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Updated on Thursday, February 15, 2018
Even in the era of the #MeToo movement, the picture is still rather bleak for victims of workplace sexual harassment who may not have the financial means to seek recourse.
According to a 2016 U.S. Equal Employment Opportunity Commission Task Force report, one in every four women have experienced sexual harassment at work. That number could be even higher. That number could be even higher.
Fearing that their claims will be ignored and their careers will be put in jeopardy, as many as 70% of sexual harassment victims choose not to come forward, let alone file legal claims against their abusers, according to Maya Raghu, director of Workplace Equality and Senior Counsel at the National Women’s Law Center.
In a Gallup poll conducted in the wake of the Harvey Weinstein scandal, some 42% of women said they had been sexually harassed.
As movements like #MeToo and Time’s Up gain more traction, many more women are coming forward through various channels, and resources are being pulled together to help them battle perpetrators and unlawful practices.
The Gallup survey suggests that the #MeToo social media campaign has encouraged more women to take legal actions against the abuser: About 38% of the women surveyed said they were more likely to sue the perpetrator they believed had sexually harassed them. This is a much higher percentage than the same question garnered 20 years ago (18%).
However, a provision buried in the new 2018 tax law could possibly deter victims from taking legal action than before. In the past, victims could deduct the attorney’s fees from a settlement subject to a confidentiality agreement, so that the amount taxed is equal to the portion of the payment the victim keeps.
Under the current tax law, which was passed late last year, employees who settle sexual harassment lawsuits and agree to a nondisclosure agreement may no longer be able to deduct their legal expenses on their taxes. Instead, they would be taxed on the full settlement.
Sen. Robert Menendez (D-N.J.) proposed this amendment last November before the existing tax bill was signed into law. The proposal came in wake of the #MeToo movement, following a flurry of sexual harassment scandals from Hollywood to Capitol Hill. Legal experts say the provision that was intended to curb corporations from seeking confidentiality — an instrument to keep victims quiet — might have unintentional consequences on the victims’ end: The way the rule is written, it would have the same effect on plaintiffs in such settlements..
Anthony C. Infanti, a professor at the University of Pittsburgh School of Law who focuses on tax law, told MagnifyMoney the provision was written so broadly that other expenses related to sexual harassment claims could be deemed eligible for tax deduction.
For instance, he explained, women going to therapy to discuss sexual harassment subject to a confidentiality agreement may not be allowed to deduct such medical expenses from their taxes.
“It’s so broadly written that it’s not targeted at perpetrators and their employers, who seem to be the intended targets,” he said.
Infanti stressed that many victims may have legitimate reasons for wanting a nondisclosure agreement, whether it is to maintain a low-profile life when the perpetrator is a famous figure, or protect their career. If the price of agreeing to a nondisclosure would be a huge tax bill, this could well prevent from them going through all the grief associated with coming forward in the first place.
“To a certain extent you have to give some agency to the victims, let them also make decisions for themselves rather than having Congress make the decision for them about what they should or shouldn’t be able to do, what’s good for them and what’s not,” Infanti said.
Whether victims will be able to deduct fees from taxes is unclear right now. It’s up to the courts and IRS to interpret the provision. But this gives more reason for sexual harassment victims to seek ways to address the issues without having to suffer from devastating economic hardships.
Once you decide to seek justice, here are the steps you should take, and resources to take advantage of:
“The thing is there are some legal options, but they aren’t perfect,” Raghu told MagnifyMoney. “And it takes a while sometimes to obtain justice, and unfortunately there are no guarantees even for someone who manages to persist, who’s able to find an attorney. It’s very very difficult.”
1. Follow your employer’s reporting guidelines
First, you should look to see if your employer has a sexual harassment policy before reporting the incidents. The employer should conduct an investigation, which doesn’t always happen or isn’t always as thorough as it can be, Raghu said.
