#MeToo Challenges Confidentiality and Nondisclosure Agreements

#MeToo Challenges Confidentiality and Nondisclosure Agreements

By:  Ann Fromholz

May 9, 2018

This article was originally published in Los Angeles Lawyer.

Revelations about sexual misconduct in the workplace have dominated the national conversation in recent months. In early October 2017, The New York Times and The New Yorker published detailed exposés regarding the alleged serial sexual abuse of women in the entertainment industry by producer Harvey Weinstein and an elaborate cover-up system that included secret payoffs, legal threats, nondisclosure agreements, and other intimidation tactics. The reports, along with an increased number of victims willing to put their names “on the record” (whether in the press or on social media), cracked open a floodgate of allegations against powerful men across industries, including hospitality, journalism, tech, and law.

In mid-October 2017—less than two weeks after the Weinstein stories were published—approximately 140 women, including state legislators, senior legislative aides, and lobbyists, signed on to a letter complaining of rampant sexual misconduct in California’s capitol. The letter described groping, other unwanted sexual advances, and quid pro quo sex harassment by men in positions of power in the state legislature.

The #MeToo movement has exposed untold numbers of allegations of sexual harassment and resulted in serious consequences for the alleged perpetrators, ranging from criminal investigations to job loss or public disgrace. Yet, there are many more cases that have not seen the light of day (or social media) because of private contractual obligations and the fear of legal retribution.

In the wake of this cultural reckoning, more people (and law- makers, in particular) have begun to question the use of nondis- closure agreements and confidentiality agreements in cases of sexual assault or harassment. Do the provisions that buy secrecy enable harassers and permit continued abuse?

Confidentiality Provisions

Confidentiality provisions are a common and material component of nearly every settlement agreement resolving a legal dispute. In settlement agreements regarding an employee’s allegations of sexual harassment or other unlawful discrimination, a confidentiality provision frequently prohibits the employee from disclosing to anyone any details about the settlement or any facts that led up to the settlement. Exceptions may be negotiated for disclosures to the employee’s spouse, attorneys, or tax advisors. It is not uncommon for these provisions to be one-sided—in other words, only the complainant is prohibited from disclosure. Sometimes, these provisions also provide an exception for the employee to be able to testify truthfully if subpoenaed for deposition or trial (but sometimes they do not).

In other cases, the lawyers negotiating these confidentiality provisions on behalf of the defendant organization or employer may try to extend the confidentiality provision to the lawyer representing the complainant. A provision preventing the lawyer from representing other employees with complaints against the defendant or employer, however, may be an unlawful restraint on the attorney’s right to practice law.

Under Title VII of the Civil Rights Act, settlement agreements in employment cases that prohibit employees from filing charges with or assisting the Equal Employment Opportunity Commission (EEOC) in its investigations are unlawful. As the U.S. Court of Appeals for the First Circuit explained: “[T]he EEOC acts not only on behalf of private parties but also ‘to vindicate the public interest in preventing employment discrimination.’” Therefore, settlement agreements that prohibit employees from filing charges or assisting with investigations could impede the enforcement of Title VII. The First Circuit explained that “[i]n many cases of widespread discrimination, victims suffer in silence. In such instances, a sprinkling of settlement agreements that contain stipulations prohibiting cooperation with the EEOC could effectively thwart an agency investigation.”

In December 2017, amidst the barrage of revelations regarding continued sexual misconduct across industries—and related cover- ups—EEOC Commissioner Chai Feldblum said that the EEOC will be closely watching settlement agreements to ensure that such agreements do not prohibit employees from filing an EEOC charge relating to sexual harassment (or to any other protected status). “It is important for employers to know that we are looking at these agreements,” Feldblum told Reuters. Feldman stated in the same interview that the EEOC will be scrutinizing settlements that include nondisclosure agreements, in order to ensure that accusers are not being unlawfully barred from filing complaints with the commission.

A confidentiality provision is generally a material—and, so far, lawful—part of a settlement agreement that protects an employer’s interests. To many employers and their counsel, the absence of a confidentiality provision in any settlement agreement could be a deal breaker. However, the employer must be careful in drafting the language. The confidentiality provision should make clear that, despite the confidentiality obligation, an employee is still allowed to file a charge with the EEOC (or to participate in an EEOC investigation).

Nondisclosure Agreements

Aside from confidentiality provisions entered into as part of a settlement of a claim, some employers require their employees to sign nondisclosure or non-disparagement agreements as a condition of employment. These clauses can also be quite broad. For example, The New York Times reported that “Mr. Weinstein enforced a code of silence; employees of the Weinstein Company have contracts saying they will not criticize it or its leaders in a way that could harm its ‘business reputation’ or ‘any employee’s personal reputation,’ a recent document shows.”

Preemployment nondisclosure agreements are prevalent in the entertainment industry where salacious details about the private lives of public figures can easily be sold to tabloids for a significant profit. These types of nondisclosure agreements are also common in positions of employment related to public figures in other fields.

Confidentiality agreements concerning trade secrets and other proprietary business information have a legitimate business purpose in protecting a company’s profitability and commercial investments. How- ever, recent revelations about the potential for misuse and abuse of mandatory confidentiality agreements in employment have opened a discussion about whether and when broader agreements relating to confidentiality and nondisclosure might be contrary to public policy or law.

