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#MeToo Is Still Driving Sexual Harassment Litigation. Here Are 4 Ways You Could Proactively Reduce Your Exposure

Though Equal Employment Opportunity Commission (EEOC) charges dropped off in 2019, increased awareness of the pervasiveness of sexual harassment means new suits will likely keep coming. Companies can take proactive steps to help create safer workplaces.
By: | April 1, 2020

When news of the Harvey Weinstein scandal broke in October 2017, the #MeToo movement took off rapidly. Increased awareness of sexual harassment in the workplace and willingness to speak up sparked a national conversation and drove a widespread cultural shift that demanded more accountability and consequences for perpetrators.

That shift was evident in the spike of sexual harassment lawsuits brought against employers in 2018. After a decade of declining numbers, the EEOC brought 7,609 sexual harassment charges in 2018, a 13.6% increase from 2017. That doesn’t include suits filed in state courts or settled out of court.

While litigation plateaued in 2019, the risks associated with sexual harassment charges have not abated. “Sexual harassment claims still constitute about 10% of all the EPLI suits, so it’s still among the leading loss drivers,” said Michael Englert, Head of Commercial Insurance for Management Lines at Ironshore, a Liberty Mutual company.

And loss amounts keep climbing, too. Total monetary benefits awarded to claimants in EEOC cases in 2018, for example, reached $56.6 million. In 2019, despite pursuing fewer cases, total benefits grew to $68.2 million.

Here’s why this exposure is growing more severe for employers and how they can take proactive steps to help create a safer workplace and reduce their risk.

Trends Driving Sexual Harassment Litigation

Kristin McMahon, Head of North America Specialty Claims for Ironshore

A lasting effect of the #MeToo movement is that more women and men feel empowered to share their stories and seek justice through legal action. Plaintiffs’ attorneys have latched on to this trend, driving litigation frequency and inflating case values by demanding higher damages or settlement amounts.

“Even if a claim seems baseless, it might make more financial sense for an employer to settle if the settlement would be a fraction of the total cost to defend – what we call the nuisance value,” said Kristin McMahon, head of North America Specialty claims for Ironshore.  “Fifteen years ago, the average nuisance value was $5,000. That has now increased to $30,000.”

Legislative changes are also shifting more liability to employers for actions taken by individual employees. In 2019, several states moved to ban non-disclosure agreements that prohibit claimants from speaking about the details of their case or settlements. This diminishes settlement as an option for resolution that keeps the company name out of negative headlines.

More states have also established minimum sexual harassment training requirements. Most require employers with five or more employees to provide two hours of training within six months of hiring, and every two years after that, though the exact parameters vary from state to state.

Failure to comply with these regulations could weaken an employer’s defense in court and increases the likelihood that the organization could be accused of permitting or overlooking a hostile work environment.

This has already happened to several major corporations — CBS, Google, McDonald’s and American Apparel, to name a few. But this risk isn’t limited to deep-pocketed big-name brands.

“In employment practices liability, we’re not dealing with accidents or natural catastrophes or system failures – we’re dealing with the failings of people or individuals. No matter how much training you provide, you can’t eliminate the possibility of people engaging in bad behavior,” said Tom Zacharopoulos, Head of Broker Relations for Professional Lines at Ironshore.

In other words, human beings are imperfect, and as long as you employ human beings, your company is exposed.

There are still, however, ways organizations can proactively reduce their risk.

1. Tighten Workplace Policies Around Acceptable Behavior

Tom Zacharopoulos, Head of Broker Relations for Professional Lines at Ironshore

Mandatory sexual harassment training will satisfy state regulators, but may not be enough to appease juries if an accusation winds up in court. Companies can go above and beyond compliance by enacting policies that keep employees out of uncomfortable or unsafe situations in the first place.

Because uneven power dynamics are a contributing factor in many instances of workplace harassment, “employers may consider putting guidelines in place around relationships between direct reports, and discouraging social engagements outside of the workplace,” Zacharopoulos said.

Companies should also consider unique situations, such as employees who frequently take business trips together.  Additional training for business travelers that addresses the social aspect of the trip may help to set clear expectations around appropriate behavior outside the office.

