Sexual Harassment 2.1: Keep Up, We Are Moving Fast…

Just three months ago, days before the Matt Lauer or Charlie Rose stories (here is a timeline one publication put together), in response to the very first wave of high-profile harassment stories, I wrote this post on The Metropreneur reviewing all of the things that had not (yet) changed for employers in terms of their obligations to combat harassment.

Given the attention to the subject at that time, likely the stakes for employers to comply with legal requirements had gone up. Perhaps there would be more complaints, and judges and juries might be less forgiving of employers. A decades-old regime of requirements upon employers was thus far intact, but certainly something different seemed to be in the air. Sexual Harassment 2.0, I will call November 2017, awaiting further updates.

Little did any of us know in November that the stories we had read then were just the tip of an iceberg of high-profile stories that continue to emerge seemingly on a daily basis. As that has happened, public awareness is even greater, some legislatures have begun to respond in small ways, and employers and their lawyers continue to process what is going on around them. Many employers have a renewed focus on complying with current requirements, certainly a good idea.

But it seems increasingly likely – something is going to really change here in terms of what the law will expect of employers. Thus, I give you this update as Sexual Harassment 2.1.

One development: did you know that the federal tax law that was passed by Congress earlier this year has something to do with sexual harassment? Generally if an employer enters into a severance agreement or settlement agreement with an employee arising out of a harassment allegation, the agreement will provide that its terms be kept confidential. This is true of the great majority of such agreements, whether harassment is involved or not in the situation.

Previously, the costs of that agreement were tax deductible as a business expense. No longer. Now, if such an agreement relating to a harassment allegation contains a confidentiality provision, it will not be tax deductible to the employer. Confidentiality provisions, though common in many kinds of agreements, have become a focus of attention as perpetuating harassment. Several state legislatures have laws pending to ban such provisions. It seems likely this trend will continue.

Another step taking place is that Congress and some state legislatures take steps to better govern themselves when it comes to harassment issues, expressing addressing requirement compliance steps.

This all remains very much a moving target, but here is a key takeaway I am telling employers: historically you have been able to avoid liability by having a decent policy, providing some training (not really subject to any quality requirement), and promptly and thoroughly addressing any concerns that are raised of even potential harassment. Employers who take that advice have generally been able to avoid liability.

The problem with that system that recent events underscore is that, once the policy and the training are in place, the system is driven by complaints, and people don’t always complain. Recent events remind us how commonplace that failure to complain is.

While it is not formally the case yet – but I sure would not want to defend a harassment case before a jury right now – I believe that the law will expect employers to find harassment even where there is no complaint.

How? Well, we are all working on figuring that out. I have seen two apps that allow anonymous reporting for people who do not wish to openly come forward. That might help. I have also told employers to think outside the traditional box of the long training video or class – do we really think those are materially making people more likely to complain, or changing the behavior of potential bad actors? What are better ways to have discussions that get closer to what people are thinking about these subjects?

Of this I am confident: you should not only be taking the customary compliance model very seriously at your business, but you should be thinking creatively about how you can find the harassment you don’t know about in your business. Most readers want to do that for non-liability related reasons, but I am confident the law that makes that legally compelling will be along soon.

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