Harassment long tolerated in world of big business
$295 million in penalties part of bottom line
The floodgates have opened on sexual harassment claims against immensely powerful men, but high-profile dismissals, including the firing of NBC host Matt Lauer and media mogul Harvey Weinstein, remain the exception, not the rule, for companies facing harassment issues.
For many firms, paying fines for sexual harassment has been treated as a cost of doing business.
In the past seven years, U.S. compa- nies paid more than $295 million in public penalties over sexual harassment claims, according to Equal Employment Opportunity Commission records.
That sum does not count all the private settlements that typically are
“For decades, women found that this (harassing) behavior often was the price of coming to work. It was entrenched, with high performers getting a free pass.”
Noreen Farrell Equal Rights Advocates
granted in exchange for alleged victims signing non-disclosure agreements.
Even those who were hit publicly with varying types of harassment charges managed to carry on with their careers in the aftermath. The highestprofile example is President Trump. There are many others.
In 2007, when he was president of basketball operations for the Madison Square Garden-owned Knicks, former NBA star Isiah Thomas was found by a jury to have aided and abetted a hostile work environment after being accused of sexual harassment. Thomas is president of the New York Liberty WNBA team, which also is owned by Madison Square Garden, and a commentator for NBA TV.
In 2010, hard-charging HewlettPackard CEO Mark Hurd was forced to resign after HP’s board investigated his interactions with a female contractor and found inconsistencies in his expense reports. The investigation arose after that contractor claimed she was sexually harassed. One month after his resignation, Hurd landed a job at Oracle, where he is now CEO.
Senior executives at firms including Starwood Hotels, American Apparel and Baker & McKenzie have all weathered sexual harassment allegations and moved on to other high-powered positions.
In January, Fox News re-upped host Bill O’Reilly to a $25 million-a-year contract, according to The New York Times, though 21st Century Fox said later that it was aware of harassment allegations against him. O’Reilly had settled multiple cases, including one for $32 million. Twenty-First Century Fox said O’Reilly, who was forced out in April, had assured the company he had “settled the matter personally.”
O’Reilly denied allegations of sexual misconduct and said he settled to protect his children. Hurd denied harassment charges and noted HP never found any evidence of it. Thomas repeatedly denied the harassment allegations made against him.
What’s different
“For decades, women found that this (harassing) behavior often was the price of coming to work. It was entrenched, with high performers getting a free pass,” says Noreen Farrell, executive director of Equal Rights Advocates, a San Francisco-based legal support organization that focuses on women’s issues.
The recent avalanche of sexual harassment accusations has hit men across an array of industries, including entertainment, tech, media and finance.
Social media helped fuel this revolution, allowing women to take their stories to the masses and often creating a public groundswell against some of the accused, said Wall Street veteran Sallie Krawcheck, CEO of female-focused financial planning and investment firm Ellevest.
“Women have a means today to tell these stories and to reinforce each other’s stories and support each other’s stories and support each other in a way that didn’t exist when this happened to me,” said Krawcheck, former CEO of Smith Barney and Merrill Lynch Wealth Management.
She recently described her experience with sexual harassment in her book Own It: The Power of Women at Work, describing how at Salomon Brothers, her investment bank colleagues placed photos of male genitalia on her desk every day in the late 1980s. The harassers never faced any consequences for their behavior, she said.
Harassment and gender bias claims were common in high finance.
For example, Smith Barney paid out $150 million to resolve disputes with women who were allegedly mistreated in the 1990s, several years before Krawcheck joined the company.
One Smith Barney employee was accused of constructing a party room in the basement of a New Jersey branch office that he dubbed the “Boom Boom Room,” where male employees would joke about harassing women who complained about mistreatment.
In the Boom Boom Room lawsuit, plaintiffs claimed that Smith Barney tolerated “sexual harassment by its branch managers, male brokers and other male employees” and that human resource and legal departments defended discriminators and harassers and encouraged “retaliating against female employees who file complaints.”
The fact that many women have had their reputations smeared while men accused of harassment continued in their careers “just shows where women are in the power hierarchy,” said Anne Vladeck, an attorney who represented Anucha Browne Sanders, the New York Knicks executive who accused Thomas of sexual harassment. “And that’s why you see repeat offenders.”
‘Imbalance of power’
Faced with a potential he-said, shesaid duel with powerful male superiors, as well as the potential for their careers to implode, many women in the workplace have taken cash in exchange for total silence sealed by non-disclosure agreements. In some cases, they were bound by arbitration clauses not to say anything.
“This is the definition of an imbalance of power,” says Brad Hoylman, a New York state senator who is pushing legislation that would void contractual provisions when pursuing legal remedies for harassment.
“We’ve seen time and time again that in a sexual harassment case, it is the executive who benefits while the employee is often dismissed, leaving in their wake co-workers who then may face the same unacceptable behavior,” he says.
In years past, allegations of misconduct or harassment against business executives often did not see the light of day.
Among those that did, it was not uncommon for the men involved to take a slight detour before continuing their careers — often to great success.
