What the New Wave of Sexual Claims Could Mean for Your Company Jim Erwin Lily Rao January 11, 2018 Today’s Goals

• Increase understanding of need for heightened commitment to free of discrimination and harassment • Review of basics and new requirements • Understand complaint & investigation process • Think about how technological, cultural, generational changes impact what is now a 30 year old legal concept

2 2017 – A Rogues’ Gallery

• Bill O’Reilly (Fox News) • Roger Ailes (Fox News) • Mark Halperin (NBC Political Analyst) • Harvey Weinstein (The Weinstein Group) • Roy Price (Amazon) • Robert Chow and Gavin Baker (Fidelity Investments) • Charlie Rose (CBS) • Matt Lauer (Today Show) • Garrison Keillor (Prairie Home Companion) • Mario Batali (Chef) • Michael Oreskes (NPR) • Alex Kozinski (Federal Appeals Judge) • John Conyers Jr., Al Franken (Congressmen) • Louis C.K. (Comedian) • Kevin Spacey (Actor)

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Why Don’t More Women Report?

2016 Harvard Business Review findings: 1. Fear of retaliation

2. Bystander effect – Journal of Personality and Social Psychology, Vol. 8, No. 4, 377-383

3. Masculine culture

4 Political Backlash

5 #MeToo Movement

• Twitter has confirmed that over 1.7 million tweets included the hashtag #MeToo in 2017. • Over 12 million posts, comments, and reactions by 4.7 million users on Facebook within 24 hours. • Facebook said 45 percent of users in the U.S. have had friends who posted “me too.”

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Time’s Up

 Legal Defense Fund ($13M) to help women protect themselves from sexual misconduct  Legislation to penalize companies that tolerate persistent harassment and discourage use of NDAs  New tax law: if settlement agreement has confidentiality provision, can’t deduct settlement amount or attorney’s fees as business expense  Golden Globes – women wore black on the red carpet in solidarity

7 Increase in Harassment Claims

• Nationwide reported a 15% increase in sales of practices liability insurances between 2016 and 2017. • Advisen, which tracks insurance trends, says that EPLI insurance price has increased 30% since 2011, which means more claims, more expensive claims, or both.

8 Increase in Sex Discrimination Claims at the Maine Human Rights Commission

9 Meanwhile…

• Popular culture highly sexualized • Smart phones and social media bring everything into the workplace

10 Basics

Adverse Action

• Submission to conduct Conduct of a That is is necessary to sexual nature unwelcome obtain/keep your job; • Submission or rejection adversely affects your job; or • Conduct unreasonably interferes with your ability to do your job

11 Sexual Harassment Basics

Unlawful harassment is Harassment is a form of based on protected discrimination characteristics (e.g., sex, prohibited under race, religion, disability, federal and state law national origin, etc.)

Discrimination due to gender identity or Retaliation is also sexual orientation can prohibited be a form of sex discrimination.

12 Types of Harassment

• Quid Pro Quo • Created by supervisor • Conditions employment on return of sexual favors, via actual or threatened “tangible employment action” (for example, termination, demotion, pay cut). • Hostile Work Environment • Can be created by any employee • Conduct that does not result in a tangible employment action but is nevertheless so “severe or pervasive” that it creates an abusive working environment • Retaliation

13 “Severe or Pervasive” – what makes sexual harassment unlawful Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.

• Comes from Meritor Savings Bank v. Vinson (U.S. Supreme Court 1986) • How does 1986 definition measure up today? 14

Examples of Actions That May Create a Hostile Work Environment

Verbal or Non-Verbal Physical Written • Sexual comments or • Sexual gestures • Massaging a person’s innuendos • Displaying sexually neck • Sending/forwarding suggestive images • Hugging or kissing sexually explicit emails, text messages, or photos

15 Important Details

Does intention • “I didn’t mean to offend you” matter? • “I was only kidding”

How can you tell • Consider body language/participation if the conduct is • Don’t forget about bystanders unwelcome?

What about non- • Customers? employees? • Vendors?

16 Fidelity Investments

Two senior employees terminated • C. Robert Chow – Portfolio Manager – Inappropriate sexual comments to colleagues • Gavin Baker – Tech Fund Manager – Allegedly harassed a 26-year-old employee

Fidelity “prohibit[s] harassment in any form. When allegations of these sorts are brought to our attention, we investigate them immediately and take prompt and appropriate action. We simply will not, and do not, tolerate this type of behavior.”

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Zero Tolerance Requires Consequences PBS Statement: “In light of yesterday’s revelations, PBS has terminated its relationship with Charlie Rose and canceled distribution of his programs. PBS expects all the producers we work with to provide a workplace where people feel safe and are treated with dignity and respect.”

Andy Lack, NBC News: “Our highest priority is to create a workplace environment where everyone feels safe and protected, and to ensure that any actions that run counter to our core values are met with consequences, no matter who the offender.”

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Zero Tolerance … When?

"This is the largest credibility crisis of any network in broadcast history." - Media critic Jeff McCall

• NBC execs: “We can say unequivocally, that, prior to Monday night, current NBC News

management was never made aware of any complaints about Matt Lauer’s conduct.” • Increasing pressure on parent company Comcast to launch an independent investigation into what NBC’s top executives knew about Lauer’s treatment of women, and when they knew it.