Broad non-disparagement or nondisclosure agreements may run afoul of federal labor law, for starters. The National Labor Relations Act (NLRA) makes it unlawful for employers to prevent workers from talking about the terms and conditions of their employment. Section 7 of the NLRA protects the rights of workers to engage in concerted activity. This activity is known in labor law parlance as protected concerted activity, and the protections of Section 7 apply to both union and nonunion work- places.

The National Labor Relations Board (NLRB) has held that discussions of, and gripes about, wages are protected concerted activity. Even individual complaints that employees make to each other—without any intent to engage in group action—are per se protected under the NLRA. In recent years, the NLRB has emphasized that employee complaints on social media about their workplaces are protected concerted activity. Specifically, the NLRB held that an employer may not maintain a policy that prohibits employees from making disparaging, false, or misleading statements on social media and elsewhere.

This NLRB rule also means that an employer may not prohibit an employee from making complaints about sexual harassment on social media or elsewhere. What then of non-disparagement provisions that are in some employment con- tracts? They are prohibited, too. Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the NLRA. It is an unfair labor practice—a violation of Section 8(a)(1) of the NLRA—for an employer to require its employees to agree not to “publicly criticize, ridicule, disparage or defame” a company or its “directors, officers, shareholders, or employees.”

Despite this prohibition under federal labor law, some employers require such non-disparagement or nondisclosure agreements to be signed as a mandatory condition of employment. Yet, California Labor Code Section 432.5 provides that employers cannot compel an employee to agree, in writing, to any term or condition known to be prohibited by law.

The provisions also might be unconscionable and therefore unenforceable under California law because of an imbalance of power between the employer and the employee or if the employee did not have a meaningful opportunity to negotiate the provisions. Unconscionability has both a procedural and a substantive element: “[T]he former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” In addition, a person who is fired for refusing to sign an unlawful nondisclosure agreement—or for violating one—may have a claim for wrongful termination in violation of public policy under California law.

Often, nondisclosure or confidentiality provisions in settlement agreements contain “liquidated damages” clauses. These clauses provide that, in the event of a breach, the damages will be set at a pre-determined amount. The liquidated dam- ages might be set at a percentage of the settlement amount or might require that the plaintiff return the full settlement amount in the event of a breach. For example, CNN reported on one such case a few years ago in which the plaintiff in an age discrimination suit lost $80,000 in settlement proceeds because his daughter posted about the settlement on Facebook in breach of his confidentiality agreement with his former employer.

Employers explain the need for liquidated damages provisions by arguing that the damage caused by a breach, while real, can be very difficult to quantify and prove. The argument against liquidated damages, however, is that they are unnecessarily punitive on occasions when a breach of confidentiality results in no provable monetary damages. Moreover, even if there are no liquidated damages provided in the contract, the threat of being forced to defend a breach of contract lawsuit is enough to deter many individuals from speaking out.

“Me Too” Evidence

Long before the hashtag, “me too” was (and still is) a legal doctrine permitting the discovery and admissibility of evidence of similar complaints of wrong-doing against the accused in California employment cases. “Me too” evidence can bolster the credibility of a complainant if witnesses testify and provide evidence about harassment that they experienced at the hands of the same alleged harasser. For an individual prosecuting harassment cases it is critical to discover whether any previous complaints were made against the same accused and how the employer responded to those com- plaints. A plaintiff likely will seek to introduce the testimony of prior complainants to bolster his or her own case.

Under California law, “me too” evidence is also relevant to the issue of punitive damages. An employer can be liable for punitive damages if prior complaints of sex harassment or assault were known and the employer failed to respond appropriately. A prominent example of this is a case from the 1990s against one of the country’s largest law firms, Baker & McKenzie, and one of its partners.19 Six women testified at trial regarding prior complaints of bad acts by the partner. The jury awarded over $7 million in punitive damages.

From a plaintiff’s lawyer’s perspective, it is difficult or impossible to get witnesses to corroborate a client’s case by way of a voluntary declaration or through an investigative interview if the witnesses have signed nondisclosure agreements. Although the witnesses might be compelled to provide testimony under subpoena, the fear of breaching a nondisclosure agreement might result in a less than forthcoming witness.

Simultaneously, as technology and the Internet have evolved, there has been an increase in the publication of deeply personal narratives through social media networks (e.g., Facebook, Twitter, and Instagram) and various blogs. There also has been an increase in “confessional” essays through sites such as XO Jane and Jezebel. This trend does not apply just to “millennials.” Many women of every generation now are using technology to publish extremely personal details about their lives, whether on “private” Facebook groups, participating in a hashtag on Twitter, contributing to a blog, or writing a book. Ellen Pao, the high-profile plaintiff in an employment discrimination suit that included allegations of sexual harassment, wrote in her memoir that she turned down significant settlement offers because she wished to tell her side of the story.20 Increasingly, the freedom to tell the story is a right that sexual assault or harassment victims do not want to sign away.

Recent Opposition

Perhaps some of the stigma of experiencing sexual assault or harassment has been stripped away by the sheer volume of recent revelations about the prevalence of this conduct in the workplace and elsewhere. Victims in previous generations may have blamed themselves or had no desire to speak of their wrongful treatment due to feelings of shame.

