The many #MeToo stories reported in the press have caused a flurry of discussion about potential changes to the legal landscape governing sexual assault and harassment. Below is a summary of proposed legislation and other potential changes to keep an eye on:
- Potential Legislation Barring Mandatory Arbitration of Sexual Harassment Claims. Bipartisan bills have been introduced in the U.S. House and the Senate prohibiting the forced arbitration of sexual harassment claims, and the Attorney Generals of every state have supported this legislation. Certain defense contractors are already prohibited from requiring pre-dispute agreements to arbitrate sexual harassment and related claims; these new proposed bills would extend the prohibition to most if not all other private employers. Depending on the scope and precision of a prohibition (and assuming it would survive court challenges), new legislation could remove a significant percentage of employment disputes from arbitration.
- Potential Legislation Nullifying Nondisclosure Agreements. Legislation has been introduced in several states (NY, CA, PA, NJ, MA, WA, and counting) to prohibit the enforcement of agreements purporting to limit harassment victims’ abilities to publicly disclose the misconduct. These restrictions would necessitate that employers take a close look at the confidentiality and nondisclosure provisions of their agreements, including severance agreements, and consider potential changes.
- Evolution of the Standards on What Constitutes “Severe or Pervasive” Conduct or “Prompt Remedial Action.” Based on the extensive #MeToo stories and their notoriety, many employers are beginning to perceive a shift in public attitude about what workplace conduct should not be tolerated. Under current case law, alleged misconduct rises to the level of actionable hostile environment harassment only if it is “sufficiently severe or pervasive to alter the conditions of employment and create an abusive working environment.” Meritor Savings Bank v. Vinson, 477 U.S. 57, 67 (1986). This standard, and the way in which it has been interpreted by courts, has traditionally excluded certain inappropriate or problematic conduct from Title VII’s scope. It would not be surprising to see EEO agencies or employee-side lawyers advocate for changes that would broaden the standard to encompass a wider range of conduct. Similarly, employee advocates may push for a more stringent definition of “prompt remedial action,” which is an element of an employer’s affirmative defense to a hostile environment harassment claim.
- Tax Deductions for Settlements of Harassment Claims Subject to Nondisclosure Agreements Have Been Eliminated by the Recent Tax Legislation. Section 13307 of the Tax Cuts and Jobs Act does this.
The Bottom Line
There are several potentially significant changes on the horizon that could impact the viability of harassment claims and potentially alter the steps employers are permitted to take with respect to such claims. Employers should stay up to date on these developments and, to the extent they become law, factor them into their practices and the manner in which they investigate and respond to complaints.