Dive Brief:
- Top companies looking to enter a merger or acquisition are being asked to supply additional guarantees leaders haven't been accused of — or, in some cases, entered into out-of-court settlements for — sexual harassment or sexual misconduct, Bloomberg reports.
- Termed the "Weinstein clause," the add-ons are part of a larger push among firms to perform "social due diligence," according to Gregory Bedrosian, CEO of investment bank Drake Star Partners, whom Bloomberg interviewed. Bloomberg said at least seven publicly announced deals have included the clauses.
- In some instances, corporate buyers have been able to negotiate rights to set aside some funds as escrow that they can claim in the event that harassment, misconduct or related allegations or issues arise, Bedrosian told Bloomberg.
Dive Insight:
That businesses are placing the #MeToo movement at the center of their concerns during large transactions speaks to how heavily the movement looms over today's business world. High-profile departures of corporate executives — including former Intel CEO Brian Krzanich — have continued to impact workplaces over the past year, and in each case, HR is at the forefront of the discussion.
Though some may be struck by the idea of the "Weinstein clause," it's important to note what is not new about mergers and acquisitions; culture is one of the biggest considerations in these deals, experts previously told HR Dive. When two or more entities become one, a measure of cultural adjustment in the form of new values and strategies is to be expected. Systemic problems like harassment, which are nothing if not cultural issues, can create both external and internal dysfunction, complicating what is already a messy process.
Industry sources have been forward in saying that mere compliance is not enough in encouraging victims of harassment and assault to bring their stories forward. Written policies, while important, must be clearly communicated at all levels of the organization, while training sessions around the subject should provide specific examples of unacceptable behavior as well as a clear plan of action should a problem arise. Specific to sexual harassment and assault, employment lawyer Jonathan Seagal previously told HR professionals to leverage male allies in the workplace and encourage them to "be affirmative partners to stand up and speak out when we see sexism."