A prominent example of testimony that reflects this changing attitude is that of singer-songwriter Taylor Swift. Swift recently testified at a trial regarding a DJ whom she alleged reached under her skirt and groped her buttocks during a photo op. The DJ later was found to have engaged in the groping. During trial Swift repeatedly described the incident in frank and unapologetic terms (later quipping, “I’m told it was the most amount of times the word ‘ass’ has ever been said in Color- ado federal court”). When cross-examined about how she felt when the DJ lost his job because of her complaint, Swift testified, “I am not going to allow your client to make me feel like it is any way my fault, because it isn’t.” Taylor Swift’s testimony was praised by one publication as “sharp, gutsy, and satisfying.” An increasing refusal to be shamed into silence may explain the rising value of the right to speak about one’s personal experiences with sexual harassment or assault.

Since October 2017, opposition to confidentiality provisions in cases of sexual assault or sex harassment has grown due in part to a belief that such provisions may have protected powerful predators from accountability. California Senator Connie Leyva announced that she will introduce legislation in 2018 to ban confidentiality provisions in settlement agreements in cases of sexual assault, sexual harassment, and sexual discrimination.

McKayla Maroney, an Olympic gymnast, recently filed a lawsuit regarding the confidentiality provision in her sexual abuse settlement which, she argued, would have prohibited her from testifying at the sentencing hearing of her abuser. It was reported that the confidentiality clause would have resulted in a $100,000 fine to her if breached. Maroney’s attorney argued that the agreement provided she could only testify in court if subpoenaed but could be in breach of the agreement if she gave a voluntary statement as part of the sentencing hearing. It appears USA Gymnastics ceded to public pressure after an outcry about the confidentiality provision at issue. Several public figures offered on Twitter to pay this fine for Maroney and criticized the confidentiality provision at issue. The gymnastics organization later issued a statement that it would not pursue any money from Maroney if she spoke publicly about the abuse.

Most parties to a confidentiality provision do not have a high profile, however. If an employer discovers that an employee has breached a nondisclosure or confidentiality agreement, the employer can seek to enforce contractual rights under the agreement. Unless there is a liquidated damages provision, the employer likely will need to weigh the cost of proceeding with legal action against whether it can actually be proven that the breach caused any monetary damages (and whether the employer can actually recover any damages from the employee, if proven).

Even armed with a contractual right to proceed against a former employee, some employers may still opt to avoid the public relations risk of filing suit against a victim of harassment for making truthful statements in violation of a nondisclosure or confidentiality agreement. In a high-profile case, such action might do the company more harm than good. In a low-profile case involving a smaller employer, however, legal action against a former employee for breach of a confidentiality agreement likely would not receive much, if any, media attention.

Another way companies and employers

keep allegations of sexual harassment and assault secret is through the use of mandatory arbitration provisions. These provisions have also been the subject of pro-posed legislation. California Assembly-woman Lorena Gonzalez Fletcher announced plans to introduce legislation that would prohibit mandatory arbitration of sexual harassment claims.

There is no question that employers and their counsel generally place a high value on confidentiality provisions. Confidentiality provisions can not only keep a lid on alleged bad conduct but also prohibit discovery of the price a company paid to resolve the legal dispute. As noted, companies can also use these provisions to try to prevent former claimants from becoming witnesses on behalf of subsequent claimants.

Benefit to Employee

Confidentiality provisions can also benefit employees who make a claim and settle situations in which the employees want to keep the facts of the harassment quiet. A mutual confidentiality or non-disparagement clause might also benefit an employee by protecting the employee from the difficulty that going public with a complaint against an employer—or filing a lawsuit— can do to one’s job prospects. This assumes, of course, that a settlement is reached before a lawsuit (or other publicly available document) is filed or published. Many employers conduct background checks or other research on applicants to discover, among other things, if they have ever been a party to a lawsuit. If an applicant has been a plaintiff in a lawsuit alleging dis- crimination or harassment against a former employer, this might be a deterrent to a prospective employer.

Some of these issues may become moot if proposed legislation prohibiting confidentiality provisions in settlement agreements of sex harassment or sexual assault becomes law. Even if such a law does not pass, however, it appears likely that there will be more protection of employees in California in the future. Outside of California, the EEOC has promised more over- sight of employees’ rights with respect to settlement agreements, despite the Trump administration’s efforts at deregulation.

The reignited conversations around sexual harassment in the workplace that began in October 2017 with the exposés on Harvey Weinstein have had many and varied consequences. These include a greater push for transparency and more people using the power of social media and journalism to shed light on issues otherwise hidden, confidentiality provisions notwithstanding.

Lawyers representing individuals in employment or sexual assault cases may start pushing back on the nature of the confidentiality provisions requested by defense counsel considering these recent developments. For example, confidentiality provisions might be negotiated so that only the amount of the settlement payment must be kept confidential, but the underlying facts leading up to the settlement are not subject to the restriction. Given the increased media spotlight, claimants may be less willing to sign away their right to tell their story. Companies, on the other hand, place a high value on confidentiality and likely will insist on confidentiality provisions until and unless a law prohibits it.

When Hollywood Offspring Land Industry Internships: “There’s a Pay-It-Forward Expectation”

When Hollywood Offspring Land Industry Internships: “There’s a Pay-It-Forward Expectation”

By: Bryn Elise Sandberg
The Hollywood Reporter
December 20, 2017

Hollywood felt pretty self-satisfied when Malia Obama famously interned on the set of HBO’s Girls in summer 2015 and then later at The Weinstein Co. (pre-Harvey scandal, of course). But generally, when powerful kids leverage their family name to get a foot in the door, the company tries to keep it quiet, as when Vice President Mike Pence’s daughter was welcomed in UTA’s agent trainee program this fall (she since has been promoted to full-time assistant).

