What the New Wave of Sexual Harassment Claims Could

Mean for Your Company Jim Erwin

Lily Rao January 11, 2018

Today’s Goals

• Increase understanding of need for heightened commitment to workplace free of discrimination and harassment

• Review of basics and new requirements

• Understand complaint & investigation process

• Think about how technological, cultural, generational changes impact what is now a 30 year old legal concept

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2017 – A Rogues’ Gallery

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• Bill O’Reilly (Fox News) • Roger Ailes (Fox News) • Mark Halperin (NBC Political Analyst) • Harvey Weinstein (The Weinstein Group) • Roy Price (Amazon) • Robert Chow and Gavin Baker (Fidelity

Investments) • Charlie Rose (CBS) • Matt Lauer (Today Show) • Garrison Keillor (Prairie Home Companion) • Mario Batali (Chef) • Michael Oreskes (NPR) • Alex Kozinski (Federal Appeals Judge) • John Conyers Jr., Al Franken (Congressmen) • Louis C.K. (Comedian) • Kevin Spacey (Actor)

Why Don’t More Women Report?

2016 Harvard Business Review findings:

1. Fear of retaliation

2. Bystander effect – Journal of Personality and

Social Psychology, Vol. 8, No. 4, 377-383

3. Masculine culture

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Political Backlash

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#MeToo Movement

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• Twitter has confirmed that over 1.7 million tweets included the hashtag #MeToo in 2017.

• Over 12 million posts, comments, and reactions by 4.7 million users on Facebook within 24 hours.

• Facebook said 45 percent of users in the U.S. have had friends who posted “me too.”

Time’s Up

Legal Defense Fund ($13M) to help women protect themselves from sexual misconduct

Legislation to penalize companies that tolerate persistent harassment and discourage use of NDAs

New tax law: if settlement agreement has confidentiality provision, can’t deduct settlement amount or attorney’s fees as business expense

Golden Globes – women wore black on the red carpet in solidarity

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Increase in Harassment Claims

• Nationwide reported a 15% increase in sales of employment practices liability insurances between 2016 and 2017.

• Advisen, which tracks insurance trends, says that EPLI insurance price has increased 30% since 2011, which means more claims, more expensive claims, or both.

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Increase in Sex Discrimination Claims at the Maine Human Rights Commission

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Meanwhile…

• Popular culture highly sexualized

• Smart phones and social media bring everything into the workplace

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Sexual Harassment Basics

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Conduct of a sexual nature

That is unwelcome

Adverse Action

• Submission to conduct is necessary to obtain/keep your job;

• Submission or rejection adversely affects your job; or

• Conduct unreasonably interferes with your ability to do your job

Sexual Harassment Basics

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Harassment is a form of discrimination

prohibited under federal and state law

Unlawful harassment is based on protected

characteristics (e.g., sex, race, religion, disability,

national origin, etc.)

Discrimination due to gender identity or

sexual orientation can be a form of sex discrimination.

Retaliation is also prohibited

Types of Harassment

• Quid Pro Quo • Created by supervisor • Conditions employment on return of sexual favors,

via actual or threatened “tangible employment action” (for example, termination, demotion, pay cut).

• Hostile Work Environment • Can be created by any employee • Conduct that does not result in a tangible

employment action but is nevertheless so “severe or pervasive” that it creates an abusive working environment

• Retaliation

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“Severe or Pervasive” – what makes sexual harassment unlawful

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Harassment becomes unlawful where

1) enduring the offensive conduct becomes a condition of continued employment, or

2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.

• Comes from Meritor Savings Bank v. Vinson (U.S. Supreme Court 1986)

• How does 1986 definition measure up today?

Examples of Actions That May Create a Hostile Work Environment

Verbal or

Written

• Sexual comments or innuendos

• Sending/forwarding sexually explicit emails, text messages, or photos

Non-Verbal

• Sexual gestures

• Displaying sexually suggestive images

Physical

• Massaging a person’s neck

• Hugging or kissing

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Important Details

• “I didn’t mean to offend you”

• “I was only kidding” Does intention

matter?

• Consider body language/participation

• Don’t forget about bystanders

How can you tell if the conduct is

unwelcome?

• Customers?

• Vendors? What about non-

employees?

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Fidelity Investments

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Two senior employees terminated • C. Robert Chow – Portfolio Manager

– Inappropriate sexual comments to colleagues

• Gavin Baker – Tech Fund Manager

– Allegedly harassed a 26-year-old employee

Fidelity “prohibit[s] harassment in any form. When allegations of these sorts are brought to our attention, we investigate them immediately and take prompt and appropriate action. We simply will not, and do not, tolerate this type of behavior.”

Zero Tolerance Requires Consequences

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PBS Statement: “In light of yesterday’s revelations, PBS has terminated its relationship with Charlie Rose and canceled distribution of his programs. PBS expects all the producers we work with to provide a workplace where people feel safe and are treated with dignity and respect.” Andy Lack, NBC News: “Our highest priority is to create a workplace environment where everyone feels safe and protected, and to ensure that any actions that run counter to our core values are met with consequences, no matter who the offender.”

Zero Tolerance … When?

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"This is the largest credibility crisis of any network in broadcast history." - Media critic Jeff McCall

• NBC execs: “We can say unequivocally, that,

prior to Monday night, current NBC News management was never made aware of any complaints about Matt Lauer’s conduct.”

