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Since the passage of the Civil Rights Act of 1991 bolstered the ability of employees to sue their companies for discrimination, an industry has emerged to help businesses deal with sexual harassment. Corporations spend hundreds of millions of dollars a year on training programs and management workshops aimed at stamping out the scourge in the workplace. There are companies that investigate complaints for employers and cadres of lawyers standing ready to litigate cases or negotiate settlements. None of this has fixed the problem. Employers have just gotten better at keeping it under wraps.
While the number of sexual harassment charges filed with the U.S. Equal Employment Opportunity Commission have been going down since 2008—falling to 11,717 in fiscal year 2010 from a 1997 peak of 15,889—lawyers say those figures are misleading. The reason: More companies are requiring new hires to agree to arbitrate complaints, including sexual harassment, as a condition of getting a job. Arbitration proceedings are usually confidential, and settlements are secret. “Just looking at the number of claims filed doesn’t have the same meaning it did 15 years ago,” says Los Angeles lawyer Gloria Allred. “In mediation, no one even knows about the fact that there was an allegation, except the opposing parties. I’m left with burning secrets I can never disclose.” Allred has made a career out of representing women with claims against high-profile men, including Tiger Woods and Arnold Schwarzenegger. A current client: one of the four women who have accused Republican Presidential candidate Herman Cain of harassing them while he was head of the National Restaurant Assn. Cain has denied the accusations.
There has been progress in eradicating workplace harassment since the 1990s, when Cain’s accusers say the incidents took place. Companies are much more likely to take action against harassers than they were 20 or even 10 years ago. “Employers have gotten more harsh about how they deal with it,” says Laura Schnell, an attorney at Eisenberg & Schnell in New York who has represented employees in sexual harassment cases since 1985. “If they can verify that something happened, they do fire people.”
There have also been shifts in the types of claims. Instead of egregious harassment—where sex is demanded of an employee who wants a promotion, raise, or to retain a job—there are more complaints from employees about bosses who make sexual remarks or send inappropriate e-mails and text messages, says Joe Harkins, a litigator at Littler Mendelson in Washington who defends companies. And with more women in management positions and employees who are openly gay, complaints filed by men against both male and female bosses have increased. In fiscal year 2010, 16.4 percent of EEOC complaints were from men, up from 11.6 percent in 1997.
One measure of how intractable the issue is: In a 2010 survey of 460 companies by the Society for Human Resource Management, 36 percent of respondents said that at least one employee had filed a harassment claim in the previous 24 months. Only 18 percent of the companies surveyed said claims had declined, 57 percent said the number of claims had remained the same, and 25 percent said the complaints were increasing. There are no cumulative data available on what U.S. companies spend on harassment prevention, but it adds up. Reid Bowman, general counsel for workplace compliance training company ELT, says the training videos his firm produces for corporate clients cost between $2 and $50 per employee.
About 59 percent of companies polled by the SHRM offered training at least every other year; 82 percent of those required it of all employees. A 2004 California law requires sexual harassment training every two years for businesses with more than 50 employees.
The EEOC runs about 10 large training events each year devoted to sexual harassment prevention, according to Nicholas Inzeo, the commission’s director of field programs. It holds 350 to 375 sessions at individual companies. “There are still numerous examples of egregious sexual harassment incidents in the workplace each year,” he says. “There are far too many for all the work and training that has gone into this area.”
One upside in the shift to arbitration is that it helps victims get a faster resolution, says Cyrus Mehri, of Mehri & Skalet, who has represented clients with sexual harassment and other claims against companies such as Morgan Stanley (MS) and Wachovia. Yet Mehri worries that the bias toward mediation may be protecting perpetrators. He says that one case he handled, in which he negotiated a settlement on behalf of a woman executive at a finance company who refused to agree to sex to get a promotion, “might be one of the largest sexual harassment settlements in U.S. history and no one knows about it.” His client left the firm and her career is now “blossoming,” he says. “But I knew when we signed that document there was going to be another victim, because if you have that tendency, it’s not going to stop with one settlement, and all the company was doing was writing a big check.”
The bottom line: Sexual harassment claims are down, but the stats are misleading. More cases are being privately arbitrated.