Introduction

In the last few years, the sports and entertainment industry has witnessed the fall of many powerful individuals accused of “bad behavior”—behavior that has not just worn out its welcome in the industry but behavior that simply will no longer be tolerated. From the dethroning of industry giants for alleged sexual assault, to closing the curtain on the racially insensitive ramblings of so- called comedians, to the sidelining of athletes for political speech that some view as unpatriotic, the range of behavior has varied widely. Bad behavior has threatened to leave industry employers confused about how best to protect themselves, their employees, talent, customers, audiences, and even the wrongly accused, not just from bad actors, but from the near immediate global consequences, intense media scrutiny, and sometimes fake news arising from the alleged conduct. What makes this phenomenon different from other periods of social change? The rapid pace caused by the role of social media, which has served not only as a method of instantaneous delivery, but often as judge, jury, and executioner, deciding what constitutes bad behavior and what will be deemed an acceptable response to it. Nothing epitomizes the impact of this phenomenon more than the rise of the #MeToo movement.

#MeToo and Subsequent Legislation

Evolving from a Twitter hashtag to a global phenomenon in just days, the #MeToo movement has spawned social change across the world. In the U.S., allegations of on-the-job sexual misconduct have risen astronomically. In October 2018, the U.S. Equal Employment Opportunity Commission (“EEOC”) released a bounty of preliminary data on workplace sexual harassment claims. The numbers were overwhelming, and reflected the reality of the #MeToo movement’s impact throughout the country. In fiscal year 2018, the EEOC filed 66 harassment lawsuits, including 41 that included allegations of sexual harassment. That reflects more than a 50 percent increase in suits challenging sexual harassment over fiscal year 2017. In addition, charges filed with the EEOC alleging sexual harassment increased by more than 12 percent from fiscal year 2017. Overall, the EEOC recovered nearly $70 million for the alleged victims of sexual harassment through litigation and administrative enforcement in fiscal year 2018, up from $47.5 million in fiscal year 2017. Companies and organizations tolerating or empowering bad behavior did not fare well.

While bad behavior comes in many forms, the employment laws most often implicated prohibit discrimination, harassment, and retaliation when based on any one of dozens of protected classifications, including (but not limited to) race, color, ancestry, national origin, religion, creed, age (over 40), mental and physical disability, sex, gender (including pregnancy, childbirth, breastfeeding, or related medical conditions), sexual orientation, gender identity, gender expression, medical condition, genetic information, marital status, military and veteran status, and HIV status, among others. The law also prohibits conduct that is assaultive or tortious in nature whether or not based on a protected category.

Despite this existing panoply of laws and regulations prohibiting bias-based bad behavior, the overwhelming focus and attention on the issues raised by the #MeToo movement forced many jurisdictions into taking further (some might say precipitous) legislative action designed specifically to attack the behavior challenged by the #MeToo movement. This resulted in a slew of new #MeToo inspired legislation around the country focused principally on expanding sexual harassment liability beyond the employment relationship, expanding the concept of what constitutes sexual harassment, imposing greater training requirements, limiting confidentiality and non-disclosure in employment agreements and settlement documents, and attacking gender inequality in pay. While California’s legislature has been perhaps the most prolific in this regard (passing what is popularly referred to as the “casting couch amendments” along with numerous other #MeToo inspired provisions), states around the country took action, as well, including New York, Tennessee, Maryland, Washington, and more recently New Jersey and Illinois. California’s legislature explicitly disapproved of longstanding federal precedent defining what constitutes “severe or pervasive” harassment, an essential element of the claim. And recently, New York’s legislature went one step further, completely eliminating the requirement that illegal harassment be based on conduct that is “severe or pervasive.”

If the potential for legal liability sounds scary, employers have also had to grapple with non-legal accountability to the public, including customers, audiences, competitors, and even politicians. Employers who are perceived to have fostered or allowed bad behavior face the risk of boycotts, brand attacks, and demands from the public, endorsers, and advertisers. Corporate leaders may be called to testify before Congress and undoubtedly face requests for accountability from corporate boards and investors. This crush of potential pressure can be best dealt with by implementing steps to prevent bad behavior in the first place and to limit its impact when it does occur.

