United States: The Import Of A Rapid, Thorough Corporate Response To Allegations Of Harassment

Summary

The increased focus on issues of harassment is putting corporate culture under a microscope. Corporate management and board members—regardless of whether the entity is private, public or charitable—must adjust the way they think about harassment in the workplace and how to respond to allegations of misconduct.

In Depth

As the #MeToo social responsibility and similar movements continue to gain momentum, it is shining a light not only on alleged misconduct by executives and other individuals in positions of power, but also on the corporate response to allegations of such misconduct. From the US Olympic Committee and USA Gymnastics to leisure companies and even charities, the media, regulators and investors are focusing on the adequacy of the response to complaints raised, including, in some cases, complaints raised many years ago.

An inadequate response can lead not only to bad publicity and reputational harm, but to corporate liability. The complainants are not the only ones seeking to hold corporations liable for unaddressed misconduct. Other stakeholders, including shareholders, are filing suits against corporations based on a drop in stock price following disclosure of allegedly unaddressed misconduct. While the viability of such lawsuits remains to be seen, the filing of such suits is likely to continue, at least for now. In addition, while there are no specific securities law requirements that mandate the reporting of harassment allegations, public companies must at least consider whether the allegations are so significant as to create legal or other financial exposure that rises to the level of a reportable event.

The board of directors, consistent with its fiduciary duty to preserve corporate assets, including corporate reputation, can and should take a leadership role on behalf of the organization in establishing a corporate culture that seeks to identify, eradicate and prevent harassment. Up-to-date compliance policies, appropriate training that includes all levels of an organization, including its board, a confidential reporting system and individual and corporate accountability are all a part of establishing such a culture. Putting such processes in place will have the effect of preventing misconduct, setting the right tone, and allowing for prompt reporting of misconduct when it occurs. Once an allegation of misconduct has been made, however, the response is critical.

In this current environment, an investigation that may previously have been handled by the human resources department may now need to be addressed through an investigation by a special committee of the board, assisted by outside counsel. Increasingly, such investigations are being handled by teams comprised of employment law specialists and members of white collar practice groups, including former prosecutors.

A special committee and outside counsel provide protections to a corporation, its management and its board that an internal investigation cannot. As an initial matter, the involvement of counsel can provide privilege protections to the investigation, which may be particularly important if outside parties, whether they be private litigants or even regulators, initiate their own investigation or file suit. Perhaps more importantly, however, bringing in outside counsel reporting to independent board members brings independence and neutrality to an investigation that may not be as easily achieved through an internal investigation conducted by other employees. Members of white collar investigative practices with experience responding to, and in many cases conducting, government investigations also bring expertise in interviewing potentially reluctant witnesses and, where necessary, making credibility determinations. Having outside counsel, as opposed to a human resources officer who may be known to the relevant employees, also emphasizes the import of the investigation to the interviewees who may be more forthcoming in a more formal setting and with interviewers they are not going to see in the hallway the next day. Outside counsel can then prepare a privileged report summarizing factual findings.

Once the investigative members of the team have completed their report, the employment experts can take the information and provide substantive recommendations regarding whether there were any policy violations and what, if any, disciplinary or other corrective action should be taken. Bi-furcating the response in this way provides a further layer of neutrality—the employment lawyer rendering the advice has been shielded from interactions with the employees involved and cannot be accused of bias towards any of them. This is also an opportunity for employment counsel to review the policies and procedures in place and make any recommendations for revisions to those processes.

Armed with an investigative report and advice from outside counsel, the board can make the decision as to whether to share any or all of the results of the investigation in response to inquiries from the media, regulators or private litigants. Given the privileged nature of the report and recommendations, it generally will not be discoverable by third-parties absent a board decision that it is in the best interests of the corporation to waive the privilege. Moreover, the mere fact that the corporation conducted an independent inquiry, supervised by independent board members and conducted by outside counsel, demonstrates a commitment to addressing misconduct allegations that, in and of itself, provides both legal and reputational protections to the corporation.

The increased focus on issues of harassment is putting corporate culture under a microscope. Corporate management and board members—regardless of whether the entity is private, public or charitable—must adjust the way they think about harassment in the workplace and how to respond to allegations of misconduct. In addition to having appropriate policies and procedures in place for preventing, identifying and reporting misconduct, corporations must consider how to adequately respond to allegations. Corporate management and board members must be counseled by the right team, be it employment counsel alone or a combination of employment experts and trained investigators who can conduct a neutral, thorough and privileged investigation and then provide recommendations and advice based on the results of that investigation. 

The Import Of A Rapid, Thorough Corporate Response To Allegations Of Harassment

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions