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Instant Insights / The Weinstein Effect: The Hollywood Sex Scandal’s Impact on Big Law

Since the news broke of sexual harassment and assault claims against Harvey Weinstein, one of Tinseltown’s most powerful movie moguls, ALM journalists have closely covered its connection to law firms and the legal industry. Whether the impact has meant more business for lawyers working for Weinstein or the company he formerly ran or more worries for firms facing harassment claims against their own lawyers, the legal community has felt The Weinstein Effect. In this Instant Insights, we’ve brought those stories together and will continue to update the collection as news develops.

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Paul O. Lopez. Paul O. Lopez.

The hits keep coming and we are not talking about box office bonanzas at Weinstein Pictures these days. The sordid sexual harassment allegations that continue to be levied against embattled former CEO and Hollywood mogul, Harvey Weinstein, on a daily basis are as distasteful as they are intriguing. They pique all of our curiosity since they evidence a culture which allows or, at a minimum, turns a blind eye to the exploitation of young vulnerable actresses by a powerful icon within the movie industry. Indeed, the stories that keep coming out of Hollywood suggest that Weinstein’s vulgar conduct has gone on for years and it appears that many employees and even board members at his company may have been aware of his predatory acts but yet no one spoke up for fear of retaliation. If it is proven that company board members and co-workers in fact knew about Weinstein’s penchant for such boorish and, likely, criminal conduct but buried their heads in the sand in order to continue to have a seat at the table in Tinsel Town then it is safe to assume Weinstein Pictures will be no more. But what lessons can companies learn from the Weinstein saga since the sexual harassment at issue was not the classic intra-company workplace harassment of one supervisor sexually badgering a subordinate (as far as we know at the moment)? The answer is: Many.

Under Title VII, companies are vicariously liable for the sexual harassment of their employees if they knew about the conduct of the harasser and failed to take action. Weinstein was the CEO of his company and, essentially, at the top of the food chain not only at his company but, evidently, within the power structure in Hollywood. As a result no one spoke up for years.  When sexual harassment comes from the top, oftentimes employees are unsure of what to do in connection with reporting the harassment. The courts have made it clear that companies will be liable for such harassment if they fail to intervene and stop the workplace harassment.  However, companies can insulate themselves from liability if there are explicit reporting mechanisms in place where the employee can seek relief if they are subjected to sexual harassment. In the case of a CEO (or any top-level manager), companies should identify within their company written policies and employee handbooks several supervisors that employees can report the sexual harassment to in the workplace. That way, if the employee is getting harassed by someone they directly report to or who is at the proverbial top, the employee should know that there are others within the company that they can speak to about the inappropriate conduct. Importantly, the company policies should also make it clear that employees can report such harassment without fear of retribution or retaliation. Title VII makes it clear that companies cannot retaliate against their employees for reporting sexual harassment since this is protected activity under the law. Employees need to know about this so that they are not in fear of their jobs or of any sort of workplace retaliation if they report sexual harassment along proper channels within the company.

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