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Sexual harassment went unchecked for decades as payouts silenced accusers

  • High-profile dismissals, including the firing of NBC host Matt Lauer, remain the exception, not the rule, for companies facing harassment issues.
  • In the past seven years alone, U.S. companies have paid out more than $295 million in public penalties over sexual harassment claims.
  • And that sum does not count all the private settlements that typically are granted in exchange for alleged victims signing non-disclosure agreements.
Matt Lauer
Getty Images
Matt Lauer

The floodgates have opened on sexual harassment claims against immensely powerful men. But high-profile dismissals, including the firing of NBC host Matt Lauer and media mogul Harvey Weinstein, remain the exception, not the rule, for companies facing harassment issues.

For many firms, paying fines for sexual harassment has been treated as a cost of doing business. In the past seven years alone, U.S. companies have paid out more than $295 million in public penalties over sexual harassment claims, according to Equal Employment Opportunity Commission records.

And that sum does not count all the private settlements that typically are granted in exchange for alleged victims signing non-disclosure agreements.

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Even those who were hit publicly with varying types of harassment charges managed to carry on with their careers in the aftermath. The highest-profile example is President Trump. But there are many others. For instance:

In 2007, when he was president of basketball operations for the Madison Square Garden-owned Knicks, former NBA star Isiah Thomas was found by a jury to have aided and abetted a hostile work environment after being accused of sexual harassment. Thomas now is president of the New York Liberty WNBA team, which also is owned by Madison Square Garden, and a commentator for NBA TV.

In 2010, hard-charging Hewlett-Packard CEO Mark Hurd was forced to resign after HP's board investigated his interactions with a female contractor and found inconsistencies in his expense reports. The investigation arose after that contractor claimed she was sexually harassed. One month after his resignation, Hurd landed a job at Oracle, where he is now CEO.

Senior executives at firms including Starwood Hotels, American Apparel and Baker & McKenzie have all weathered sexual harassment allegations and moved on to other high-powered positions.

As recently as last January, Fox News re-upped host Bill O'Reilly to a $25 million-a-year contract, according to the New York Times, even though O'Reilly or parent 21st Century Fox had settled multiple cases over misconduct with women, including one he settled for $32 million. Fox later said it was aware of harassment allegations against him and said O'Reilly, who was subsequently forced out, assured it he had "settled the matter personally."

O'Reilly has denied allegations of sexual misconduct and said he settled to protect his children. Hurd denied harassment charges and noted HP never found any evidence of it. Thomas has also denied the harassment allegations made against him.

What's different

"For decades, women found that this (harassing) behavior often was the price of coming to work, it was entrenched, with high performers getting a free pass," says Noreen Farrell, executive director of Equal Rights Advocates, a San Francisco-based legal support organization that focuses on women's issues.

So far, the recent avalanche of sexual harassment accusations has hit men across an array of industries, including entertainment, tech, media and finance.

Social media has helped fuel this revolution, allowing women to take their stories to the masses and often creating a public groundswell against some of the accused, said Wall Street veteran Sallie Krawcheck, CEO of female-focused financial planning and investment firm Ellevest.

"Women have a means today to tell these stories and to reinforce each other's stories and support each other's stories and support each other in a way that didn't exist when this happened to me," said Krawcheck, the former CEO of Smith Barney and Merrill Lynch Wealth Management.

She recently described her experience with sexual harassment in her book Own It, describing how at Salomon Brothers, her investment bank colleagues placed photos of male genitalia on her desk every day in the late 1980s. The harassers never faced any consequences for their behavior, she said.

Harassment and gender bias claims were common in high finance.

For example, Smith Barney paid out $150 million to resolve disputes with women who were allegedly mistreated in the 1990s, several years before Krawcheck joined the company. In the famous case, one Smith Barney employee had been accused of constructing a party room in the basement of a New Jersey branch office that he dubbed the "Boom Boom Room," where male employees would joke about harassing women who complained about mistreatment.

The fact that many women have historically had their reputations smeared while men accused of harassment continued in their careers "just shows where women are in the power hierarchy," said Anne Vladeck, an attorney who represented Anucha Browne Sanders, the New York Knicks executive who accused Thomas of sexual harassment. "And that's why you see repeat offenders."

'Imbalance of power'

Faced with a potential he-said, she-said duel with powerful male superiors, as well as the potential for their careers to implode, many women in the workplace have taken cash in exchange for total silence sealed by non-disclosure agreements. And in some cases, they were bound by arbitration clauses not to say anything.

"This is the definition of an imbalance of power," says Brad Hoylman, a New York state senator who is pushing legislation that would void contractual provisions when pursuing legal remedies for harassment.

"We've seen time and time again that in a sexual harassment case, it is the executive who benefits while the employee is often dismissed, leaving in their wake coworkers who then may face the same unacceptable behavior," he says.

In years past, allegations of misconduct or harassment against business executives often did not see the light of day. Among those that did, it was not uncommon for the men involved to take a slight detour before continuing their careers — often to great success.

Oracle's Hurd: In a 2010 letter to Hurd, attorney Gloria Allred claimed the then-HP CEO subjected her client Jodie Fisher to kissing and unwanted touching. Fisher, a reality TV star-turned-event hostess hired by HP, was asked to spend the night in Hurd's hotel room, according to the letter, which also said Hurd expected "sexual favors in return for giving her work."

