#MeToo misconduct expands to deep-pocketed defendant groups

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#MeToo misconduct expands to deep-pocketed defendant groups

On Behalf of | Mar 6, 2020 | business litigation

When faced with a class-action lawsuit, few companies expect it to be related to sexual misconduct in the workplace. Yet, this is becoming a more common occurrence. Instead of targeting the specific people they hold liable for sexual misconduct, many people are now focusing attention on the business instead. 

For some, the idea is that if a business holds itself more accountable, it can help to change the culture that leads to, facilitates or allows sexual misconduct to take place and then go unpunished. Class-action lawsuits often lead to big settlements when successful, so it is only natural that a business person might become nervous when they find themselves faced with such a situation. 

According to the American Bar Association, the allegations included in class-action lawsuits center around company policies that either omit or make misleading statements related to gender biases and sexual harassment. Shareholder derivative actions are also becoming more common. These face far fewer hurdles than federal securities class-action lawsuits. Some of the companies facing or who have faced lawsuits related to these issues recently include Google, CBS, Nike and Twenty-First Century Fox. 

CNBC reports that because of these and other instances, businesses can expect to see increases in their premiums. These premium increases directly relate to the higher likelihood of getting sued. In fact, compared to just a few years ago, Fortune 500 companies are already paying 24% higher insurance premiums. This reflects the 150% increase over the past 10 years in filed suits against companies. 

The #MeToo movement is just one aspect of this. Other alleged actions of negligence include liabilities related to security breaches, wildfires, opioid deaths, airplane crashes and concert shootings. To better protect themselves, companies need to revisit company policies and safety procedures at work. 

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