Love, Business, and the Law

Love, Business, and The Law

The Discovery of Sexual Harassment

During the late 1970s and early 1980s the concept of sexual harassment existed only in the mind of a young legal scholar named Catherine A. MacKinnon. By the 1990s MacKinnon had become a prominent law professor at the University of Michigan and 15,000 sexual harassment complaints were being filed annually with the federal Equal Employment Opportunity Commission (EEOC). Now it is impossible for even the most diligent of executives to stay current with the vast and diverse body of precedent and law that sexual harassment cases have generated. Few, though, can afford to ignore the numbers, such as the record $34 million payment that Mitsubishi Motor Corporation made in 1998 to settle an EEOC investigation of alleged harassment taking place at their plant in Normal, Illinois. The legal system has also disciplined companies for an apparently too rigid enforcement of sexual harassment policies. When the Miller Brewing Company fired a manager for telling his secretary about a lurid and salacious episode of Seinfeld, a jury awarded him $26 million in damages and lost wages and ordered the company to give him back his job. To avoid finding themselves, and placing their companies, in similar jeopardy on either side of this inflammatory issue, many executives and managers, such as those at Aerotek, a high-tech temp agency, simply adopted a policy that prohibited employees from dating or even socializing with coworkers. Others, however, turned increasingly to consultants and experts for advice and guidance. Dennis Powers, a law professor at the University of Southern Oregon, warned, "today's fling is tomorrow's filing." Littler Mendelson, the largest U.S. employment law firm, for example, drew up "love contracts" between those engaging in workplace romances, especially if the persons involved happened to be superior and subordinate. Such contracts stipulate that, despite the legal risks, both parties "independently and collectively desire to undertake and pursue a mutually consensual social and amorous relationship." Art Bauer, founder and CEO of American Media, invited corporate executives to view free of charge his videos Sexual Harassment —Is it or Isn't It? and Stopping Sexual Harassment Before It Starts. Bauer was just one among thousands of lawyers, consultants, and therapists who found it profitable to monitor and interpret the latest judicial rulings and legal precedents with regard to sexual harassment in the workplace. Like many of his counterparts, Bauer tried to calm fearful executives—by promising not only to uncover but also to prevent harassment, and to eliminate the conditions that encourage it.

Regulating Romance

Ricky Silberman, former vice chairman of the EEOC, speculated about the human ability to "fall in love and get married and have children if people are going to be working in areas where we don't allow that to happen, or where it happens only under the threat of litigation." Despite Silberman's concerns, office romances continued to be a prominent issue in the workplace. In 1988 a study conducted by the Bureau of National Affairs found that nearly 33 percent of all romances began at work. Dennis M. Powers, in The Office Romance: Playing With Fire Without Getting Burned (1999), calculated that between six and eight million Americans entered into such relationships every year in the 1990s. According to a survey conducted in 1994 by the American Management Association, nearly 50 percent of workplace liaisons resulted in a long-term relationship or marriage, "better odds than for nonworkplace romances," Powers pointed out. Nevertheless, the workplace remained a hazardous place to under-take romance. Corporate America started establishing regulations, procedures, and guidelines to govern workplace dating and relationships in the interest of preventing sexual harassment litigation. The growing body of federal, state, and corporate law forced millions of Americans to struggle to clarify what conduct constituted a legally actionable offense. Experts agreed that the most potentially dangerous relationships were those between superiors and subordinates. In the litigious 1990s the central questions seemed always to be just how welcome and reciprocal were the advances, attention, and affection of the superior. "I can't tell you how many cases we get daily that are like this," explained Garry G. Mathiason, senior partner at Littler Mendelson. Mathiason described the breakup of superior-subordinate relationships as "nothing less than a thermonuclear blast occurring in your workplace." Banning workplace relationships, the preferred method among corporate executives for solving the problem of sexual harassment, was also fraught with surprising perils. "All any good attorney would have to do," according to Powers, "is find one person that had a relationship and wasn't fired, and one who was, and you're off to the races." Wary of the legal ramifications of prohibiting romance, almost as much as permitting or unwittingly encouraging it, companies began to look for ways to discourage it, or at least to manage and contain its often acrimonious repercussions, especially when superiors and subordinates were involved. One policy that became popular was known as "date-and-tell." Under such a rule the couple must tell a supervisor of their relationship. The supervisor is then responsible for informing a designated person in the corporate hierarchy who advises the couple of their legal rights. At the same time, company officials gained the legal protection of knowing that the relationship was consensual and that they were not exposed to litigation by permitting, either through acts of omission or commission, the creation of a hostile work environment. The other approach was the "love contract," to which Littler Mendelson holds almost exclusive title. At the end of the decade love contracts had yet to gain as widespread an acceptance as the "date-and-tell" policy, although Littler Mendelson had drawn up approximately one thousand by the end of 1999, usually in response to an employer's apprehension about a relationship involving a top executive. The love contract, Mathiason admits, "is a tool for extreme cases and indicative of extreme times."

