In a recent NY Times article, Harvey Weinstein, American film producer and film studio executive best known as co-founder of Miramax, is accused of numerous acts of sexual harassment and assault that date back 30 years. This accusation has since been raised by as many as 40 additional women who claim to have been harassed or assaulted by him. He has 3 adult daughters from his first marriage and 2 small children with his current spouse. His wife is currently looking for a divorce attorney.
It is not uncommon in divorce for ugly allegations to arise. Minnesota law provides for no-fault divorce. While the issue of misconduct does not impact the grounds for obtaining a divorce, as it once did, it can have an impact on the issues of a case particularly the financial issues and custody.
If there were allegations that a powerful, wealthy Minnesota executive had been accused of sexual misconduct in relation to his work and his spouse initiated a divorce would the alleged conduct have an impact on the issues of the divorce in a Minnesota Court?
An examination of the conduct and the funds used to facilitate the conduct would be considered. In Mr. Weinstein’s case, he may have used business funds to pay for settlements, and secure hotel rooms where he was alleged to have engaged in the acts that are being described as sexual harassment and assault. If the settlements, rooms, meals, transportation and other expenses were not connected to any legitimate business purpose it is possible that the funds could arguably be funds that the business would seek to recoup if the company were not complicit in the payment of the settlements, e.g. Fox News knew that the settlement payments made to various women were for allegations of sexual harassment by Roger Ailes former CEO of Fox News and the Fox Television Stations Group. This would be an issue in a divorce if marital assets were expected to repay an alleged debt to the business.
If the settlement and/or acts were funded by marital assets there could be a claim by the other spouse that the marital estate be reimbursed depending on the facts. The amount in question would need to be substantial and relevant in time to justify pursuit.
If the executive were terminated for his acts a question could arise as to the impact that the loss of income would have on the financial questions of spousal support and child support. The loss would likely include the executive’s salary and deferred benefits such as bonuses or distributions, stock options, restricted stock, SARs and other benefits. In a spousal support case the standard of living and length of marriage would be significant considerations.
If the executive of the company were a substantial shareholder in the company further complications could arise in a divorce. With a privately held company, depending on the amount and period of time involved it is possible that settlement payouts could negatively impact the valuation of the business which would make them relevant to the financial issues of the case. If the business had to be dissolved as a result of the executive’s actions, as is occurring with the Weinstein Company, there is an issue regarding whether the value of the shares were diminished by the actions of the shareholder and whether the marital estate should take the loss.
As to custody of the children, the issue of parenting time would center around the children and whether there was any danger or concern that the children would be subjected to and/or harmed by the acts of the executive. A related question arises as to whether there would be harm to the children if access to the accused parent were restricted or denied. A penitent parent who is not a threat to his children, especially if the parent is legitimately seeking to address his issues through a therapeutic process, is not likely to lose parenting time with the children. It is possible for a parent who engages in work place misconduct to be a good parent. The misconduct does not necessarily preclude one from being a loving and caring parent.
Sometimes older children, such as teenagers, can be confused and judgmental about the behavior of an accused parent. This can impact their desire to spend time with the parent. Counselling for the child and joint counselling between the accused and the child can help sort out the difficulties and restore the relationship.
The impact of sexual misconduct in the workplace is not limited to the relationship of the accused and the accusers. It also impacts every other important relationship in which the accused is involved. It can have profound implications in a divorce as the spouses try to sort through the issues that the allegations and actual conduct have on the spouses, children and financial issues.
Sorting through and navigating these complex issues can have a profound, long-term impact on the outcome of the divorce. Perhaps Mr. Weinstein can limit these issues with a solid antenuptial agreement. But that is a different discussion.