Farore Law contributes to Bloomberg article: “How Corporate Britain Hides Thousands of Sex Discrimination Cases”

Farore Law has been cited in an article published by Bloomberg regarding the hundreds of workers who each year file sex discrimination grievances “in return for money – and silence.”

Bloomberg analysed legal judgments available via UK Government’s public Employment Tribunal decisions database [1] and found that 2,195 sex discrimination cases were dropped before court rulings in the past 2 and a half years, out of 3,585 cases in total. This equates to around 61%. Bloomberg’s analysis of the judgments is backed by the separate Ministry of Justice data, which show that the number of sex discrimination complaints at the Employment Tribunal increased by 69% in the year to March. In contrast, all types of cases increased by 27%. Last year, only 3% of sex discrimination cases made it to a final ruling, of which two-thirds saw the claimant succeed.

A range of employers – including hairdressers, the police, and multinational corporations – have been sued for sex discrimination in cases that were later withdrawn. In the finance industry, at least 71 out of the 94 cases that were brought “vanished into the ether.”

Major employers noted in Bloomberg’s analysis include Barclays, HSBC, JPMorgan. and Santander. Their cases represented only a fraction of 7,000+ sex discrimination cases that were withdrawn from Employment Tribunals since 2013 via a mechanism which usually indicates that a settlement was reached. Such settlements overwhelmingly include confidentiality clauses and non-disclosure agreements (NDAs). In addition, many disputes end in payouts and gag orders before they reach the court, meaning that there is no public register of them. Only a “tiny minority” of cases end up in the Tribunal.

The fact that a case was filed or withdrawn tells nothing about its merits: the dataset may include spurious cases, or cases dropped without a deal by people who were either worn down by the process, or convinced that they would lose. Details of allegations will sometimes become public even if there is a settlement, should judges publish pre-trial rulings. The data likely includes small-scale disputes that were resolved with relative ease, but “it’s clear that dark tales lurk behind many settlements.”

Huge numbers of people face harassment and discrimination but decide “there’s nothing they can do,” said Lizzie Barmes, Professor of Labour Law at Queen Mary University of London. Many companies faced with a “genuine claim” that poses a “reputational risk” will try to settle it before potential claimants file any court papers, said Florence Brocklesby, Principal at Bellevue Law.

Bloomberg News spoke to eight women in banking and finance who took their employers to court before dropping their claims. Their experiences included – and were not limited to – out-and-out sexual assault at work, offensive comments, being sidelined after having a baby, and raising the alarm about lower pay and fewer promotion opportunities for women. These women spoke on condition of anonymity as they feared losing their livelihoods for going public.

All but one of these women received payments and signed NDAs. In the months and years after abandoning their claims, some of them realised that their ordeal was not over. Many are struggling to move on in their careers and with coming to terms of the reality of keeping a secret forever: “If in five years’ time I accidentally say something to someone, or someone finds out through some other means and my former employer decides that it was my fault, they can come after me and get all that money back, or at least try to get it back,” states another anonymous NDA-holder. “It is a weight that hangs over you for the rest of your life.” Some live with the knowledge that their cases failed to change behaviour within the companies they sued.

The nature of secret settlements means that victims of harassment and discrimination do not learn about each other’s cases, and so cannot band together. Patterns of wrongdoing therefore become hidden and the system never comes under pressure to change. “Since the system can only offer money, one could say I won,” said one woman, who dropped her case against a large bank. “What we lose is the chance to give courage and inspiration to other women.”

Settling is not the problem. A settlement is an out-of-court agreement, and potentially a good thing for everyone since court battles are often stressful and expensive. The problem is the secrecy clauses that are added to them. This was an issue reported by Zelda Perkins, a former assistant in the London office of Harvey Weinstein. She broke her NDA in 2017 to speak out about alleged sexual harassment by the Hollywood producer. and who now wants a legal ban on confidentiality clauses in discrimination cases. Perkins said that when she signed Weinstein’s NDA more than two decades ago aged 24, she “really didn’t think about the power of what I was signing.” Perkins was not permitted to keep a copy of the agreement, and she was prevented from being able to “speak to my family, my friends, a doctor, a therapist,” or even other lawyers about whether the NDA was legal and could be enforced. “You can’t own your own trauma.”

Lawyers can use an arsenal of tools to push claimants to agree to keep quiet rather than have their day in court. One such move is to try and make the claimant pay the employer’s costs – even though Tribunal rules allow this only when a judge rules that the other side has been unreasonable. Once, a company’s lawyers applied for £35,000 in costs mid-way through the process. This was a move designed to “derail” the other side and pressure them to settle, said Suzanne McKie QC.

One company’s lawyers applied for £35,000 in costs mid-way through the process. This was designed to pressure the other side to settle, said Suzanne McKie QC

Intimidation is another tactic. Nathalie Abildgaard, an investment analyst in her 20s, took her employer (IFM Investors) to court: her senior colleague, Frederic Michel-Verdier, had texted her his hotel room number with a message saying “come” and offered to teach her “a lot about sex.” Abildgaard said that her employer’s lawyer from Herbert Smith Freehills warned that she’d be “toast” if she testified, and would never work in the industry again.

