October 24, 2018 practice point

3 Firm Policy Ideas from Recent #MeToo Legislation

By Kelsey Heino

October 5, 2018, marked one year since the Harvey Weinstein scandal broke. Countless stories have been shared, resulting in a marked increase in awareness of sexual harassment and discrimination in the workplace. More than half of the states’ legislatures introduced #MeToo inspired bills for the 2017–2018 legislative session. Twelve even went so far as to institute new rules for all employers within their borders.

Where large corporations or law firms may have a legal slush fund available to deal with fallout from a #MeToo incident, the negative publicity and legal costs associated with such a scandal may very well wipe out a sole practitioner or small firm. What can you take from state legislatures’ efforts in order to create a safer, healthier environment, even before state action mandates it? Here are 3 considerations inspired by the recent wave of legislation:

  1. Train openly, train often. Michigan put forth a bill to modify education, curriculum and instruction in sex education to include sexual harassment and sexual violence. One of the most important steps any employer can take in creating a healthy workplace environment is training its employees on a regular basis. And not just the “put in a tape and call it good” trainings of days gone by—current trends include alternative methods like bystander intervention and civility training. By reminding your employees to report improper behavior they witness and going back to the Golden Rule basics of treating coworkers with respect, these methods remove the stigma and awkwardness from sexual harassment training.
  2. Ix-nay on the NDA. A common tactic regarding sexual harassment has been to require a complaining employee to sign a nondisclosure agreement (NDA) as part of any settlement. Federal action has already made it impossible to claim a tax deduction on settlement payments arising from agreements which include a NDA. The Internal Revenue Code Section 162(q) now expressly prevents business expense deductions for:
    1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or (2) attorney’s fees related to such a settlement or payment. States like Kansas and Indiana are taking steps to make NDAs related to #MeToo behavior void as against public policy. Consider whether inclusion of a NDA provision in your harassment policy is really sending the right message to your employees.
  3. Consider keeping it anonymous. Many large companies already utilize outside reporting services that provide an anonymous hotline for harassment complaints, and a new Texas law requires private colleges to allow the more discrete reporting approach. In solo and small firms, there may not be a feasible reporting option within the firm itself. Anonymity may encourage early reporting—if an individual will not be singled out for reporting, they may feel more inclined to report even minor improprieties, as opposed to waiting until he or she just can’t stand it anymore. Your Employer Practices Liability Insurance carrier may also provide this service. Don’t have an EPLI policy? It may be worth looking into!

With more and more states taking a hands-on approach to combatting the problems raised by the #MeToo movement, solo practitioners and small firms should consider a proactive approach to getting their workplaces in line. Taking steps now to improve your firm’s culture will boost your employees’ morale and lower the chances of an incident down the line.

Kelsey Heino is an associate with Goosmann Law Firm out of Sioux City, Iowa.

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