But it’s important to go through the internal procedure before seeking external assistance. Raghu said that’s because if someone eventually chooses to file a lawsuit, his or her employer can assert as a defense that the victim didn’t take advantage of the internal reporting procedure.
Read our guide to report sexual harassment at work.
2. File a complaint with the EEOC
Once an investigation is conducted, or the company doesn’t act, Raghu said the victim can go to his or her federal, state or local civil rights agency, and file a complaint citing discrimination. The EEOC is the federal agency that enforces laws against workplace discrimination. It has offices throughout the country.
Raghu said it is a prerequisite for the victim to file a complaint with the EEOC before filing a lawsuit, and the victim doesn’t necessarily need an attorney at this point.
What happens is that the EEOC will in many cases try to get the parties to come to some resolution without requiring a full-blown litigation. But if that doesn’t happen, the EEOC will investigate, asking the employer for a written answer to the charge. The victim will need to provide documents supporting the complaint, such as evidence of harassment and retaliation. The investigation is based on facts provided by both parties and additional information the EEOC gathers. The agency can either find the claim viable and can go forward with filing a lawsuit in court or they make a determination that the discrimination didn’t occur.
Sexual harassment is considered a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964. If the EEOC determines that sexual harassment did occur after investigation, it will issue the victim a Right to Sue notice.
3. File a lawsuit
Once you have received the letter of Right to Sue, you can file a lawsuit under the federal anti-discrimination law. This has to happen within 90 days of receiving the green light from the EEOC. This is the time when victims need to work with an employment discrimination attorney.
4. Explore alternative options
Many victims may not have the financial means to take their employer or even an individual colleague to court and risk losing their case. Raghu acknowledges that few cases get to the point of trial or even a settlement. If you can’t find any legal defense funding and you still want to take action, you may want to come forward in public, Raghu suggested.
What we’ve seen in the last few months is that many victims have been talking openly about their experiences to the press and on social media, bringing the incidents to light without necessarily going through the legal process.
Catharine A. MacKinnon, who teaches law at the University of Michigan and Harvard University, wrote in a New York Times op-ed that the #MeToo movement is accomplishing what the law has not.
If you suspect the perpetrator has routinely harassed other people, maybe you can find allies in your company, or through former employees. Allegations of sexual harassment are being taken seriously as the social movements against predator behaviors run deep. You may feel more empowered coming forward as a group than battling on your own.
Just last week, 10 women signed a public letter accusing a Northwestern University journalism professor of sexual harassment and assault. The 10 former students of Northwestern’s Medill School of Journalism have received overwhelming public support from alumni and professors. The accused professor denied all the allegations, but will take a leave of absence while the case is being investigated by the university, according to the Chicago Tribune.
5. Prepare for the cost
To be sure, waging a legal battle against workplace sexual harassment can be a costly, time-consuming and mentally exhausting process. Victims may already have experienced substantial economic harms as a result of harassment in the first place. Many cannot afford legal representation, and very few cases get to the point of a trial or even a settlement unless they are representing themselves, Raghu said.
Raghu said some private attorneys may take on a sexual harassment lawsuit on a contingency basis, meaning that the lawyer would charge nothing — or sometimes they may ask the defendants to pay their costs — if you lose the case. On the other end, if the victim wins, the attorney would take anywhere from 20 to 50 percent of the money from a settlement or judgment.
Attorneys’ rates vary depending on the complexity of the case, the location of the attorney and the agreement between the plaintiff and the lawyer. But Raghu said those with a history of reaching larger settlements/judgments may charge a higher percentage for the case. In other cases, she said the lawyer may take a sexual harassment lawsuit on a partial contingency basis, requiring the client to pay for certain expenses, such as court filing fees, travel costs, etc., no matter whether they win or lose the fight.
