18 December 2017
Since allegations of sexual harassment at The Weinstein Company came to light in October 2017, we have seen a host of high-profile organisations contend with similar complaints. These include NBC News, Nickelodeon, Amazon, Uber, Warner Brothers, Mediacorp, the BBC, O2 (Telefonica group) and the International Olympic Committee. There is ongoing debate around a high number of individual experiences and therefore the organisational governance about reporting and handling of harassment in the workplace. What constitutes acceptable behaviour is only part of the debate. It is also about what constitutes good governance, and changing generational attitudes to work.
In many cases, allegations span years (three decades in the case of Harvey Weinstein), revealing a change in attitudes as to what conduct will no longer be tolerated. Behaviour that might have been dismissed in the past as “harmless banter” is increasingly under scrutiny across a range of occupations and jurisdictions.
In politics, the UK has seen Sir Michael Fallon resign from his cabinet post as Defence Secretary after admitting to having repeatedly touched a female journalist’s knee at a Conservative Party conference dinner 15 years ago. When he resigned, he said his conduct had “fallen short of the standards expected by the UK military” and noted that “the culture has changed over the years. What might have been acceptable 10, 15 years ago is clearly not acceptable now.”
Some places where this is an issue are not “employer” led – for example, sport and voluntary organisations. But the experience of employers and their advisers in employment contexts provides a wealth of experience to help guide future organisational conduct.
It’s a global thing
One thing that is noteworthy is how similar industry reactions are around the world. Industries that are about communication and personality seem affected in similar ways. In Poland, TV journalist Kamil Durczok (host and head of one of the most famous information daily primetime TV programs) has been forced to respond to accusations, for example, in respect of text messages sent to a young female journalist propositioning her with sexual advances. Similarly, in Singapore, eminent media company, Mediacorp, recently investigated allegations of sexual remarks that were posted on social media by a producer in relation to a colleague. Following the female producer’s complaint to the company, disciplinary action was taken and other producers were reported to have come forward to make similar complaints about the same colleague.
In theatre, London’s The Old Vic has been investigating allegations from 20 young men (most of whom were former members of staff) claiming they were victims of “inappropriate behaviour” by Kevin Spacey during his tenure as artistic director, from 2004 to 2015. Spacey has been subject to in-depth police enquiry, and The Old Vic has apologised for “not creating an environment or culture where people felt able to speak freely”.
Corporate governance issues
The theatre admitted that Spacey operated “without sufficient accountability” as it has become clear that members of staff felt unable to raise concerns about Spacey’s conduct. It has been forced to look closely at how its internal practices should be improved moving forward.
These types of incidents have thrown a spotlight on the importance of strong and adaptive corporate governance and the real and damaging impact of failure to have a culture and process that allow people to speak out. That can include, now, a need properly to investigate historic concerns, as they affect the reputations of senior employees and the brand of a business as a whole.
Compare the case of The Football Association (FA), where senior leadership figures have faced detailed investigation by MPs regarding their treatment of racism and bullying complaints which were made against the now former England women’s head coach, Mark Sampson. It is reported that Eniola Aluko (one of England’s most recognisable female footballers) was paid around £80,000 to sign a settlement agreement after she raised the complaints against Sampson, which the FA claims was offered to “avoid disruption” ahead of the Euro 2017 tournament. The FA’s handling of Aluko’s allegations has brought internal governance issues at the organisation to the fore, calling into question how Sampson was appointed, the investigatory process and the use of confidential agreements or gagging clauses. Similar concerns have been reported with Weinstein, with the added context of shareholder claims and investigation about the role of independent directors.
Power of social media
When considering the best course of action on receipt of any internal complaint, the influence of social media on businesses can be huge. High-profile social media campaigns such as #MeToo, which encouraged women to disclose on social media feeds the sexual harassment or assault they had experienced have exposed the magnitude of the problem and put pressure on companies, industries and political figures to be accountable.
Blogging is on the rise and can be very persuasive. When former Uber engineer Susan Fowler launched a viral blog revealing sexual harassment and discrimination at the ride-sharing app’s Silicon Valley office, the company set up an anonymous hotline for employees to report their concerns. Uber’s investigation into sexual harassment and workplace culture (which included reviewing over 200 reports of misconduct made via the hotline), reportedly culminated in the dismissal of more than 20 employees, including some senior figures.
Susan Fowler’s blog post is, it is reported, due to form the inspiration for a new film adaptation, which will no doubt reignite further interest in the company’s internal practices and working culture. More recently, Uber also dealt with the resignation of former Board member, David Huberman, following inappropriate comments he made during a Board meeting which was aimed at addressing sexism and harassment; leading to further bad press.
