Two Silicon Valley heavyweights faced fresh headlines this week about prior allegations of sexual misconduct, serving as a reminder to companies that their handling of harassment cases can very well come back to haunt them, emerging months or even years later as the #MeToo movement rolls on.
Uber’s top dealmaker, corporate development executive Cameron Poetzscher, resigned on Monday, the Wall Street Journal reported. It came less than a month after the newspaper reported he had been disciplined the year before, following an investigation into sexual misconduct allegations that included making suggestive comments about co-workers. Poetzscher, who had overseen some of Uber’s largest deals, was not initially terminated, but given a warning, a reduced bonus and sensitivity training.
Then on Thursday, the New York Times released a bombshell report about Google’s handling of past allegations, reporting that it had “protected” three executives over the past decade who were accused of sexual misconduct. The Times reported that Google paid Andy Rubin, who created the Android mobile software Google acquired, $90 million after he left in 2014 over an allegation of sexual misconduct. In another case, it did not fire an executive accused of groping an employee but accepted his resignation and negotiated an exit package, the Times reported.
The headlines drew attention yet again to the workplace environments that technology companies have had to answer for in recent years as concerns about diversity, inclusion and a “bro-grammer” culture have buffeted the industry. They also served to illustrate how past decisions regarding sexual misconduct can surface, causing a potentially greater hit to morale if the perception is that something was kept quiet or that star players are treated differently, experts said.
“You almost have to assume that these things are going to become public in some manner and at some point,” said Amy Bess, a partner with Vedder Price in Washington who handles employment law issues. And when it comes to company culture and employee morale, she said, “there’s an argument it’s worse for it to come out later."
Uber said in a statement to the Journal in September that there was “never any recommendation or determination” by an outside law firm to terminate Poetzscher and the matter “was fully investigated by outside counsel, and the appropriate actions were taken as a result." A spokesman declined to comment for this story, and emails sent to Poetzscher’s attorney were not returned.
Uber CEO Dara Khosrowshahi has been working to reform Uber’s culture, making “do the right thing. Period” a company mantra and moving beyond a list of “norms” that once included “always be hustlin'." Before he started, the company fired twenty employees and placed even more in training or counseling as the result of a workplace investigation; it also pledged to implement recommendations from a top-to-bottom workplace review. Among other things, the company has hired a chief diversity officer, invested in new training and revamped its performance review system.
In Khosrowshahi’s case, this is more than just management pablum; cleaning up Uber’s culture will also be essential to reap the rewards of an initial public offering that has been valued at as much as $120 billion, according to reports, and could take place early next year.
He has repeatedly acknowledged there is more work to do. On Monday, for instance, before the Journal published its story about Poetzscher, Khosrowshahi said at a Financial Times event in London that his first year has been “very much focused on external emergencies.”
“My second year is going to be much more internally focused," he said, "to make sure that we’re not only the company we dreamed of being to the world, but most importantly we’re that company to all of our employees.”
At Google on Thursday, CEO Sundar Pichai and Eileen Naughton, Google’s vice president of people operations, sent employees an email, calling the story “difficult to read" and saying the company is “dead serious about making sure we provide a safe and inclusive workplace.”
They said in recent years, the company has “taken an increasingly hard line on inappropriate conduct by people in positions of authority” and that 48 people have been terminated for sexual harassment in the last two years, 13 of whom were senior managers and above. “None of these individuals received an exit package,” the email said.
In two tweets on Thursday night, Rubin said the Times' story contained inaccuracies and exaggerations. “Specifically, I never coerced a woman to have sex in a hotel room,” he said, saying the “false allegations are part of a smear campaign to disparage me during a divorce and custody battle.”
Experts say one of the most important things companies focused on culture can do is to make sure they send consistent messages about how they handle employee misconduct, whether that involves a high-profile superstar or someone in the trenches.
“Whether unintentional or intentional, it actually sends a signal,” said Justin Wasserman, a managing director with Kotter International, a consultancy that focuses on change management. “It’s symbolic if an organization’s words and deeds are not aligned.”
The week also served as a reminder of what companies are grappling with amid the lasting effects of the #MeToo movement. A year after the Harvey Weinstein allegations surfaced -- talks to settle civil claims on those accusations are reportedly now in process -- employers are still finding their way and addressing lingering questions as a renewed focus on workplace civility underscores how much culture is a deeply rooted phenomenon.
The dilemma between disciplining or dismissing an employee is one that many companies have been wrestling with, employment lawyers said. Allegations of sexual misconduct went from often being historically brushed aside by corporations to prompting aggressive responses as companies feared the possibility of their own Weinstein-size reputation hit.
“Organizations are struggling so much with this,” said Christine Porath, a professor at Georgetown University’s business school who has written about incivility at work. “It usually runs deep. Norms have manifested and taken hold. Viruses have spread, so to speak.”
Others say employers are trying to carefully weigh scenarios that necessitate dismissal with those that don’t.
Many companies, said Cheryl Pinarchick, an attorney in Boston who represents employers on labor issues, “rushed to come forward to say we’re not going to tolerate this -- we are now instituting a ‘zero tolerance’ policy.”
But, she asked, “what does that mean, ‘zero tolerance’? For unlawful sexual harassment or for any type of behavior that might be considered inappropriate? Companies have really started to grapple with that.”
At employers that have faced sexual harassment allegations, experts say, harassers may have been outed and a rash of attention may have been paid to the misconduct itself. But companies are often still left with the task of fixing deeper cultural problems. That’s why a number of companies are adding training that might seem rudimentary -- about creating a respectful, civil work environment -- rather than just focusing on legal compliance about sexual harassment.
“What’s appropriate in the workplace has changed,” Pinarchick said. One client told her “I used to walk in and say ‘good morning, girls’ every morning. I can’t do that any more,” she said. She told him: ” ‘Good morning’ is probably good enough.’ "
Employers also need to prepare for a long slog. “We tell our clients from day one that it will take you at least two years," Wasserman said.
“The kind of changes we expect to see are fundamental,” he said. "It simply takes a long time.”