Employers should also establish clear reporting procedures that promise confidentiality. Employees may know who to speak to about an incident, but they also need to feel comfortable and unafraid of repercussions.

2. Drive a Culture of Diversity and Equality

One way to extinguish discriminatory behavior is to increase diversity in hiring and promotion processes.

“The more people of different backgrounds we have in the workplace, the more perspectives and views we have. That helps to foster a more inclusive environment that discourages discriminatory behavior,” McMahon said.

“You also need a due diligence process around prospective hires. Ensure that people you’re bringing in to the organization fit the philosophy of your culture; make it clear that there is no room for harassing or discriminatory behaviors.

Outline a plan to increase diversity within your organization, including methods for auditing and measuring progress toward specific goals. Diversifying recruitment efforts or establishing a mentorship program are just some ways to get started. Most importantly, involve senior leaders in driving these initiatives.

“It starts at the top. The C-suite has to set an example to funnel down through the rest of the organization,” Zacharopoulos said.

3. Build Internal and External Response Plans

If an employee does lodge an accusation of sexual harassment, the first steps can determine whether the employee decides to file suit, and whether the company will be able to mount a strong defense.

“You have to deal with it promptly. The longer an investigation goes on, the greater the likelihood there will be leaks, which makes the environment uncomfortable for the accuser and the accused. Investigate fully, but quickly,” McMahon said.

To do that, the human relations team must understand how to conduct thorough investigations discreetly and document in detail. Proving that an allegation was taken seriously can go a long way in defending a claim.

If an employee does file suit, the news may quickly disseminate. A slow or hedged response could create a negative public perception of how a company handled the situation and cause irreparable reputational harm.

“You need to be really thoughtful about your statement to the public. Demonstrate that you want to make amends, resolve the situation and move on. Show by example that creating a healthy workplace is a top priority,” Zacharopoulos said. “Companies talk about how they’re going to ensure something like this doesn’t happen again tend to rebound more quickly.”

4. Take Advantage of Risk Management Resources Through Your EPLI Carrier

Most insurers offer free or discounted risk management resources to policyholders. Especially for smaller businesses without large risk management departments, these resources are invaluable.

“We recently rolled out the Jackson Lewis Prevent and Protect Portal, which offers a variety of educational resources to clients who have purchased employment practices liability coverage from us,” Englert said.

In addition to news briefs that keep companies up-to-date on the latest litigation trends, the portal also contains information sheets, podcasts and webinars detailing best practices on everything from sexual harassment training to updating employee manuals.

Another value-added service Ironshore offers is access to a legal help hotline, manned by Jackson Lewis attorneys who each have at least 25 years of experience in the employment practices arena. Policyholders can speak directly with an attorney for one hour, free of charge, about any question or issue they are dealing with.

In some cases, a risk manager may simply want input on a new policy or procedure. In others, a company may be facing a problematic claim that could potentially turn into a lawsuit.

“The attorney’s advice could be critical in preventing the complaint from turning into a full-blown, litigated EPL claim,” McMahon said. If further counsel is needed, clients can continue working with the attorney past the initial hour at a discounted rate.

With the frequency of sexual harassment lawsuits still high and the costs still growing, these proactive services are vital to help businesses control their exposure, stay out of the courtroom, and most importantly, keep employees safe.

To learn more, visit http://www.ironshore.com/usa/professional-lines/c19.

Neither Ironshore, nor any other Liberty Mutual Insurance Company affiliate or subsidiary, (the “Insurer”) are engaged in the practice of law. The foregoing information is for informational purposes only. It is not a substitute for legal advice from a licensed attorney, nor does it create an attorney-client relationship. The Insurer disclaims all liability arising out of this resource.


This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Ironshore. The editorial staff of Risk & Insurance had no role in its preparation.

Ironshore, a Liberty Mutual Company, is a top tier insurer providing broker-sourced specialty property and casualty insurance coverages for varying risks. Now that we're part of Liberty Mutual we'll bring even greater scale, innovation, and product offerings to market.

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.


Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.


As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.


Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &


Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]