Ryan McMaken – January 15, 2019
Bloomberg reports this week [December 3, 2018] that on Wall Street, men have started to implement office strategies that some managers and employees believe will minimize the likeliness of being accused of sexual harassment:
While the new personal codes for dealing with #MeToo have only just begun to ripple, the shift is already palpable, according to the people interviewed, who declined to be named. … [Many of the men are] saying how uneasy they are about being alone with female colleagues, particularly youthful or attractive ones, fearful of the rumor mill or of, as one put it, the potential liability.
A manager in infrastructure investing said he won’t meet with female employees in rooms without windows anymore; he also keeps his distance in elevators. A late-40-something in private equity said he has a new rule, established on the advice of his wife, an attorney: no business dinner with a woman 35 or younger.
Not surprisingly, some advocates for female employees have protested, claiming they are being “iced out” of important meetings and are now “excluded from casual after-work drinks, leaving male colleagues to bond.”
Nor is avoiding a lawsuit simply a matter of being more polite or less sexist, since that doesn’t necessarily reduce the risk of false accusations.
Thus, for male workers who wish to reduce the risk of lawsuits, the key is often likely found in avoiding situations which could even lead to the very possibility of a lawsuit.
Avoiding the potential for accusations and lawsuits becomes all the more high stakes if male workers believe that they will not receive adequate due process in case an accusation is lodged.
That is, if a male worker feels he’ll be entitled to his “day in court,” so to speak, he might be willing to risk the appearance of impropriety or private settings which could lead to a he-said-she-said situation.
It’s easy to see how in today’s environment, though, that many male workers may conclude that even an accusation will be enough to ruin one’s career.
In that case, understandably, they may be willing to go to great lengths to minimize risks.
The ADA Example: Hiring Fewer Disabled Workers to Avoid Lawsuits
This isn’t the first time we’ve seen this sort of dynamic at work.
Passed in 1990, the Americans with Disabilities Act was followed by a decline in employment for disabled workers for similar reasons.
The ADA mandated that employers provide “reasonable accommodations” to disabled employees, who needed assistance in performing job duties.
Employers that did not comply opened themselves up to lawsuits.
For this reason, it is believed, many employers sought to avoid lawsuits altogether by simply not hiring disabled workers.
The empirical data showed a measurable decline in employment for the disabled. According to the National Bureau of Economic Research:
Using data from the Current Population surveys for 1988-97, the authors find that the ADA had no effect on the wages of disabled workers, which are still approximately 40 percent below those of the non-disabled. On the other hand, employment rates for disabled men in all age categories, and disabled women under the age of 40, fell sharply after the ADA. This decline represents a clear break from past trends for both disabled and non-disabled workers, and therefore seems likely to have been caused by the ADA. Additional evidence for this claim is the finding that mid-sized companies show the most pronounced decrease in hiring the disabled. Large companies probably have sufficient resources to absorb compliance costs, according to the authors, while small companies are exempt from the ADA requirements. Also, in states with large numbers of ADA-related discrimination cases in previous years, fewer disabled people are hired afterwards. This too suggests that concern about costs from ADA provisions may have been driving the decline in disabled employment.
More recent indicators also indicate that employment among the disabled continues to lag. In fact, 27 years after the adoption of the ADA, researchers found that disabled people were making gains in most areas. But not in employment:
“My organization has been collecting data on disability going back to the mid-1980s when we did our first so-called gap survey, which reports on quality of life for people with and without disabilities and looks at the gaps,” said Carol Glazer, president of the National Organization on Disability. “A number of gaps have been closing. Unemployment, unfortunately, is one thing that hasn’t improved appreciably since we started measuring.”
Keep in mind that according to the NBER report, there had been a downward trend in unemployment among disabled workers prior to 1990. It may very well be that the ADA stopped that trend in its tracks, and employment among the disabled has never recovered.
In practice, of course, the ADA essentially turned disabled workers into walking potential lawsuits. While, prior to the ADA employers had leeway in negotiating with disabled employees as to what accommodations might be made, the ADA replaced this with mandates under pain of legal action.
Under these conditions, even those employers who might be truly motivated to give more disabled workers a chance may think twice about endangering their businesses in this way.
This situation is made even worse by the vaguely defined nature of “reasonable accommodation,” and the fact that employees and employers might disagree as to what constitutes “reasonable.” Given the lack of any precision as to defining what might lead to a lawsuit, employers have likely taken to avoiding the issue altogether.
Wall Street, it seems, may have come to some similar conclusions about sexual-harassment lawsuits.
This article was originally published at Mises.org. Ryan McMaken is a senior editor at the Mises Institute. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.