No Fleeting Hashtag: #MeToo’s Enduring Impact on Employers

This month marks two years since #MeToo emerged as a means to shine a light on sexual harassment, misconduct, and hostile workplaces. Not only do discussions that began with #MeToo continue, its impact stretches from traditional and social media to courthouses, federal agencies, and state legislatures to boardrooms and beyond.

A New Regulatory Environment

What began as a few individuals expressing solidarity with those who publicly shared stories of sexual harassment and abuse — often alleged to have occurred in the workplace — developed into a bona fide, powerful social media movement. #MeToo sparked important and arguably overdue conversations about workplace discrimination and power imbalances.

Since #MeToo began, the frequency of sexual harassment claims that employees have filed with the Equal Employment Opportunity Commission (EEOC) has dramatically increased. The agency has also stepped up enforcement of sex-based discrimination under Title VII of the Civil Rights Act of 1964.

But the regulatory repercussions don’t stop there. Since the beginning of 2018, 15 states — led by California and New York — have enacted new workplace harassment and discrimination protections, according to the National Women’s Law Center. Measures include limiting or prohibiting the signing of nondisclosure agreements in sexual harassment settlements; protecting contractors, students, and others; extending statutes of limitations; and requiring mandatory employee training.

A Board-Level Issue

Corporate boards, meanwhile, have noted how social media-fueled discussions can bring greater attention to allegations and increase costs for businesses. A decade ago, a sexual harassment lawsuit filed by an employee might have been quietly settled for a small sum. Today, plaintiffs’ attorneys — who have often bypassed the EEOC charge process and gone straight to demand letters — are emboldened to make their case in the court of public opinion. That increases their leverage to negotiate settlements that are orders of magnitude larger than historical norms.

Directors now recognize that #MeToo has potentially wide-ranging effects on reputations and bottom lines. It’s not just sexual harassment litigation that businesses must prepare for — securities class actions, derivative suits, and more can target organizations and their directors and officers.

New Approaches to Risk Management

#MeToo makes it clear that old approaches to sexual harassment and workplace misconduct are insufficient. At minimum, employers must enact strong, regularly updated anti-harassment and anti-retaliation policies and provide employees with clear guidance and multiple channels to report misconduct.

But employers need to set the tone from the top. Executive buy-in and participation in training is essential to enforcing zero-tolerance policies and preventing claims involving senior leaders.

Businesses must also consider #MeToo’s insurance implications. If you don’t already buy employment practices liability insurance, it’s time to think about it. It’s also critical to ensure that your directors and officers liability policies provide adequate protection to your organization and senior leaders’ personal assets.

#MeToo is no passing fad — it’s here to stay. Businesses need to recognize and manage the potential risks from the issues the hashtag has surfaced, while also embracing the benefits of a more tolerant workplace.

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Kelly Thoerig

Director General, Director of Civil Liability Coverage Related to Employment Practices