BY PHILLIP M. PERRY
Proactive policies can create a respectful environment and stave off costly lawsuits
Editor’s note: The advice presented in this article is intended for general informational purposes. To create a sexual harassment policy for your company or for other guidance regarding how to deal with sexual harassment in the workplace, consult your own legal counsel.
Last week, Jake complimented Sarah on her “sexy” new hairstyle. Today, he patted Marianne on the shoulder and thanked her for wearing a “revealing” outfit. As for Juanita, a vendor’s representative, Jake has been pressing her for a date to “get better acquainted.”
Maybe Jake is a top-performing employee, and maybe the women seem to go along with his chatter. In fact, Jake is a ticking time bomb. His comments are creating a hostile work environment that can affect morale and lead to a costly sexual harassment lawsuit. Recent headlines about misdeeds should remind everyone that a toxic workplace hurts employees and can threaten the bottom line.
“Ignoring the issue of sexual harassment can lead to disaster on many levels,” says Joseph P. Harkins, a shareholder in the Washington, D.C., office of San Francisco-based Littler, the world’s largest employment law practice representing management. “Businesses can be subject to costly financial settlements, damaging morale and negative publicity.”
Beware the risk
People often think of sexual harassment in terms of quid pro quo: a supervisor offers someone a job or a raise in return for a sexual act. But in today’s workplace, most sexual harassment stems from a more insidious problem.
“Statistically, most complaints in recent years are not for quid pro quo harassment but for environment claims, such as inappropriate comments and jokes,” Harkins says. That’s why Jake, in our opening scenario, poses a threat.
The problem has become better understood as employees have been more willing to speak up about harassers like Jake.
“We have come to a tipping point in society where people are starting to believe individuals who say they were sexually harassed,” says Valda Ford, chief executive officer for the Center for Human Diversity in Omaha, Nebraska. “And that’s a good thing. Before, it was too often a case of ‘he said, she said.’ But now people will no longer deal with these indignities.”
Costly lawsuits
The financial cost of sexual harassment lawsuits is top of mind for many business owners and executives. And the expense can be substantial: While federal law caps compensatory damages at $300,000, most states have no such ceiling.
“It is popular for plaintiffs to sue under state law for the unlimited damages,” Harkins says. And the financial costs don’t end there. “Most statutes include fee-shifting provisions, so a prevailing employee’s attorney fees are paid by the employer,” he adds. “It’s not uncommon for attorneys’ fees to come to a quarter of a million dollars, on each side.”
Moreover, transgressors can incur personal responsibility.
“Some state laws extend liability for general sexual harassment to the individual,” says Bob Gregg, co-chair of the employment practice law group at Boardman and Clark LLC in Madison, Wisconsin. This is especially the case if the harassment involves touching and groping, which can be deemed assault and battery.
“Individuals can also be held liable for defamation if they spread false information or make mocking comments about a person’s sexuality,” Gregg says. Finally, individuals can be held personally liable for sexual harassment against third parties such as customers, suppliers or public visitors to the workplace.
Don’t think only big employers are at risk. “Federal anti-discrimination law covers businesses with 15 or more employees,” Harkins says. “And most states have similar laws, which cover even smaller (companies).”
Plunging morale
Beyond the financial expense of lawsuits and settlements, a company with unchecked harassment can suffer a costly loss in staff morale.
“Sexual harassment is a form of bullying,” Ford explains. And bullying can take a toll on performance. “Instead of being productive, a harassed individual becomes constantly afraid of encountering another comment, another inappropriate touch, another arrival of that creeping feeling of ‘here we go again,’ ” she says.
The harm can extend to an employer’s reputation. “Abused individuals will likely go into a protective stance when asked by a prospective employee about working at the company,” Ford says. “They will try to find some way to alert the person about the abusive environment.” In contrast, satisfied and secure employees are great recruiters. “There is no marketing better than someone saying, ‘I love where I work,’ ” Ford says.
Protect yourself
How can you protect your business? Gregg says a company can mount a sexual harassment defense by showing two things: First, that it took reasonable care to prevent and quell harassment; and second, that the plaintiff did not take advantage of corrective opportunities the employer had established.
While those general guidelines are important, Gregg points to two exceptions. The first is any quid pro quo act, such as an individual being promoted in exchange for a sexual favor—or being terminated for refusing one. The second is any act by a top-level executive.
