Corporate America Is Moving in the Wrong Direction on Sexual Harassment Transparency

Corporate America Is Moving in the Wrong Direction on Sexual Harassment Transparency

Since last year, the #MeToo movement has blown a hole in the shroud of secrecy that has long surrounded the scourge of sexual harassment at companies of all forms, sizes, and industries, both in the US and around the world. Yet just as the public consciousness of this issue is growing, more sexual harassment complaints are being handled behind closed doors than in the past. The US Equal Employment Opportunity Commission and equivalent state agencies received 41 percent fewer complaints in 2017 than they did in 1997, Bloomberg’s Jeff Green points out—not because fewer employees are getting harassed, but rather because companies have become much more likely to handle these matters internally:

Ninety-five percent of companies now have an in-house complaint process, the Society for Human Resource Management said in a January report. Eighty-two percent have an investigation protocol in place. …

At the company level, HR departments don’t always know the extent of their own problems. The same SHRM report found a wide disconnect between what HR sees and what employees are saying. Three out of four non-manager employees who experienced harassment said they did not report it. At the same time, 57 percent of human resource professionals said that unreported sexual harassment occurs “to a small extent.”

Companies can’t bar employees from reporting complaints to the EEOC, which investigates and makes a determination about whether there’s enough to proceed with a court case. But many employers have required employees to sign away their right to file a civil suit.

Today, many lawmakers and investors are looking to make it more difficult for companies to keep their sexual harassment complaints under wraps. The New York State Senate is working on a bill that would make eligibility for certain tax breaks contingent on companies reporting harassment complaint statistics each year, Green explains, while the California Public Employees Retirement System is considering a policy to urge its portfolio companies to disclose more information about sexual harassment settlements. A suite of anti-harassment legislation recently passed in the New York City Council, meanwhile, requires city agencies to report harassment complaints to the city government’s central administrative division, so that the city can get a better understanding of the prevalence of the problem.

New laws are also being written to prevent companies from throttling sexual harassment victims with contractual provisions like non-disclosure agreements and arbitration clauses. A bill recently signed into law in the state of Washington, which may serve as a model as other states weigh legislation of their own, bans the enforcement of these provisions in sexual harassment cases, while a bipartisan bill has been introduced in the US Congress to ban forced arbitration of sexual harassment claims. The use of NDAs is also a key focal point of an ongoing UK government inquiry into this issue.

Yet the growing legal risks are not even the main reason why companies need to be more transparent, not less, in their handling of sexual harassment claims. If you really want to create a culture that discourages harassment, you need to make clear to employees that this kind of behavior has severe consequences. The best way to do that is to make it public when it happens and to show everyone the consequences of doing it. In contrast, a hush-hush approach to these cases sends a message to would-be harassers that the organization will tolerate their behavior and protect their reputations.

If more companies are treating sexual harassment as a private issue to be resolved quietly, these companies will fail to prevent it from happening again in the future—it is not hard to draw a line from the trend in the EEOC reporting data to the explosive revelations that have come to light over the past six months, and further to the shock with which these revelations were received among corporate leaders.

It’s important to remember that even if the sexual harassment reckoning did not come to your industry last year, it almost certainly will this year, and when it does, the media, investors, and your employees are going to have a lot of questions about what your organization is doing to prevent it. Companies are worried about taking a bad PR hit if they make sexual harassment claims public, but in fact, if you deal with them transparently and show that you are taking decisive action against harassers, this is actually good for your organization’s public image. In the current environment, trying to cover up the fact that sexual harassment happens at all incurs a much bigger reputational liability.