June 22nd, 2018

ATTENTION EXECUTIVES – Do You Know Your Role in Sexual Harassment Prevention and Investigations?

Reflecting on the last several years, we have been witness to the evolution of voices against abuses of power being raised without fear, becoming more persistent, and being accepted and supported with a focus on change. The No More movement.  The Me Too campaign. The Never Again effort.  They each include the common message that harassment, violence, and any other abuse of power, however presented, is unacceptable and will not be tolerated.  These are not behaviors that are absent from the workplace.  To the contrary, we continue to hear story after story about employees victimized by sexual harassment and sexual assault at work.  All employers, regardless of the industry, should expect victims to continue speaking out on this issue, which will likely become the norm and no longer the exception.

In response, executives need to evaluate their role in the prevention and investigation of sexual harassment and sexual assault in their company. Given the fact that allegations of sexual harassment and sexual assault can have a significant, and sometimes devastating, impact on company culture, morale, reputation, and finances, executives must be proactive in addressing and eliminating sexual harassment and sexual assault in the workplace.

In its prevention efforts, executives should review the anti-harassment and anti-discrimination policies of the company and consider having those policies updated to ensure they are clear, concise and provide employees with the information they need to report harassment and discrimination without the fear of reprisal. This includes making it clear the company takes any allegations of harassment and discrimination seriously and prohibits harassment and discrimination.  The policies should provide employees with examples of unacceptable behavior; multiple points of contact to report harassment and discrimination; confirmation that the policy will be enforced consistently for all employees or affiliates of the company, regardless of position, and retaliation will not be tolerated; and an explanation of the investigation process.  The company’s policies relating to the use of company information technology systems, email, social media, and personal devices also should be updated so they are consist with and incorporate the obligations under the anti-harassment and anti-discrimination policy.

In addition to having company policies updated, executives should understand the harassment and discrimination training that is made available to, and may be required of, management and non-management level employees. Notably, certain states, such as California and Colorado, require sexual harassment prevention training.  Even in states where such training is not required, such as Pennsylvania, regular training is recommended to promote compliance with the anti-harassment and anti-discrimination policies, maintain a harassment and discrimination free workplace, and reduce potential legal exposures.

Executives should also familiarize themselves with the company’s history as it relates to harassment and discrimination. This may include a review of information to identify any past complaints or rumors of harassment and discrimination, any patterns of harassment and discrimination, any persons accused of harassment and discrimination on multiple occasions, and any disciplinary action or settlements involving harassment or discrimination.

It is also recommended that executives review the company’s Employment Practices Liability insurance policy (and its Directors and Officers Liability insurance policy) in order to ensure the company has sufficient coverage to address any harassment and discrimination claims that may be asserted against the company.

With regard to claims made under the anti-harassment or anti-discrimination policy, executives should implement a policy requiring management to report any such claims to the executives promptly. This will allow the executives to ensure immediate steps are taken to acknowledge the allegation and to commence an investigation in accordance with the company policies and procedures.  Importantly, depending on the nature of the allegations and the parties involved, the executives may need to make a determination as to whether the investigation will be handled internally or through an outside attorney or investigator.  The executives may also consider forming a special committee to oversee the investigation and to work with the person designated to conduct the investigation in order to ensure access to all witnesses and information necessary to complete due diligence and perform a thorough and expeditious investigation.

The executives should also consider having statements prepared in order to address any questions employees may raise regarding the allegations or to submit in response to any media inquiry if the complaint goes public.

Upon completion of the investigation, the executives should review the findings and recommendations of the investigator in order to understand the proposed decision, or to make a decision, as to the appropriate disciplinary action, if any, that will be imposed against the accused. It is also important for the executives continue monitoring the situation for any action taken in retaliation of the complaint.

The executives should similarly monitor any complaints filed with any administrative agency, such as the EEOC, or litigation commenced in the appropriate court.  These actions will likely involve, and require the executives to participate in, settlement discussions at some point in the process. Significantly, it should be noted that under the Tax Cuts and Jobs Act, effective as of December 22, 2017, Section 162(q) of the Internal Revenue Code provides that an employer cannot deduct any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or attorney’s fees related to such a settlement or payment.  There are also a number of states, including Pennsylvania, which have introduced legislation that would restrict confidentiality agreements as they relate to sexual harassment claims.

While there is no way to predict where these movements will lead, executives should anticipate that matters involving sexual harassment and sexual assault will no longer be brushed under the rug and victims will not be silenced. Now, more than ever, executives need to understand sexual harassment issues, and what conduct constitutes sexual harassment, and implement ongoing efforts to promote a zero-tolerance and harassment-free workplace.

Attorney Loren Speziale counsels businesses in all areas related to employment law including policies and procedures, employment agreements, benefits, and more.

The content found in this resource is for informational reference use only and is not considered legal advice. Laws at all levels of government change frequently and the information found here may be or become outdated. It is recommended to consult your attorney for the most up-to-date information regarding current laws and legal matters.