Meanwhile, Tom Hanks’ youngest son, Truman Hanks, a student at Stanford, has secured a coveted internship at Bad Robot the past two summers, where he’s served as a production assistant on various J.J. Abrams film shoots. The twin daughters of NBC Entertainment’s Jennifer Salke and Fox 21 Television Studios’ Bert Salke interned at WME this summer; Fox Television Group chairman and CEO Dana Walden’s 17-year-old daughter spent the past two summers interning for Ryan Murphy and then 3 Arts manager Oly Obst; and former NBC Broadcasting chairman Ted Harbert’s daughter worked on the desk of Lionsgate TV Group president Sandra Stern. And in some cases, the road to a job can be as short as the family breakfast table. David Kohan’s daughter and Max Mutchnick’s niece are production assistants on the new season of their show Will & Grace.

There’s no law that prevents you (or your boss) from hiring a favorite son or niece. That’s true for any private entity (unlike the public sector). So it’s up to the company. “There are plenty of companies, Donald Trump’s among them, that do not have any sort of nepotism policies,” says employment attorney Ann Fromholz. “And some appear to make nepotism a practice.”

Still, aware of the optics and pitfalls, many Hollywood entities engage someone like Fromholz to address nepotism in their corporate guidelines. “I don’t necessarily recommend a total prohibition,” she says. “Most companies are sizable enough that you can separate the people who are related to each other.”

Still, those running Hollywood’s most coveted internship programs insist the practice of industry veterans opening doors for powerful progeny is overstated. “Look, I’m not going to tell you that there’s never a situation where there’s somebody important that we do business with where we’re not going to squint hard at the résumé to let their kid in,” says an individual with one agency program, adding that an estimated 20 percent of applicants come from showbiz families. “But most of the time, these candidates are very well-qualified.”

Take Ellie Monahan, the 26-year-old daughter of Katie Couric. She interned for HBO for four months during the summer of 2012 while still at Yale. Sources say she worked harder than everyone else at the cable network and is remembered as one of best interns the program has ever had. Monahan has since lined her résumé with more film and TV gigs: She went on to study screenwriting at AFI, then worked with Shawn Ryan on The Get Down before landing her current job as a writers’ assistant on Amazon’s new superhero drama The Boys. She’s hardly anyone’s idea of a favor hire.

“There’s something of a pay-it-forward expectation,” says a former staffer at Vanity Fair, where many Hollywood kids have spent a New York summer, including Carson Meyer (daughter of Ron), Jessica Springsteen (daughter of Bruce) and Angelica Zollo (daughter of Barbara Broccoli). “If I help your kid, maybe you’ll help me or my kid down the road. If the person ends up being a good, smart, hard-working intern without attitude, that’s just a total bonus.”

The Fish Stinks From the Head

The Fish Stinks From the Head

A number of years ago, I attended the holiday party of the firm where I worked at the time. The firm’s management committee met in Los Angeles that week, so all of the members of the executive committee attended the holiday party. Talk about awkward.

It was Friday night and I was tired from a long week of working on various harassment and discrimination lawsuits. I decided to leave the party early and said goodbye to the friends and colleagues around me. In that group was a member of the executive committee, who was from another office and whom I had never met before. He asked for a ride back to his hotel. I said, “Sure”, because his hotel was on my way back to the freeway, and because it did not occur to me that he would do anything inappropriate. Our office did not have that kind of culture.

Apparently, his office did. Or at least he did. As I drove toward the hotel, I asked where the entrance was. He pointed to the parking lot and said, “Well, you can park there if you want to come up to my room.” I laughed. Was I nervous? Was I trying to play it off as a joke? I’m not sure. I know that I managed to convey that wasn’t going to happen. I dropped him at the entrance and got home without incident.

The next day, I went to talk to my best friend in the office. He had made partner earlier that year. I told him what happened and, without hesitation, he said, “You have to tell [the managing partner].” I told him I did not want to. He said that if I did not, he would.

So, later that day, I knocked on the door of the managing partner. “Can I talk to you?” I asked. I was incredibly nervous. I really did not want to tell him. But my sister once told me that, in difficult situations like this, you should just start talking and momentum will take over. She’s right.

I told the managing partner about the creepy member of the executive committee. His reaction surprised me, in the best possible way. The first word he said? “Shit.” And then he said, “The fish stinks from the head.” I knew what he meant: if there are bad actors at the top, it ruins the rest of the organization. He had worked so hard to make sure there was no such stink in our office. And he was dismayed that such a stink had affected one of his lawyers.

I don’t know what the firm did, but I know that I never had to interact with that executive committee member again. I also know that my complaint had no adverse impact on my career. I have every faith that the managing partner of our office put the fear of god into him and anyone else who might disrupt the harmony of our office.

Keeping a workplace free from harassment requires good policies, procedures, and training. But those things cannot alone create a safe and productive workplace. The leadership must be dedicated to creating, cultivating, and protecting a harassment-free workplace, and to taking prompt action when even the slightest hint of harassment occurs.

High Court Docket: Unions, Overtime

High Court Docket: Unions, Overtime

By: Carol Patton
This article was originally published by Human Resource Executive on December 6, 2017

The Supreme Court’s decisions on two upcoming employment-law cases could end up weakening organized labor and impacting overtime for some workers, legal experts say.

