When Employers Hear #MeToo: Top 10 Tips on How to Respond

1. The Business Case for Combating Sexual Harassment
In addition to being illegal, sexual harassment can affect a business’s bottom line. It can take a toll monetarily through the cost of judgments, settlements, and attorney fees incurred in litigation, as well as through decreased productivity attributable to low morale. All together, this creates a negative impact on a company’s reputation internally and externally. Both victims of harassment and witnesses are more likely to suffer from psychological harm than someone who does not experience harassment. Those who do face it are also likely to use more sick time and experience more workplace disengagement resulting in overall lower productivity, according to the June 2016 report by the Equal Employment Opportunity Commission (EEOC) on harassment in the workplace. The Financial Times and Newsweek reported that Netflix recently lost $39 million as a result of the sexual misconduct allegations made against Kevin Spacey. Million-dollar harassment verdicts and settlements are not uncommon anymore, and juries may be fueled by the #MeToo movement and other current events. The EEOC alone collected about $164.5 million in settlements over the course of 2015—and that was before sexual harassment started making front-page news with stories of various high-powered Hollywood harassers. Keep in mind, these numbers are lost business and settlement figures only—they do not include the cost of defense or other indirect losses arising from company representatives’ time spent in depositions, meeting with lawyers, or performing other tasks focused on the lawsuit, instead of their regular job duties.

2. A Well-Written Anti-Harassment Policy
The most fundamental step a business must take to combat sexual harassment in the workplace is a well-written anti-harassment policy. In its simplest form, an effective policy must define what conduct is prohibited and provide a procedure for reporting it.

Harassment is legally defined as offensive, unwanted conduct based on race, color, religion, sex (including pregnancy), national origin, age (40 years or older), disability, genetic information, and any other classification protected by law, which is either made a condition of continued employment (“quid pro quo”) or is severe or pervasive enough to create a hostile work environment.

To help prevent workplace harassment before it becomes a legal issue, a well-written policy should also prohibit conduct that has not yet risen to the level of illegal harassment but has the potential to do so. This allows the company to respond to potentially harassing conduct earlier, in proportion to the severity of the conduct, and perhaps before it has a chance to harm anyone’s career.

An effective anti-harassment policy must also state how harassment can be reported and who must report it. Employees should be strongly encouraged to report all concerns of harassment to a designated representative of the company. Members of management should be required to report all harassment issues to the company’s designated representative. For larger companies, the designated representative is usually a member of the human resources department. Smaller organizations may need to designate an upper level executive or administrator who has received training on responding to harassment complaints and who can be trusted to respond promptly, consistently, and effectively. To ensure all employees have an effective avenue of report, a well-written policy should identify a primary person (or department) to whom reports of harassment can be made, as well as a second, alternative person (or department) for receiving reports of harassment when an employee feels uncomfortable reporting to the primary person or when reporting to the primary person could be inappropriate in some way—such as when the report involves a complaint against the designated person or someone within the designated department.

It is also important that the policy clearly explain that anyone can report concerns of harassment—not just the victim. Bystander involvement and witness reporting are valuable tools for combatting workplace harassment. To this end, and because retaliation is illegal, the policy must notify employees that retaliation against any person for reporting a concern of harassment or for assisting in the company’s investigation of harassment will not be tolerated.

3. What “He Said” and What “She Said” Matters
The phrase “he said, she said” is used frequently when talking about reports of sexual harassment and other forms of sexual misconduct. As used in some contexts, the phrase suggests that the “truth” cannot be found or perhaps is merely a matter of each person’s conflicting perspective. It is commonly used dismissively to suggest a “tie” in the evidence, thus preventing an ultimate conclusion. In responding to employee complaints of harassment in the workplace, however, employers do not have the option of casually dismissing situations as merely a matter of “he said, she said.” If an employer has knowledge of the potential harassment of one of its employees, it is under a duty to investigate and take appropriate action to remedy past harassment and prevent any future harassment. At the end of the investigation, there must be a conclusion about whether a violation of company policy has occurred. Failure to reach a conclusion can result in liability to the harassed employee.