• Increasing pressure on parent company Comcast to launch an independent investigation into what NBC’s top executives knew about Lauer’s treatment of women, and when they knew it.

Zero Tolerance … Of What?

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• Popular culture bombards us with sexualized

messages

• A significant number of romantic relationships begin in the workplace

• However, important to stop harassing behavior before it harms employees or creates liability

• How does an employer balance severe and pervasive standard with realities of modern workplace?

One of the Guys

A product development specialist, Alex, has a great relationship with his co-workers. They work hard and play hard and everyone gets along great. They schedule weekly meetings on Friday afternoons and occasionally treat themselves to lunch at Hooters down the street. Of course, they all enjoy good-natured humor about the waitresses and that usually leads to a colorful discussion of their girlfriends. Amy is part of the group and she attends these lunches but doesn’t seem to mind the banter. In fact, she is so relaxed about it that they sometimes forget that she is a female.

Is this harassment?

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Romance in the Air

After breaking up with his girlfriend, Alex realizes that he really enjoys spending time with Amy. He asks her out a few times and they have a great time together. He decides he would like to take this to a new level and asks her to go to the Cape for a summer weekend with him. She hesitates and says she is busy. He askes again a few weeks later.

Is this harassment?

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Harassment vs. Offensive Conduct

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• “Hostile Work Environment” and “Harassment” are legal terms

• Not all unacceptable conduct meets the legal definition of harassment.

• We recommend a separate policy prohibiting offensive conduct.

• Does not require same procedures to respond.

Sample Offensive Conduct Policy

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Offensive conduct, while not unlawful, is not appropriate in the workplace. Therefore, the Company prohibits conduct that a reasonable person would find offensive and unrelated to the Company's legitimate business interests, even if such conduct is not related to any protected characteristic. Examples of prohibited offensive conduct include: repeated verbal abuse, such as the use of derogatory remarks and insults; verbal or physical conduct that a reasonable person would find threatening or intimidating, that does not meet the definition of sexual or other unlawful harassment; persistent, malicious mistreatment that degrades or humiliates an employee; personal attacks (i.e., angry outbursts, excessive profanity, or name-calling); unreasonable interference with an employee's ability to do his or her work; and deliberate sabotage or undermining of a person’s work performance. A single act usually does not constitute offensive conduct, unless that single act is severe and egregious. The Company strongly encourages employees to promptly report offensive conduct in the workplace to your supervisor or the ___________________. Employees should always feel free to ask anyone who is engaging in offensive conduct to stop.

Your Policy is Your Best Defense

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• Employees trained on what it is and what to do about it

• Managers trained on what do to about it

• HR trained on how to investigate & resolve

• The Faragher defense allows employers to avoid liability for harassment even by supervisors, if: • No adverse employment action occurred

• Employer took reasonable steps to prevent and promptly correct harassment, and

• Employee unreasonably failed to take advantage of the preventive or corrective measures

Complaint Procedure

Notification of outcome

violations will result in discipline “training, counseling, warning, suspension, or

immediate dismissal”

Investigations

all allegations “quickly and discreetly”

Report any sexual or other harassment

to supervisor or department manager or any member of management

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Purpose(s) of Investigation

Determinative

To figure out whether disciplinary action required in response to employee misconduct

To correct an injustice or mistake by management

To make the work environment safer or less hostile or offensive to minority group

To correct legal compliance problems before they become liabilities

Defensive

To create an Ellerth/Faragher defense to a potential hostile work environment claim

To pin down witness statements while memories are fresh and to prevent future exaggeration

To be able to communicate the facts in order to obtain legal advice

To figure out facts in order to devise a defense strategy in anticipated litigation

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Selecting the Investigator(s)

1. Impartial, objective, fair

2. Respected

3. Skilled, experienced, knowledgeable

4. Good listening skills, empathetic

5. Available

6. Clear writer

7. Effective witness

8. Single investigator vs. investigatory team

9. Primary investigator and notetaker

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Should the investigation be conducted under the cloak of attorney-client privilege?

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Legal counsel should be involved at outset if:

Charge or lawsuit has been filed or threatened

There is a significant likelihood of litigation against company

Corporate compliance question (OSHA/FLSA/SOX) is at issue

Serious criminal behavior has been alleged

Unusual investigative techniques contemplated

Misconduct alleged against senior member of management

Accused is a member of a collective bargaining unit

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New Maine Training Requirements

2017 MDOL Training Law Requires: • Workplace Posting now free on MDOL website • Same Annual Written Employee Notification • Same education for all new employees • Same additional training for supervisory and

managerial employees • New compliance checklist on MDOL website • New recordkeeping requirement • New enforcement mandate for MDOL • New penalties for violations: up to $1,000 for first,

$2,500/$5,000 for repeated violations

See 26 M.R.S. § 807 (PL 162)

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Take Aways

• Make sure your training and record-keeping are up to speed – may need to retrain

• Implement an Offensive Conduct policy

• The world is changing but the law is not

• You can’t fight popular culture, but you can have your own culture of civility and zero tolerance

• Prompt & appropriate investigation and resolution – have to prioritize

• No retaliation has to mean no retaliation

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Lily Rao

Merrill’s Wharf

254 Commercial Street

Portland, ME 04101

Merrill’s Wharf

254 Commercial Street

Portland, ME 04101

lrao@pierceatwood.com

Jim Erwin jerwin@pierceatwood.com

PH / 207.791.1172

CELL / 207.370.0657

PH / 207.791.1237

CELL / 207.232.9025