Legal experts say the Supreme Court’s upcoming decisions in two employment-law cases involve a pair of hot-button topics: labor unions and overtime.

The first case, Janus v. American Federation of State, County and Municipal Employees, Council 31, challenges the constitutionality of public employees being forced to pay union dues even if they don’t support or join unions. The other case, Encino Motorcars, LLC v Navarro, focuses on whether service advisors at auto dealerships are exempt from overtime.

The plaintiff in the first case, a public-sector worker, refused to join the union but was still required to pay 84 percent of full members’ dues, which excludes fees for the union’s political activities, says employment-law attorney Ann Fromholz, founder of The Frumholz Firm in Pasadena, Calif.

“Employees have the right to decide whether to join the union and can be required to pay a fee even if they elect not to be a member,” she says. “There’s no doubt in my mind that the Supreme Court will rule in favor of the worker and against the union. This could be a big blow for public employee unions.”

This isn’t surprising considering that Justice Gorsuch, who filled Justice Scalia’s seat following his sudden death, is likely to support his predecessor’s conservative views.

If the high court rules in favor of workers, Fromholz says, union membership may dwindle, resulting in less dues and power to negotiate contracts. Such a decision could also create HR quagmires as well. For example, if a union negotiates worker benefits that would not have been otherwise offered, should nonunion members receive those same benefits? Likewise, would nonunion employees be required to pay a portion of their health insurance premiums while employers pay the entire premium for union workers?

“It’s hard to say [if this is fair] because employees do benefit from the work of unions,” says Fromholz. “If there are environments where the union is weak and doesn’t negotiate much beyond what the employee would get, it’s probably not overly fair to ask everyone to contribute.”

Other HR problems would involve worker protections, she says. For example, union employees can only be fired for cause and must receive progressive discipline before termination. However, nonunion employees at the same workplace would be employed at will and not guaranteed those same rights.

This sets the stage for possible instances of inequity, says Fromholz, and opens the door for employers to scale back benefits to ensure consistency between the two employee groups.

“Workers may be unhappy if those protections are stripped away,” she says, adding that benefits such as retirement, however, would remain intact. “That would be an issue HR would need to manage.”

Regarding the second employment-law case, Encino Motorcars, LLC v. Navarro, the U.S. Supreme Court in June rejected a 2011 final rule issued by the U.S. Department of Labor that stated that service advisors at auto dealerships are not exempt from overtime. This final rule contradicted DOL’s 1978 opinion letter, which concluded that service advisors (along with salesmen, partsmen or mechanics, according to the Fair Labor Standards Act) were exempt from overtime.
Initially, the district court dismissed this case on the grounds that service advisors were “functionally equivalent to salesmen, partsmen and mechanics,” says Lee Schreter, an attorney and co-chair of the national wage and hour practice at Littler Mendelson in Atlanta.

Since then, she says, the case has bounced between the Ninth Circuit, which deferred to the DOL’s latest interpretation and unanimously rejected the lower court’s decision, and the U.S. Supreme Court, which reversed the Ninth Circuit’s decision, finding that the DOL’s explanation for departing from the interpretation it had followed for nearly 40 years was inadequate. The case was remanded back to the Ninth Circuit, which not only upheld its decision but also opposes previous rulings made by the Fourth and Fifth Circuits and Supreme Court of Montana. Due to the courts’ disagreements, the case is back in the hands of the Supreme Court.

Ironically, Schreter says, the DOL’s “flip-flopping” won’t help service advisors, because employers can still prevent them from working overtime, reduce their hourly rate to compensate for overtime expenses or put them on commission.
“No good comes from a federal agency having dramatic swings in its interpretation of the law,” says Schreter. “It becomes very hard to comply when you have dramatic swings from one administration to the next [and] makes it very difficult for employers and employees because you don’t have settled expectations.”

Robert Brock, an attorney at the law office of Lowell J. Kuvin in Miami, supports the Ninth Circuit’s opinion but believes the U.S. Supreme Court’s decision will swing the other way. As, he says the Ninth Circuit’s persuasive argument is based on historic records dating back to ground zero for the statute.

Making service advisors exempt would be a stretch, he says, signaling a broadening of exemptions even though exemptions are supposed to be construed narrowly.

But if this occurs, he says HR professionals at auto dealerships need to review nonexempt, even borderline exempt positions.

“If there is a broadening of the construction of statutory exemptions for overtime, that’s going to affect a lot of gray area positions throughout the country,” he says. “If that happens, we’ll see more of it in the future, a loosening of the narrow construction.”

Here’s how to help if you witness sexual harassment at work

Here’s how to help if you witness sexual harassment at work

By: Meera Jagannathan, Moneyish

The most effective thing to do, one employment lawyer says, is to take contemporaneous notes.

The bystander effect is real: For instance, ousted NBC anchor Matt Lauer’s alleged sexual misconduct was “not a secret among other employees at ‘Today,’” several unnamed sources told Variety. And 16 former and current employees of Harvey Weinstein’s companies told the New Yorker the disgraced mogul’s pattern of predation was “widely known within both Miramax and the Weinstein Company.”

“Harassment law does not require (a non-management employee) to report harassment that occurs toward someone else,” Pasadena employment lawyer Ann Fromholz told Moneyish. “But is it the morally correct thing to do? Sure.” The Equal Employment Opportunities Commission encouraged employers in its 2016 task force report to incorporate bystander intervention training into their harassment prevention programs.

