Erika Hayes James

Sexual Harassment in the Workplace: A Risk Without Equal

Over the past year, sexual harassment became a defining issue for our times.

On October 5, 2017, The New York Times published an investigation that revealed sexual misconduct allegations against Hollywood mogul, Harvey Weinstein, dating back to the 1990’s. Within months, that story had ignited an industry-wide reckoning and a global public backlash fanned by traditional mass and social media.

Weinstein today faces a slew of criminal investigations and possibly jail time. Fired by his company, Weinstein Co., he has become an industry untouchable. And he is not alone. 2017 saw an unprecedented number of household names accused of sexual harassment. Matt Lauer, Charlie Rose, Roger Ailes, Bill O’Reilly and Kevin Spacey are just a few the industry’s stellar players whose careers have apparently been extinguished by allegations of sexual misconduct.

Meanwhile, the #MeToo social media movement had a galvanizing effect around the world. The slogan was coined two decades ago by U.S. civil rights activist, Tarana Burke, to de-stigmatize abuse sufferers.

It was shared in October 2017 on Twitter by actress Alyssa Milano, a Weinstein accuser, and quickly went viral, reaching scores of countries and millions of users within days.

Reaction from the industry has been swift. Studios and TV networks have been fast to distance themselves from high-profile figures accused of harassment. Canceled films and TV series are leaving the industry with hefty bills to pick up; the Spacey scandal alone is estimated to have cost Netflix $39 million in film and series cancellation fees.

The scale and speed with which accusations and responses have flooded the public consciousness point to two things: the ingrained and intractable nature of the problem itself; and the emergence of a tipping point – a shift in culture and attitudes that suggest that we might be at a pivotal moment in corporate history.

Discrimination lawsuits rank among the leading crises faced by business leaders in the United States. Of these, sexual harassment allegations pose the single greatest threat to corporate reputation. That was a primary finding of “Diversity Crisis: How Firms Manage Discrimination Lawsuits” – a paper by me and my colleague Lynn Wooten, now Dean at the Charles H. Dyson School of Applied Economics and Management Cornell University, in the fall of 2006.

When a firm was accused of discrimination its initial response would be denial. This would, in time, yield to some acceptance of responsibility and then to settlement. It took them much longer to accept responsibility. In fact, the companies in the study were actually more prone to move to a retaliatory stance directed not only against the legal process but also oftentimes against the plaintiffs themselves. While sexual harassment disputes were not the most frequent, they nonetheless took a disproportionately longer time to settle than any other type of claim.

Race and sex-based allegations – the most common discrimination cases – were typically resolved between 33 and 36 months. Sexual harassment suits, however, were taking an average of 49 months – more than one year longer – to reach a settlement.

In other words, companies accused of sexual harassment were spending just over four years, on average, to settle with plaintiffs. Four years of denials, rebuttals, trenchant negotiations – and, inevitably, spiraling costs to the firm.

The longer a discrimination case took to resolve, the longer it remained in the public domain. And the longer it was exposed to scrutiny – and negative publicity – from the press and from interested parties. Sexual harassment allegations mobilize stronger feelings, more antagonistic engagement with activist groups and plaintiffs and played out longer in the public arena, thus, sparking increased public interest and driving greater sensationalism of the cases.

Over the past year, Wooten and I considered how our original findings may be coalescing in the new wave of sexual harassment accusations – a sea change in attitudes driving an unprecedented reckoning for the world of business and, in particular, entertainment.

And it has happened very fast.

Undoubtedly the most significant of these is the scandal that has engulfed WeinsteinTheNew York Times published an exposé in October 2017 alleging that Weinstein had reached at least eight legal settlements over sexual harassment dating back over three decades. The case rocked Hollywood, not least because of the scale of the accusations against the producer and the celebrity profile of those making the allegations.

Within days of the report going to print, Weinstein, whose credits included a slew of Oscar-winning movies, was fired by the board of his company, Weinstein Co. as it emerged that his allegedly inappropriate conduct with women was an “open secret” in the industry.

