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CEO of large SD non-profit agency remains in his job despite federal sexual harassment settlement

CEO of large SD non-profit agency remains in his job despite federal sexual harassment settlement
Peter Smith, CEO of the Rural Office of Community Services, was the subject of a workplace sexual harassment settlement that paid $320,000 to a group of female former employees of the South Dakota non-profit agency. (Photo: Courtesy Yankton Press & Dakotan)

Editor’s note: This article is the result of a reporting collaboration between South Dakota News Watch Content Director Bart Pfankuch and Kristi Hine, editor of the True Dakotan newspaper in Wessington Springs.

WAGNER, S.D. – The director of one of the largest non-profit social service agencies in South Dakota was the subject of a recent federal sexual harassment investigation that resulted in a $320,000 payment to several former female employees.

A two-year investigation by the U.S. Equal Employment Opportunity Commission found that the male director of the Rural Office of Community Services, based in Wagner, sexually harassed female employees for years and that some victims of the harassment were fired when they complained.

According to EEOC officials and reporting by South Dakota News Watch and the True Dakotan newspaper, Peter Smith, CEO of ROCS, sexually harassed several female employees at the private non-profit agency that provides housing, food and transportation assistance to low-income residents in 22 southeastern South Dakota counties.

News Watch reporting shows that despite the alleged violations of federal Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of gender and prohibits retaliation by employers, Smith remains in his position as head of the agency. A ROCS employee told News Watch on Jan. 12 that Smith was unavailable for a phone call because he was at training sessions in Pierre.

In his current role, Smith oversees all operations of ROCS and manages a main office staff of 33, including 23 women, which serves low-income individuals and families from a wide swath of South Dakota roughly from Chamberlain to Mitchell to Yankton.

In a December 2022 announcement of the $320,000 settlement, the EEOC reported that the payment resolves a charge alleging that “Rural Office of Community Services, Inc. discriminated against employees because of their sex by subjecting them to sexual harassment and retaliated against certain employees who complained by terminating them. The EEOC found that the female employees were harassed by executive director. Despite complaints to management and the board of directors, the EEOC found the harassment continued over several years.”

Peter Smith

In an on-the-record interview with the True Dakotan, one of the former employees who received EEOC settlement funds said Smith directed sexual innuendos toward female employees and commented on their breasts; that he hugged and touched female employees in a way that made them uncomfortable; and that he once pretended to have had a sexual encounter with the employee whom he had hugged in an office at an agency Christmas party.

That former employee, Becky Sieh, said she felt a pit of worry in her stomach each time Smith arrived at the office, and that after the unsettling holiday party incident, she made a point never to be alone with Smith again.

One other female former ROCS employees who was part of the EEOC settlement shared similar stories about Smith’s behavior with the True Dakotan, but was unwilling to have her name used because she feared retaliation by Smith.

The former employees, who either quit or were fired from ROCS, said Smith also created a toxic workplace culture of intimidation, bullying, retaliation and favoritism that detracted from the ability of the agency to help clients. The former employees further noted that when they complained to members of the ROCS Board of Directors, their complaints were ignored or rejected as unreliable and that the 12-member board did not prevent their terminations or disciplinary actions against them.

Smith did not respond to phone messages and an email from News Watch seeking comment, and several board members also did not respond to phone messages. Reached by phone, ROCS Board Member Dallas Laffey told a reporter: “You’re only hearing from one side; I’m not going to say any more,” before hanging up.

The attorney representing ROCS, Richard J. Rylance of the firm MorganTheeler in Mitchell, sent News Watch a statement saying that ROCS fully cooperated with the EEOC review and has since completed additional training for its entire staff and board. ROCS has enhanced its internal processes and protocols as well, the statement said.

“ROCS is committed to a workplace environment which is respectful, welcoming and safe for all of our employees,” the statement said.

Peter Smith, CEO of the Rural Office of Community Services, was the subject of a workplace sexual harassment settlement that paid $320,000 to a group of female former employees of the South Dakota non-profit agency. (Photo: Courtesy Yankton Press & Dakotan)

Cherie Doak, director of the Minneapolis office of the EEOC, oversaw the investigation into the complaints by ROCS employees.

Doak said confidentiality rules prevent her from discussing specifics of the complaints, the investigation or the settlement agreement. News Watch has filed a federal Freedom of Information Act request with the EEOC office in Washington, D.C., to obtain those records, but the documents had not been released as of Jan. 17.

Doak told a News Watch reporter that her understanding was that Peter Smith had been removed from his position as CEO of ROCS, and was surprised to hear that Smith remains in charge of the agency.

“That is news to me; very interesting,” Doak said.

