When Zelda Perkins signed a non-disclosure agreement with Miramax in 1998, she was sworn to secrecy about Harvey Weinstein’s alleged harassment of herself and a colleague. For 20 years Perkins stuck by the undertaking, which banned any publicizing of Weinstein’s unwanted advances. But at the end of 2017, she publicly broke that contract, jeopardizing her future and her bank account.
As the dust of #MeToo settles, society everywhere is being forced to confront a problem that appears to be universal. Since the unmasking of Hollywood producer Weinstein in late 2017, it has become clear that sexual harassment was occurring in workplaces across multiple industries — from the theater to law to hospitality. Even the most elevated workplaces — national parliaments — are not immune, as British MP Caroline Lucas highlighted on March 9, and WikiTribune has reported.
Lucas told BBC radio that it was “unsurprising” that behavior which should not be allowed in any workplace was happening in the House of Commons, and that the procedures for reporting harassment and bullying were not fit for purpose.
But reporting a sexual harassment case at work is complicated, difficult, and can extract a high price in both money and stress. Fearing this, many victims don’t even report their abuse. But when they do, they might end up signing a non-disclosure agreement in return for some pay-off.
Non-disclosure agreements (NDAs) contractually oblige employees to keep information confidential. Now they are cited as playing a role in silencing sexual harassment victims.
In 1998, Zelda Perkins agreed to a £250,000 ($345,000) settlement, divided between herself and a colleague in return for their silence. Perkins is now openly challenging NDAs and calling for them to be regulated. As she told the Financial Times: “My entire world fell in because I thought the law was there to protect those who abided by it. I discovered that it had nothing to do with right and wrong and everything to do with money and power.” Perkins was never even given a copy of her agreement.
Reporting a claim
But before NDAs are even on the cards, victims have three choices: report the case to local authorities, take it to their employer, or stay silent.
The first barrier to reporting sexual abuse can be ignorance of the procedure. In the United States, around one-tenth (6-13 percent) of people who experienced harassment file a formal complaint, according to a 2016 report by the Equal Employment Opportunity Commission (EEOC).
The report found anywhere from 25 to 85 percent of women said they’d experienced sexual harassment in the workplace but, on average, approximately 90 percent didn’t file a formal complaint.
Matteo Winkler, an Italian law professor at HEC Paris, says a “toxic” work environment can mean victims don’t feel safe enough to make a claim. Winkler specializes in LGBT and sexual rights and diversity. His work encompasses the U.S. as well as Europe.
Victims who do want to come forward often don’t know how to, says Winkler. A lack of transparency in the workplace is resulting in victims not knowing how to submit a complaint or claim of sexual harassment, he says.
“There is something wrong with that … something must be done internally,” said Winkler. Complaints procedures vary wildly between companies, and often lack rigor, he told WikiTribune.
Even when they do report a claim, accusers can spend weeks and even months waiting for a response. It takes 300 days on average in the U.S. for a sexual harassment claim to be evaluated, according to the EEOC. The average time for a claim to be reviewed was 295 days in 2017 (USA Today) and half of sexual harassment claims resulted in no charge, according to the EEOC. “[Claims] are completely ignored,” says Winkler.
Some companies have stepped up to the plate. Ride-sharing app Uber faced 215 cases of sexual harassment, most of which concerned the San Francisco office, after it created an anonymous hotline for staff to report sexual harassment, discrimination, bullying and unprofessional behavior. The company took no action in 100 of the cases but fired “more than 20” employees (The Guardian) on lawyers’ recommendations.
In the United Kingdom,the Equality Act 2010 protects employees from discrimination at work. This requires all workplaces to have a formal complaints procedure. However, as with the U.S., there is no requirement for a specific sexual harassment or bullying procedure.
“They vary from workplace to workplace – as do legal costs, depending on a variety of factors,” said an Equality and Human Rights Commission (EHRC) spokesperson, in an email. (The EHRC is an independent government body that promotes and enforces equality and non-discrimination laws in England, Scotland and Wales.)
Bill could be thousands
The costs for both accusers and employers can be both visible and invisible, Matteo Winkler noted. Visible costs include actual economic costs to victims and employers, and vary case-by-case, he says. The most obvious of these are lawyer fees, legal settlements and payouts to victims.
In the U.K., the legal costs for plaintiffs “could easily run into tens of thousands of pounds,” says Neil Maclean, head of UK employment at law firm Shepherd and Wedderburn.
“While it is possible for a claimant to represent themselves in the UK Employment Tribunal at no cost, commonly a lawyer is engaged. There are no statistics on the average cost of sexual harassment cases because this information is almost always private between the claimant and their lawyer,” says Maclean, who thinks the #MeToo campaign could lead to more complaints being pursued in the U.K.
