By: Ryan Udell and Melissa Pang
The #MeToo movement jumpstarted, by the sexual misconduct allegations against film producer Harvey Weinstein, has led to a sea of change in how companies address and handle inappropriate behavior in the workplace. Indeed, over the last few years, we have seen the swift removal of very high profile filmmakers, television figures, politicians, chefs and financial and public relations executives from their positions. Seeing the potentially devastating effects of a #MeToo claim – from public relations crises, to expensive lawsuits and other lasting harm, businesses are taking action to minimize the future occurrence of such behavior. This includes additional training, implementing better policies and mechanisms for addressing complaints, and increasing insurance coverage for sexual harassment. Because one #MeToo claim could substantially impair value, buyers are also now worried about acquiring a company in which sexual harassment claims have occurred or may be lurking and are increasingly focusing on understanding any potential exposure through more robust due diligence in addressing any such exposure in the definitive purchase agreement through so called “Weinstein Reps” or “MeToo Reps.”
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