Doak said EEOC generally does not have the authority to require an employer to fire an employee who has broken federal workplace discrimination laws. However, she added: “Had he been an employee of mine, he would not still be in his position, let me just say that.”

Doak said the initial complaint was filed with the EEOC in October 2019 and that the investigation and settlement were concluded in late spring of 2022. Doak said the ROCS board complied with EEOC investigators and appeared to take the claims and settlement requirements seriously.

Doak said the ROCS board and staff are now subject to a five-year monitoring program by EEOC to ensure that sexual harassment or other illegal behaviors are not repeated, and that policy and procedure changes mandated as part of the settlement are enacted. EEOC investigators can visit ROCS, interview employees or review documents to ensure future compliance, Doak said.

Doak said EEOC investigators worked closely with the ROCS complainants before determining that violations of federal employment laws had taken place. The EEOC then spoke with the victims to develop potential settlement payments, which typically include back pay and lost wages but can include other compensatory payments.

It is unclear where the $320,000 paid to victims came from within the agency’s budget, which mostly is supported by government funding. According to a September 2021 audit of ROCS, the agency received $8.3 million in public support that fiscal year, mainly from federal human services and other agencies. ROCS spent $8.1 million that year and had $377,000 in cash reserves.

After working at ROCS in 2019, former employee Tammy Rueb filed a claim with the EEOC alleging that she was sexually harassed at ROCS and was terminated after reporting the harassment, according to a letter sent to the True Dakotan by her lawyer, Creighton A. Thurman of Yankton.

“Ms. Rueb was subjected to repeated harassment of a sexual nature that made her extremely uncomfortable. Such inappropriate actions created a great deal of stress and anxiety for Ms. Rueb,” Thurman wrote. “Prior to Ms. Rueb’s subsequent termination from her employment, Ms. Rueb made the human resources department aware of the discrimination, as well as the board of the corporation, to no avail. The reporting of the aforesaid harassment led to her termination from employment.”

Thurman said the EEOC investigated and found reasonable cause to believe that discrimination and retaliation took place. “During the course of the EEOC’s investigation into Ms. Rueb’s complaints, they apparently found other employees that were subjected to harassment,” Thurman wrote.

In his letter to the True Dakotan, Thurman said he and his client are unsure whether the harassment of ROCS employees has ended, even after the EEOC settlement.

“Unfortunately, even though the situation is being monitored by the EEOC, we are uncertain that the harassment that Ms. Rueb was subjected to has ceased,” he wrote.

“Had he [Peter Smith] been an employee of mine, he would not still be in his position, let me just say that.” -- Cherie Doak, director of the Minneapolis office of the EEOC, which led the investigation into sexual harassment charges at ROCS

An environment of ‘fear and intimidation’

Over the course of nearly 13 years with ROCS, Becky Sieh ran a variety of programs in Charles Mix and Gregory counties as an outreach service provider.

Sieh notes that immediately following Smith’s hiring, the work culture at ROCS changed drastically.

“Peter’s style was to yell up and down the hallways,” Sieh said. “The environment changed to one of fear and intimidation.”

Despite his unsettling behavior, at that point Sieh said she gave Smith the benefit of the doubt and was hopeful that he might catapult ROCS forward, allowing the organization to expand programs and serve more South Dakotans.

“Although his behavior led me to think there was something amiss, I thought, let’s see what he will do with the agency,” Sieh recalled.

Sieh points to the summer of 2019 as the first time she heard of sexual harassment accusations against Smith, during an all-staff meeting and conference call informing employees that the board had received a sexual harassment complaint.

In 2020, Sieh was approached by ROCS board member Dallas Laffey, who was also her neighbor, and he told her about an incident in which Smith exhibited inappropriate behavior toward two female employees.

“I had not seen this behavior from him at that time,” Sieh said. “I truly didn’t believe that this was going on.”

But the work environment deteriorated soon after, she said.

“Shortly after that, it was one chaotic episode after the other, with a revolving door of directors either quitting or getting fired,” she said. “My close colleagues and I just wanted things to settle down so our energy could be spent helping people, not constantly putting out fires.”

Sieh describes the situation in 2020 as escalating to “very toxic.”

“I’d see his car in the parking lot and say to myself, ‘Oh no.’ His yelling and mood swings were starting to become unbearable,” she recalled. “You never knew what Peter you were getting on any given day — or hour for that matter.”

Until this point, Sieh had flown mainly under the radar when it came to Smith’s wrath, until she began carpooling to work with another female employee and he approached her about it.

“He said, ‘I am going to break up this marriage of you and the other employee carpooling,’” Sieh recalled. “I tried to make a joke out of it and told him the other employee and I were just ‘Thelma and Louise’ crossing the highway.”

