Weinstein Saga Has Business Leaders Calling Their Lawyers

By Chris Opfer, Bloomberg BNA 

The reverberations from movie producer Harvey Weinstein’s fall from grace has some businesses—and their lawyers—taking another look at how a permissive office culture can allow sexual harassment to go unchecked.

“I’m getting hit with a lot of calls,” Jonathan Segal, an attorney at Duane Morris who advises businesses on compliance with discrimination and harassment laws, told Bloomberg Law. “It isn’t really just what do we have to do to protect ourselves from liability, but also how do we protect our workers.”

Weinstein was canned in early October, following a New York Times report that he had secretly settled sexual harassment claims with at least eight women. Several actors and others in the entertainment business have come forward with similar allegations in the days since, exposing what some have called the worst-kept secret in Hollywood.

The movie mogul is the latest in what seems to be an increasingly long line of powerful people—often men—publicly exiled after reports of decades of alleged harassment, and sometimes more. From comedian Bill Cosby, who continued to work in entertainment as rape allegations slowly mounted, to former Fox News commentator and subject of multiple sexual harassment accusations Bill O’Reilly, revelations of wrongdoing have been quickly followed by questions about how alleged harassers managed to continue to operate for so long.

“Any time you have an organization dominated by a particularly strong and powerful person who is essential to the mission and viability of the company, that presents challenges in all sorts of ways,” David Garland, an attorney at Epstein Becker & Green, told Bloomberg Law. Garland last year represented former Fox News chief Roger Ailes in a harassment lawsuit by anchor Gretchen Carlson. Ailes later resigned, as similar allegations from other Fox News anchors went public. He died in May.

“The challenge is not necessarily complicity, it’s how you address the allegations,” Garland said.

Top-Down Culture Club

Management lawyers say the Weinstein case is a prime example of how corporate culture can keep bad behavior, especially by big names, under the radar. They say changing the environment starts at the top.

“People with power need to stand up,” Segal said. “To be silent is to condone. When it comes to people with authority, there is no innocent bystander.”

Companies can go a long way by creating a clear policy against harassment, including behavior that may not necessarily rise to the level of a legal violation. Bad behavior has to be so baked in that it becomes a condition of a worker’s job or otherwise qualifies as “severe or pervasive” to be considered harassment under federal law. But that doesn’t mean a business can’t nip lesser transgressions in the bud.

Attorneys also said it’s important to open up multiple channels for workers to lodge complaints, including to human resources managers and a company’s board of directors, in some cases. That helps ensure that workers feel comfortable coming forward.

“Most boards take very seriously their role as stewards of the organization and the need for them to have an independent view of issues that arise in the course of the business,” Valerie Hoffman, an attorney at Seyfarth Shaw who represents technology and finance companies, told Bloomberg Law.

In the end, it’s more about what the company does in response to harassment complaints than what it says. Boards and executives have to be willing to take corrective action against harassers, whether that means a stern talking to, a suspension, or termination.

Weinstein, Cosby, O’Reilly, and others were able to keep a lid on much of the allegations against them by reportedly convincing their accusers to sign nondisclosure agreements as part of legal settlements. Attorneys told Bloomberg Law that businesses are likely to continue requiring NDAs as part of settlements, which they said may be offered as a way to avoid costly litigation rather than as an admission of guilt.

Where companies run into trouble, and open themselves up to significant liability, is when they use NDAs to protect a harasser and then allow the person to stay on the job.

Jon Hyman, who represents small and medium-size businesses in Ohio, said the Weinstein situation is a “perfect example” of why confidentiality agreements “are a bad idea” for cases involving alleged serial harassers. “Now it’s not just did you know about this one claim, but did you create an environment that allowed this to continue,” he said.

Mad Men

Culture shifts don’t happen overnight, but Segal said it’s vital that a company’s entire leadership get on board with the change. That includes the men.

When confronted with allegations of workplace harassment, Segal said some men tend to try to wrap their heads around the situation by referencing a sister or daughter. He’s not a fan of that approach.

“This is not about rescuing women because women don’t need rescuing,” Segal said. “You don’t need to have a daughter, you need to have a conscience and a spine.”

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bna.com