The costs of sexual harassment can include millions of dollars in settlements, low employee morale, high-job turnover, increased sick leave, decreased productivity and reputational loss. (Photo: Shutterstock)

The recent national spotlight on accused sexual harassers and the widespread #MeToo social movement have sent companies scrambling for advice on how to address the imbalance of power that protects workplace abusers.

Big names—Harvey Weinstein, Bill O’Reilly, Roger Ailes, Charlie Rose and others—are dominating the headlines after women stepped forward with claims that in some instances go back decades. The U.S. Congress has  looked into its own practices. No industry or government body appears to be immune.

How can companies make sure they have sexual harassment policies in place to protect interests and employees? We talked to several attorneys about common pitfalls and the lay of the land in the corporate environment right now. Here are highlights from those conversations.

Beware of protecting the alleged “super star” harasser

 

Harvey Weinstein was the face of his film company and Bill O’Reilly was one of Fox network’s most popular hosts. Reports of alleged sexual harassment sometimes can affect financial decisions, and that exacerbates the problem and creates a culture of feature, said Debra Katz, partner at Katz, Marshall & Banks and Amy Bess, shareholder at Vedder Price, during a webinar for the Practising Law Institute.

In a June 2016 report, the U.S. Equal Employment Opportunity Commission highlighted this problem. Organizations are sometimes willing to ignore bad behavior out of fear that losing the harasser would be too costly to the company. Companies should instead act evenly and fairly, addressing the complaint to avoid retaining toxic employees and providing a safe culture.

“Think of anyone in the company who is the high earner, the rainmaker, the prestigious surgeon or professor,” Katz said. “By virtue of that status there is a certain privilege—a view that those individuals are above the rules. That feeling of privilege and being indispensable allows people to abuse their authority.”

Bess said the EEOC found that companies did a cost-benefit analysis to come to the “knee-jerk conclusion” that keeping a harasser in place is better for the brand or the business. “They end up making a decision based on economics or perceived economics that keeping that person around is the better option,” Bess said. She cited a study by Harvard Business School, however, that found retaining toxic employees is a net negative. Katz said there are indirect costs that are difficult to identify, but additionally there is a huge legal risk of a serial harasser.

O’Reilly and Weinstein have both denied various allegations against them, and O’Reilly recently called reports about alleged misconduct as being part of a “smear” campaign against him.

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Be careful what you ask employees to sign

 

In the wake of the scandals, nondisclosure agreements that could potentially silence women from outing their accusers have come into the forefront. Greta Van Susteren called such an agreement a silencer of victims. Many of Weinstein’s victims signed such documents.

The best practice, however, may not necessarily be to eliminate all settlement agreements, said Katz, who represents employees in harassment and retaliation cases. They can be useful for the victim in protecting their reputation and a good bargaining tool. Katz said she would not advise including language in an agreement or settlement that indicates a victim cannot be part of an EEOC claim or go to law enforcement.

The National Labor Relations Act and Title VII also invalidate agreements that limit workers discussing workplace conditions and charges of discrimination. Nondisclosure agreements can be used to protect employers’ intellectual property and other trade secrets but should not be used to keep victims from reporting illegal activity. “These agreements can further the imbalance of power and allow the abuse to go on for decades and decades,” Katz said. “Lawyers need to look critically when they facilitate these kind of agreements.”

Confusion about the arbitration process is creating misperceptions about how these agreements affect sexual harassment claims, according to Scott Fanning, an associate at Fisher & Phillips in Chicago who represents employers in sexual harassment cases. He said arbitration clauses do not necessarily have to silence victims. The private nature of settlements could provide a forum that encourages women to make claims, he said, rather than a public pleading in court. He also stressed that employees are entitled to file with agencies such as the EEOC.

Victims need many ways to report; put policies in place

 

The costs of sexual harassment can include millions of dollars in settlements, low employee morale, high-job turnover, increased sick leave, decreased productivity and reputational loss, said Mark Hanley, a partner and labor and employment attorney in the Tampa office of Bradley Arant Boult Cummings.

“Among employer best practices are a zero-tolerance policy—to start, a written sexual harassment policy, proper training of management and employees on that policy upon hire and at least every year thereafter, prompt and thorough investigations of allegations, and prompt and effective remedial action based on investigations,” Hanley said.

Corporate policies need to be drafted and designed to focus on two basic components: educating employees about what their rights are in the workplace and defining what is and isn’t prohibited conduct, said Pat Lundvall, a partner at McDonald Carano in Nevada and chair of the firm’s employment and labor group. There should be many ways, and clear ways, that an employee can report harassment. “These policies should be designed in a way to empower the employee, so that they can do something about it,” Lundvall said. “Rather than quitting or suffering in silence, just thinking that’s part of their workplace and they have to do something about it. Policies are designed around education.”

There needs to be a process to allow employees to complain. “An employer may wave paper around but they need to practice what they put on paper,” she said. “You have to enforce that policy and give it teeth.”

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The board can’t shirk responsibility

 

What is the appropriate response of the board of directors when a single executive is accused multiple times of harassment? A simple slap on the wrist could help foster the culture where it appears harassment is protected.

In the case of Weinstein, for example, Katz said, “the idea that the board did not know or have reason to suspect is absurd,” given the Hollywood producer’s behavior was apparently the worst kept secret in Hollywood. Bess and Katz said that a board of directors has a fiduciary duty to not cover up the mess in these cases. “They do so at great risk,” Katz said.

Further down the chain, human resources departments also have the duty to investigate rumors and gossip about harassers, Bess said. Across the company, policies should be put in place that do not shift the burden but eradicate behavior. The board cannot be absolved of responsibility, Katz said. They also have the duty to report sexual harassment to the U.S. Securities and Exchange Commission.

Response is key—how to react and not overreact

 

A company should have a policy in place laying out how to react in the instance of sexual harassment. This includes not reacting without investigating the claim. Lundvall of McDonald Carano said complaints shouldn’t necessarily be taken at face value. There needs to be a mechanism to investigate claims. There also needs to be a clear way forward if the complaint it valid on how to remediate.

Bess said companies have been reactive—amid the flood of national press attention—in terminating workers who were accused of sexual harassment. She said a prompt and thorough investigation, rather, will help eradicate the behavior. Katz agreed. “There is a need to take a breath and ensure there is due process.” The bottom line, “There has to be robust training at the top level and strong messages need to be sent that the behavior won’t be tolerated,” Katz said.