On the other hand, claims by employees accused of harassment are on the rise. It is not unusual for the accused to consult with an attorney of his or her own to determine if there are any grounds for a claim of wrongful termination, negligence, breach of contract, defamation, or discrimination following adverse action arising from a sexual harassment complaint. For this reason, it is imperative that the company take a fair and objective approach to the investigation from the start. Neither what “he said” nor what “she said” should be given any more or less weight, without first considering all of the relevant witness reports, evidence, and other circumstances. At all times throughout the process, the company must follow its own policies and procedures to ensure the process is fair for both the alleged victim and the accused. Both employees must be given an opportunity to provide their side of the story and to identify any supporting witnesses and evidence, and they must be informed of the conclusion of the investigation. Knowing that a prompt, fair, and thorough investigation is best for everyone involved and conducting the investigation accordingly just may be the company’s best tool for minimizing litigation risk from either employee involved in the situation.

4. The Anatomy of an Internal Investigation
When handling the investigation internally, make it clear that an investigation is being conducted. Make sure that the fact finder is not only neutral but also perceived as neutral by the participating employees.

The investigation should always be documented to support the employer’s defense in the case of a charge of discrimination or lawsuit and to justify that appropriate action was taken against the harasser. Be careful of the language used in these reports. The legal definitions of “harassment” and “discrimination” are very different from the literal use of the word. Labeling behavior as harassment could result in unintended consequences in the event the report is used as evidence in a subsequent administrative or legal proceeding. Company investigations are neither criminal nor civil proceedings. The objective of the investigation is not necessarily to determine whether any law has been violated; rather, it is to determine whether any company policy has been violated and whether any employee has engaged in conduct that the company deems unacceptable in the workplace. Therefore, the conclusion of the investigation should be explained in terms of whether there is reason to believe that any questionable conduct has occurred and whether that conduct violated any company policy.

If the investigation reveals that a company policy has been violated, then proportionate discipline or other corrective action must be taken in a manner that is fair and consistent with the company’s response in comparable situations. Regardless of the outcome, keep reports as private as possible and share the outcome of the investigation only with those within the organization who have a business reason to know. This means always sharing the conclusion of the investigation with the complainant and the accused.

5. Calling In an Outside Investigator
|There are certain situations better suited for investigation by someone outside the company. If no one within the company can be neutral and unbiased, or if no one will be perceived as neutral and unbiased, consider an outside investigator. Cases that involve top-ranking or other important company figures are best handled by an outside investigator who neither reports to the accused nor can be intimidated or retaliated against by the accused. In addition, an outside investigator should be called in when there have been prior complaints against the accused, where the employee has made prior complaints of a similar nature, or where there are concerns of retaliation. Third-party attorney investigators often have more time to dedicate to the investigation, specialize in gathering relevant facts (including those necessary for pertinent legal analyses), and can make reasonable inferences and factual determinations with an understanding of the most current case law and legal standards. It is important to understand that the outside investigator should not be hired to create a defense but rather to gather pertinent information and determine the facts.

6. Situations That Seem to Resolve Themselves
It is not uncommon for a company to receive a complaint of harassment, and then, before the investigation has been completed, something important changes and the situation seems to have conveniently resolved itself. Perhaps the allegedly harassed employee has been transferred to a new location and will no longer report to the alleged harasser. Perhaps the alleged harasser has resigned from his or her employment with the company. Perhaps the reporting employee has recanted his or her report of harassment.

In situations such as these, it is tempting to consider the matter closed and move on. But doing so overlooks the possibility that there could be lingering effects of the past harassment that need to be remedied for the allegedly harassed employee, the possibility that the alleged harasser will harass someone else, and the possibility that the reporting employee may have been subjected to intimidation or retaliation for reporting.

A company should not dismiss an “old” complaint just because it may no longer be actionable. Despite the age of certain allegations, the situation may still have a reputational impact, not to mention there may be other complainants to learn about, particularly if the alleged harasser is still employed. A situation involving potential harassment brought to the company’s attention should also not be dismissed because the alleged “victim” failed to complain. Always conducting a prompt, fair, and thorough investigation is the best way to document the circumstances justifying the company’s response, while also revealing what claims or other workplace issues may exist warranting the company’s strategic attention.

