Tag Archives: sexual harassment

Shhh? Sexual Harassment Settlements May No Longer Be Deductible

The tax reform law that passed in December has been the topic of much discussion.  One aspect of it that has not received as much discussion is a provision which impacts whether a payment made as part of a sexual harassment settlement is deductible.

In response to the #MeToo Movement Congress included the following in the new tax reform bill:

No deduction shall be allowed under this chapter for – (a) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement; or (b) attorney’s fees related to such a settlement or payment.”

It seems clear that the intent of this provision is to remove the tax deduction from a payment made to settle a sexual harassment or sexual abuse suit  if the payment is subject to a nondisclosure or confidentiality agreement.   But several questions remain.

What if there are multiple claims being settled?  Is the entire payment not deductible if a confidentiality provision is included in the agreement, or just a portion of it? And will allocating a specific portion of the payment to the sexual harassment claim suffice, so that only that amount is not deductible?

What about the attorney’s fees? If a nondisclosure agreement is required is the deduction lost for all the fees in the case, or just the portion “related to such a settlement or payment”?

In most cases the settlement is subject to a confidentiality provision.  Congress has now given employers settling sexual harassment claims reason to pause before automatically making confidentiality a part of the settlement.  Remember to discuss this with your lawyer, and consider the pros and cons of silence verse the tax deduction,  before you make this decision.

 

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How To Avoid Sexual Harassment Claims

Today,  NBC announced long-time Today Show host Matt Lauer has been fired because of sexual harassment allegations.  Recently, sexual harassment claims against film producer Harvey Weinstein have been all over the news.  Allegedly,  Weinstein sexually assaulted and harassed women over four decades, dating back to the 1970s.  Sexual harassment is reprehensible and should never occur.

To prevent sexual harassment from occurring, and to make your workplace safer,  follow these tips:

  1. Train Your Workforce-  Conduct sexual harassment training annually so that your employees know what sexual harassment is, who to report complaints to, that complaints will be investigated promptly and thoroughly, and that sexual harassment will not be tolerated.
  2. Maintain And Distribute A Strong Policy-  You must have a policy which clearly defines sexual harassment, has a clear complaint procedure, states that all complaints will be investigated and prompt, corrective action will be taken to address substantiated complaints.   The policy should be distributed to all employees and posted on the real or virtual employee bulletin or information board.
  3. Be Alert- Be aware of what is occurring in the workplace.  Are there calendars or other postings with  inappropriate pictures?  Dirty jokes or sexual innuendos via email? Banter with sexual content?  All of these things should be stopped as soon as you become aware of them, even if no one complains.
  4. Investigate – All complaints must be investigated promptly and thoroughly, even if the complainant asks you not to investigate it or says she will handle it herself. This also applies to reports of harassment or inappropriate conduct happening outside of work or at a Halloween or other holiday event.
  5.  Take Prompt, Corrective Action-  If the investigation substantiates that harassment occurred take prompt, corrective action designed to resolve the issue once and for all.  This may mean a verbal discussion, a written warning, or termination, depending on the circumstances.  But as NBC did with Lauer, take action without delay, no matter who is involved and no matter how important they are to your organization.

Following these tips will result in a safer workplace, happier employees, and lower legal costs.

 

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Prevent Sexual Harassment Claims To Make Your Workplace Safer

Today,  NBC announced long-time Today Show host Matt Lauer has been fired because of sexual harassment allegations.  Recently, sexual harassment claims against film producer Harvey Weinstein have been all over the news.  Allegedly,  Weinstein sexually assaulted and harassed women over four decades, dating back to the 1970s.  Sexual harassment is reprehensible and should never occur.