19 Zero Tolerance … Of What?

• Popular culture bombards us with sexualized messages

• A significant number of romantic relationships begin in the workplace

• However, important to stop harassing behavior before it harms employees or creates liability

• How does an employer balance severe and pervasive standard with realities of modern workplace?

20 One of the Guys

A product development specialist, Alex, has a great relationship with his co-workers. They work hard and play hard and everyone gets along great. They schedule weekly meetings on Friday afternoons and occasionally treat themselves to lunch at Hooters down the street. Of course, they all enjoy good-natured humor about the waitresses and that usually leads to a colorful discussion of their girlfriends. Amy is part of the group and she attends these lunches but doesn’t seem to mind the banter. In fact, she is so relaxed about it that they sometimes forget that she is a female.

Is this harassment?

21 Romance in the Air

After breaking up with his girlfriend, Alex realizes that he really enjoys spending time with Amy. He asks her out a few times and they have a great time together. He decides he would like to take this to a new level and asks her to go to the Cape for a summer weekend with him. She hesitates and says she is busy. He askes again a few weeks later. Is this harassment?

22 Harassment vs. Offensive Conduct • “Hostile Work Environment” and “Harassment” are legal terms • Not all unacceptable conduct meets the legal definition of harassment. • We recommend a separate policy prohibiting offensive conduct. • Does not require same procedures to respond.

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Sample Offensive Conduct Policy Offensive conduct, while not unlawful, is not appropriate in the workplace. Therefore, the Company prohibits conduct that a reasonable person would find offensive and unrelated to the Company's legitimate business interests, even if such conduct is not related to any protected characteristic.

Examples of prohibited offensive conduct include: repeated verbal abuse, such as the use of derogatory remarks and insults; verbal or physical conduct that a reasonable person would find threatening or intimidating, that does not meet the definition of sexual or other unlawful harassment; persistent, malicious mistreatment that degrades or humiliates an employee; personal attacks (i.e., angry outbursts, excessive profanity, or name-calling); unreasonable interference with an employee's ability to do his or her work; and deliberate or undermining of a person’s work performance. A single act usually does not constitute offensive conduct, unless that single act is severe and egregious.

The Company strongly encourages employees to promptly report offensive conduct in the workplace to your supervisor or the ______. Employees should always feel free to ask anyone who is engaging in offensive conduct to stop.

24 Your Policy is Your Best Defense

• Employees trained on what it is and what to do about it • Managers trained on what do to about it • HR trained on how to investigate & resolve • The Faragher defense allows employers to avoid liability for harassment even by supervisors, if: • No adverse employment action occurred • Employer took reasonable steps to prevent and promptly correct harassment, and • Employee unreasonably failed to take advantage of the preventive or corrective measures

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Complaint Procedure

Report any sexual or other harassment to supervisor or department manager or any member of management

Investigations

all allegations “quickly and discreetly”

Notification of outcome “training, counseling, warning, suspension, or violations will result in discipline immediate dismissal”

26 Purpose(s) of Investigation Determinative Defensive

To figure out whether disciplinary action To create an Ellerth/Faragher defense to a required in response to employee misconduct potential hostile work environment claim

To correct an injustice or mistake by To pin down witness statements while memories management are fresh and to prevent future exaggeration

To make the work environment safer or less To be able to communicate the facts in order to hostile or offensive to minority group obtain legal advice

To correct legal compliance problems before To figure out facts in order to devise a defense they become liabilities strategy in anticipated litigation

27 Selecting the Investigator(s)

1. Impartial, objective, fair 2. Respected 3. Skilled, experienced, knowledgeable 4. Good listening skills, empathetic 5. Available 6. Clear writer 7. Effective witness 8. Single investigator vs. investigatory team 9. Primary investigator and notetaker

28 Should the investigation be conducted under the cloak of attorney-client privilege?

29 Legal counsel should be involved at outset if:

Charge or lawsuit has been filed or threatened

There is a significant likelihood of litigation against company

Corporate compliance question (OSHA/FLSA/SOX) is at issue

Serious criminal behavior has been alleged

Unusual investigative techniques contemplated

Misconduct alleged against senior member of management

Accused is a member of a collective bargaining unit

30 New Maine Training Requirements

2017 MDOL Training Law Requires: • Workplace Posting now free on MDOL website • Same Annual Written Employee Notification • Same education for all new employees • Same additional training for supervisory and managerial employees • New compliance checklist on MDOL website • New recordkeeping requirement • New enforcement mandate for MDOL • New penalties for violations: up to $1,000 for first, $2,500/$5,000 for repeated violations

See 26 M.R.S. § 807 (PL 162)

31 Take Aways

• Make sure your training and record- keeping are up to speed – may need to retrain • Implement an Offensive Conduct policy • The world is changing but the law is not • You can’t fight popular culture, but you can have your own culture of civility and zero tolerance • Prompt & appropriate investigation and resolution – have to prioritize • No retaliation has to mean no retaliation

32 Jim Erwin Lily Rao [email protected] [email protected]

Merrill’s Wharf Merrill’s Wharf 254 Commercial Street 254 Commercial Street Portland, ME 04101 Portland, ME 04101

PH / 207.791.1237 PH / 207.791.1172 CELL / 207.232.9025 CELL / 207.370.0657