How to Prevent Bad Behavior

The good news is that there are a number of steps employers can take to educate employees and talent about behavior expectations and consequences, both reducing the likelihood of bad behavior and mitigating the impact when it does occur.

Policy Development & Training - Among the most important initial actions employers can take to prevent bad behavior and limit its consequences is to develop policies on behavior expectations and standards of conduct in the workplace and to regularly and thoroughly train the workforce on those policies. Every national employer should maintain an anti-harassment/anti-discrimination policy and train on the policy. More than a dozen states either require or recommend such training and California and New York—the meccas of the entertainment industry—maintain the most robust requirements. But even where not required or explicitly recommended, training on anti-bias policies is a best practice, the absence of which itself could lead to a claim of failure to prevent harassment or discrimination, or limit an employer’s ability to take advantage of certain defenses to harassment liability. Indeed, non-compliant employers face the risk that a judge’s or jury’s focus will be drawn not just to the alleged bad workplace behavior, but to the employer’s failure to maintain safeguards against that conduct in the first place. The costs of litigation can soar when employers are drawn into expert battles over the impact of inadequacies in workplace practices and policies, including the lack of training.

Beyond anti-bias concerns, employers can help limit bad behavior through clear policies and training in a number of other areas that are often implicated in corporate scandals, including how to handle confidential information, the use of drugs that impact the workplace, appropriate workplace communications, including email, the internet, social media, and other forms of digital communication, limits on workplace privacy, and limits on public speech on behalf of the employer. In the context of sports and entertainment relationships, the use of a morals clause can also hold a party to a contract to behavior expectations and standards of conduct that may be necessary to preserve an image, brand, or reputation central to the agreement.

Investigation - When bad behavior is alleged, it is central that the employer investigate that conduct immediately. The law requires that once an employer becomes aware of harassment in the workplace, it must take prompt, remedial action to stop and further prevent it. The failure to do so could result in liability. Hereto, the focus of harassment litigation can quickly shift from the alleged bad behavior to whether and how an employer investigated that conduct. Prompt, thorough, unbiased investigations by qualified personnel are essential to meeting the required standard. Investigations may take many forms and can be short and informal or lengthy and conducted by an outside professional investigator. Either way, employers are advised to document their investigative efforts, no matter how small the occurrence.

Coordinate with Stakeholders - Even if an employer maintains appropriate policies, implements training, and timely investigates issues, when the right hand doesn’t know what the left hand is doing, problems can arise. Importantly, it is essential that all involved or impacted understand the nature of retaliation and how to avoid it. It is one of the most common claims arising from an employer’s response to claim of harassment or discrimination. Employers should coordinate with stakeholders, which typically include human resources and legal, but could include founders/owners, a board, the compliance audit department, risk management, and communications and/or public relations. While there are good reasons to keep the circle tight when exploring bad behavior in the workplace (including understanding and appropriately using the attorney-client privilege), incorporating representatives from these stakeholder groups can increase the effectiveness of the employer’s response, and avoid mishaps that stem from miscommunication or inconsistent communications to the workforce, the public, the media, or others. Forming a crisis response team with members from relevant stakeholders is recommended.

Monitoring and Follow-Through - Once the lights go down and the curtain is closed, there can be a temptation to move on from the alleged bad behavior, leaving it in the past with the hope that is gets lost in the annals of the long forgotten. But correcting bad behavior requires monitoring and follow-through. Employers are advised to check in with complainants as well those about whom they complained. Are the remedial measures working? Has the conduct been resolved? Are resentments being managed? It is during this post-event period where behaviors can resurface but be missed or overlooked as something that was already dealt with.

Conclusion

It is too soon to say whether the #MeToo movement is here to stay—but its impact has already been felt and will not soon be forgotten. All employers, including those in sports and entertainment,