A week later, on October 11, the British Academy of Film and Television Arts announced it had suspended Weinstein’s membership. Three days later, the organization behind the Oscars voted to expel him.

As the allegations continued to stack up against the mogul, key figures and politicians were quick to sever their ties – among these, a number of senior members of the Democratic Party to whom Weinstein had been a noted campaign donor.

On October 30, the Producers Guild of America banned Weinstein for life. In less than 25 days, the downfall of one of Hollywood’s most powerful figures was complete.

Consider again Matt Lauer, Charlie Rose, Louie C.K., Kevin Spacey and Bill O’Reilly. In 2017 a new paradigm emerged: no career was too big to topple. Lauer, Rose, Cosby, O’Reilly and Spacy have gone from media darlings to industry pariahs.

Employers have been fast to fire, replace and sever ties with them. What Hollywood seems to have understood is what we warned of in 2006. In their haste to manage the contagion, studios and networks have grasped that the slur of sexual harassment has the capacity to damage reputation unlike any other.

Between October 1, 2017, and December 31, 2017, The New York Times reported that no fewer than 71 men with an estimated net worth of as much as $1 billion saw their careers flat-line.

In 2018 there is a sense that we may have arrived at a tipping point in terms of sexual abuse and harassment. To understand why this is happening now is first to understand the scale and the endemic nature of the problem itself. And this is becoming increasingly clear as the volume of people speaking up continues to grow.

Public awareness of the issue is, of course, nothing new.

Our research established sexual misconduct cases had enormous potential to mobilize wide-spread stakeholder activism in support of victims, and that these groups were prepared to engage aggressively with organizations. What that research could not have anticipated was that in 2018 the power of social media could viralize this kind of activity into a global phenomenon.

Milano, a Weinstein accuser, used the #MeToo hashtag on Twitter to encourage other women (and men) to share their experience of sexual violence. Within 24 hours the message had reached 500,000 people.

By November, Twitter confirmed that 1.7 million tweets had been created worldwide using the hashtag. Facebook, meanwhile, confirmed to CBS News that in the 24 hours following Milano’s tweet, the hashtag had appeared in a stunning 17 million posts and comments.

Thus, a beat change in attitudes and tolerance that began in Hollywood is spreading to other sectors as we go further into 2018. It seems 2017 will go down as a landmark year in the fight against sexual discrimination and harassment in the workplace. It has ushered in a new era of awareness and activism that represents a pivotal moment.

And there is an opportunity here for business leaders to be part of this change; to intensify focus instead of turning a blind eye. To lead the solution instead of dealing with damage control.

The entertainment sector has been a lightning rod for sexual harassment, but all sectors are vulnerable to this issue in today’s global economy where diversity is a key business asset.

Armed with these insights, business leaders today can make a choice: to wait to be called out and suffer the consequences. Or to be proactive in tackling sexual misconduct within their organizations.

Leaders need to ensure that they are doing what it takes to:

  • Prevent harassment from taking place
  • Create a culture where harassment cannot thrive
  •  Resolve issues effectively when they do occur

There are a number of significant, effective and concrete measures that firms that can take to be proactive, including:

  • Enacting and comprehensive anti-harassment policies
  • Ensuring policies are communicated and are accessible to all employees
  • Clearly defining what harassment means
  • Clearly define complaints, processes and procedures
  • Define investigation procedures that defend the rights of the accuser and the accused
  • Define anti-bias measures
  • Articulate and enforce measures to ensure the well-being of complainants – including workplace safety measures: schedules, workspaces, escorts, etc.
  • A statement of zero tolerance in cases of retaliation against accusers
  • Commitment to investigating all complaints fairly and transparently

For business leaders and decision-makers there is a clear imperative.

It is incumbent on leaders to set the tone at the top: to model transparency and integrity, while making the commitment to abide by policies and strategies to be implemented at every level of their organization.

Click here for the complete report on our research.

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