In an apparent reference to the movie in which Brad Pitt’s character has sex with the Thelma character, “He [Smith] turned to face me and replied, ‘I’ll be your Brad Pitt,’” Sieh said. “I immediately saw a different side of Peter and I began to wonder if the accusations were correct.”

Sieh said other female employees endured treatment from Smith that included staring at and commenting about their breasts and asking for kisses.

During the company Christmas party, held in January 2021, all of the employees pitched in to purchase a gift card for Smith.

He singled out Sieh to thank her for the gift, and she quickly pointed out that all of the employees chipped in.

“He called me in to my office and shut the door, asking if he could give me a side hug. I reluctantly said, ‘Sure.’ There was a knock on my office door and when I went to open it, Peter pretended to pull up his pants and zip his zipper, implying that that we were engaged in some sort of an encounter. I was mortified,” said Sieh. “That’s when I knew. They were so right. After that, I made sure we were never alone together. Never.”

Sieh told her husband about the incident and he felt a sense of urgency to remove her from the situation. He began looking for a job elsewhere and the Siehs ended up moving out of state in the fall of 2021. Sieh worked at ROCS until she and her husband moved.

This redacted document shows the claim agreements signed by former employees of the Rural Office of Community Services who were part of a $320,000 sexual harassment settlement. (Photo: News Watch image)

Workplace harassment remains stubborn problem

Despite laws that protect workers, EEOC officials said incidents of sexual harassment and other illegal behaviors continue to occur in American workplaces, and that employers are legally obligated to act on behalf of affected employees.

“This case shows sex-based harassment continues to be a problem, and employers are responsible for immediately stopping and preventing such behavior,” said EEOC Chicago District Director Julianne Bowman. “By resolving this matter through the conciliation process, Rural Office of Community Services has avoided protracted litigation.”

In Fiscal Year 2021, the EEOC received slightly more than 10,000 complaints of workplace violations, about 5,600 of which related to sexual harassment. Of those, 83% were filed by women, according to department data. In all, about 12% of cases led to settlements totaling $62 million that year.

Employees subjected to sexual harassment in the workplace can suffer both immediate and long-range emotional trauma and psychological damage, according to Erin Meyer, a licensed mental health counselor from Sioux Falls who works with victims of sexual harassment and abuse.

Meyer said victims of harassment can suffer from Post-Traumatic Stress Disorder or anxiety that can affect their daily lives, their ability to develop meaningful relationships and their ability to work again.

“It can hinder their ability to trust in men or authority figures, and it could make people not want to work in that kind of setting again,” said Meyer, a therapist since 2007. “Especially if it’s been going on for years, it can hinder their ability to trust intimate partners in their life.”

The strain of working under an abusive boss can inhibit an employee’s ability to do their job, Meyer said.

“How can a person be at their best when they have fear while at work?” she said.

Everyone responds to trauma or abuse differently, and some victims can endure changes in their ability to live a normal life even after the harassment has ended, Meyer said.

“Their daily life can be affected,” she said. “Their anxiety could be triggered out in the community and it could make them avoid all kinds of daily activities, even like grocery shopping,” she said.

Revelations of the ROCS settlement come at the same time as the appointee of Gov. Kristi Noem as new head of the state Department of Social Services is facing questions about a prior workplace sexual harassment incident.

Matt Althoff, who is in line to become the new DSS secretary, was an official in the Catholic Diocese of Sioux Falls when he was confronted by an employee who claimed to be a victim of sexual harassment by a priest, according to a 2017 report by KELO news. The news report included secret audio recordings by the employee in which Althoff appears to acknowledge that the employee was harassed but then adds that the employee could lose his or her job if complaints continued.

“Let me tell you, and I don’t like to be threatening. Because it’s an employee situation I think now that we have this established arrangement, this understanding, you need to understand that that complicates the church’s ability to employ you. If you continue to send things out,” Althoff said, according to the 2017 KELO report.

The diocese at the time said the recordings were heavily edited; Althoff and Noem’s office have not responded to recent reports about the incident.

ROCS board of directors

Here is a list of the board of directors at the Rural Office of Community Services, based in Wagner, which provides food, housing and transportation assistance to low-income residents and families in 22 southeastern South Dakota counties:

  • Jim Kasten, chairperson
  • Fred Kuil, vice chairperson
  • James Deines, treasurer
  • Georgia Chicoine, secretary
  • Members: Clint Bartlett, Georgia Boyer, April Charging Hawk, Wendy Figland, Rachel Fischer, Dallas Laffey, Larry Miller and Robert Nuss.

Sources: ROCS website and South Dakota Secretary of State documents