Daily Labor Report®

Lawyers, PR Firms Team Up For Employers Facing #MeToo Crises

Sept. 17, 2018, 10:45 AM

The days of quiet exits by powerful executives caught harassing subordinates may be ending.

CBS is the latest corporation faced with cleaning up an embarrassing workplace situation while the world watches. And nearly a year after someone first put a hashtag before the words “MeToo,” some employers are realizing they need advice from more than lawyers when harassment allegations arise.

“Clients who in the past have not worked with crisis communications managers now are asking about having them involved,” Ann Marie Painter, chair of the labor and employment practice at Perkins Coie, told Bloomberg Law.

The role for crisis communications “is not to influence the legal outcome but to put the company in a better position for reputational recovery at the conclusion of the legal action,” Laura Guitar, an executive vice president at rbb Communications, said. Since #MeToo, “we are being brought in more often, either by the company itself or by legal counsel.”

The resignation of long-time CBS chief executive Les Moonves came with a promise that he and the company “will donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace,” CBS said in a press release.

Writing a large check to a sympathetic cause won’t solve the problem because a change in corporate culture is also needed, Guitar told Bloomberg Law. “If it was ever the case that reputation recovery could be achieved with a financial donation, that’s no longer true today,” she said.

CBS didn’t immediately respond to Bloomberg Law’s request for comment. Moonves has called allegations that he sexually harassed women and retaliated against them “untrue.”

Social Pressure Intensifies Consequences

“This resignation would never have happened prior to #MeToo in such a public way—or maybe at all,” Guitar said. “Social pressure has changed the landscape and the consequences for everyone, perhaps most for individuals in power.”

Attorney Helene Wasserman agrees.

Both the plaintiffs and the defendants are very different” since #MeToo, she told Bloomberg Law. Wasserman is co-chair of the litigation practice group at Littler Mendelson’s Los Angeles office.

“The value of cases has gone up” for settlement purposes, and some companies are settling earlier “out of fear,” Wasserman said. She believes the #MeToo movement “is emboldening the plaintiff’s bar” and that some targets of harassment may be “overblowing” incidents.

Investigations Get More Thorough

Several management employment lawyers told Bloomberg Law their clients are taking sexual harassment claims more seriously and checking into them more meticulously than before. Instead of having their own human resources departments look into a complaint, many employers are hiring law firms or human resources consultants to investigate.

“By the time the case gets to us, the investigations are much more thorough and much more defensible,” Wasserman said. Higher-quality investigations “will be a game changer in many respects,” she said.

A good investigation “could dissuade the lawyer on the other side from taking it too far,” she said. “It may not make people walk away, but it may make the dollar amount of cases go down.”

The amount of payouts in sexual harassment settlements may matter more to clients because of a recent tax law change. The Tax Cuts and Jobs Act of 2017 ended the deduction for settlement payments and related attorneys’ fees in sexual harassment disputes governed by a nondisclosure provision.

Clients may want to use a nondisclosure provision because they fear damage to their public image. Reputation affects customer loyalty and employee recruitment and retention, Guitar said.

‘Yes, But’ Defense Gets Trickier

Research reported in the Harvard Business Review in June indicates that even a single allegation of sexual harassment can damage the public perception of a company.

Such considerations may influence a client’s use of affirmative defenses, Painter said.

People getting sued use an affirmative defense when they don’t contest the facts but want to assert that they had a legally valid reason for their actions. For example, an employer may be able to avoid liability by showing that a worker didn’t alert the company and give it a chance to fix the problem.

Still, even a defense “supported by the law and the facts” could “look harsh or like further bad treatment” of a complaining employee, “depending on how articulately and vigorously you assert these defenses,” Painter told Bloomberg Law.

To contact the reporter on this story: Gayle Cinquegrani in Washington at gcinquegrani@bloomberglaw.com

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

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