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Wish You Had a Case Against Harvey Weinstein? Maybe Not

Harvey Weinstein and the Real truth about the Hollywood Casting CouchAccording to the New York Law Journal, Harvey Weinstein’s accusers will have a difficult time actually recovering payment on their claims[1]. The parent company of Weinstein Co.filed for Chapter 11 bankruptcy protection in Delaware on March 20, 2018. Before that, Eric Schneiderman, the New York Attorney General, had filed a lawsuit against the Weinstein companies on February 11, 2018 based upon its gender based hostile work environment and a pattern of quid pro quo sexual harassment. After over 100 women made accusations against Harvey based on his outrageous behavior and the company fired him in October 2017, it became clear that his company could no longer continue without new leadership. There were negotiations with a potential buyer which would have included $90 Million in funding to pay the claims, but the deal fell through. After the company filed Chapter 11, a new buyer is negotiating a deal which does not include any fund for the payment of claims. These women’s claims will now have to compete with all of the company’s other creditors for limited funds. In fact, they are at a disadvantage because most of the their claims never reached a judgment, which at least would have given them a claim for a certain amount. When a dollar amount has to be assigned to any contested claim in bankruptcy court, it will always be at a much lower amount than it would have been if the woman could have presented her case to a jury. All of the women can still bring their cases against Harvey Weinstein personally, but his income is now limited and he had just gone through a very expensive divorce.  They’d better hurry up and get a place in the line.

What is Quid Pro Quo Sexual Harassment?

Casting Couch 101. STAGE REVIEW: “Schooled” by Lisa LewisQuid pro quo is latin for something received or traded for something else. Applied to sexual harassment, it means the boss or supervisor will give the employee something (a raise or a promotion) in return for satisfaction of a sexual demand, or when a manager or other authority figure implies that he will not fire or punish the employee as long as she agrees to give him some type of sexual favor. While we usually think of men as the culprits, be aware that there are also cases where women demand sexual favors from men or from other women as well. Andrea Ramsey, a former executive, had to drop out of the race to become the democratic candidate for a competitive congressional district in the Kansas City area, when it came out that a man had filed a lawsuit against her in 2005 claiming he had been fired for rejecting her sexual advances. She denied that the claim was ever valid, but in December 2017 she acknowledged that in this climate, candidates were being held to higher standards, and the allegation was enough to make her abandon her congressional bid.

Can a Sexual Harassment Claim be Wiped Out (Discharged) in Bankruptcy?

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A sexual harassment claim can continue even if the guilty party has filed bankruptcy if it is “willful and malicious”[2], but the conduct has to be very serious. For example, where a father had sexually abused his daughter for 10 years, beat her, warned her not to tell others, and threatened her life, the bankruptcy court held that there was no need to have any trial on whether the conduct was willful and malicious, the harm was inevitable, and the daughter’s judgment was non-dischargeable and had to be paid even though the father had gone bankrupt[3].  In that case, the daughter had already obtained a judgment. Where there is an accusation of touching that the offending party denies, there will have to be a trial in the bankruptcy court. While I have not been able to find any cases on this, I am very confident that if the woman had to meet sexual demands to keep her job, she would win if the court believed her claims. On the other hand, if the conduct involved only verbal abuse and the injury was psychological, I think the claim would probably be wiped out by the bankruptcy, but I cannot find any reported case which answers this question either way. This is particularly true because bankruptcy judges tend to think only in economic terms, and are generally not receptive to awarding limited dollars against claims of emotional trauma, as opposed to giving it to creditors who have sustained economic losses in hard dollars and who are only going to get a small portion of their claims paid. This might change with the advent of the #metoo movement, though – we’ll have to wait and see.

[1] Weinstein Accusers Face Difficult Road to Recovery in Bankruptcy, NYLJ 3/24/18

[2] 11 USCS § 523(a)(6).

[3] Henderson v. Woolley (In re Woolley), 288 B.R. 294, 303, 2001 Bankr. LEXIS 2106, *22

Author: Bill Cafaro

New York Employment Lawyers,Law Offices of William Cafaro

Stopping Sexual Harassment in Your Company is More Important than Ever

 

Author: Stephen D. Hans & Associates

Recent high-profile sexual harassment stories  have been dominating the headlines in the last few weeks. The likelihood is that such exposés will continue as more victims come forward to tell their stories. And while stories that include famous celebrities and high profile politicians will be more desirable fodder for major news outlets, it’s easy to believe that local business scandals may go unnoticed.

Sexual harassment under the law

Rather than just considering how your company should respond to a sexual harassment claim, you should also consider how such incidences in your company can be decreased. Limiting your company’s liability is a valid concern but focusing on creating a non-threatening work environment for your employees may help you to create a sexual harassment policy that will be successful.

Sexual harassment is a form of discrimination that falls under Title VII of the Civil Rights Act of 1964. Such discrimination can manifest as:

  • Requests for sexual favors
  • Unwelcome sexual advances (both physical and verbal)
  • Offensive jokes
  • Slurs
  • Name calling
  • Physical assaults / threats
  • Intimidation
  • Ridicule
  • Offensive objects or pictures
  • Interference with work performance

The EEOC investigates thousands of sexual harassment claims per year—and given the current climate, those claims are likely to increase.

What you can do

Small to medium business need to understand that it is not just large corporations and famous celebrities that get hit with sexual harassment claims. If you have as few as 15 employees you could find yourself facing such a suit, so taking an active role in preventing workplace sexual harassment and correcting any incidents should be a priority for you.

Written Policies and Procedures. Having written policies and procedures against sexual discrimination provides a major legal defense against liability. By having policy and procedures in place, it shows that you’ve made a good faith effort to prevent and correct harassment. Such policies and procedures should include:

  • Definition of sexual harassment
  • A procedure for filing complaints
  • Designated employees trained on receiving and documenting complaints
  • Encouragement in filing complaints
  • Assurances of confidentiality and non-retaliation for reporting

Providing training on sexual harassment to employees

Providing comprehensive training on what sexual harassment is, how to recognize it, how to report it, and the responsibilities for both workers and employers can save your company a lot of future headaches. Your training course should contain both theoretical and practical content—using drills, hypothetical situations, and other means to provide a personal understanding of sexual harassment. It is also wise to train managerial and supervisory staff separately from employees.

Prevent sexual harassment before it occurs—talk to an employment law attorney

Ultimately your best approach to harassment in your company is to create and adhere to a zero tolerance policy. By refusing to tolerate such behavior and protecting any employee subjected to it, you not only protect your company but also invest in your greatest resource – your employees. An experienced NY employment law attorney can work with you to develop the appropriate policies and steps to take to prevent and correct sexual harassment within your company.  If you have questions about your company’s sexual harassment policies contact us online or call 718-275-6700 today to schedule a consultation.