By: Ann Fromholz
Originally published by Law360 on April 24, 2017.
When a major star and moneymaker has a history of sexually harassing employees, the company may have to choose between protecting the star and handling the employee complaints appropriately.
For any responsible company, there is no choice but to handle the complaints properly.
In this case, the company went the other way, which should serve as a lesson to other companies because Fox did not eliminate the problem, it only allowed it to fester in a way that ultimately ruined the star, further eroded the company’s reputation and left far too many victims along the way.
As the situation recently came to a head, Bill O’Reilly, the subject of the complaints — which saw payouts of at least $13 million to at least five employees — dug a deeper hole for himself as well as the network by making Trumpian statements — proffering alternative facts to suggest no such scandal existed.
“In my more than 20 years at Fox News Channel, no one has ever filed a complaint about me with the human resources department, even on the anonymous hotline,” O’Reilly wrote on his website as the news of sexual harassment allegations against him grew.
To be fair, any company can have a Bill O’Reilly in its midst. The question is whether the company does the right thing once it realizes what’s going on. As a workplace investigator who routinely gets called in when HR departments have a complaint that’s too hot to handle, I can recognize how, in Fox’s case, the company went outside the lines. As word surfaced that O’Reilly was making unwanted sexual advances toward female colleagues, Fox acted more like a wingman than a policeman.
A company’s duty to investigate possible sexual harassment starts well before a lawsuit is filed. It starts before a formal internal complaint is filed. The duty to investigate possible harassment, and to take steps to stop the harassment if it does exist, begins when the company is “on notice” of the potential harassment.
Courts have made clear that an employer is on notice when it knows or should know of harassment. [See Nichols v. Azteca Rest. Enters., 256 F.3d 864, 875 (9th Cir. 2001); Fuller v. City of Oakland, 47 F.3d 1522, 1528 (9th Cir. 1994)]. The Equal Employment Opportunity Commission guidance on investigating harassment provides that, “[a]s soon as management learns about alleged harassment, it should determine whether a detailed fact-finding investigation is necessary.” The employer then has an “obligation to take prompt effective steps that will end current harassment and deter future harassment by the harasser or others.” [See Nichols, 256 F.3d at 875, 47 F.3d at 1528.]
When is a company like Fox News on notice of potential harassment? Articles about O’Reilly, former Fox News chief Roger Ailes, and the culture at Fox News report that other Fox News executives were well aware of O’Reilly’s (and Ailes’) conduct. The company, therefore, was on notice and should have investigated the possible harassment by O’Reilly and Ailes, and the existence of a “culture of harassment” when it first learned about it, regardless of whether or when anyone complained.
Picking the Right Investigator
After Wendy Walsh, a Los Angeles talk show host and former frequent guest on “The O’Reilly Factor,” complained of harassment by O’Reilly, Fox News parent 21st Century Fox asked Paul Weiss Rifkind Wharton & Garrison LLP to investigate. Paul Weiss is the same firm that investigated the sexual harassment complaints against Ailes in 2016.
The EEOC guidance on harassment investigations provides that “[a]n employer should set up a mechanism for a prompt, thorough, and impartial investigation into alleged harassment.” Companies often are inclined to hire the employment lawyers who regularly represent them when the need for an investigation arises. However, such a choice can invite allegations that the investigators are not impartial and that they have a conflict of interest. In addition, if the company’s regular law firm conducts the investigation, that firm might be precluded from representing the company if litigation arises and the investigation is called into question. Therefore, a company should consider hiring an independent investigator, a lawyer who is trained and experienced in workplace investigations, but who has not represented the company in the past.
Walsh’s lawyer, Lisa Bloom, is less than satisfied with the choice of Paul Weiss as investigator. She alleged that, because Paul Weiss has represented Fox News before, the firm has a conflict and should not serve as the investigator. She asked that Fox News assign the investigation to someone else. Fox News declined to do so.
There are many factors that go into choosing the right investigator for the job. Impartiality is an important one, but the appearance of a conflict of interest evidently did not carry significant weight to Fox News when it made the decision to hire Paul Weiss, perhaps because the statute of limitations has run on Walsh’s claims and she cannot sue [Nichols v. Azteca Rest. Enters., 256 F.3d 864, 875 (9th Cir. 2001); Fuller v. City of Oakland, 47 F.3d 1522, 1528 (9th Cir. 1994)].
A Big Star or Rainmaker Should Not Be Immune From Discipline
The New York Times reported — in an article that led to O’Reilly’s eventual departure on April 19 — that Fox News paid $13 million to five women who made claims of sexual harassment against O’Reilly. But his harassing conduct apparently went beyond those cases. Since that New York Times article, numerous other women have come forward with reports of harassment by O’Reilly.
The EEOC guidance, and case law, require an employer to take “immediate and appropriate corrective action, including discipline, whenever it determines that harassment has occurred.” The corrective action “should be designed to stop the harassment … and ensure that the harassment does not recur.
We do not know whether Fox News took any corrective action with O’Reilly as it paid out millions because of his conduct. We do know that the corrective action, if there was any, did not have the required effect of stopping the harassment.
At least one woman who complained to Fox News about O’Reilly says that she was told the network would not do anything because O’Reilly made too much money for the network. The New York Times reported that, from 2014 to 2016, “The O’Reilly Factor” generated more than $446 million in advertising revenues for Fox News. O’Reilly was the highest earner for the network.
This is not the first time an employer has decided not to take action against a superstar employee, even when that person repeatedly has engaged in clearly harassing conduct. Nineteen years ago, a jury awarded a secretary named Rena Weeks nearly $4 million for harassment she suffered at the hands of a powerful partner at the law firm Baker & McKenzie [Weeks v. Baker & McKenzie, (1998) 63 Cal. App. 4th 1128]. The conduct that the partner directed at Weeks was not isolated. The case included assertions that the partner had harassed as many as 10 other women before, and that — like Fox News — the firm turned a blind eye to this conduct.
The decision not to discipline an employee because they’re a star, because they make a lot of money for the company, or because they are powerful runs counter to the legal requirement. A company should hold every employee, from entry level to senior executive, to the same strict policy against harassment. If an investigation finds that harassment has occurred, the company should take action to stop that harassment and ensure it does not happen again, regardless of who the harasser is. Failure to do this likely exposes the company to increased liability.
The case of Fox News and Bill O’Reilly most likely is not finished, but it already should serve as a cautionary tale to employers who are concerned with legal compliance and with keeping their workplaces safe for all workers.