In the 26 years since the Anita Hill hearings focused national attention on the issue of sexual harassment in the workplace, significant progress has been made. Most employers take seriously allegations of sexual and ethnic harassment and show little tolerance when presented with credible cases of abuse.
However, in situations where the accused are “rainmakers” — individuals on whom the success of the business depends — too many companies sweep allegations of predatory behavior under the rug. That’s in part because of the use of nondisparagement or nondisclosure clauses in settlement agreements (called NDAs), which pay out substantial sums to accusers in exchange for their silence.
NDAs have become more common in number in recent years and are especially prevalent in the entertainment and media industries. As the cases of Harvey Weinstein, Bill O’Reilly and others show, the use of NDAs threatens workplace safety and morale, by giving repeat offenders impunity to victimize others. The federal government can help to curb these abuses — by exercising regulatory powers it already possesses.
In the wake of the Weinstein scandal, some lawmakers have called for bans on companies’ use of NDAs in harassment cases. But in and of themselves, NDAs are not necessarily harmful and should not be prohibited as such. Confidential settlements are often necessary for cases where the facts are unclear — because there are no third-party witnesses — or where accusers are reluctant to go public and jeopardize their careers.
In such instances, a resolution providing some compensation to the accuser may seem to be the best that can be had in the circumstances. The problem is that such resolutions also enable repeat offenders to continue their abusive, unlawful conduct.
That’s why regulators must step in. The federal Equal Employment Opportunity Commission has the authority, without need for new laws, to require employers to provide data on the number of settlement agreements they have entered into involving allegations against particular employees. In the first instance, identities would not need to be revealed. When a pattern of repeated settlements emerges, the agency could intervene, by opening an investigation or filing a commissioner’s charge (which does not require the accusers themselves to file formal charges).
Companies would then face the possibility of a government lawsuit, in which the EEOC would obtain discovery of all claims of abuse involving the particular employee and seek substantial compensatory and punitive damages from the employer. The government could also pursue possible injunctive relief against patterns of misconduct. In some states, the lawsuit could seek damages against the offenders themselves.
The mere threat of government action could have a deterrent effect. Faced with the prospect of litigation, companies will be more likely to act swiftly against repeat offenders without waiting for the EEOC to get involved.
With serial offenders, the benefits of confidentiality are outweighed by the need to prevent them from violating the rights of workers to be free of sexual, racial, and ethnic harassment. If employers can’t protect their workers from abuse, it’s incumbent on the government to do it for them.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.