If you decide to take action after witnessing workplace sexual harassment, here are potential ways to help. (Not all, of course, will work in every situation or with every type of person.)

Confront the harasser. Many workplace harassers don’t even understand their behavior is inappropriate, Fromholz said. If you feel you can head straight to the source without fear of retaliation, “be specific about the conduct, be specific about the fact that it’s making people uncomfortable, and be specific that it needs to stop.” Use your judgment when deciding whether to mention the name of the person being made uncomfortable, as that could “put a target on their back”: You might say “people” are uncomfortable, for example, rather than naming specific names. “Don’t frame it as a threat,” Fromholz added. “It’s just a reasonable discussion between adults.”

Run interference. To “obnoxiously prevent there being the privacy that’s necessary for a lot of sexual harassment to happen,” said employment attorney Mary Kuntz of the Washington, D.C. firm Kalijarvi, Chuzi, Newman & Fitch, you might try gatecrashing what appears to be an unwelcome seduction in the office or at a work party. “You essentially run block for someone,” she said. “You insert yourself into conversations … You go take the seat next to the person who is trying to get the young thing to sit next to him,” she said. “You essentially don’t let them have that one-on-one engagement.”

You could also throw the victim a lifeline: “Walk up to them and say, ‘Hey, do you want to go get a Diet Coke?’” Fromholz said. “In the very worst situations, where it ends up in sexual assault, there sometimes is grooming behavior from the beginning … The person who ends up assaulting will say, ‘No, no, no, she’s fine,’ … so giving that person an option, an out, is a good possibility. You can’t promise they’ll take you up on it, but you do the best you can.”

Keep in mind, warned Kuntz, that this is “a temporary Band-Aid fix”: While you can intervene when you spot the behavior, you likely won’t be around every time it occurs.

Go to a manager. If you’re a non-management worker uncomfortable approaching the harasser — due to their personality or stature within the company, perhaps — “then the best thing to do is go to somebody in some position of authority who you are comfortable with,” Fromholz said. Notifying a member of management “puts the company on notice and triggers their legal requirement to take certain action” under Title VII, EEOC sexual harassment guidelines and state law.

Talk to the victim. You may not feel comfortable approaching them; they may not feel comfortable being approached. But if you forge ahead, be sure not to retraumatize the person, Fromholz said: Speak with empathy, realize their reaction may not be what you expected, understand they may be unwilling to talk, and don’t expect their memories of the incident to be as linear as yours. You might say something to the effect of, “Hey, I saw what happened. I wasn’t comfortable with it; I’d like to talk to somebody so that it can stop; and I wanted to talk to you first.” “Unless you’re somebody who’s trained … you’re not qualified to solve their pain,” Fromholz added.

Take contemporaneous notes. “Probably the most effective thing you can do,” Kuntz said, is to record details in real time of harassment you’ve witnessed, then make yourself available to testify should your colleague file a complaint. “Memories fade over time; even over a couple of days, you forget details,” Fromholz said. “Send a text to yourself — that’s a good way of making sure you remember the details that may become important.”

“It’s testimony like that that removes Matt Lauer … You have to have people who can say, ‘No, I saw this happen,’” Kuntz said. “That corroborating testimony helps, and it can bring permanent change as opposed to just running interference one night at a party.”

Investigating When A Complaining Employee Won’t Cooperate

Investigating When A Complaining Employee Won’t Cooperate

By: Ann Fromholz
Originally published in Law360 on October 22, 2017

Earlier this year, an executive with a real estate developer alerted the company’s general counsel that comments and rumors about her sex life that were circulating throughout the company, from hourly employees and assistants to the C­suite, were so personally and professionally damaging that she was too upset to work.

The general counsel took immediate action. He called the company’s outside employment counsel, who advised that the company needed to conduct an immediate investigation into the executive’s complaints. Because no one at the company was trained or equipped in workplace investigations, the lawyer advised that the company engage an outside expert, a lawyer whose practice focuses on workplace investigations.

As the investigator, I reviewed the complainant’s demand letter and developed an
investigation plan. My first order of business was to interview the complaining employee (which is usually the case). But when I emailed and called the executive to schedule an interview, the executive did not respond. Finally, after three attempts without a response, the executive’s lawyer responded that the executive would not agree to be interviewed.

This situation happens more frequently than one might imagine. A complaining employee, who may be the only person who can provide the details of her complaints, refuses to be interviewed. The employee may refuse because her lawyer recommends that she not be interviewed, she is too nervous to be interviewed, or some other reason. Whatever the reason, the investigator then needs to determine whether and how to investigate without the complainant’s testimony.

The U.S. Equal Employment Opportunity Commission’s existing enforcement guidance on harassment investigations requires a “prompt, thorough and impartial investigation” into complaints of workplace misconduct.[1] The guidance further provides that, “when detailed fact­finding is necessary, the investigator should interview the complainant, the alleged harasser, and third parties who could reasonably be expected to have relevant information.”

Even without an interview of the complainant, the investigator likely has enough information to determine which witnesses to interview and which questions to ask. The investigator may not know everything about the complaining party’s complaints, but likely has enough information from the initial complaint to start asking questions. The answers to those questions, from witnesses other than the complainant, will often lead to other witnesses and other questions, and eventually can provide a fairly complete picture of the situation.

The EEOC proposed “Enforcement Guidance on Unlawful Harassment” in January 2017, but that guidance is not yet final.[2] The proposed guidance provides that an investigation is effective if it is sufficiently thorough to “arrive at a reasonably fair estimate of truth.”

