While Schneiderman is empowered to undertake criminal investigations, this is not an exercise of the office’s prosecutorial power. Rather, this is an example of the attorney general’s power to enforce civil rights and police business practices.
The attorney general has broad investigatory powers under New York’s Executive Law, which it may invoke whenever it suspects a person or company has engaged in illegal or fraudulent business activities under New York law.
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The Executive Law then authorizes the Attorney General to seek injunctive relief, restitution and damages when a person or business engages in “repeated … illegal acts or otherwise demonstrate(s) persistent … illegality in the carrying on ... or transaction of business.”
The Weinstein company can be held liable for Harvey Weinstein’s individual conduct. A harassing employee’s conduct can be imputed to an employer when that employee is a high-level manager. In the case of Harvey Weinstein, the alleged harasser was ostensibly the company’s highest-ranking employee. In the case of certain kinds of harassment, a company may be automatically liable as well.
Bob Weinstein may argue that he was just an officer of the Weinstein entity which allegedly performed illegal acts and that, as such, the attorney general cannot “pierce the corporate veil” to hold him liable. However, individual corporate officers and directors can be personally liable if they personally participated or had actual knowledge of the conduct.
There are two main theories of sexual harassment, both of which are alleged in the petition: (1) quid pro quo; and (2) hostile work environment. “Quid pro quo” harassment occurs when unwelcome sexual advances, requests for sexual favors, or other verbal or physical sexual conduct is used, either explicitly or implicitly, as the basis for employment decisions affecting a victim. A “hostile work environment” exists when the workplace is permeated with discriminatory intimidation, ridicule, and insult. That conduct must be so severe or pervasive that it alters the conditions of the victim’s employment. Under the quid pro quo sexual harassment theory, corporate defendants are automatically liable for the supervisor’s harassment. Corporate defendants are not automatically liable under the hostile environment sexual harassment theory.
The petition alleges a lot more than just sexual harassment, however. It alleges criminal conduct, including forcible touching, sexual abuse and coercion, unlawful sexual misconduct, criminal sexual acts, and attempts to commit the same. Each of these are crimes under New York’s Penal Code. Again, however, the attorney general is not indicting or charging criminal conduct. Rather, these crimes are part of the overall constellation of illegal conduct that supports Schneiderman’s authority to bring this civil case. It’s important that the attorney general allege a broad array of unlawful conduct. This is because the Executive Law does not create independent claims; it merely gives the attorney general the authority to get involved and bring a lawsuit based upon violations of its citizens’ rights. The office is not a direct victim; rather it must tether its lawsuit to harm caused to particular victims.
These special proceedings are an expeditious means for the attorney general to halt ongoing damage by a business, but also seek relief for the victims. Schneiderman wants the Weinstein defendants to pay civil penalties to the State of at least $350,000 for each violation of state and city Human Rights Law, but it also seeks restitution for the victims.
How the government agency will calculate restitution for each victim remains to be seen. Indeed, victims may not agree with how the attorney general places a value on their harrowing experiences with these defendants. The issue will ultimately be decided by a court, but the Office of the Attorney General is ultimately the plaintiff — not the victims.