Employment Law Attorneys

Sexual Harassment Investigations and Settlements Must be Transparent2 min read

If a woman makes a sexual harassment complaint to her employer, should the claim and the resulting settlement be confidential? The short answer is “no.”

INTERNAL SEXUAL HARASMENT INVESTIGATIONS SHOULD BE TRANSPARENT

When an employee files an internal complaint of sex discrimination or sexual harassment, the company immediately begins an internal investigation.  However, the complaining employee will never know the result of the internal investigation and she lacks any legal rights to demand a written or verbal finding.  Employers are mandated to conduct the investigation under federal law, if the employer wants the protection of an affirmative defense that it took action to remediate the underlying cause of the sexual harassment complaint.  You would think an “investigation” would have some curative effect, but it does not.

The corporate investigation should be open for all to see how terrible a male co-worker or supervisor actually behaved toward his female counterpart.  We cannot bury our heads under the cover of confidentiality of corporate investigations, just because the legal department said so.  The only reason why companies keep corporate investigations confidential is because the company is seeking to build a case to protect itself against the complaining employee; there is no value to the employee whatsoever.

THE SETTLEMENT AGREEMENT SHOULD ALSO BE TRANSPARENT

Employers love confidentiality provisions in settlement agreements.  They and their counsel claim the company is buying confidentiality in exchange for the settlement payment.  In reality, the company is buying the release of legal claims.  Confidentiality provisions have long been a staple of settlement agreements, in particular in employment discrimination cases, because employers demand them.  Employees who complained of sexual harassment did not demand confidentiality.  Employees want public disclosure in order to signal to other employees to watch out for the alleged perpetrator so he does not repeat the offense on others.  In addition, public shaming of individuals who commit sexual harassment offenses is now the norm.

Today, Congress has taken one step closer to making confidentiality provisions illegal.  The new  Tax Cuts and Jobs Act seeks to restrain corporate tax deductions for legal fees and settlements related to sexual harassment claims.  In essence, if a corporation wants a tax deduction it has to make the settlement of sexual harassment cases public and not confidential.   If the company seeks the confidentiality clause in the settlement agreement, they are prohibited from taking the deduction.

See a similar discussion on the same topic at #metoo Sexual Harassment Laws Are Broken.

If you have employment law questions or need help with specific workplace issues, contact Carey & Associates, P.C. Our employment lawyers can consult with you regarding your issue and offer guidance on next steps.