Some jurisdictions seek to control online activity. For example, in Singapore new legislation (the Protection from Harassment Act 2014 (POHA)), applies to harassment committed online, as well as where the victim or perpetrator is based outside Singapore (subject to certain conditions). The legislation covers a wide range of harassment behaviours, including a new offence of “unlawful stalking”, and provides for civil remedies (such as a protection order and/or damages on the basis of a statutory tort), as well as criminal sanctions (fines or imprisonment). It would be possible for this law to be applied to bloggers as much as assailants.
The commercial importance of handling complaints carefully cannot be overstated. As well as the reputational damage and financial costs which are inherent in defending potential legal claims there are possible criminal and civil penalties across different jurisdictions.
In many jurisdictions (including Austria, Germany, Slovakia and the UK), employers can be vicariously liable for harassment which is committed by employees in the course of their employment. But in the UK, employers have a legal defence if they can show they have taken all reasonable steps to prevent the employee from doing the act.
In some jurisdictions (for example the UK) someone making allegations about sexual harassment will fall in the category of a “whistle-blower” meaning they have extra legal protection. Different cultural protections need to be understood. Under German law, employees who are harassed have the right to withdraw their services with continued pay if the employer does not take suitable and necessary measures to prevent the harassment. They can also claim for damages and compensation.
Given the business and legal risks, some organisations opt to take pre-emptive action if concerns of inappropriate behaviour come to light, even if this may mean reducing expected commercial revenue. For example, at the BBC, recent claims against former Gossip Girl star Ed Westwick have led to the removal of Agatha Christie’s Ordeal by Innocence (starring Westwick) from the Christmas schedule pending further investigation and filming has been “paused” on the second series of BBC Two comedy White Gold, in which Westwick also stars. The concept of “innocent until proven guilty” may apply in the criminal realm, but in the public arena the reputational risks to an organisation if it fails to act in line with heartfelt public opinion can be significant, and may take precedence.
For employers, the potential damage caused by not providing “good work” can also have a significant commercial cost. Organisations that do not foster a working environment where employees feel able to raise concerns, and which fail to address any complaints properly, invariably experience reduced productivity, higher levels of sickness absence (often stress-related) and can struggle to retain talent in the long-term.
Scrutiny of the conduct of business (by both regulators and the public) has never been greater. The UK Bar Council has reportedly written to all heads of barristers chambers about their professional obligations to avoid discrimination and harassment and the Equality and Human Rights Commission (which has investigatory powers) has written to leading law firms to check they have appropriate procedures. Lawyers may be under scrutiny on two counts – as a vanguard profession but also because of their necessary involvement in resolving disputes which gives rise to some difficult judgments.
More than just a paper policy needed
Fear of not being taken seriously or retaliation can prevent victims from coming forward with concerns. According to a survey by the UK Trades Union Congress (“Still just a bit of banter?”), four out of five women did not report sexual harassment when it took place and, for those that did, 70% said nothing had changed following the report. In 16% of cases, complainants reported that the situation had worsened after they raised concerns.
So what should employers do to reduce the risks of harassment and foster a positive working culture moving forward? Clearly, putting in place robust policies and procedures for investigation of harassment and bullying complaints should only be the starting point. Cultivating an open culture in which employees feel able to voice concerns and where it is made clear that bullying and harassment will not be tolerated requires more than just a carefully drafted policy.
Empowering employees to talk more openly about the line between acceptable and unacceptable behaviour is crucial for establishing the right kind of working environment. A clear message should be sent from the top down that the company operates a policy of zero tolerance in relation to harassment and that all complaints will be dealt with properly, irrespective of the identity and seniority of the alleged perpetrator. Fostering a positive culture where employees feel safe, supported and able to raise concerns, increases an organisation’s chance of retaining key employees and reduces its long term legal exposure.
In Poland, employers have a duty to prevent “mobbing”, which is defined as the long-term, repeated mistreatment of an employee, including harassment, threats, name-calling and ridicule. Typical examples of mobbing include blackmailing an employee with threatened dismissal, unjustified criticism, public humiliation, allocating too many responsibilities in comparison with other workers or not assigning any tasks to perform, isolating an employee from co-workers and excluding an employee from the team.
With these risks in mind, staff at all levels must not only understand what constitutes unacceptable behaviour, but also have confidence that any complaints will be dealt with fairly, sensitively and promptly. Appropriate levels of professionalism and confidentiality are key. Providing avenues for victims to make complaints, such as via an anonymous and confidential hotline (like Uber), can be a useful tool for understanding more about embedded workplace practices. Managers and HR staff need training on how to handle complaints of harassment and bullying (for example to investigate and undertake any disciplinary processes that may follow). They also need training on how to provide effective support to complainants.
