This week, Sen. Elizabeth Warren (D-MA) and Rep. Jacky Rosen (D-NV) introduced the “Sunlight in Workplace Harassment Act” (S. 2454/H.R. 5028), which would require publicly held companies to report the total number of discrimination claims they—and their contractors and subcontractors—settle every year. The bill would require companies to disclose the following information on their 10-K reports:
- The total number and aggregate dollar amount of settled claims related to sexual abuse or harassment or discrimination based on race, religion, sex, national origin, age, disability, genetic information, service member status, gender identity, or sexual orientation;
- The average length of time it takes to resolve harassment complaints;
- The number of pending harassment complaints the company is seeking to resolve through internal processes or litigation; and
- Their efforts to prevent the perpetration of harassment, discrimination, and abuse by their employees.
According to Sen. Warren, “Secret settlements pose a material risk to investors [and] some investors argue that the way companies treat their workers—including the company’s response to harassment allegations—is critical to a company’s financial success or failure. Furthermore, investors deserve to know the amount of money that companies spend on settlements related to discriminatory behavior.” The same day the bill was introduced, the Council of Institutional Investors, which represents 130 pension funds, released a report encouraging boards to review five areas in their efforts to mitigate sexual harassment and urging investors to question boards on those issues, including whether the company claws back compensation where sexual harassment has been shown to occur. Meanwhile, Rep. Nanette Diaz Barragán (D-CA) introduced the “Federal Contractor Anti-Harassment Training Act,” which would require federal contractors to provide annual anti-harassment and anti-discrimination training to their employees. At the state level, the Washington legislature unanimously passed two bills addressing sexual harassment in the workplace. One will prohibit employers from requiring employees to sign a nondisclosure agreement preventing them from reporting sexual assault or harassment. The bill will also constrain employers from firing or otherwise retaliating against employees who disclose or discuss “sexual harassment or sexual assault occurring in the workplace, at work-related events coordinated by or through the employer, or between employees, or between an employer and an employee, off the employment premises.” The bill exempts confidentiality clauses in settlement agreements. The second measure will establish "a stakeholder work group to develop model policies and best practices for employers and employees to keep workplaces safe from sexual harassment." There was no testimony against either bill in both chambers of the Washington legislature. Governor Jay Inslee is expected to sign both measures into law.
