For most Americans, the Red Cross is a trusted institution, a nonprofit organization that can be relied on during disasters to provide aid. Indeed, here in Western Pennsylvania, the Red Cross has done an incredible amount of good for our community. Yet even the Red Cross is not immune from scandal. Most recently, it was discovered that the national Red Cross not only shielded a top employee from repercussions from sexually harassing one subordinate and allegedly raping another, but also helped to find him a job at another charity organization— Save the Children. Rather than take action against this executive, Gerald Anderson, the attorney who was assigned to investigate the allegations against him sent out an organization-wide email praising Anderson for his dedication and commitment to the Red Cross in announcing his departure. He then used similar language in a reference letter to Save the Children. The Red Cross never disclosed to Save the Children that two separate employees had made allegations of sexual harassment and sexual assault against Anderson.
While this story is certainly major news in the nonprofit world, it is far from the first time that a major organization or company has covered up the actions of a serial sexual harasser or abuser. Across the political, entertainment and news industries, stories of men sexually harassing subordinates for decades have emerged as part of the #MeToo movement — often without any real consequences. Instead, it is their victims who bear the consequences, both from the actual harassment and then the impact on their careers.
When companies and organizations cover up sexual harassment, they allow this type of abuse to flourish. Sexual harassment is part of the continuum of sexual assault; it cannot be viewed as something that just happens as part of natural workplace interactions between coworkers. It can be deeply traumatic, and have a profound impact on a victim’s ability to earn a living and advance in her or his career. Unfortunately, far too many businesses and nonprofits perceive sexual harassment as a potential legal problem to be avoided, rather than a real and tangible harm to protect their employees from, as they would any other type of assault. For this reason, sexual harassment trainings often fail — they are more focused on shielding a company from legal liability than on preventing sexual harassment.
However, one aspect of the new tax reform bill may make it harder for companies and other organizations to sweep sexual harassment claims under the proverbial rug. The new act denies deductions for any settlement or payment related to sexual harassment or sexual abuse or attorney’s fees related to the claim IF the settlement or payment is subject to a nondisclosure agreement. In other words, if a settlement is reached in a sexual harassment or abuse case, an employer will have to make a choice between keeping the settlement confidential or being able to deduct the settlement. If the settlement has a nondisclosure agreement (i.e., it must be kept confidential), then it is not tax deductible. If it does not have a nondisclosure agreement, then it is tax deductible. While attorneys may ultimately find ways around this provision, for the immediate, it may prevent companies from covering up sexual harassment or abuse claims — which may ultimately stop serial harassers or abusers from operating in stealth for years on end.
At Blackburn Center, we offer help to all victims of violence and crime, including those who have been affected by sexual harassment. We also offer training and education programs on topics such as sexual harassment that go beyond shielding an organization from legal liability, and help participants understand the nature of this type of abuse and how to stop it. Contact our office today to learn more or to schedule a program for your business, community organization or group.