Our recent webinar provides a useful overview of how harassment rules work in Europe, as well as some of the methods employers can use to minimise the risks. Our Law at Work article also explores internal best practice in this area.
Settlement agreements and employer practice
While settlement agreements have long offered employers a means of compromising possible tribunal claims, and have typically included confidentiality and non-disparagement clauses as a matter of course, “Harvey Weinstein style contracts” (restricting employees from doing anything that would harm “its business reputation” or “any employee’s personal reputation” as well as arbitration clauses) have sparked debate about their potential to keep episodes of sexual misconduct hidden from public view.
It is reported that Harvey Weinstein signed settlement agreements with eight accusers (including his former assistant, Zelda Perkins, who was said to have shared a £250,000 pay-out against the backdrop of her £20,000 annual salary) and some of those agreements featured non-disclosure clauses. In the US, Fox News founder Roger Ailes and former host Bill O’Reilly are said to have personally or through their company (21st Century Fox) paid tens of millions of dollars to women to silence claims of sexual harassment. There are concerns about the prevalence of non-disparagement clauses in Silicon Valley.
Critics argue that these types of agreements allow powerful companies and individuals to avoid scrutiny and therefore continue damaging internal practices and protect criminal activity. Some victims, it is feared, sign confidentiality and non-disclosure agreements under duress, as they feel they have no other form of recourse. On the other hand, supporters of such agreements assert that agreement to confidentiality provisions in exchange for a monetary pay-out can be the best way to resolve issues from the complainants’ perspective too; avoiding the need for protracted and expensive litigation, unwanted attention and, possibly, retaliation.
Employment lawyers are now seeking out ways to circumvent such restrictions and break this “silencing culture” around workplace harassment. Strategies include bringing claims against people not mentioned in the restrictions and, in the US, going to different states with subpoena power. It is possible that the value of monetary sums payable under settlement agreements could reduce if non-disclosure provisions are removed; so it may be that rather than a total departure we see a more nuanced approach to the use of these types of clauses moving forward. Of course while signature of a settlement agreement offers some comfort to employers in terms of reputation management and confidentiality, reaching a deal with one individual does not prevent another coming forward with allegations about the same concern.
Lawyers and advisers also risk close public scrutiny. In the case of Weinstein, publications have criticised Weinstein’s legal advisers in the US and UK and for their seemingly “oppressive” conduct, revealing the reputational risks gagging clauses pose for advisers as much as clients. Earlier this year, PR firm Bell Pottinger grappled with comparable reputational fall-out in dealing with alleged South African corruption issues, ultimately leading to the collapse of Bell Pottinger.
What about the accused?
There is no doubt that the cultural climate towards behaviour in the workplace is changing and for many it is encouraging to see an increasing awareness and recognition of the issue of harassment in the workplace across the globe.
That said, the death of Welsh politician, Carl Sargeant, underlines the importance of careful handling by employers when it comes to investigating allegations of sexual harassment. It is reported that Mr Sargeant took his own life after being accused of sexual harassment and being dismissed from his job without having been told the particulars of the allegations. When dealing with any internal work complaints, accusers should be informed of complaints made against them and have the opportunity to defend themselves as part of a fair disciplinary process. Employers owe a duty of care for the health and safety of all their staff.
The degree to which local laws protect individuals from defamation may well influence the number of claims that come into public view. In Singapore, for example, recent legislation (POHA) allows a victim of a false statement of fact alleged against him to obtain a court order for a person to be prevented from or to cease publication of the false statement unless it contained a suitable notification (as directed by the court) which alerts readers that the statement is false. In a decision by the Singapore Court of Appeal in early 2017, it was held that the Singapore Government could not invoke this provision as only natural persons could do so.
The degree of legal protection aimed at preventing inappropriate behaviour in the workplace varies from one jurisdiction to the next. In the Ukraine, the scope of legislation (and therefore case law) in this area is limited, and Slovakia and Hungary report few publicly known cases of bullying and harassment. The German press is currently contemplating whether its current legislation is sufficient or whether there is a need for stricter laws. In China, although there are national laws protecting female employees from harassment, there remains no protection for males who are subjected to such treatment. In the UK, it remains to be seen whether the removal of tribunal fees, together with increased awareness and recognition of the issue, will lead to increased claims moving forward. What is clear, however, is that awareness and recognition of harassment as a cross cultural phenomenon in the workplace is increasing.
Given this, it is vital that employers tread carefully when faced with any allegations of this kind. After all, trust in business is intrinsically linked to its value and the increasing public focus on harassment in the workplace places ever-growing pressure on organisations to take a stand. In what has become known as a “post-truth” world, trust in business is particularly fragile and failure to investigate allegations and take accountability, particularly in consumer-facing markets, can now have a devastating effect on public brands.