Catherwood LibraryILR School

Companies will often choose to settle cases of sexual harassment when the perpetrator is a prominent and profitable leader, as seen with the ongoing Harvey Weinstein scandal. The New York Times’ investigation into Hollywood mogul Harvey Weinstein, founder and former CEO of the Weinstein Company, reported that there were at least eight settlements with women since the 1990s, with settlement costs likely to be in the six-digits. Weinstein has since been terminated from his former company, and he has also been removed as a member from the Academy of Motion Picture Arts and Sciences. The cost of sexual harassment cases is difficult to measure because of the often private nature of settlements - with victims usually signing non-disclosure agreements - as well as the under-reporting of incidents, but the highest payout in U.S. history for a victim of workplace harassment was $168 million in 2012. With the potential costs of lawsuits so high, companies are now including “employment practices liability insurance” as a necessary cost of doing business. However, despite workplace training, there has been little improvement in the number of sexual harassment incidents, perhaps due to a desensitization to sexually inappropriate behavior as seen in movies, TV, pornography and internet bullying. The Equal Employment Opportunity Commission received 5,607 sexual harassment complaints in 1992 and 6,870 in 2015. While companies bear financial costs in protecting valuable employees who continue to offend, the damage of sexual harassment to victims is both financial and psychological. The financial cost of a lawsuit can deter victims from pursuing a complaint. Employees can’t necessarily leave their jobs, due in part to an inability to find other suitable jobs, or without having their careers stall. Women report significant higher financial distress two years after the incident. Victims may experience suspicion and doubt, and the situation is worsened when the employee may actually admire the perpetrator’s career, impacting mental health.