#MeToo or Not Us: Revisiting Workplace Sexual Harassment Prevention and Response  

 Written by: Frederick J. Pomerantz, Managing Member, Insurance Legal & Regulatory Consulting, PLLC

Nicole Stover and Jeffrey Grossman of Stradley Ronon Stevens & Young led a discussion on the highly charged topic #MeToo or Not Us: Revisiting Workplace Sexual Harassment Prevention and Response.

Given the increasing numbers of workplace sexual harassment claims and the    corrosive effect they have on an organization's culture as well as their propensity to result in low employee morale, reduced productivity, and even institutional civil and individual criminal liability, many large corporations have begun offering employee training at all levels. The subtopics of training may include current trends and predictions, steps all managers can take to encourage reporting by employees (including witnesses, to such behavior, direct or indirect, involved or uninvolved) and training in leadership and accountability, civility training and the cost to the organization’s financial standing and reputation in the community. Role playing has also become an element of training employees and managers in this increasingly relevant topic that cuts across all industries and most notably into government and Hollywood.

Mandatory annual sexual harassment training for employees in New York City is one feature of a package of legislation targeting sexual harassment in the workplace signed by Mayor Bill de Blasio on May 9, 2018. Most private employers in New York City will be required to conduct annual sexual harassment training for employees beginning April 1, 2019.

Further, the New York City Human Rights Law now includes new provisions applicable  to small employers (those with fewer than four employees) with respect to claims of sexual harassment. This aligns the NYC Human Rights Law with the New York State Human Rights Laws coverage of sexual harassment claims.

Further, effective immediately, the statute of limitations for filing harassment claims with the New York City Commission on Human Rights is three years, rather than one year, from the date of the alleged conduct.

In addition to also imposing training requirements, New York State law will impose policy requirements and affect the use of nondisclosure agreements in the context of settling sexual harassment claims against employers.

The recent significant amendment to the Internal Revenue Code, Public Law No: 115-97 (the Tax Cuts and Jobs Act) disallows as “necessary and ordinary business expenses” deductions of payments in settlement of an action for sexual harassment or sexual abuse, if the settlement or payment requires the parties to enter into a non-disclosure agreement. This includes the payment of attorneys’ fees related to such a payment or settlement, if they are included in the scope of the non-disclosure agreement.

The presenters also discussed the impact of such claims in future policies covering EPL, GL and D&O liabilities, led a discussion of hypothetical fact situations requiring smart management in the workplace and speculated as to the eventual expansion of the scope of laws designed to inhibit such acts by prohibiting settlements of actions for gender discrimination in compensation and the expansion beyond sexual harassment to other forms of harassment.