Compliance August 14, 2003

EEOC Charges Caterpillar With Bulldozing Employees' Rights

August 14, 2003 (PLANSPONSOR.com) - Charging that white employees of Caterpillar Inc. whistled at their African American counterparts "as if they were dogs," federal officials have filed two suits against the company for racial and sexual harassment.
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>According to an announcement from the US Equal Employment Opportunity Commission (EEOC), the suits cover allegations involving Caterpillar’s facilities in Joliet and Aurora, Illinois, respectively.

>In the case involving the Joliet plant, the EEOC maintains that during 2000 and 2001 Caterpillar permitted the racial harassment of at least three African American employees, George Ervins, Stanley McCallum and Rickey McNeal. EEOC said that its administrative investigation showed that, among other things, certain white employees made a practice of whistling at the African American workers. Caterpillar managers refused to act on complaints about the practice and contended that one of the white employees “had a sinus problem,” the agency alleged.

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>In the case involving the Aurora facility, EEOC alleges that a supervisor sexually harassed Safety Industrial Hygiene Supervisor Karon Lambert and a class of women. EEOC also contends that Caterpillar retaliated against Lambert and other women for opposing the harassment. EEOC’s investigation revealed that the sexual harassment at Aurora involved both sexually offensive propositions and comments and unwelcome inappropriate physical touching. According to EEOC, when women complained about the harassment they were fired.

>Caterpillar’s facility in Joliet has over 1,000 employees and there are over 2,000 employees at Aurora.

“In these cases, some of the excuses given by management for not taking corrective action were virtually as insulting as the original harassment and compounded the problem, as did the company’s rush to retaliate,” John Hendrickson, EEOC’s Regional Attorney in Chicago, said in a statement. “Employers should learn from both of these cases that how they react after learning of claims or harassment may overshadow the harassment itself and make them liable for damages in a higher order of magnitude. Suffice it to say, Caterpillar did not do itself any favors in either of these situations.”

>In a statement reported by Dow Jones, Rich Lavin, vice president for Caterpillar’s human-services division, said the company has a long-standing policy against harassment and doesn’t tolerate retaliation against employees who report harassment. “There is no merit to these allegations,” he added, “and we intend to defend vigorously against them.”

Investing August 13, 2003

MSCI: Hedge Funds Inch Higher In July

August 13, 2003 (PLANSPONSOR.com) - Preliminary results show the MSCI Hedge Fund Composite Index managed a slim 0.1% return in July.
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With 60% of the funds reporting, the Composite’s gain is lower than June’s 0.5% (See  MSCI Hedge Fund Index Wrings Out Gain In June ) and alsolower than the MSCI World Equity Index, which was up 1.9%.  For the year, the Composite index is up 8.1%, underperforming its World counterpart’s 12.1% return, according to a MSCI news release.

Compared to the World Sovereign Debt Index, which returned a negative 3% in July, the Composite index was better for the month.  For the year, the World Sovereign Debt Index has stayed on the positive side, up 4%.

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Per Group 

July’s largest process group gainer, based on 59% of funds reporting, was Security Selection, up 1.2%.   Security Selection, those managers who combine long positions and short sales with the aim of benefiting from their ability in selecting investments while offsetting systematic market risks, has now returned 9.5% year-to-date.

Gains were also recorded in Specialist Credit and Multi-Process Group, both of which were better by 0.6% for the month.   Specialist Credit, those funds that seek to lend to credit-sensitive issuers, has now returned 11.7% year-to-date, based on a 58% reporting rate, and multi-process, strategies that focus on spread relationships between pricing components of financial assets or commodities, is better by 10.6% on the year, with 53% of fund returns in.

On the other hand, Directional Trading and Relative Value did not fare so well in July, ending up in the red by 1.8% and 0.5%, respectively.   With 68% of funds reporting, Directional Trading, strategies based upon speculating on the direction of market prices of currencies, commodities, equities, and bonds in the futures and cash markets, is still up 6.7% year-to date.   Similarly, Relative Value is still positive for the year (4.8%) even after a lackluster July, with 57% of funds reporting.

The MSCI Hedge Fund Indices are composed of more than 160 indices. More than 1,700 hedge funds have agreed to participate in the database and there are over 1,550 hedge funds currently in the MSCI Hedge Fund Indices and Database.

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