7. Using Credibility Assessment with Caution
Another tempting shortcut is applying overbroad and generic credibility assessments. Employers should not disregard a report of harassment based solely on the timing of the complaint or the credibility of the complainant relative to the credibility of the alleged harasser. This does not mean that companies should not consider all of the circumstances surrounding a complaint or the credibility of each witness. Credibility assessments can be helpful tools but only when used carefully.

From the beginning of the investigation, the company must maintain a neutral position, neither favoring the complainant nor the alleged harasser, in terms of credibility. Often, sexual harassment claims go unreported because of the inherent embarrassment and potential social, personal, and professional consequences that may follow. If an employee comes forward despite this risk, it behooves an employer to take the report seriously.

This is true even if the employee is a routine complainer. Just because someone complains frequently does not mean that he or she was not sincerely offended or should not be taken seriously. An investigation resulting in a finding of no policy violation is still useful in documenting the employer’s response to the complaint and preserving a record of the evidence and circumstances supporting that conclusion. There is always the possibility that a different complaint against the same alleged harasser will be substantiated in the future. In that case, it would be helpful to have a record of the company’s prompt, fair, and thorough response to any prior allegations.

Furthermore, the fact that an employee waited a significant period of time—perhaps even years—before complaining does not necessarily make it any more or less likely that the underlying conduct did not occur. The #MeToo movement has shown that people have endured a shocking level of inappropriate conduct in order to protect their personal reputations and preserve their careers. Nonetheless, the employee’s delayed reporting may be relevant to the affirmative defense to respondeat superior liability by demonstrating that the conduct was not subjectively offensive to the employee around the time that it occurred.

In sum, do use credibility assessments carefully, but do not rely on them to skip any steps in an investigation or to avoid responding to a complaint.

8. Dealing with Powerful Players and Open Secrets
Making sure employees have an avenue to complain, even if it’s anonymously, is all the more important when the harasser is a high-level manager, an important client, or another “powerful player” within the company or industry. Employees must trust the company to do what is right for all employees at all levels of the organization—not just those at the top, those who bring in the most revenue, or those who have the most influence. If there are rumors, social media posts, or office gossip that suggests inappropriate behavior is occurring, it is important for a company to investigate, ask questions, and find out what is really going on.

Ignoring “open secrets” can discourage others from reporting, which will only lead to further problems down the road. Employees often do not want to report harassment or assist in an investigation of a complaint of harassment out of fear that someone will lose his or her job or that others will treat the employee differently. Employees should be encouraged to report and helped to understand that assisting a company with an investigation is not only required by the company but may in fact help save someone’s job. Companies can accomplish this by taking all reports seriously; conducting prompt, fair, and thorough investigations; and taking disciplinary or other action that is proportionate to the situation. A single, off-color comment may warrant diversity training or corrective coaching, but a repeat or serious offender who has not responded to training or lower levels of progressive discipline is a liability risk and impediment to a company’s workplace culture.

Companies may inappropriately rely on a cost-benefit analysis when deciding whether to properly deal with a powerful player who is found to have engaged in harassing conduct. A company may contend that it cannot afford to terminate the “powerful player” due to the loss of business relationships or revenue that would result. It may, at first blush, want to offer the complainant a settlement to resolve the situation as quickly and quietly as possible and without assessing discipline against the alleged harasser. This is shortsighted. If the employee has already failed to respond to feedback or discipline in the past, there likely will be additional claims.

If harassment by a certain powerful player is an open secret that everyone knows but does not report, the company is still liable. Tolerating such an individual is a compounding liability risk, pure and simple. It also sends a message to employees that harassment in the workplace is, in fact, tolerated by the company if the harasser is considered more important to the company than the victim. It is not OK to turn a blind eye to the problem because the harasser is important, valuable, or influential and everyone is just used to ignoring his or her inappropriate conduct. As the #MeToo movement has demonstrated, open secrets only compound over time, making the situation even more unwieldly and repugnant when they finally surface. The only way to combat harassment in such an environment is to stand up to the powerful players who think they are too big to fall and to communicate a powerful message of cultural change that starts with the company’s leadership.

