The damaging, incalculable price of sexual harassment

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The damaging, incalculable price of sexual harassment

April 15, 2019

Women wore black at the 75th Golden Globes in support of all the women, those in the entertainment industry and those unseen and without a platform, who have endured sexual harassment or assault.

Whether the alleged perpetrator is Harvey Weinstein, Matt Lauer, Kevin Spacey or Roger Ailes sexual harassment can come at a steep price. And not just one that can be measured in dollars.

Of course, the damage for victims may never be able to be fully calculated. For companies, it has often cost millions, from settling with victims to damage to their brand.

When alleged perpetrators are prominent at their companies, employers sometimes decide it’s worth settling with alleged victims rather than getting rid of the perpetrator, Jennifer Drobac, a professor of law at Indiana University’s Robert H. McKinney School of Law. They’re sometimes powerful and profitable for the company that management decides it’s worth paying “a few hundred thousand dollars in settlements to make a problem go away,” he said. That decision often comes with one major problem: In many cases, these men continue to offend.

The total costs paid by companies in fighting or settling sexual harassment cases are difficult to calculate, partly because companies often prefer to settle out of court with the alleged victims signing non-disclosure agreements.

How has the number of sexual harassment cases changed?

The number of sexual harassment complaints has remained close to constant from the 1990s when Anita Hill made sexual harassment allegations against Clarence Thomas, who went on to be appointed a Supreme Court justice. The Equal Employment Opportunity Commission received 5,607 sexual harassment complaints in 1992 and 6,870 in 2015.

Despite workplace training, many people are desensitized to sexually inappropriate behavior, either through TV and movies, pornography and cyberbulling on social media. There has also been a spike in reported cases in the military. More men are reporting sexual harassment too. Cases in recent years have often involved men sexually harassing other men, even involving physical assaults.

Sexual harassment can cause emotional trauma and missed career opportunities for victims, not to mention costing them thousands in attorneys’ fees. It costs companies, too. Some pay thousands or even millions of dollars to victims and in attorneys’ fees.

It may not even be possible to accurately assess the total damage caused by sexual harassment, because so many of the cases are settled privately and sexual harassment is still under-reported, said Maya Raghu, an expert on workplace sexual harassment at the National Women’s Law Center, a nonprofit based in Washington, D.C.

What kind of payouts have companies made in sexual harassment cases?

The New York Times reported that Weinstein reached eight settlements with women to avoid “lengthy and costly” litigation, which were in the six figure range. But the paper also reported that Fox News paid $13 million to five women who worked at or appeared on Bill O’Reilly’s show, which ultimately led to dozens of advertisers boycotting his program.

The process varies whether the case is settled in court or privately. A woman in California was awarded some $168 million in a court case in 2012 for punitive damages, lost wages and mental anguish. She was a physician’s assistant at a hospital in Sacramento and said she experienced unwanted sexual advances and touching and inappropriate comments from surgeons and other medical staff at the surgery center where she worked.

It is believed to be the highest compensation for a victim of workplace harassment in U.S. history. In that case, the plaintiff also alleged violations of health and safety code, which may have played a part in the high settlement.

What are companies doing to protect employees against harassment?

Companies are increasingly purchasing insurance, including “employment practices liability insurance,” to cover costs associated with employment lawsuits, said David Yamada, a professor of law and the director of the New Workplace Institute at Suffolk University.

“A growing number of companies are just counting liability risk as part of the cost of doing business,” Yamada said. Some insurers are also providing training materials for companies to teach their employees about sexual harassment in hope of avoiding it, he added.

But these policies can actually help victims, if it means the company has allocated money to compensate and help them recover, Drobac said. “Even responsible employers may not have eyes in every hallway,” she said. “It may be a top executive doing it in the office, and word doesn’t get out quickly.” And if it does, people are afraid to talk openly about it.

Do federal workers receive the same as those in the private sector?

Federal workers don’t have the same recourse. The federal government caps the amount victims can receive from their employers in punitive and compensatory damages. The caps are based on size of the company. Employers with 15 to 100 employees have a cap of $50,000, and those with 500 or more have a cap of $300,000, according to the Equal Employment Opportunity Commission.

When employers and employees settle out of court, they negotiate on the amount, based on factors including the victim’s salary and how hard it would be for them to secure similar employment elsewhere, Drobac said.

Why do sexual harassment cases often go unreported?

Critics sometimes ask victims why they didn’t just quit their jobs, if the harassment was so damaging, Drobac said. But many victims don’t have alternative jobs they could take if they left, and significant financial responsibilities, she said. Plus, leaving an employer makes it hard for victims to advance in their careers, Drobac said, in a concept known as “the revolving door.”

“If you have to leave to escape sexual harassment, you’re not climbing the corporate ladder and you’re stalled in your career,” she said. “You have to start over again at the bottom rung. You didn’t get the pay raises, the training, the opportunities to shine, and you’re constantly watching your back.”

There are also psychological costs, she said. Many employees who experience harassment may actually admire the perpetrator’s career, which can impact a person’s mental health. And victims themselves, if they make formal accusations or share their story, may be shrouded in suspicion and doubt, Yamada said.

Women who are harassed at work report significantly higher financial distress two years after the incident than women who aren’t harassed, according to research from an assistant professor at Oklahoma State University.

The financial cost can also deter victims from pursuing a case. Attorneys sometimes agree to work for a low initial fee, if they believe the victim has a compelling case, she said. But finding such a lawyer can be “a hurdle,” she said. “Most working women who are just trying to make it in the world can’t afford this.”