The rise of the #MeToo anti-sexual assault and harassment movement has brought into focus the fact that incidents seemingly resolved in the past are just as ripe as new incidents - if not more so - to quickly make the news and prompt shakeups within an organization.
As general counsel work to ensure their companies are well positioned to address allegations of assault and harassment, the view should be just as much a retrospective as it is prospective – with value in taking a fresh look at past incidents.
First, revisiting past incidents provides valuable insight into how the organization handled issues historically, a matter of particular importance if the general counsel is new to the position or organization. Knowing what incidents have occurred in the past and how they were dealt with helps, among other things, shape corporate culture and responses prospectively.
Second, past cases believed to be resolved may present specific risks for an organization. Thoughtful organizations should take stock of those cases now so they can:
- Internally address any conduct that was not adequately addressed before
- Be prepared to respond meaningfully if the matters resurface publicly.
That ‘soul searching’ allows an organization to communicate effectively about the matter, if that becomes necessary, and to take action that demonstrates an organization’s commitment to preventing and responding to sexual harassment and related misconduct.
Choosing to wait and see may prove to be short sighted, as the organization could be forced to react on impulse without the benefit of forethought.
CONDUCTING A REVIEW
The question then is: where to start? Counsel should begin with old investigation files and settlement agreements. Counsel should also consider whether (and where) the organization maintains other repositories of potentially relevant information, such as employee grievances, exit interviews or ethics hotline reports.
In reviewing these materials, counsel should take a hard look at how past allegations of sexual misconduct were raised and investigated. It’s important to understand what allegations have been made, by whom and against whom.
Counsel should consider whether the person or team who handled the investigation was objective and independent. Whether the investigation was handled by in-house or outside counsel is an important consideration. If the investigation was done in-house, consider whether the person or team who investigated the matter had a conflict of interest or an appearance of a conflict.
This may arise because the investigator(s) reported directly to the accused, or was underneath the accused in the chain of command. If there was a potential conflict of interest, it will be important to think through what your organization can do now to mitigate the effects of that conflict, which may include an independent review of the matter.
Knowing that an investigation was done is not enough. Carefully consider how thorough the past investigation was. Process matters as much as outcome. Review the file for information about witness interviews: understand who was interviewed and what was said. Give thought to whether potential witnesses were overlooked, or whether key witnesses avoided being meaningfully questioned.
If witnesses expressed hesitancy to come forward or co-operate, that may provide you with valuable insight about your organization’s culture of facilitating and encouraging reporting. Ask whether and how the credibility of allegations was assessed.
Scrutinize the file, including any documents and records, to understand what steps were taken, if any, to determine whether there was corroboration for the allegations. Doing this should help counsel determine whether allegations were treated seriously or merely shrugged off.
Counsel should also assess the organization’s approach to attorney-client privilege. Ask what steps were taken to establish and protect that privilege during the investigation, and think about circumstances under which the organization may choose (or be asked to) waive the privilege.
Understanding past allegations against an accused will help counsel develop a risk profile. Factor in whether the incident was an isolated claim against the accused, or whether the accused has been the subject of multiple complaints. Determine whether the accused has a reputation for inappropriate behavior.
A person’s position within a company is not necessarily static, which means it is important to know whether the accused is still at the company, what position the accused now holds and what power or authority the accused currently has.
General counsel must be cognizant that their role in managing the response to a substantiated allegation does not necessarily end when a bad actor leaves the organization. In particular, counsel must take care when communicating with prospective employers.
Although as a general matter organizations may not be legally required to reveal misconduct to a prospective employer, that should not be seen as permitting the opposite - doling out good reviews or ushering out wrongdoers with praise. That sends the wrong message about accountability for sexual misconduct, and can itself violate an organization’s policies.
On the other hand, disclosing alleged misconduct may expose a company to defamation claims. Many companies will confirm only dates of employment and positions held to avoid risks associated with providing more substantive references.
A thoughtful approach is particularly important if the bad actor happens to be a high-level employee. Take care to collaborate with your organization’s communications or public relations team to ensure that public messaging about that high-level employee’s departure is appropriate.