If, however, the investigator chooses to stop the investigation when the complaining party declines to be interviewed, the investigator risks failing in her duty to conduct a prompt, thorough and impartial investigation.

In May 2017, the California Department of Fair Employment and Housing issued new guidance for preventing and addressing workplace harassment.[3] That guidance specifically addresses the basic steps to ensure a fair workplace investigation and says that due process is the goal. The guidance provides that the investigator should interview the complaining party, “give the accused party a chance to tell his/her side of the story,” interview relevant witnesses, and review relevant documents.

The guidance also provides that the investigator “do other work that might be necessary for [her] to get all the facts,” and “reach a reasonable and fair conclusion based on the information [she] collected, reviewed and analyzed during the investigation.”

The DFEH guidance therefore makes clear that there are elements of an investigation that are as essential as the interview of the complaining party.

Once the employer is on notice of a complaint of workplace misconduct, the investigator should conduct those elements of the investigation regardless of whether the complaining party chooses to participate.
The investigator’s report will detail the efforts to interview the complaining party and will detail the other steps the investigator took to conduct a thorough and fair investigation, even without the participation of the complaining party. The report will say that the complaining party refused to be interviewed and will say that the investigator is making factual findings and drawing a conclusion without the benefit of the complaining party’s input. The investigator or the employer likely will report to the complaining party that the investigation has concluded without her involvement.

On occasion, the specter of the investigation concluding without the complaining party’s input is enough to convince an otherwise recalcitrant complainant to participate, in some fashion, in an interview.

I know of investigations where the complainant insisted on being interviewed with her lawyer present and others where the complainant agreed to respond to written questions but still refused to be interviewed. Whether to agree to those terms is a judgment call that the investigator must make, weighing the benefit of gathering facts directly from the complainant against the diminished credibility of that testimony because it was influenced or perhaps even written by the complainant’s lawyer. Of course, the report in such an investigation will reflect the relative weight that the investigator gives to the complainant’s testimony as compared to testimony from witnesses who were more forthcoming.

The reluctant or refusing complainant creates a hurdle for a workplace investigator in her path to a complete investigation that arrives at a reasonably fair estimate of the truth. But the hurdle is one that a thorough and persistent investigator can overcome, either by thorough interviews of co­workers and other witnesses and a careful review of evidence, or by allowing the complainant to participate in the interview even with restrictions mandated by the complainant’s lawyer.

The investigator’s ultimate goal is to find the facts and reach a reasoned conclusion, not to stand on ceremony regarding exactly how the complainant ought to participate.

Weinstein Scandal Widens in Hollywood

Weinstein Scandal Widens in Hollywood

By: Jake Coyle
Associated Press
October 11, 2017

As the grim scope of the allegations surrounding Harvey Weinstein continued to expand Wednesday, the organization that bestows the Academy Awards moved to distance itself from the film mogul, Ben Affleck was forced to defend his own previous actions, and scrutiny fell on who knew what about the Weinstein’s behavior over the decades it allegedly took place.

A key and potentially volatile component of Tuesday’s New Yorker expose was the claim that “a culture of complicity” has existed at both The Weinstein Co. and his previous film company, the Walt Disney-owned Miramax. “Numerous people throughout the companies (were) fully aware of his behavior but either abetting it or looking the other way,” the magazine reported.

Further scrutiny has followed the contention that Weinstein’s conduct was “an open secret” in Hollywood. Focus has turned, in part, to not just the workplace environments Weinstein operated in, but the stars who may have had some knowledge of Weinstein’s alleged behavior but who failed to raise any alarms.

Ben Affleck was called out Tuesday by actress Rose McGowan. In a tweet, McGowan accused Affleck of lying after issuing a statement that he was “saddened and angry” about the Weinstein revelations. McGowan, who The New York Times reported reached a $100,000 settlement with Weinstein in 1997, suggested Affleck knew decades ago about Weinstein’s behavior.

Actress Hilarie Burton also renewed an earlier allegation that Affleck groped her during a visit to MTV’s TRL, which she was hosting in 2003. Affleck on Wednesday tweeted an apology: “I acted inappropriately toward Ms. Burton and I sincerely apologize.”

The Academy of Motion Picture Arts and Sciences also announced Wednesday that its Board of Governors will hold a special meeting Saturday to discuss the allegations “and any actions warranted by the academy.”

Weinstein has long been a major figure at the Academy Awards, where his films have regularly won Oscars, including five best picture-winners. Weinstein personally shared in the best-picture Oscar for “Shakespeare in Love.” The film academy called Weinstein’s alleged conduct “repugnant” and “antithetical to the high standards of the Academy and the creative community it represents.”

The ongoing fallout poses potentially severe legal issues for the companies involved. The Weinstein Co., which fired its co-chairman on Sunday, has moved to continue forward with plans to change its name. In a statement Tuesday night, the Weinstein Co. board of directors strongly denied that it knew about Weinstein’s behavior.

“These alleged actions are antithetical to human decency. These allegations come as an utter surprise to the board. Any suggestion that the board had knowledge of this conduct is false,” the four-member board said in a statement. “We are committed to assisting with our full energies in all criminal or other investigations of these alleged acts, while pursuing justice for the victims and a full and independent investigation of our own.”