If you are determined to pursue your rights through the legal system, there is legal and financial assistance available for victims. Here are some examples:
The National Women’s Law Center is the home of the TIME’S UP™ Legal Defense Fund, an initiative launched by women in the entertainment industry on Jan.1, 2018. Over $20 million has been raised to subsidize legal support for individuals who have experienced workplace sexual harassment and retaliation.
When victims seek assistance, Raghu said the center connects them to a network of attorneys who will take their case for a reduced fee, or in some cases, pro bono. Depending on circumstances, their cases may be eligible to receive support by the TIME’S UP™ Legal Defense Fund. But there’s no guarantee of representation, Raghu adds.
NWLC’s Legal Network for Gender Equity, launched last October, now has 530 attorneys across the country. It has received almost 1,500 requests for assistance from workplace sexual harassment victims, Raghu said.
Equal Rights Advocates (ERA), a national civil rights organization based in California, defends laws that prohibit sex-based discrimination, and advances gender equality in the workplace partly through representing women in lawsuits. For more information or referrals, contact Equal Rights Advocates.
6. Weigh the pros and cons of signing a nondisclosure agreement
As the new tax law is currently written, people who decide to settle a sexual harassment lawsuit and sign a nondisclosure agreement may no longer be able to claim their legal fees as a deduction on their taxes. This was one way that plaintiffs could formerly offset the taxes they would likely have to pay on the settlement amount.
Infanti said the court and the IRS will be the final interpreters of the new provision under the tax law when such cases appear. At this stage, he said, there is not much that sexual harassment victims who may want to seek a confidentiality agreement can do besides put pressure on their state representatives to amend the law.
Potentially, employees may choose to change what type of claims they are pursuing in order to avoid a huge tax bill.
For example, “if you are a woman of color, you may be experiencing sexual harassment but also racial harassment, or racial discrimination or national origin discrimination that are all related,” Raghu said. “Or maybe there are sex discrimination claims that are not sexual harassment, for example.”
Raghu said all related information can be incorporated into the strategy when attorneys are litigating these cases or trying to negotiate a settlement agreement for the victims. If there are multiple claims other than sexual harassment, perhaps a settlement could be structured in a way that separates the allocation of the settlement from those other claims, so that the related attorney’s fees aren’t taxed, according to Raghu.
In any case, this is even more of an incentive to find a qualified attorney knowledgeable in cases of sexual harassment or discrimination who can craft the right strategy for your situation.
7. Know the risks
Reporting sexual harassment comes with potential dangers, which have prevented so many from coming forward. Raghu advises victims to consider a few things before taking action:
- Understand what sexual harassment is. A December Reuters/Ipsos poll found that Americans hold very different views on sexual harassment. The EEOC defines sexual harassment as unwelcome sexual advances, requests for sexual favors, other verbal or physical harassment of a sexual nature, as well as offensive comments based on gender, which don’t have to involve sex. Sexual harassment occurs when it creates a hostile or offensive work environment, or when it leads to someone’s unemployment or demotion, according to the EEOC. Learn more about sexual harassment from this NWLC guide.
- Don’t be surprised if the employer dismisses your complaint or simply doesn’t believe your account. You may experience retaliation, which has deterred many women from coming forward. Retaliation comes in various forms that include firing, demoting and cutting salaries of an employee who filed a sexual harassment complaint. Retaliation is illegal but happens frequently. In 2013, roughly half of all complaints filed with the EEOC were retaliation allegations, with 42 percent of findings of discrimination based on retaliation, according to the agency.
Therefore, for practical reasons, you should:
- Document evidence of harassment, infractions, retaliation, correspondence with your supervisor and the human resources department.
- Start looking for other employment while trying to obtain justice. You can reach out to co-workers and former colleagues, and network with your industry contacts for job opportunities.
- Start putting money aside in case you have to leave the company as a result of retaliation following your harassment accusation. It is critical that you have a financial cushion to fall back on when you need to move on in your life. Generally, three to six months’ worth of necessary living expenses should be able to navigate you around job loss.