To prevent sexual harassment from occurring, and to make your workplace safer,  follow these tips:

  1. Train Your Workforce-  Conduct sexual harassment training annually so that your employees know what sexual harassment is, who to report complaints to, that complaints will be investigated promptly and thoroughly, and that sexual harassment will not be tolerated.
  2. Maintain And Distribute A Strong Policy-  You must have a policy which clearly defines sexual harassment, has a clear complaint procedure, states that all complaints will be investigated and prompt, corrective action will be taken to address substantiated complaints.   The policy should be distributed to all employees and posted on the real or virtual employee bulletin or information board.
  3. Be Alert- Be aware of what is occurring in the workplace.  Are there calendars or other postings with  inappropriate pictures?  Dirty jokes or sexual innuendos via email? Banter with sexual content?  All of these things should be stopped as soon as you become aware of them, even if no one complains.
  4. Investigate – All complaints must be investigated promptly and thoroughly, even if the complainant asks you not to investigate it or says she will handle it herself. This also applies to reports of harassment or inappropriate conduct happening outside of work or at a Halloween or other holiday event.
  5.  Take Prompt, Corrective Action-  If the investigation substantiates that harassment occurred take prompt, corrective action designed to resolve the issue once and for all.  This may mean a verbal discussion, a written warning, or termination, depending on the circumstances.  But as NBC did with Lauer, take action without delay, no matter who is involved and no matter how important they are to your organization.

Following these tips will result in a safer workplace, happier employees, and lower legal costs.

 

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Not Every Work Environment Is Hostile

One of the most overused terms in today’s workplace is “hostile work environment”.  Many employees believe their environment is a “hostile work environment” prohibited under applicable law.  But the reality is that simply having a difficult boss or supervisor does not make the environment a hostile work environment under the law.  The recent decision by the Sixth Circuit Court of Appeals in Daniels v. Pike County Commissioners reinforces this point.

Ms. Daniels, who worked as a secretary in the Pike County, Ohio Prosecutor’s office, claimed that Mr. Junk, the Pike County Prosecutor, subjected her to a hostile work environment because of her sex.  The Court rejected her claim because none of the incidents Daniels pointed to were acts of harassment based on her sex.  The Court found that Junk’s treatment of Daniels was not based on his sexual attraction to Daniels or based on a hostility toward females.  Instead, the proof showed that Junk was a difficult boss for both male and female subordinates.

In rejecting Daniels’ claim the Court reiterated that Title VII is not a “general civility code for the American workplace”.  This means that acts of harassment will not be illegal under Title VII or similar state employment laws unless the harassment is based on sex, race or another protected class.  The conduct may, however, be illegal under a state tort law theory.

Employers, if you have a supervisor who is known to be a difficult boss or a “jerk” make sure you investigate any complaints about his or her conduct and take appropriate steps to address it – which may include training and/or discipline.  Just because a supervisor’s conduct may not create a hostile work environment, it could still disrupt your workplace and result in low employee morale, loss of productivity and, potentially, an expensive lawsuit.

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Spring Cleaning: Get Your Employee Handbook Legally Compliant

Spring is in the air.  For many of us that means Spring cleaning.

Spring cleaning for all employers should include a review of the current Employee Handbook. The review should focus on whether the current version of the Handbook complies with the law and adequately meets the needs of your business.

Make sure the Handbook does not promise more than what the law requires unless you intend to keep that promise. The recent case of Marini v. Costco (U.S. District Court of Conn.) illustrates why committing in a Handbook to do more than what the law requires might result in you having to keep that commitment.

In Marini  the company’s sexual harassment policy did more than what the law requires.  For example, the policy said the company would take appropriate corrective action, regardless of whether the conduct violated the law.  Because of this and other language in the harassment policy, the Court denied the company’s motion for summary judgment on the employee’s breach of contract claim.

Similarly, in Tilley v. Kalamazoo County Road Commission (6th Cir. 2015) the employer’s FMLA policy said that employees were eligible for FMLA leave if they had “accumulated 1250 work hours in the previous 12 months.”  The policy did not mention the FMLA requirement that the employer must also employ 50 employees within a 75 mile radius of the work location of the employee requesting leave for that employee to be eligible.  As a result the Court in Tilley held that the employee was entitled to FMLA leave.

Take the time to review your Employee Handbook to insure that it complies with the law and is consistent with your intent.  You will reap the benefits from this Spring cleaning for many seasons to come.

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