'A Wake Up Call' for Companies in Weinstein, Spacey Scandals
As the allegations stream in, companies are paying attention.
November 10, 2017 at 05:07 PM
6 minute read
They've created a social media movement—#metoo—as well as a word for it—”Weinsteining.” Sexual harassment and assault allegations are snowballing against powerful figures such as Hollywood producer Harvey Weinstein and actor Kevin Spacey. And the legal fallout is affecting companies and their general counsel across the country.
“Employers are concerned,” said employment lawyer Jed Marcus, a principal at Bressler, Amery & Ross in Florham Park, New Jersey, who says he's receiving an increasing number of calls from companies concerned about these issues. “Sexual harassment, any harassment really, is in clear focus to employers right now,” Marcus said. “They realize they need to take more ownership of the [anti-harassment] process.”
Since The New York Times broke the Weinstein allegations on Oct. 5, the movie mogul has been fired by The Weinstein Co. and new allegations against him and others have flooded the news.
Similarly since allegations against Kevin Spacey hit on Oct. 29, at least 14 people have come forward alleging he groped, harassed or attempted to rape them. Five of them were teens at the time. Spacey has denied some of the accusations.
In the latest episode of sexual misconduct, the comedian Louis C.K. Friday released a statement saying the allegations of six women against him were true. He apologized to the women, and to everyone his actions had hurt.
Marcus said a company's reputation, even its survival, can depend on how effectively it responds to such allegations against high-ranking individuals.
“Employers should be concerned,” said David Lopez, former general counsel of the U.S. Equal Employment Opportunity Commission and co-chair of the discrimination and retaliation practice group at Outten & Golden in Washington, D.C. “They should take it as a wake-up call that they need to take it seriously.“
Lopez, who represents plaintiffs in employment cases, said one problem is that workplace discrimination complaints, particularly those involving sex, often have been handled through confidential settlements, which frequently include nondisclosure agreements.
The result is “a real distortion in the market in terms of information,” Lopez said. “Employers don't understand their liability until something like this happens. And employees don't understand their rights.”
Lopez said he was still “stunned” that Fox News host Bill O'Reilly was able to obtain a multimillion-dollar contract after he agreed to pay $32 million to settle a sexual harassment complaint from a former network analyst that included “nonconsensual” sex. “What did the general counsel of Fox News think of the discrimination laws?” Lopez asked.
The company's executive vice president of legal and business affairs, Dianne Brandi, took a leave of absence on Oct. 6 amid the network's ongoing sexual harassment scandal.
So, what would Lopez have companies do to prevent this kind of misconduct? First, he said, they need to empower their human resources departments with enough authority to address sex and other discrimination complaints.
“The message needs to come from the top,” Lopez said. “If CEOs don't want to deal with a slew of harassment allegations, they need to make it very clear to everyone that it will not be tolerated. And if people come forward, they will not be retaliated against.”
He said he would also like to see companies become more transparent about how they handle such complaints. “People do not know how rampant sexual harassment really is because cases are being arbitrated and settled confidentially,” Lopez said.
“What the EEOC handles is just a small fraction of what is happening in the workplace,” he added.
Several employment law blogs have added their two cents on the issue recently. Blogger Daniel Schwartz, of Shipman & Goodwin in Connecticut, wrote Nov. 9 that sexual harassment workplace training is broken, citing an NPR story and an EEOC report.
“The primary reason most harassment training fails is that both managers and workers regard it as a pro forma exercise aimed at limiting the employer's legal liability,” he concluded.
Fort Lauderdale employment lawyer and private practitioner Donna Ballman wrote in her blog that sexual harassment victims haven't come forward before because women who complain are called liars, mocked and retaliated against. Even women who take cases to court, she wrote, have a tough time getting past the judge, because these are often viewed as he-said/she-said cases.
And the court issue raises another problem for victims.
Professor Suja Thomas, of the University of Illinois College of Law, has co-authored a book on the problem, “Unequal: How America's Courts Undermine Discrimination Law” (with Sandra Sperino, Oxford University Press, 2017).
The book is based on a federal judicial study that found judges dismissed 70 percent of employment discrimination cases in whole or in part when an employer made a motion for summary judgment.
“People keep saying that victims need to bring these cases in court and have juries decide them,” Thomas said in an interview Friday with Corporate Counsel. But what the people don't understand, she added, is that cases are being dismissed by judges before they can even get to juries.
Thomas' book is riddled with case after case of blatant acts of harassment and discrimination that never went to a jury, which she implied could be affected by most of the judges being white and male.
“We're not saying plaintiffs should win,” Thomas said, “but that juries should decide.”
Some other corporate lessons from the Weinstein/Spacey cases are here, presented by Fort Lauderdale attorney Paul Lopez, litigation chief, director and chief operating officer at Tripp Scott.
Marcus, the New Jersey lawyer, said perhaps the best solution lies with employers. They need to implement strong anti-harassment policies, he said, thoroughly investigate any complaint, take steps to remedy it and communicate the outcome to the complainant.
If nothing else, Marcus said, Weinsteining means “they can't sweep it under the rug any more.”
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