Unmasking Sexual Harassment: The Empirical Evidence for a New Approach

17 N.Y.U. J.L. & BUS. 315-390 (2021)

76 Pages Posted: 23 Aug 2022

See all articles by Jennifer Ann Drobac

Jennifer Ann Drobac

Indiana University Robert H. McKinney School of Law

Mark Russell

University of Queensland Business School

Date Written: September 1, 2020

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.

Keywords: sexual harassment, #MeToo, sex-based discrimination, Title VII, SEC, corporate disclosures, securities law, financial disclosures

JEL Classification: K22, K31

Suggested Citation

Drobac, Jennifer Ann and Russell, Mark, Unmasking Sexual Harassment: The Empirical Evidence for a New Approach (September 1, 2020). 17 N.Y.U. J.L. & BUS. 315-390 (2021), Available at SSRN: https://ssrn.com/abstract=4195097

Jennifer Ann Drobac (Contact Author)

Indiana University Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States
317-278-4777 (Phone)
317-278-7563 (Fax)

HOME PAGE: http://www.indylaw.indiana.edu/people/profile.cfm?EmpNum=41

Mark Russell

University of Queensland Business School ( email )

University of Queensland
Brisbane, QLD 4072
Australia

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