New York Federal Judge Rejects Proposed Settlement in Sexual Harassment Class Action

In late 2017, a series of sexual harassment allegations against a prominent film producer ended his career and launched the #MeToo movement. New York City sexual harassment attorneys know that the kind of conduct described by the film producer’s accusers extends far beyond the entertainment business. It occurs on Wall Street and Madison Avenue, in restaurants and hotels, at fashion shows, and in almost every other workplace in New York City and around the world. Soon after the first allegations gained widespread publicity in 2017, a group of women filed a class action against the producer, his production company, and others alleging a wide range of causes of action related to alleged sexual harassment. In July 2020, a federal judge in New York City rejected a proposed settlement in the class action, questioning whether it would provide fair compensation.

Sexual harassment is considered a form of sex discrimination under laws like Title VII of the Civil Rights Act of 1964 in certain circumstances. For example, quid pro quo sexual harassment occurs when acquiescence to sexual demands is a condition of obtaining a job, keeping a job, or securing benefits in a job. The entertainment industry trope known as the “casting couch,” in which a performer — often but not always an actress — must agree to the sexual demands of a producer or director in order to get a part, constitutes this type of sexual harassment. Many of the allegations against the producer are examples of the “casting couch,” since he is alleged to have routinely cited his influence throughout Hollywood in order to coerce women into some form of sexual activity.

The 2017 class action against the producer does not directly allege sexual harassment or sex discrimination as a cause of action. It previously alleged causes of action commonly found alongside claims for sexual harassment, such as negligent supervision and retention and intentional infliction of emotional distress. In 2019, the court dismissed most of the plaintiffs’ claims, along with all defendants except the producer himself. The one remaining cause of action is based on the Trafficking Victims Protection Act.

The parties to the class action announced a proposed settlement in late June 2020. The total amount of the settlement would be more than $46.7 million. This would include a settlement fund of $18.8 million, from which class members could submit claims describing their encounters with the producer. Individual payouts would range from $7,500 to $750,000 based on the decisions of a special master. Nine plaintiffs moved for preliminary approval of the settlement.

A federal judge rejected the settlement during a conference call on July 14, and issued a memorandum opinion on July 24. He noted that not only is the producer joining in asking him to approve the settlement, “he benefits from it, financially as well as by obtaining a release of claims.” The judge raised questions about class certification, calling the proposed subclasses both “overbroad” and “too narrow.” He also criticized the proposed use of a special master, who is not a judge, to determine allocation of settlement funds, suggesting it would be “likely to lead to arbitrary awards for claimants.” He directed the parties to “swiftly complete discovery and be ready for trials.”

If you have experienced sexual harassment in New York City, the employment lawyers at Phillips & Associates are available to discuss your rights and options. Please contact us online or at (212) 248-7431 today to schedule a free and confidential consultation with a member of our team.

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