NEW EXECUTIVE DIVORCE

During the 1990s many business executives and CEOs learned that marriage, like work, can be one of the most important business ventures they would ever undertake. When marriage goes bad, it can be as costly as the collapse of any other business venture. Increasingly, divorce cases involving wealthy businessmen turned ugly, especially over the issues of alimony and other financial settlements. Executives faced the reality of not only handing over large sums of money to their former spouses, but also hefty stock and pension packages, and, in some cases, even a chair on the company board. To fight back, many executives have resorted to stashing hidden assets away in secret Caribbean trusts. Wives have retaliated by airing the couple's dirty laundry for the court and the public. In any case, lawyers stood to benefit the most, often walking away with seven-figure fees. As a result, the boards of many companies now consider the possibility that their executives may face divorce; and if so, what the company must do to protect itself, its assets, and its future from vindictive spouses.

Sensitivity and Sensibility

The most pervasive method of eliminating sexual harassment from the workplace was sensitivity training, which involved examining case studies and conducting role playing within the larger context of promoting diversity. Trainers, whether special consultants, employment attorneys, or human-resources personnel, familiarized executives and employees with the implications of the latest court decisions while discouraging the speech and behavior that caused offense, especially from men. To companies large and small the cost benefit of sensitivity training was unmistakable. "If you can prevent one lawsuit a year and save a legal bill of $50,000, and if it costs you $25,000 to give a seminar, that's pretty hard to resist," said Jerome B. Kauff, a New York employment lawyer. Critics, though, feared an insidious effect. In sensitivity training sessions, instructors encouraged employees to tailor their remarks and conduct to a legal construct known as the "reasonable woman." With the avoidance of litigation being the utmost concern, charged such scholars as Walter Olson, author of The Excuse Factory: How Employment Law is Paralyzing the American Workplace (1997), the "reasonable woman" became "whoever is thinnest-skinned." Yet, if the goal was to get men to think twice about their conduct toward women in the workplace, then it seems to have worked. By the end of the decade the most stringent sexual-harassment policies were usually those that workers imposed upon themselves. Many male executives and workers refrained entirely from telling jokes, hugging, or touching their female associates or clients, or complimenting them on their dress or appearance. Most harassment experts suggested that there was no need for this level of prudence, and even the U.S. Supreme Court rendered a decision in favor of "low-level flirtation." Some experts, though, were not surprised at the extreme measures taken to avoid arousing even the suspicion of intentions or actions considered unsavory and potentially litigious. This development, critics insisted, was the predictable result of perceptions, laws, and litigation that were out of proportion to the problems they intended to address. According to Barbara J. Ledeen, executive director for policy at the Independent Women's Forum, the excesses prove that "you can't legislate how people treat each other. The more the legal code eats up the area that used to be reserved for an informal kind of civil code, the worse things are going to get." Proponents of stricter sexual harassment laws and punishments for those who violate them, or who tolerate their violation, on the contrary, pointed out that for many women the old "civil code" included not only lower-paying jobs but also predatory superiors and pornography as standard office decor, as well as sexual and nonsexual intimidation and hostility. "It's not as though there was a neutral state of affairs in which everyone got along peachy keen before Title VII took effect," suggested Yale University law professor Vicki Schultz. Conservative critics blamed feminism, but as Schultz has argued, the sexual harassment policies became more a corporate than a feminist initiative. The original message of sexual harassment law, she declared, was "don't use sex as a weapon of exclusion and marginalization of women." That ideal was gradually transformed into one more in keeping with the traditional objective of management: to rationalize the workplace. "The goal," explained Schultz, "became 'Let's have people leave sex behind when they come to work—it's too volatile.'" Between 1993 and 1998, however, according to a survey conducted by the Society for Human Resource Management, only 4 percent of companies experienced sexual harassment lawsuits. Although not wishing to deny the reality or trivialize the problem of sexual harassment, many companies, such as AT&T, began to implement principles, guidelines, and regulations grounded in practicality and common sense. This approach, explained company spokesman Burke Stinson, was to respond forcefully and unhesitatingly whenever the company uncovered an obvious or egregious instance. "We've had six-figure people recruited into the company at no small expense, and we've let them go within a few weeks because of sexual-harassment activities," Stinson said. "You get that kind of word of mouth, you know you're in a company that takes the problem seriously." Stinson compared sexual-harassment policies at AT&T and many other companies, large and small, to traffic laws. AT&T had 110,000 employees. "That's a fairly big city, and you need sexual-harassment policies the way a city needs traffic laws. While most people are good drivers, there are some fools out there."

Sources:

James Lardner, "Cupid's Cubicles/' U.S. News and World Report, 125 (14 December 1998): 44-54.

Catherine A. MacKinnon, Sexual Harassment of Working Women: A Case of Sex Discrimination (New Haven: Yale University Press, 1979).

Joann Muller, "Ford: The High Cost of Harassment," Business Week (15 November 1999): 94-95.

Walter Olson, The Excuse Factory: How Employment Law is Paralyzing the American Workplace (New York: Free Press, 1997).

Dennis M. Powers, The Office Romance: Playing With Fire Without Getting Burned (New York: American Management Association, 1999).

Jeffrey Rosen, "Fall of Private Man," New Republic, 222 (12 June 2000): 22-29.

William Symonds and others, "Divorce Executive Style," Business Week (3 August 1998): 56-62.