#MeToo: Is Your Company Covered?

Q.  Are there any steps we should take to protect our company from liability in the #MeToo era?

A.  A year ago, sexual assault allegations against movie mogul Harvey Weinstein rocked the entertainment industry and quickly led to the rise of the #MeToo movement, sparking an upsurge of reports and claims of sexual harassment in workplaces across America. In many cases, the alleged misconduct is not new. But the intensity, tone, and tenor of the claims — and the sheer volume of allegations — has been dramatically different and has had significant effects on businesses caught in the cross-hairs.

Public sentiment has also shifted: A CNN poll conducted in December 2017 found that nearly 70 percent of Americans described sexual harassment as a “very serious problem.” That’s almost double the 36% of Americans who expressed similar views in a CNN/Time poll conducted in 1998. As high-profile, credible women have come forward in virtually every industry, more women have been emboldened to share their stories.

Alleged perpetrators are not the only ones being called to account; so are other corporate actors who allegedly enabled, covered up, or failed to prevent the wrongdoing. Sexual harassment claims against high-ranking corporate actors can expose companies to enormous costs, including reputational harm, consumer boycotts, drops in market capitalization, loss of corporate opportunities, and legal expenses for internal investigations, government proceedings, employment lawsuits, securities class actions, and shareholder derivative suits.

It’s vital that businesses and individual directors and officers understand their potential exposure to loss arising out of sexual misconduct claims and the availability and limitations of their insurance coverage.

Read Full Article Here.

Pamela S. Palmer and Susan K. Lessack*

* This publication was prepared by Marsh in conjunction with Pepper Hamilton LLP. Copyright © 2018 Marsh LLC. All rights reserved. It is reprinted here with permission.

Tips for Addressing and Investigating Sexual Harassment Allegations in the Workplace in Light of the #MeToo Movement

Q.  There is a lot of conversation in the national media about the #MeToo movement. How do I ensure that my employees are treating each other properly?

A.  In October of 2017, the two-word hashtag,“#MeToo,” created a social media movement amongst women and men who have experienced sexual harassment. The hashtag was an attempt to educate society about the prevalence of sexual harassment. As a result of the movement, men and women all over the world have been reporting inappropriate behavior in the workplace.  Thus, employers need to be ready for the impact of the MeToo movement and make sure that they have the appropriate policies and procedures in place to effectively address harassment complaints.

    • Be Proactive. Employers have a duty to implement sound, reasonable employment practices aimed at prohibiting and remedying workplace harassment, such as implementing and enforcing anti-harassment policies and procedures, providing sexual harassment training programs, and creating effective reporting mechanisms. Employers should make sure that their anti-harassment policies are legally compliant and their trainings are up-to-date.
    • Take Every Complaint Seriously. Employers are legally required to investigate employee complaints regarding harassment, discrimination, and retaliation. It is important for employers to adequately address every complaint it receives, and recognize that sexual harassment encompasses a variety of behaviors. Sexual harassment appears in many forms, including but not limited to distributing or displaying inappropriate materials, sexual jokes and innuendos, sexual contact and assault, unwelcome sexual propositions, distributing or displaying inappropriate emails, leering and staring, obscene gestures, unwelcome touching or groping, forwarding inappropriate text messages and emails, and making suggestive comments.
    • Begin The Investigation Promptly. It is important to investigate allegations of harassment thoroughly, impartially and quickly. Delaying an investigation makes it more difficult to collect evidence and can signal to employees that their complaints are not being taken seriously.
    • Create An Investigation Plan. Before beginning any investigation, it is helpful to generate an investigation plan. The plan should clearly define the purpose and the scope of the investigation by identifying: the individual(s) and the issue(s) that are being investigated, who will be interviewed, and what evidence needs to be collected. Investigation plans must, however, be flexible, and allow the investigator the ability to adjust the plan in light of information received and “follow the evidence where it leads.”
    • Keep the Investigation Confidential. Employers should ensure that the contents of the investigation are kept as confidential as possible. The employer cannot promise complete confidentiality because the investigator must be free to question appropriate witnesses about the events so that they can obtain a complete picture of the incident.   But information about the investigation should only be shared with individuals who have a need to know.  Failure to treat a complaint with the appropriate level of confidentiality could result in employees being hesitant to report their issues and concerns in the future.
    • Maintain Adequate Documentation. Employers should document the investigative process in case it ever has to defend its investigation during litigation or an EEOC or state agency investigation. Employers should document when the initial complaint was received, when the investigation began, the evidence collected, individuals interviewed, and the resolution. When taking notes, it is important that they are taken contemporaneously, and identify the author of the notes and the date they were taken. In addition, employers should keep in mind that these notes may become evidence in a litigation, and therefore stick to the facts and avoid using labels or drawing legal conclusions in written memoranda.
    • Maintain Objectivity. Investigators must conduct an unbiased investigation. It is recommended that, when feasible, workplace investigations include a two-person investigation team. In some instances it may be necessary to hire independent investigators.  If an employer chooses to utilize internal investigators (HR professionals, general counsel, etc.) it is important to make sure the investigators have the proper training.   Consider whether the company can (and should) keep documents created during the investigation privileged from disclosure.
    • Take Appropriate Remedial Measures. Remedial measures can be implemented before, during, or after the investigation. Depending on the nature of the complaint, it may be necessary to separate the complainant and the accused while the investigation occurs, or place the accused on leave. If the investigator concludes that unlawful conduct, or even inappropriate conduct that may not rise to the level of actionable harassment, has occurred, the employer must take reasonable action. The action the employer takes must be directed to stopping the conduct and any ongoing harm that is occurring due to the conduct. Effective remedial measures may take many forms. When the employee who committed the conduct continues with the employer, there should generally include an acknowledgement of the prohibition against harassment and additional training.
    • Proactively Avoid Retaliation. Claims of retaliation are very common among employees who raise complaints about sexual or other forms of harassment. Employers must make clear to all involved in the complaint, investigation and remedial measure processes that retaliation will not be tolerated. Any remedial measures taken by the employer should include a clear message that retaliation against the complaining party or others involved in the investigation is prohibited, and provide the individual with a mechanism for informing the employer if he or she believes he or she is being retaliated against for making a complaint and/or participating in the process.
    • Be Consistent. Employers must ensure that all complaints are investigated in accordance with their policies and procedures. It is also important that similar conduct receives a similar level of discipline.

Incorporating the following tips into your workplace investigations will help employers identify and eliminate unlawful harassment and avoid the incalculable harm done to the workplace when harassment occurs and is not remedied. These actions will also reduce a company’s liability risk from harassment and discrimination claims. If, as an employer, you feel that sexual harassment is an issue in your workplace, you may want to hire outside counsel to conduct a full investigation and make recommendations.

–Renee Manson