RBGG’s Gay Grunfeld and Krista Stone-Manista published an article in The Recorder on March 28, 2017 entitled, “The Consequences of Not Responding to Sexual Harassment Allegations.” Full text of the article set out below.
The Consequences of Failing to Respond to Harassment Allegations
Sexual harassment in the American workplace remains an ongoing and expensive problem for companies of all types and sizes, more than 25 years after Anita Hill’s testimony to Congress made it a topic of national conversation. In recent years, the conversation has focused on the rampant epidemic of sexual harassment in the technology industry, but addressing harassment must be a priority for all employers. In June 2016, the EEOC reported that roughly one-third of the “90,000 charges received by EEOC in fiscal year 2015 included an allegation of workplace harassment,” that three-quarters of those who had experienced workplace harassment did not report it within the workplace, and that harassment was a major cause of employee turnover, workplace strife, and lost productivity.
As the recent Uber allegations demonstrate, this problem is particularly acute in Silicon Valley. On Feb. 19, former Uber site reliability engineer Susan Fowler shook the tech industry with a frank blog post discussing her experiences with sexual harassment during her time at Uber, and the ways in which Uber’s human resources department failed to respond appropriately to her reports of harassment. A few days later, a former Uber employee using the pseudonym Amy Vertino posted about her similar experiences at the company. On Feb. 27, Uber’s senior vice president of engineering, Amit Singhal, resigned amid reports that he had previously left Google while under investigation for allegations of sexual harassment. Tesla and other major tech companies are also in the cross hairs.
The harassment suffered by women at tech companies does not consist merely of inappropriate comments or touching. As Susan Fowler, “Amy,” and others report, it often takes the form of lengthy campaigns of boundary-testing and forced intimacy. The same position of power that makes a senior male employee a valuable mentor and supervisor also makes it difficult for his mentees and subordinates to report harassment. Indeed, “Amy” noted that this problem can begin at the top of the leadership chain: “[Uber CEO] Travis [Kalanick] is well known to protect high performing team leaders no matter how abusive they are towards their employees.”
The Uber nightmare does not exist in a vacuum. In 2015, following the Ellen Pao trial, a team of Stanford researchers asked women employed by Silicon Valley companies to complete an online survey about their experiences. Sixty percent of the 210 respondents reported that they had experienced unwanted sexual advances in the workplace, and 65 percent of those reported they had received advances from a superior. The 2015 survey also confirmed that it is difficult to report sexual harassment in technology companies and that the consequences of harassment to the harasser are often minimal. Thirty-nine percent of the women harassed reported that they had not taken action for fear of damaging their careers—a concern even more salient in circumstances where the harasser is also his victim’s mentor or supervisor. Even for those women who did report, 60 percent of the survey respondents said they were not satisfied with the results of their reporting. There is a clear need for more effective reporting, investigation, and follow-up measures when women report sexual harassment to tech companies.
The finance industry is also well known as a male-dominated culture that has generated multiple sexual harassment lawsuits. Starting with the Smith Barney Boom-Boom-Room of 1996, finance giants including PriceWaterhouseCoopers and Goldman Sachs have been hit with major and highly unsavory claims. Just last year, Raymond James was subject to a sexual harassment complaint by a 24-year-old female consultant who objected to a fraternity-like work atmosphere, including being told to get on her knees and chug a bottle of Smirnoff vodka.
Sexual harassment in broadcast journalism has been in sharp focus for the past year amid multiple allegations against former Fox News Chairman Roger Ailes and other high-profile figures at the network. These allegations have resulted in a cascade of expensive settlements and months of negative publicity for Fox News. For example, just weeks after Ailes’ departure, Fox, according to news reports, paid a “high six figures” settlement to settle claims brought by broadcast personality Juliet Huddy against Bill O’Reilly, in which Huddy alleged that O’Reilly had “pursued a sexual relationship with her … at a time he exerted significant influence over her career.” Eight months after Ailes resigned, the company is under an internal investigation of its culture of disrespecting women, as reports of significant out-of-court settlements continue to be released.
The epidemic of harassment in these industries limits career advancement for women, imposes significant litigation and business costs, and incurs incalculable costs in negative publicity and damage to investor confidence. The costs of harassment to the company’s productivity and profitability begin long before any public reports of harassment, as women who are subjected to persistent and unremitting harassment suffer in ways both professional and personal. Once lawsuits are filed, costs mount exponentially. Recently, California juries have issued damages awards of over a million dollars in several sexual harassment cases, and routinely award verdicts in the high six figures. Confidential settlements quietly putting to rest individual situations are presumably similar in scope. Corporate leadership cannot afford to ignore this problem.
One significant contributing factor to unchecked harassment at all of these varying workplaces is the creation and growth of insular teams led by prominent male industry leaders. Hungry to increase stock prices or prepare for IPOs, companies are allowing these “alpha males” to recruit and manage, and sexually harass, their team members without appropriate oversight and management. Some of these team leaders have a history of sexual harassment at their prior employers, a fact that is too often not investigated in the recruiting process.
Further, human resources departments are too often “captured” by the teams to which ostensibly they provide oversight and support. Many startup firms do not hire human resources personnel until they are well into their development, and many others do not adequately ensure that their human resources personnel are sufficiently funded and independent.
Companies should frequently remind their human resources departments that their duty is to protect the company, not the harasser. As Uber’s Susan Fowler described, HR’s response is often unduly protective of the alleged harasser: he’s a valuable asset; this is his first offense; let’s not “punish him for what was probably just an innocent mistake on his part.” But as Uber and many other technology companies are learning, the ultimate public relations and bottom-line consequences of failing to respond to harassment allegations are far worse in the long run.
To attack this epidemic, human resources departments must be kept sufficiently independent of the company’s other teams, including by regular rotation of management and human resources personnel through different teams. Company leadership should also be particularly sensitive to the risks posed within teams where one or more intermediate supervisors has been brought into the company by the team’s ultimate supervisor, and should ensure regular independent review and oversight of such teams.
As to the endemic failure to investigate harassment allegations adequately, and the forces that prevent victims from even asserting such complaints in the first place, there is a pressing need for a culture shift. Companies must develop, and enforce, consistent reporting and investigation practices, regardless of whether it is someone’s “first offense” or not, and must minimize negative effects to those who report sexual harassment. Companies must also closely monitor post-allegation performance reports given to victims of harassment—both to protect themselves from retaliation claims, and to ensure that harassment does not harm a victim’s career advancement. It is all too frequently the case, as in the recent Uber reports, that the career of an employee who reports sexual harassment suffers by subsequent negative performance reports, or by frequent rotations from team to team.
If Silicon Valley cannot fix its structural problems with sexual harassment soon, government agencies must step in. Notably, until recently U.S. Attorney Preet Bharara was investigating whether Fox News failed to properly alert its shareholders of the network’s multiple sexual harassment settlements.
Gay Grunfeld is a partner with Rosen Bien Galvan & Grunfeld in San Francisco where she focuses her practice on complex civil litigation, with an emphasis on business, civil rights, and employment litigation. Krista Stone-Manista is an associate at RBGG focusing on complex commercial litigation matters.