Me Too Archives - McCarthy Lebit - A Cleveland/Ohio Law Firm

New “Guidance” on the Deducting Attorney Fees for Sexual Harassment Cases

Ann-Marie Ahern — Thu, 14 Mar 2019 15:31:12 +0000

Due to the #MeToo movement, settlement agreements that require confidentiality have come under attack. Such clauses, some argue, permit a harasser or the harasser’s employer to pay hush money to make the problem go away, thereby permitting serial harassers to persist in their conduct while preventing the public from ever knowing that the allegations were made or settled. Congress, in response to this concern, attempted to disincentivize companies by disallowing a deduction for attorney fees paid in regards to a settlement for sexual abuse or harassment claims, if such settlement was subject to a nondisclosure agreement. This provision, passed as part of the Tax Cuts and Jobs Act of 2017, was intended to curtail confidential settlements.

As well-intentioned as this code section may have been, there were drafting problems. Lawmakers wrote the language of §162(q) in broad terms so that it currently does not distinguish between the plaintiff and the defendant when denying the deduction. Many thought this position was unfair to the plaintiff, who for personal privacy reasons, may also want the protection of a nondisclosure agreement when settling claims involving sexual harassment. It was feared that if the law was applied as written, sexual harassment victims would lose their deduction for attorneys’ fees.

However, the IRS recently provided informal “guidance” on its website stating that the IRS interprets §162(q) as applicable only to the defendant, which is consistent with the Joint Committee on Taxation’s position documented in the December 2018 Bluebook. Essentially this means that the IRS believes the recipient of payments related to sexual harassment or abuse, even if such payment is subject to a nondisclosure provision, is not precluded by §162(q) from deducting attorney fees so long as such fees are otherwise deductible.

Potential plaintiffs working through sexual harassment and abuse claims need to be cognizant of this new interpretation of §162(q) to ensure they do not miss the opportunity to claim a deduction to which the IRS believes they may be entitled.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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5 Things Employers Should Do in Response to #MeToo

McCarthy Lebit — Thu, 01 Mar 2018 14:08:53 +0000

1.) Review and Update Harassment Policy

By now, most employers have a written policy that prohibits harassment at work and sets forth a process under which employees can report suspected harassment. Many of these policies, however, were drafted 20 years ago and do not reflect today’s workplace or incorporate developments in the law. For instance, a policy that identifies only one person to handle concerns of harassment is insufficient. What if that person is the alleged harasser or is close to the alleged harasser? Following the policy, under those circumstances, may be practically infeasible. Another somewhat common and antiquated feature of some sexual harassment policies is language that states something to the effect of, “if it is determined that your complaint was made in bad faith, then you will be subject to discipline.” This language is ill-advised because it may be read as a deterrent to bringing concerns of sexual harassment forward. Does your policy incorporate the modern state of technology? If your policy refers to Blackberries, facsimile or similar technology but does not address social media or texting, it’s time for a refresh.

2.) Consider Training for Managers and Employees

#MeToo, while bringing the issue of sexual harassment into the light of day, has also generated a lot of confusion about what is and isn’t sexual harassment. Most managers do not know what constitutes sexual harassment and are therefore not in a position to appropriately prevent it. All employees should know what type of conduct the employer expects in the workplace. There is a fair amount of “gray” in this area, and setting forth clear expectations is the best way to remind employees of what will not be tolerated.

3.) Reaffirm the Company’s Commitment to Providing a Workplace Free from Harassment

With all of the attention on sexual harassment recently, employers may be wondering “what has my employer done to address this issue? Do they really care?” A simple email from company leadership proactively expressing the company’s commitment to a harassment-free workplace is a good starting point. A link to the company’s sexual harassment policy would also be helpful.

4.) Consider Implementing a Policy Regarding Romantic Relationships in the Workplace

Often, claims of sexual harassment arise from a relationship that at one time was consensual. Other times, only one participant views the relationship as consensual. Prohibiting any kind of romantic relationship between a boss and his or her subordinate is a wise policy. There is almost never a good outcome to a romantic relationship between direct reports. With respect to peer romantic relationships or relationships between two people who do not have a reporting relationship with one another, the best practice is to require disclosure or the relationship and an acknowledgment of the consensual nature of the relationship.

5.) If a Concern About Sexual Harassment is Raised, Consider Bringing in an Outside Neutral Investigator

Human resources professionals are rarely trained and equipped to conduct an appropriate investigation into allegations of sexual harassment. Moreover, there is an inherent conflict, often, for the HR manager whose role is in part to protect the company. The higher the accused is in the organization, the more difficult it may be to render a truly objective determination as to whether anything improper has occurred.

If there is one take away for businesses of the #MeToo movement, it’s that business, as usual, will no longer cut it. Smart employers will take appropriate measures in reaction to this growing awareness around the issue of sexual harassment.

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#MeTooNow

McCarthy Lebit — Tue, 02 Jan 2018 14:14:36 +0000

The #MeToo movement ushered in an overdue cultural shift of epic proportions in 2017. Women are publicly discussing their painful experiences with sexual harassment and sexual assault in the workplace. By empowering women to come forward, #MeToo has caused employers to take women’s claims more seriously and to conduct investigations that have ultimately ended the careers of wrongdoers. Likewise, organizations like Time’s Up have further emboldened women by providing funding for legal support when necessary. Not surprisingly, #MeToo has energized students on college campuses to lobby for strong Title IX enforcement.

When students report claims of sexual assault, colleges must follow its Title IX sexual misconduct policies. At the same time as invoking Title IX processes, students can also file reports with law enforcement agencies. As a result, accused students may face expulsion and criminal prosecution. Given the high stakes for both sides, colleges and universities continue to struggle with balancing the rights and interests of all parties to reports of sexual misconduct. The Office for Civil Rights continues to wrestle with this debate.

Despite what some may think, how to respond to reports of sexual misconduct in the academic setting is complicated. Really complicated. Students can bring claims anytime they are enrolled at a school. Because there is no time limit for reporting sexual misconduct, academic institutions with limited resources must investigate reports about alleged behavior that took place years before the filing of complaints. When this happens, cases may turn on one person’s memory, which can be dangerous. Evaluating credibility without additional evidence is a thorny process.

To ensure fairness and accuracy, we encourage that the slogan for 2018 be hailed as #MeTooNow. In other words, reports of sexual misconduct are best handled when the reports are made in a timely manner. Prompt reporting is best for all parties to the equation.

Both sides benefit when a report is made in a timely manner. Title IX investigators are better situated to secure witness statements. If a student waits to file a report and delays an investigation, witnesses might move or transfer to another academic institution, be reluctant to come forward, or just not remember details that could be important to evaluating a claim. Another advantage is that electronic evidence such as text messages, social media posts, and surveillance footage can be obtained and preserved. Delayed reporting creates a risk that valuable evidence disappears, which undermines the accuracy of investigations.

Timely reporting helps both sides draw on-campus resources and obtain a decision that is supported by evidence.

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