Unmasking Sexual Harassment: The Empirical Evidence for a New Approach

Abstract

If moral outrage were enough, 50 years of antidiscrimination law and two full years of #MeToo should have led to the rapid remediation and elimination of sexual harassment by corporate decisionmakers. However, moral condemnation apparently is not enough, so this Article urges a multifaceted approach that combines (to start) research, financial analysis, disclosure, preventative cultural change, and remediation (if still needed). Through disclosure, it suggests a tactic that combines the goals of social entrepreneurship and profit maximization. Estimates suggest that sexual harassment costs U.S. business millions, if not billions, annually. However, most stock exchange-listed companies avoid financial disclosure or other reporting of sexual harassment claims. The onus for the invocation of Title VII and other antidiscrimination protections falls upon the victims and targets of abuse. Our research and empirical evidence demonstrate that corporations need to make changes to improve the proverbial bottom line. The disclosures that companies do make lack useful information for users of financial reports. Further, a high number of perpetrators of corporate sexual harassment are those with power--key executives and Chief Executive Officers (CEOs). Further, a number of non-disclosures of sexual harassment indicate poor management and culture at companies. Our results are consistent with companies that use arbitration and non-disclosure agreements (NDAs) to conceal sexual harassment. Our research supports a new SEC reporting requirement for all publicly traded companies (and a best practices approach for all organizations). Arguably, corporations would save much more by getting ahead of sexual harassment cases, disclosing problems, and avoiding expensive Title VII and shareholder derivative lawsuits. The evidence and common sense call for additional prophylactic action.