairman Becky Harris — the first woman to ever chair the board — on her final weekday in that role. In it, the company admits most of the allegations of wrongdoing except for a few lines alleging that specific top-level executives knew of certain allegations of sexual harassment.
In conducting its investigation, Gaming Control Board agents interviewed accusers, witnesses, current and former employees, management and other officers of Wynn Resorts, according to the complaint. They also reviewed personnel records, court records, claims filed by employees with the U.S. Equal Employment Opportunity commission and the Nevada Equal Rights Commission, settlement agreements entered into between Wynn and employees or former employees, administrative records and others.
The complaint details how allegations of Wynn’s alleged sexual encounters with employees, and rumors of sexual liaisons between another executive and cocktail servers, arrived to top management but never led to timely investigations and other steps required by company policy. Among the instances that circumvented company policy was when Wynn signed a confidential, $7.5 million settlement to resolve a rape allegation from 2005, and when he signed a $975,000 private settlement in 2006 to resolve allegations of pressuring an employee into a sexual relationship.
“Respondents’ policies and procedures pertaining to conflicts of interest were not followed for several settlements, including, but not limited to, the 2005 Settlement, and the 2006 Settlement,” the complaint said.
It also paints the picture of a founder who was above the law, excused from trainings aimed at preventing sexual harassment.
“The ability of former Wynn executives to operate outside of Company policies and procedures, contributed to the internal control breakdowns that occurred in relation to allegations of misconduct as described in this Complaint,” it says.
In the settlement agreement, the company acknowledges that it was more preoccupied with Steve Wynn than it was about creating a healthy workplace for its thousands of employees.
“Respondents have realized, through the Board’s investigation as well as its own, that Respondents fell short of their culture and commitment in perhaps one of the most important areas for an employers — focusing on its employees,” the stipulation states. ”Respondents have focused on a single man, rather than the Company’s greatest asset, its 25,000 employees.”
The settlement order lists a number of changes the company has implemented since allegations of sexual misconduct were first published in The Wall Street Journal. That included more than half of the board members departing and the installation of several new female board members.
Wynn Resorts has also hired women to the positions of company president, general counsel and senior vice president of human resources.
Efforts to improve workplace culture include enhanced training on sexual harassment prevention, designed and delivered by a third party; commissioning studies to explore pay and promotion equality between women and men; launching a program that provides six weeks of paid leave to new parents, and launching a scholarship program for employees and their dependents that has so far awarded 10 scholarships of $7,500 each.
“Respondents have undergone an extensive self-examination over the last twelve months, intended to reinvigorate and implement meaningful change across all levels of the organization, to cultivate a safe, healthy, and supportive workplace culture, and to build on their core values or respecting their employees, corporate responsibility and citizenship, and services to the community. And Respondents represent that they have been successful in that regard,” the agreement says.
Wynn Resorts issued a statement calling the settlement an “important remedial step” and noting that any employee who was mentioned in the complaint as having not responded properly to allegations of sexual misconduct is no longer with the company.
“We have fully cooperated and been transparent with the Board in this in-depth investigation. We look forward to appearing before the Nevada Gaming Commission to review the settlement and establish the final resolution of the investigation,” the statement said.
The order said it does not prevent the board from pursuing cases against people or entities who are not considered “respondents” in the settlement or part of Wynn Resorts.
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