9. Confidentiality and Nondisclosure Clauses in Settlement Agreements
With the onset of the #MeToo movement, companies need to be all the more careful that employee concerns of sexual harassment are promptly and adequately addressed. Liability risk aside, the public disclosure of circumstances that can be construed as a company’s complicity with sexual harassment in the workplace presents significant risk of public backlash and irreparable reputational harm.

Employers use nondisclosure and confidentiality clauses in settlement agreements to manage publicity and to keep the settlement from becoming public knowledge, which could have the effect of encouraging false claims. In recent years, victim advocates have come out against nondisclosure agreements, portraying them as enabling of further harassment by the accused and re-traumatizing to victims who could get sued by their harassers for speaking out in violation of these clauses. See Michelle Fabio, “The Harvey Weinstein Effect: The End of Nondisclosure Agreements in Sexual Assault Cases?,” Forbes, Oct. 26, 2017.

Yet, not all confidentiality or nondisclosure clauses are created equal. Some limit disclosure of the underlying facts of the claim, while others protect against disclosure of the existence or the amount of the settlement. Moreover, under certain circumstances, all parties may agree that some level of discretion and confidentiality is desired to protect the interests of everyone involved.

Whether a nondisclosure clause is appropriate in any given situation depends on all of the facts of that particular case. When drafting the settlement agreement, companies should consider not just whether or not to include the company’s standard nondisclosure language but also how broadly a nondisclosure clause should be written under the particular circumstances. Victim advocates encourage companies to include the alleged victim in the conversation, rather than insisting on boilerplate contractual terms. There may be strategic business or financial advantages to including or excluding a nondisclosure clause in a settlement agreement. Beginning December 22, 2017, companies can no longer deduct amounts paid as settlement, as payout, or for attorney fees related to sexual harassment or sexual abuse claims if such payments are subject to a nondisclosure agreement. See 26 U.S.C. § 162(q). In addition, staying away from settlement terms that restrict the alleged victim’s ability to discuss his or her experience could have the positive impact of portraying the employer as taking a strong stance against harassment and openly transitioning to a more socially responsible organization.

10. Combatting Harassment with Offensive and Defensive Strategies
Can harassment be prevented? The EEOC studied the issue and was disappointed that sexual harassment training has not been as effective in preventing harassment as was previously thought. Therefore, in its 2016 report on harassment, the EEOC has adjusted its recommendations on ways employers can effectively prevent harassment of any kind.

Companies should take a holistic approach to preventing harassment. In addition to an easy-to-understand and well-drafted anti-harassment policy and reporting process for receiving complaints, company leadership needs to “walk the walk.” Corporate culture starts from the top. If leadership places a value on a positive and harassment-free working environment, then employees will follow suit. Company leaders need to believe that harassment and retaliation are morally wrong and unacceptable in the workplace. They should convey this message with a sense of urgency and must mean what they say in order for it to be believed.

Leaders also need to make intentional efforts to become aware of the behavior that occurs in the work environment. This can be accomplished through employee climate surveys allowing employees to voice concerns. Of course, if a company is going to use climate assessments, leadership needs to commit the resources necessary to react to and improve on the results.

It is not enough to conduct sexual harassment training. While compliance training is highly recommended, it should also include training on workplace civility and bystander intervention. Front-line managers also need to understand what to do if they see inappropriate conduct or receive a complaint.

Ultimately, leaders need to hold managers accountable for not only maintaining a professional environment but also properly reporting complaints and putting an end to inappropriate behavior. Leaders must ensure that all managers are properly trained and subsequently held to performance metrics that include a commitment to a harassment-free environment. Managers also need to understand not only that this is an important performance measure but that they could be subjected to discipline or even personal liability should they fail to uphold company values and the law.

Sarah Clay Leyshock is a partner with Taft Stettinius & Hollister LLP, Cincinnati. Rachel Ablin is with Ablin Law, PC, Chicago.

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