The board, however, includes Weinstein’s brother, Bob, the company’s other co-chairman. And several board members earlier resigned in the wake of the initial allegations of sexual harassment. That report, published Thursday by the New York Times, also detailed hundreds of thousands of dollars in alleged settlements. It’s not known if Weinstein made the payments personally or if either The Weinstein Co. or Miramax did.

Legal experts are skeptical The Weinstein Co. could have been unaware given the volume of allegations.

“Given all the information that’s coming out now, I would find it highly implausible that the board was not aware,” said Angela Reddock-Wright, an attorney specializing in employment and labor law who has represented businesses in harassment suits. “There are just too many allegations here. Unless there were settlements paid out by Weinstein from his own personal money, settlements over a certain dollar value would have presumably been approved by the board of directors.”

Veteran employment attorney Ann Fromholz said that given Weinstein’s position at the company, The Weinstein Co. would be liable over sexual harassment claims even if they weren’t aware. Between the potential lawsuits and the likely loss of business, Fromholz considers it unlikely The Weinstein Co. will survive under any name.

Representatives for both companies didn’t respond to questions.

On Tuesday, Michael Eisner, who was Disney’s chief executive during Harvey Weinstein’s tenure at Miramax, said he “had no idea he was capable of these horrible actions.” Disney purchased Miramax in 1993; the Weinstein brothers departed in 2005 to create the Weinstein Co.

“Fired (the) Weinsteins because they were irresponsible, and Harvey was an incorrigible bully,” said Eisner on Twitter.

When Does a Sexual Advance Amount to Sexual Harassment? An Attorney Explains

When Does a Sexual Advance Amount to Sexual Harassment? An Attorney Explains

By: Ann Fromholz
This article was originally published on October 16, 2017 in The Hollywood Reporter

In the Harvey Weinstein situation, an actor or crew member working on a film that he produced, or any person working at The Weinstein Co., would be an employee under the law.

The old trope of the casting couch has never really died. In recent days, it has been renewed and recast by the news about Harvey Weinstein’s alleged sexual harassment and sexual assault of a growing list of women in hotel rooms and offices across the country. It has become apparent there is no clear understanding of where the line is between harassment and a consensual relationship when something happens between a boss and employee.

The laws against sexual harassment — Title VII in federal law, the Fair Employment and Housing Act in California and the New York Human Rights Law, among others — apply to the employment context. In the Weinstein situation, an actor or crewmember working on a film that he produced, or any person working at The Weinstein Co., would be an employee under the law. But the law also applies to applicants, and women who agreed to meet with him because they hoped that he would cast them for a film likely would be covered by the laws against harassment.

The laws against sexual harassment do not prohibit all sexual conduct in the workplace. If an affair or sexual relationship truly is consensual, it can be legal. But the fact that sexual conduct was voluntary, in that the victim was not forced against her will to participate in the sexual activity, does not make the conduct consensual and legal. The central question of any sexual harassment claim is whether the sexual advances were unwelcome.

When a supervisor dates a subordinate, it is difficult to show that the advances were welcome and the relationship was consensual because of the differential in power. When people have differing levels of power, a sexual advance may feel compulsory. When a supervisor, for example, asks a subordinate employee for sexual favors, that employee could very well believe that their continued employment depends on whether they agree to the sex. The coercive nature of supervisor/employee relationships brings up a serious question of whether sexual relationships between the two parties are truly consensual.

Courts have recognized two kinds of sexual harassment. The first is “quid quo pro” — or “this for that” — harassment, where the person in the position of power promises a job benefit — a role, a job promotion, a compensation increase — if the victim submits to his sexual advances. Quid pro quo harassment also exists where the person in the position of power makes a threat of termination, blacklisting or job loss if the victim refuses the sexual advances. This is the behavior that some women allege that Weinstein engaged in. It often is easy to identify as inappropriate and unlawful.

The second kind of harassment is “hostile work environment” harassment, in which sexual conduct is so severe or pervasive that it creates an abusive working environment. This behavior sometimes is more difficult to identify as unlawful. The Supreme Court recognized this kind of harassment for the first time in 1986, in a case called Meritor Savings Bank v. Vinson. In that case, Mechelle Vinson claimed that Sidney Taylor, the vice president of the bank, coerced her to have sexual relations with him and made demands for sexual favors while at work. Vinson said that she had sexual intercourse with Taylor 40 or 50 times.

The court in Vinson decided that Taylor’s conduct amounted to hostile environment harassment. Even though Vinson and Taylor had sex multiple times and the sex was voluntary, in the sense that Taylor did not force Vinson to have sex with him, the advances and thus the sex were not welcome. The important lesson for people evaluating a situation they are in or know about is that, even if a subordinate employee has sex with her boss one time or many times, the relationship may nonetheless amount to unlawful harassment. The question is whether the advances were welcome and whether the victim by her conduct indicated that the alleged sexual advances were unwelcome, not whether her actual participation in sexual intercourse was voluntary.

Sexual harassment that creates a hostile or offensive environment is a barrier to gender equality in the workplace. The requirement that a person run a gauntlet of sexual abuse in return for the privilege of being allowed to work is demeaning and troubling. If the unwelcome conduct is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment, it is unlawful.

If the Harvey Weinstein situation teaches us anything, perhaps it will teach us that sexual conduct and sexual advances, if they are not clearly welcome, are inappropriate and probably illegal. It is up to all of us to make sure that this conduct stops and to change the culture that allowed it to fester.