After settling with Hurd, Fisher said there were "many inaccuracies" in the claims enumerated in her lawyer's letter. HP's board said Hurd didn't violate its harassment policies, but did say he ran afoul of its business standards using expense reports in connection to Fisher.

A month after Hurd resigned, Oracle founder Larry Ellison crowed about hiring Hurd, who now leads $204 billion-market cap Oracle as co-CEO (along with Safra Catz), where last year he took home $41 million in compensation. Oracle and Hurd declined to comment. Allred did not respond to a request for comment.

Starwood Hotels' Steven J. Heyer: In 2007, Heyer was removed as CEO of Starwood Hotels after the company's board received an anonymous letter from a female employee saying the CEO had sent her suggestive and provocative e-mails, according to a Wall Street Journal report. Heyer denied the allegations, although an outside law firm hired by the Starwood board corroborated the woman's claims, the Journal reported. Heyer remains on the board of financial advisory and asset management firm Lazard, which led to his tenure in 2010 as CEO of retailer Harry & David. Lazard declined to make Heyer available for comment.

Isiah Thomas: The Knicks executive was accused of sexually harassing Sanders. She alleged he called her a "b----" and a "ho" and later made sexual advances toward her before eventually firing her. A federal jury found Sanders had aided and abetted a hostile work environment and fined the Knicks organization for firing her when she spoke up, according to court records. She was awarded $11.6 million from Madison Square Garden Co. (MSG) and Knicks owner James Dolan but later settled for $11.5 million.

Thomas, who has maintained his innocence, is currently serving as a commentator on NBA TV and as president of WNBA team, the New York Liberty. NBA TV declined to comment.

"We continue to believe that Isiah did nothing wrong," MSG said in a statement. "In addition, the jury did not find any basis to award punitive damages against Isiah."

Dov Charney: The CEO was soaring as the man behind trendy clothing company American Apparel when he was hit with a number of sexual harassment suits in 2011. The accusations included alleged incidents in which Charney met with the female employees wearing only a towel and then tried to have sex with them.

Charney told USA TODAY he successfully defended three and settled two, and continued to run the company. When the board fired him in 2014, it followed a suspension for charges of misconduct, including misuse of funds.

Charney has since started a new company, Los Angeles Apparel. He said American Apparel did not dismiss him for reasons related to harassment. "I embrace the regulations of the workplace, and I abhor sexual harassment," he said.

American Apparel paid more than $3 million to settle sexual harassment and related claims against Charney and the company, according to the Wall Street Journal.

Martin Greenstein: In 1994, the high-powered Silicon Valley attorney and his celebrated firm, Baker & McKenzie, were hit with a then-record $7.1 million sexual harassment verdict (later reduced to $3.5 million) after Greenstein was found to have harassed temporary secretary Rena Weeks. His actions, the suit claimed, included grabbing her breast while dropping M&Ms into her shirt pocket.

Greenstein was forced to resign from the global firm for unrelated issues, but did so a year after Weeks filed her lawsuit and after eight other women came forward claiming they had been subjected to Greenstein's harassment for years. Greenstein went on to found San Jose, Calif. trademark firm, TechMark, which he still runs. He did not respond to an email seeking comment.

What could happen

As more women share their harassment experiences, the hope among advocates is that men who observe such behavior will speak out as well.

"Real change needs to happen, but women cannot do it alone," says Deborah Gillis, CEO of Catalyst, a global non-profit focusing on women in the workplace. "We need men to make the right decisions, not when caught in a torrential media downpour, or years later when the experiences of their daughters cause them to reconsider their ways."

One way to ensure that cases of harassment make an impact on both an individual and a company is to revisit the often-required signing of non-disclosure agreements, said Sunu Chandy, legal director of the National Women's Law Center.

Chandy notes that such documents can often keep women from connecting with others like them who are victims of the same person or company. "It's swept under the rug, and they can't find each other," she said.

Arbitration agreements also keep harassment allegations out of the public eye — and the scrutiny of would-be employers. These agreements, which are common at many companies, stipulate that any disagreements must be handled out of court. That can often allow those guilty of harassment to continue on their career path unfettered by their deeds.

"In so many cases in the past, those kinds of agreements led to payoffs that then allowed companies to reward and celebrate the men in question," said Cindy Gallop, an advertising industry advisor and founder of the healthy sexuality site, Make Sex Not Porn. "Men may have been terminated, but because no one knew why, it allowed them to be snatched up elsewhere where they could continue harassing."

Last summer, an attorney representing Susan Fowler — the former Uber engineer whose blog post detailing the toxic work atmosphere for women led to the ouster of CEO Travis Kalanick — filed amicus briefs with the Supreme Court. She urged the justices to consider whether employer arbitration agreements should be able to prevent employees from pursuing class action suits.

The sheer volume of new incidents of sexual harassment cropping up daily could well lead to a signal change in attitudes. But more importantly, advocates say the corporate trappings protecting male predatory behavior must be dismantled. "Everything is on the table in a way that it was never before," says Farrell of Equal Rights Advocates. "It's certainly a moment to seize, but it won't happen on its own."