Stephen E. Tisman and Rither Alabre
Propelled by the Harvey Weinstein scandal and the “#MeToo” movement, New York government officials have taken new steps to protect victims of sexual misconduct in the workplace.
- The New York County District Attorney’s Office has created a special “Work-Related Sexual Violence Team” of prosecutors to investigate reports of work-related sexual violence.
- The New York Attorney General filed suit, in response to the announcement of the proposed sale of the Weinstein Company, for civil penalties and an order of “restitution” to victims.
These actions make clear that new layers of scrutiny are being imposed to examine how employers handle sexual harassment claims. Importantly, companies and individuals faced with such claims will confront new areas of exposure—outside of traditional human resources procedures and concerns—which must be analyzed and addressed.
For example:
- If the conduct of an employee is deemed by the prosecutor to violate criminal laws, is the company also at risk of a criminal prosecution? If the conduct was known to, and “recklessly tolerated” by, the Board of Directors or a high managerial agent, there could be corporate criminal liability.
- Do corporate employees or agents investigating claims need to avoid traditional approaches, like asking witnesses not to discuss the matter with others, or risk running afoul of labor, whistleblower, or criminal laws?
- In cases where an individual is the subject of a second (or third or fourth) allegation of misconduct, do human resources representatives need to alert higher management, to avoid a claim by the Attorney General that the Board of Directors has condoned or assisted in repeated violations of the state’s anti-discrimination laws? And what must the Board do to protect the corporation and its shareholders—and themselves—from such liabilities?
- Should a company (or an executive) settling a sexual harassment claim seek to keep the matter confidential, given, among other things, the change in the tax laws that may deny deductions for settlement payments and legal fees where confidentiality is required?
- How does a company contemplating an acquisition assess and handle these exposures?
With the growth of the #MeToo movement and the clear impact it has had on state and local governments, the fact is that companies and executives must consider far more than the “usual” labor/employment issues that historically drove the analysis and evaluation of any potential claims. Inside and outside employment counsel now must consider involving counsel experienced with, and sensitive to, the criminal and tax consequences that may now result from alleged sexually harassing workplace conduct.
Blank Rome’s team—including employment lawyers, white collar criminal and investigation lawyers, corporate lawyers, and tax lawyers—are assisting companies and executives facing these thorny issues, by collaborating to assess the myriad of potential risks and exposures, to achieve the best possible resolutions consistent with fair and just treatment of the employees involved, while keeping in mind the reputational and business interests of the company.
To discuss a situation involving potential sexual harassment or misconduct in the workplace, please do not hesitate to contact any member of Blank Rome’s Labor & Employment or White Collar Defense & Investigations Practice Groups.