Oracle’s Hurd: In a letter to Hurd in 2010, attorney Gloria Allred claimed the then-HP CEO subjected her client Jodie Fisher to kissing and unwanted touch- ing. Fisher, an actress and reality TV star hired by HP as an event hostess, was asked to spend the night in Hurd’s hotel room, according to the letter, which said Hurd expected “sexual favors in return for giving her work.”
After settling with Hurd, Fisher said there were “many inaccuracies” in the claims enumerated in her lawyer’s letter. HP’s board said Hurd didn’t violate its harassment policies but did say he ran afoul of its business standards by using expense reports in connection to Fisher.
A month after Hurd resigned, Oracle founder Larry Ellison crowed about hiring Hurd, who now leads $204 billionmarket cap Oracle as co-CEO (along with Safra Catz), where he took home $41 million in compensation last year. Oracle and Hurd declined to comment. Allred did not respond to a request for comment. Starwood Hotels’ Steven Heyer: In 2007, Heyer was removed as CEO of Starwood Hotels after the company’s board received an anonymous letter from a female employee saying the CEO had sent her suggestive and provocative e-mails, according to a Wall Street Journal report. Heyer denied the allegations, although an outside law firm hired by the Starwood board corroborated the woman’s claims, the Journal reported. Heyer remains on the board of financial advisory and asset management firm Lazard, which led to his tenure in 2010 as CEO of retailer Harry & David. Lazard declined to make Heyer available for comment.
Isiah Thomas. The Knicks executive was accused of sexually harassing Sanders. She alleged he called her a “b----” and a “ho” and later made sexual advances toward her before eventually firing her. A federal jury found Sanders had aided and abetted a hostile work environment and fined the Knicks organization for firing her when she spoke up, according to court records. She was awarded $11.6 million from Madison Square Garden Co. (MSG) and Knicks owner James Dolan but later settled for $11.5 million.
Thomas, who has maintained his innocence, serves as a commentator on NBA TV and as president of WNBA team the New York Liberty. NBA TV declined to comment.
“We continue to believe that Isiah did nothing wrong,” MSG said in a statement. “In addition, the jury did not find any basis to award punitive damages against Isiah.” Martin Greenstein: In 1994, the high-powered Silicon Valley attorney and his celebrated firm, Baker & McKenzie, were hit with a then-record $7.1 million sexual harassment verdict (later reduced to $3.5 million) after Greenstein was found to have harassed temporary secretary Rena Weeks. His actions allegedly included grabbing her breasts while dropping M&Ms into her shirt pocket.
Greenstein went on to found San Jose-based trademark firm, TechMark, which he still runs. He did not respond to an email seeking comment.
What could happen
As more women share their harassment experiences, the hope among advocates is that men who observe such behavior will speak out as well.
“Real change needs to happen, but women cannot do it alone,” says Deborah Gillis, CEO of Catalyst, a global nonprofit group that focuses on women in the workplace. “We need men to make the right decisions, not when caught in a torrential media downpour or years later when the experiences of their daughters cause them to reconsider their ways.”
One way to ensure that cases of harassment make an impact on both an individual and a company is to revisit the often-required signing of non-disclosure agreements, said Sunu Chandy, legal director of the National Women’s Law Center.
Chandy noted that such documents can often keep women from connecting with others like them who are victims of the same person or company. “It’s swept under the rug, and they can’t find each other,” she said.
Arbitration agreements also keep harassment allegations out of the public eye — and the scrutiny of would-be employers.
These agreements, which are common at many companies, stipulate that any disagreements must be handled out of court. That can often allow those guilty of harassment to continue on their career path unfettered by their deeds.
“In so many cases in the past, those kinds of agreements led to payoffs that then allowed companies to reward and celebrate the men in question,” said Cindy Gallop, an advertising industry adviser. “Men may have been terminated, but because no one knew why, it allowed them to be snatched up elsewhere where they could continue harassing.”
Last summer, an attorney representing Susan Fowler — a former Uber engineer whose blog post detailing the toxic work atmosphere for women led to the ouster of CEO Travis Kalanick — filed amicus briefs with the Supreme Court urging the justices to view arbitration agreements as a violation of federal labor laws.
The sheer volume of incidents of sexual harassment cropping up daily could lead to a signal change in attitudes. Advocates said the corporate trappings protecting male predatory behavior must be dismantled.
“Everything is on the table in a way that it was never before,” said Farrell of Equal Rights Advocates. “It’s certainly a moment to seize, but it won’t happen on its own.”
“It’s not about one bad guy, it’s about the corporation and the board that protects them,” Farrell said.
She said she hopes that lawmakers looking to get the support of women voters in the 2018 election cycle will propose wholesale changes to the way government and business views sexual harassment.
“When you have respected figures topple, it creates important cracks in the armor,” she said.
“Men would often just go on (after harassment accusations), but women would often find their dreams and careers derailed,” Gallop said. “Maybe now that can stop.”
“Women have a means today to tell these stories and to reinforce each other’s stories and support each other’s stories and support each other in a way that didn’t exist when this happened to me.” Sallie Krawcheck Ellevest CEO