 “The process of complaining about mistreatment is often as stressful and upsetting as the initial behaviour,” said Florence Brocklesby. “Many women end up signed off work with anxiety related illnesses.”

“I was standing at the top of the Canary Wharf escalators in tears thinking, this is not me,” after an internal meeting that made it clear the case was going to drag on and potentially end up in court, said one of the women interviewed by Bloomberg. “For the employee, everything’s stacked against you.”

“They just want you to go away because you’re like an annoying fly,” said another. “It’s horrific. You’re made out to be a liar and you end up doubting yourself,” while the company is “badgering you, saying you’re not going to get anywhere so we’re going to sue you for costs.”

Another of the women said that, after filing her case, colleagues felt differently about her. “People’s perception of you is, you’re trouble,” she said. “You’re tarnished.”

The effect can be profound, said McKie. When people believe their employer has treated them badly, they revisit their entire career, asking themselves: “Why have you sacrificed having children, why have you not put as much time into your marriage? […] Your thoughts go to all the effort you put in, and for what?”

Suzanne McKie QC: When people believe their employer has treated them badly, they revisit their entire career, asking themselves: “Why have you sacrificed having children, why have you not put as much time into your marriage?”

Juliet Carp, Chair of the Employment Lawyers Association, said alleged victims’ reasons for wanting confidentiality include the fear of being bad-mouthed, especially to potential new employers, and the desire to draw a line under what happened. But companies are unlikely to pay out without a gag order when that could be seen as an admission of wrongdoing. Carp stated that some employers settle even if they think that they have done nothing wrong, because it is cheaper than a trial.

Settling with secrecy brings closure, avoids stressful and expensive trials and lets everyone move on, Carp said. “If you can’t have confidentiality, far fewer claims will settle [and] a lot of people who’ve been badly treated won’t make claims at all.” But “whether it works best for the public as a whole is another issue,” she said. If “everyone agrees to say nothing, how does that help the next person?”

Bloomberg reports that the scale of secretive settlement deals is just one of the reasons the worldwide #MeToo movement has not led to “much of a reckoning” in the UK. In the US, hundreds of people have been fired, resigned, or faced other professional consequences since allegations of serial predation by Weinstein were first reported in 2017. Comparatively, British libel and privacy laws are tougher. Courts frequently issue injunctions that limit press reporting of allegations of extramarital affairs, sexual assault and harassment.

For example, The Times reported in July 2019 that one of the British establishment’s richest and most powerful figures had won secrecy orders that stopped him from being named as the target of allegations of serious sexual harassment and assault. Separately, billionaire Philip Green won an interim injunction last year that prevented the Telegraph newspaper from publishing allegations that he’d used legal agreements and payments to hide accusations of sexual harassment, racist abuse and bullying. His name only became public because it was revealed by Peter Hain under Parliamentary privilege.

A recent Bloomberg investigation into sexual harassment in the Lloyd’s of London insurance market found that the human resources departments in many city firms appeared complicit in silencing alleged victims of abuse. Several of the women Bloomberg spoke to said that when they reported their harassers to HR they were advised their careers would likely suffer if they made a formal complaint, because they would become known as being difficult.

Once a dispute is underway, the only way to avoid a gag order is usually to go through with a trial. But that’s expensive and time-consuming – and sometimes traumatic. “I’ve represented people who won their cases and came out of it feeling like they’ve lost, the experience has been so bruising,” said Karon Monaghan QC of Matrix Chambers.

By way of example: in one recent case, a junior lawyer told a Tribunal that a colleague in his 50s had invited her to his house and said she could swim naked in his pool. He allegedly encouraged her to eat a hash brownie on a work trip to Amsterdam, told her that cocaine makes him ‘horny,’ touched her breast and tried to unzip her dress. The man’s lawyer said the woman was “obsessed” with him and wanted a relationship. During proceedings, the lawyer states that the claimant was “a malicious liar and this is a malicious lie,” because “with you there was no boundary anymore.” The woman, who cried on the witness stand, lost her case. The Tribunal found she was “reluctant to take responsibility for her own actions” and it was hard to know whether she was telling the truth because, on her own admission, she sometimes lied. Whatever the merits may be, it shows going to trial is not easy.

Nathalie Abildgaard – the analyst who was told she would be “toast” if she spoke out – persisted with her case despite this intimidation. She eventually received a £270,000 settlement from IFM that, highly unusually, did not include an NDA. Abildgaard has since set up a charity to help others in a similar situation.

“That girl, I applaud her,” said a female senior executive who sued a major bank for sex discrimination, and accepted payment and an NDA. “You would never get a lawyer at the beginning of the process who’d say that’s even possible.”

Source: Bloomberg

[1] This data is the only known compilation of its kind. Across much of Europe, the kind of Tribunal data that formed the basis for Bloomberg’s analysis is simply not available. There is no US equivalent; although the US Equal Employment Opportunity Commission publishes aggregate data on sex-discrimination and harassment cases, it doesn’t include employer names.