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CVS Ousts Executives After Internal Probe, Vows to Overhaul How It Handles Sexual-Harassment Complaints

CVS Healthcare Corp.

CVS 0.01%

Chief Executive Karen Lynch has removed several executives following an internal investigation into how they handled sexual-harassment complaints and is overhauling how the company handles such matters, according to people familiar with the matter.

Ms. Lynch, who took over as CEO a year ago, in December became aware of complaints made by at least two female employees alleging that a New Jersey-based regional store manager had either harassed or inappropriately touched them at work, the people said.

Ms. Lynch oversaw an investigation, carried out by a professional investigator, that culminated in January in the dismissal of the manager, who oversaw hundreds of stores, and the departure of senior executives who supervised him, these people said. The probe and leadership exits haven’t previously been disclosed.

On Friday, she outlined the events to some 450 senior leaders on a call, and laid out plans to create an office designed to give employees a confidential channel to navigate what Ms. Lynch described as challenging situations, some of the people said.

In a memo sent to staff later Friday, Ms. Lynch said the allegations were substantiated, and she immediately terminated the regional manager. “Our investigation also revealed that other employees failed in their duty to treat such allegations with the seriousness we expect, and they are no longer with the company,” she wrote.

One executive who supervised the regional manager and a human-resources executive were dismissed, while a third executive left the company during the investigation, the people said. The regional manager and the third executive declined to comment. The other two individuals had no immediate comment.

CVS operates 9,900 drug stores.


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GABBY JONES for The Wall Street Journal

“I want to be crystal clear: this company does not tolerate harassment or hostile, abusive or discriminatory behaviors of any kind from any employee —regardless of position,” she wrote in the memo. “We also will not tolerate inaction from leaders who are responsible for escalating concerns or allegations raised by our colleagues.”

In her memo, Ms. Lynch said the company would improve its internal reporting and investigation processes, and had created a confidential channel for employees to raise such concerns to senior leaders. She is reviewing procedures in the company’s human-resources and legal departments as well as an arbitration program for employees.

CVS, which operates 9,900 drugstores and the Aetna insurance business, has about 300,000 employees. The company and its rival Walgreens Boots Alliance inc.

have struggled at times to keep up with demand for Covid-19 vaccines and testing amid a tight labor market. Difficult working conditions at stores have led to employee backlash and prompted both companies to at times shorten store hours and sometimes close on weekends.

Ms. Lynch, an insurance-industry veteran, presided over Aetna following its acquisition by CVS in 2018. She took over in February 2021, making CVS the largest company by revenue to be run by a female CEO.

Write to Sharon Terlep at sharon.terlep@wsj.com and Suzanne Kapner at Suzanne.Kapner@wsj.com

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