Substantiated allegations may provide insight into an organization’s approach to accountability. If the allegations were substantiated, know whether the accused was held accountable, and fully understand the disciplinary action. Determine whether the disciplinary action ‘fit’ the specific misconduct.
You must also understand what was communicated to the accuser, and when. Keep a broad outlook, considering whether other individuals were implicated in the course of the investigation and whether they were they investigated. If not, now is the time to try to understand why not.
Counsel’s inquiries should not just take into consideration the accused, but should also extend to the accuser. Is the accuser still at the company? If no, why not? Did they leave on good terms? Was the accuser’s departure related to the alleged misconduct or investigation of it? Did the organization enter into a settlement with the accuser?
Whether or not there is a non-disclosure agreement (NDA), what is the risk that the accuser will resurface and re-raise the allegations or suggest that:
- The organization has systemic problems relating to preventing and responding to sexual misconduct?
- He/she wasn’t the only victim of the bad actor?
- He/she was forced out of the company or otherwise faced retaliation for raising the issue?
Identifying retaliation is particularly important to providing insight into troublesome patterns as well as corporate culture.
In reviewing past matters, counsel should consider how management has treated red flags and other warning signs. Consider whether the board of directors has had access to information about prior matters to help ensure that the board has been adequately informed about particularly significant complaints as well as the organization’s response to those complaints.
Although not all allegations of sexual misconduct require board attention, counsel should carefully consider the effect the incident may have on the company’s reputation, culture and brand in deciding whether board attention is required. Close scrutiny should be given to the past reporting of incidents involving senior management, including whether and how quickly those incidents were brought to the attention of the board and by whom.
Be sure to know whether the board was kept informed of progress of the matter, and whether the board had a hand in approving the resolution of the matter. No organization wants to be in a position of having to defend itself against accusations that senior management enabled, facilitated or ignored sexual misconduct.
NDAs
Apart from investigative files, counsel’s retrospective should include any settlement agreements the organization has entered into in the past. Counsel should review these agreements to better understand how they came about, their enforceability and their viability.
In conducting that review, a close eye should be given to non-disclosure provisions and NDAs, what we will collectively refer to as NDAs for this article. NDAs have been in the limelight recently; some accusers have come forward about past allegations in apparent breach of their NDAs, and at least one organization has publicly announced that it would not enforce its past NDAs.
Now is a good time for counsel to assess the risks and benefits of NDAs to make informed decisions when the need arises. Although much of the recent discussion in the media has been critical of NDAs - calling them tools to silence accusers or otherwise chill speech - there are circumstances where an NDA is appropriate.
An accuser may bargain for an NDA to avoid unwanted publicity, retaliation or career consequences associated with reporting workplace harassment or assault. Regardless of whether the allegations are substantiated, the parties may reasonably elect to resolve the matter quickly and quietly to avoid litigation or unwanted publicity. In addition, counsel’s preparation and knowledge that the organization concluded that particular allegations could not be substantiated can help form any response that may be necessary.
The decision to seek enforcement of an NDA is as much a legal question as it is a business question, with potential public relations consequences. In the midst of widespread publicity about NDAs, some jurisdictions - New York, California and Pennsylvania - are considering banning their use in sexual harassment cases altogether.
If an accuser can establish that he/she was wrongfully pressured into signing an NDA, it may prove to be both unenforceable and a public relations nightmare. Separately, careful thought must be given to whether enforcement will be viewed as muzzling proper efforts to expose misconduct. An organization should also consider whether its efforts to enforce an NDA could have a chilling effect on current employees reporting misconduct.
Put simply, there are risks and benefits to obtaining and enforcing NDAs in connection with allegations of sexual harassment and assault depending on the facts of a case beyond the purely legal question of its enforceability. That’s why it is critical for counsel to take stock of the organization’s track record and risk profile in this area now, before a response is necessary.
The #MeToo movement has cast a long shadow, spanning old and new allegations of misconduct, and requiring counsel to make quick judgments that reflect on companies’ cultures and carry the potential to impact leadership and the viability of the organization. Prudence and preparation are important in this climate, requiring counsel to objectively reassess what has happened in the past, and consider how to deal with it now and in the future.
Jade Lambert and Patrick Otlewski are partners with King & Spalding in Chicago
