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Article: November 2019: Crisis Law Update

Business Litigation Reports

Lessons Learned from a MeToo Settlement

When a high-ranking female company executive endures years of an “Animal House” work culture, suffering discrimination, harassment, demotion, and constructive discharge due to her gender, her pregnancy, and her status as a mother, it usually results in protracted litigation and front-page news.  This summer, the firm took a different approach on the plaintiff’s side of a MeToo case and negotiated a favorable pre-litigation settlement, by preparing and presenting a complaint that thoroughly detailed the “boys club” atmosphere at the company, leaving little room for denials by the company and its executives.  This victory was one of several favorable resolutions that led the firm to launch its plaintiff-side Sexual Harassment and Employment Litigation practice in late September.  In the interview below, some of QE’s Crisis Law Group members share their perspectives on crisis management lessons defendants can take away from the plaintiff’s side of this “Me Too” case.

 

On lessons learned from this litigation for plaintiffs and defendants…

            For a defendant, hopefully with the right prevention mechanisms already in place, do your own investigation to evaluate the allegations and what the various stakeholders say.  You must run a substantial investigation at every level of the company to determine what took place and to assess credible defenses and ways to reverse the narrative.  Be aware of the rules of discovery in your jurisdiction:  Is your investigation discoverable, and to what extent?  Consider ulterior motives on the part of the plaintiff.  Look into the decisions that were made at issue in the case (such as salary reductions or termination) to determine if there was a valid reason for that decision, unrelated to discrimination.  Keep in mind that you do not want to look like you’re bullying the plaintiff.  Talk to neutral third parties who were present during relevant events who are no longer affiliated with the company and therefore not biased.  Ask questions of former employees.  You need to thoroughly investigate all the facts in order to successfully reverse the narrative. 

            On the plaintiff’s side, Quinn Emanuel attorneys recommend strongly that you should have a completely drafted, fully-baked complaint at the ready.  Presenting a strong complaint before any litigation begins allows you to lead from a position of strength during negotiations because you’re positioned to file at the drop of a hat—and the other side knows it.  Indeed, in this era, they cannot afford to have such a complaint filed.  Plus, if written effectively, the complaint should bring your client’s narrative to life, and when the defendant sees those allegations in black and white, they’ll likely recognize just how badly that narrative could potentially play out for them, including in the press and the court of public opinion.  Presenting a strong complaint can really set the plaintiff on the right path early on.

 

On the benefits of an early settlement...

            In evaluating this case, Quinn Emanuel attorneys determined that they had the so-called “perfect” plaintiff and “perfect” defendant.  What is meant by that?  The plaintiff (our client) not only had a compelling narrative with detailed accounts, but she was a highly accomplished, likeable individual who wanted to tell her story and could withstand the pressures of litigation.  She was articulate, presentable, and skilled at the job she did at the company.  However, because litigation can be a sometimes consuming and distracting process—particularly for an individual—our client  was open to a settlement for the right amount with the right factors.  Meanwhile, the defendant was a company whose CEO did not want to risk its (or his) good reputation, undermine its executives, or put at risk its lucrative business deals because of the press of a “Me Too” scandal.  For both sides, it made sense to avoid the lawsuit and the publicity as early as possible.

 

On preventing and defending against “Me Too” litigation…

            Companies – whether public or non-public – should have in place dedicated legal and human resources departments that oversee and handle issues or reports of discrimination and harassment, and that are completely independent from company executives and directors.  Companies also should have comprehensive training programs and literature to help educate employees, insulate legal claims, and prevent or address these situations hopefully before they arise.  With those foundational elements in place, if your company does face allegations (like the ones the firm made in this case), then it’s far better-positioned to run internal investigations and evaluate applicable defenses and counter-points.  In fact, there may be perfectly valid counter-points to the allegations being lodged by the plaintiff, but in order to build those facts credibly, the company needs an independent body that lends legitimacy to that position.  For example, decisions with respect to an employee’s responsibilities or compensation may have been made for  legitimate reasons, which have nothing to do with any discrimination or harassment.  With these processes in place, the company is well-positioned to present a strong, credible counter-narrative during the litigation or settlement discussions. 

            In our case, the defendant was missing these fundamental elements.  For example, its legal and human resources departments weren’t independent at all, so employees like our client had nowhere to turn.  Quinn Emanuel was able to capitalize on that deficiency, both in writing the complaint and negotiating a settlement.

On building rapport with clients to discuss sensitive and uncomfortable allegations…

            Whether you’re representing a plaintiff or a defendant in cases involving discrimination and harassment claims, it may be the first time your client is going through this type of legal action, so you have to take the time to build confidence both as an advocate and as a legal expert.  Having candid conversations with your client from the outset about the procedures and claims at issue, and what’s really at stake personally and financially, goes a long way in establishing trust and allowing the client to then open up about the uncomfortable and sensitive topics that form the heart of the dispute.  Additionally, to the extent possible, it’s ideal to include at least one member of the legal team with whom the client can identify on a personal level.  Here, although not by design, two Quinn Emanuel attorneys that worked on this case happened to be in their third trimesters of pregnancy.  That commonality helped our client to talk frankly about intimate details relating to her own pregnancy and how her company treated her as a result.  Establishing trust early is important so that every detail, positive or negative, can be evaluated as the claims or defenses are evaluated from a juror’s perspective.