Wynn Resorts Ltd. received generally favorable remarks from a law firm hired by the Massachusetts Gaming Commission to monitor CEO Matt Maddox and his executive team after the state’s regulators ordered additional oversight after the company’s 2018 sexual harassment scandal.
And the company is paying dearly for it.
The firm billed Wynn Resorts $830,000 for six months of work as of February after receiving an estimate expenses would be between $575,000 and $775,000. A commission spokeswoman said the amount is still within 15 percent of the total amount agreed upon as allowed in the commission’s contract.
Representatives of Washington-based Miller & Chevalier Chartered spent nearly 2½ hours reviewing findings with the commission Thursday and issued a 127-page report on the company’s efforts to revamp harassment policies and make them widely available to the company’s workforce in Las Vegas, where the company operates Wynn Las Vegas and Encore, and in Boston, home of Encore Boston Harbor.
The commission’s examination of Wynn Resorts began after January 2018 when the Wall Street Journal published an article detailing allegations of workplace sexual misconduct and sexual harassment of female company employees by former Chairman and CEO Steve Wynn. He has denied ever harassing anyone.
He resigned the next month and divested himself from the company a month after that. Several other executives and board members left the company with nearly a dozen changes in the executive and board levels.
The commission ordered a monitor for the company in April 2019.
The report issued Thursday was the first describing the monitor’s findings.
Recommendations ‘taken to heart’
The six-member monitoring team, led by Alejandra Montenegro Almonte, produced 56 recommendations within 10 categories after reviewing more than 300 documents provided by the company and conducting 27 onsite interviews of company personnel in Boston and Las Vegas. The monitor team also had 32 focus groups with 200 employees.
Wynn executives, invited to participate in the review, declined but sent a letter promising to continue to support the efforts of the monitoring firm.
“We remain confident that the company’s enhanced policies and procedures as presented and documented to the commission and as reviewed by the monitor satisfy legal and moral obligations to ensure the company’s workforce is provided with a healthy safe and welcoming environment,” said the letter, co-signed by Ellen Whittemore and Jacqui Krum, general counsels for Wynn properties in Las Vegas and Boston.
“Nevertheless, we have taken to heart the monitor’s recommendations for enhancements to the existing policies and procedures and are in the process of implementing the vast majority of those recommendations,” the letter said.
The monitor’s recommendations took into consideration that Wynn is a top-of-class hospitality company striving to provide five-star service to its customers.
The monitor also referenced a permissive attitude in the gaming industry and in Las Vegas specifically.
“Las Vegas is seen as a destination where individuals can behave outside of otherwise socially acceptable norms,” the report says. “This behavior does not get checked at the door. Employees at both properties, but particularly in Las Vegas, described conduct that indicates an increased risk of harassment because of the overall atmosphere in the city. Employees in focus groups confirmed this sentiment to the monitor team, noting that patrons bring coarsened behaviors and attitudes with them into the Wynn Resorts properties.”
The report also referenced the Las Vegas Convention and Visitors Authority’s successful advertising campaign as a potential problem for Wynn.
“Companies do not exist in bubbles and Wynn Resorts is no exception,” the report says. “Las Vegas recently changed its slogan phrase from ‘What happens in Vegas stays in Vegas’ to ‘What happens here only happens here.’ The commercial promoting the new phrase notably advertises ‘Here, you don’t need permission from anyone except yourself.’ A milieu in which patrons feel that they can depart from acceptable behavior creates added challenges for organizations seeking to engender a culture that promotes (Human Resources Compliance Program) compliance.”
10 areas of recommendations
The list of recommendations from the monitor is categorized in 10 areas:
— Culture of compliance and conduct at the top
— Proper authority, oversight and independence
— Policies and procedures
— Third-party relationships
— Training and guidance
— Internal reporting and investigation
— Incentives and discipline
— Risk-based review
— Monitoring and testing
— Controls environment