In the U.S., the vast majority of sexual harassment cases are settled out of court, before a lawsuit takes place. This is typical, says Kathleen Peratis, partner and leader of a sexual harassment practice group at New York law firm Outten and Golden. But the plaintiff would end up paying anywhere between a few thousand to tens of thousands of dollars in fees, she says.
It’s common for a contingency agreement to be arranged, says Kevin Mintzer, a specialist sexual harassment lawyer in New York. Under a contingency agreement, the accuser doesn’t have to pay anything up front and legal fees are paid to the lawyer only if there is a verdict or settlement. However even in these cases, plaintiffs might still incur other costs of $15,000 to $30,000 or more on court reporters and videographers for witness statements, says Mintzer. Some cases also include witness fees for cases involving significant emotional distress and economic expert fees for cases where wages were lost.
Cases that aren’t settled early on and end up in lawsuits can cost plaintiffs millions of dollars in legal fees, Peratis says.
Third of companies dealt with claims
A 2010 study released by the Society for Human Resource Managers found that one in three U.S. companies had dealt with sexual harassment claims within the two years to 2018. Since 2010, U.S. employers have paid a total of $699 million to employees claiming harassment on the basis of their identity, according to the Equal Employment Opportunity Commission task force.
Payouts can be high. Fox News Channel’s paid out $20 million (FT) in 2016 in a lawsuit filed by former broadcaster Gretchen Carlson against former Fox News CEO Roger Ailes.
The average harassment claim settled out of court will typically cost a company anywhere from $75,000–$125,000, according to business website Workforce.
Other, less-quantifiable costs – what Winkler calls “invisible costs” – like decreased commitment and higher levels of stress are harder to put into numbers. However, sexual harassment has been shown to impact people physically, much like stress does. Over time, exposure to sexual harassment can cause health problems such as PTSD, depression, and sleep disorders Lynn Parramore, senior research analyst at the Institute for New Economic Thinking, outlined in a research paper on the economic effects of sexual harassment.
Sexual harassment can also lead to absence from work, less productivity, poor morale, and a high turnover of staff, says Winkler. “Higher turnover means basically people quit very easily, and this is of course not good for the firm.”
Keeping it quiet
Due to their confidential nature, it’s unclear how many non-disclosure agreements are currently in force. Stormy Daniels, the American stripper who says she had a brief affair with President Donald Trump in 2006, has filed a lawsuit challenging the validity of a NDA she signed at the time. She does not allege assault, but claims the NDA is invalid because Trump did not sign it.
The remedies and repercussions of breaching an NDA are usually written into the contract itself, Winkler says. This could range anywhere from a fine to a fine and the repayment of the settlement sum.
Many NDAs about sexual harassment include damage provisions – large penalties in the case that the accuser speaks out about the case. Others also contain clauses that require any complaints be resolved in private arbitration rather than a courtroom.
Once the law has been broken, however, an NDA is invalid. Taking a harassment case to court overrides a gagging order.
Apart from NDAs, there is a growing record of other financial settlements made to women who protested sexual assault. Those that have been made public include those between Weinstein and Perkins, as well as Weinstein and at least eight other women according to The New York Times.
A problem to be solved
Carrying out a claim can be “horrendous” for accusers because they have to see the accused on a day-to-day basis says Dr Victoria Brooks, a senior law lecturer at Westminster University, London, whose work focus on sexual violence cases. “Perhaps the recommendation for employers [is] that they should create some kind of distance between the complainant and the accused. But I mean, practically, it’s going to be difficult.”
A representative of the EHRC said in an email that the public body will shortly be launching “recommendations for change” [due to be published in March]. The guidelines based on evidence from employers across the UK propose recommendations for reform which will hopefully encourage better practice in workplaces. The representative also said the EHRC would “carefully consider exercising our enforcement powers, such as investigations into organisations to ensure that employees are properly protected.”
If that doesn’t keep companies in check, Professor Winkler suggests making companies publicly declare settlement costs incurred from harassment cases to combat misconduct by making companies take responsibility. Authorities could even punish companies with evident harassment issues, he said.
“The government should stop working with firms that have a sexual harassment problem, or a sexual discrimination problem. So if you have a bad reputation, the government shouldn’t give you contracts to work with.”
For business in the UK, the United States and continental Europe, Winkler thinks wider change is imminent: “I hope that the Weinstein case [and] the #MeToo debate trigger reform in the corporate world, and enhance the culture of anti-sexual harassment provisions inside firms.”
If the paths chosen recently by Zelda Perkins and Stormy Daniels are indicators of change, that reform could be on the cards.