One of the biggest film producers in Hollywood, Harvey Weinstein, has recently been dismissed by the management board of his own production company following several historic sexual harassment complaints.
To some this has been Hollywood’s worst-kept secret. Reports have emerged that Weinstein has settled up to eight harassment lawsuits previously. He also faces a string of allegations of sexual misconduct and three allegations of rape.
While this story is set in Hollywood it is equally a problem within UK businesses. Many victims of sexual harassment may feel that they cannot complain about their boss without risking their job prospects, while complaints that do come to light can often spell disaster for employers.
The cost of sexual harassment claims
How an employer manages the fallout from a sexual harassment complaint against the ‘boss’ can make or break a business financially, reputationally and culturally. Often the alleged perpetrator will want to fight their corner, if anything to protect their integrity and possibly their family life. Some will turn the tables on the complainant and claim that they are the subject of a malicious campaign.
Colleagues in the business will feel conflicted. Fellow shareholders and directors will scrutinise company articles looking for some legitimate way of suspending a wilful boss. Boardroom rifts can easily follow and lead to the ultimate destruction of a business. Directors will feel compromised in their legal duties to the business. Staff will leave and will be difficult to replace.
Tribunal claims will follow and sexual harassment complaints do not come cheap. What’s more, compensation awards are expected to significantly rise following the reassessment of the traditional ‘Vento’ bands for injury to feelings. A story of sexual harassment in the workplace is also newsworthy and is likely to be widely reported within your business sector, so the reputational costs associated with negative media coverage – and any subsequent investment into crisis communications/PR – are also likely to be significant.
Managing sexual harassment complaints
Can there ever be a Hollywood ending? The business strategy in managing a sexual harassment complaint can be crucial to minimise financial exposure and retain corporate integrity.
In our experience, taking the accused away from the business is fundamental. Preferably this is achieved with their agreement. This gives the business an opportunity to independently investigate the complaint and reduces the risk of any further harm to the accused.
If the allegations do stack up how does the business respond? Can you sack the boss? A distinction should be drawn between the nature of the allegations. Allegations of physical contact may require police involvement and are likely to limit the options open to a business if, for example, the accused is subject to bail conditions or remanded in custody. Complaints of offensive or inappropriate verbal exchanges may give a business more scope to consider disciplinary action and/or suggest that the executive agrees to an extended leave of absence. A swift apology in these circumstances can sometimes help repair a fractious relationship and it could save the business thousands at an employment tribunal.
Preventing sexual harassment claims
Invariably, the fewer steps a business has taken to avoid a sexual harassment complaint in the first place, the more it is likely to cost in settling a claim. Evidence of training can be vital to a business facing a meritorious harassment complaint. A prudent business will have trained its board and staff on discrimination and harassment issues in the workplace. A business should also have an effective procedure in place warning staff about the consequences of committing acts of harassment.
Our advice to businesses is to champion a zero-tolerance policy on acts of discrimination and harassment in the workplace. Businesses should enlist a professional to train staff at all levels about the risk of harassment and warn them about the consequences should standards not be adhered to.
Mark McKeating is a senior associate in Kuits’ employment team