“If I am a top manager then my acts are perceived by the courts to be those of the organization itself,” Gregg explains. This exception is a particular danger to smaller businesses, where just about any manager or supervisor might be perceived as a top-level manager.
With those guidelines in mind, here are some practical steps recommended by attorneys:
Step 1: Create good policies
“The No. 1 step for protecting your business is to write policies that prohibit sexual harassment and promote a respectful workplace,” Gregg says. “And don’t just bury them somewhere in your employment handbook. Communicate them in employee orientations and continually emphasize them in staff meetings.”
Step 2: Establish a reporting procedure
“Designate properly trained individuals to whom complaints can be made,” says James J. McDonald Jr., managing partner at the Irvine, California, office of Fisher & Phillips. He warns against the common mistake of requiring complainants to report incidents to supervisors, who may not have the requisite training or may themselves be harassers. Bear in mind that many people refrain from reporting incidents out of a fear of retaliation.
So, who should play the role of reporting point person? Larger companies may assign properly trained individuals in the human resources department. Smaller ones may contract with an independent HR service firm. What about the very smallest businesses—those that can’t afford the full-time services of an outside organization?
“Some human resources consultants provide fractional services for smaller clients,” McDonald says. “They might, for a reasonable fee, provide an individual on-site for two days a week and offer availability by telephone hotline on other days. That resource can make all the difference when an incident occurs.”
Step 3: Train your personnel
The most carefully designed policies only will work if supervisors are trained to identify and respond appropriately to incidents of sexual harassment. “We all have to be educated,” Ford says. “Plenty of people make mistakes from simple ignorance. They just do not know what they are doing.”
All levels of personnel need training on company policies and on the established channels for reporting incidents. And everyone needs to understand they are expected and encouraged to come forward with complaints.
“Plenty of people encounter sexual harassment but hesitate to take action,” Ford says. “That’s because they have always lived in an environment where saying something about the problem makes you a coward or not able to keep a stiff upper lip.”
Step 4: Respond quickly to complaints
Take prompt action when individuals report harassment. “One of the biggest errors employers make is not listening when people raise issues,” Gregg says. “Employers often don’t take reports seriously.”
Your business benefits because a quick response to complaints helps establish the credibility of your prevention program. “People are more prone to utilize internal resources to resolve problems if their employer has a record of prompt and effective action when harassment is reported,” McDonald says. “On the other hand, if an employer has not taken sexual harassment reports seriously, people are more likely to use outside attorneys to sue when harassment occurs.”
Step 5: Involve the complainant
Investigate each complaint thoroughly, interviewing any third-party witnesses. And find out what corrective action the complainant deems appropriate. “While you don’t want the complainant to decide what action is taken, you do want to get that person’s input on whether termination or a lesser remedial measure is appropriate,” Harkins says.
Complainants may have any number of reactions to what they have experienced. “Sometimes they say the harassment was not severe, but they reported it because they just wanted the organization to know about it,” Harkins says. “Sometimes they want to have a discussion or have the person counseled. And still other times they ask that a person be terminated for making a single, unfunny joke.”
If the remedial action does not satisfy the complainant, Harkins suggests involving the person in any new training the company introduces. That can help to provide a broader base of knowledge so the focus is taken off the individual and put onto a general improvement in the environment.
Step 6: Be proactive
Communicate your seriousness about the issue by actively monitoring your workplace for violations.
“Don’t just wait for complaints to be filed,” Gregg says. “Be proactive.”
Make sure all supervisors realize they have a duty to act when a questionable event occurs. Such monitoring should include behavior that might not be illegal but that has the potential to escalate. “When a person is nasty, surly and engaged in behavior that is disruptive and abusive,” Gregg says, “speak up and say you expect the individual to be civil.”
Indeed, attorneys recommend being alert to any activity that reflects a disrespect for others or that creates a hostile working environment. That includes making crude comments or reinforcing gender stereotypes.
A proactive stance may require changing mindsets. “Most supervisors are reactionary,” Ford says. “They are not accustomed to working on creating an environment where, if something inappropriate is said, there is an opportunity to discuss what happened, why it is inappropriate and then move on to improving behaviors.” The result? “Things get worse because management has issued an unspoken ‘OK’ to bad behavior,” Ford says.
Beware of personal relationships
Other admonitions for employers include understanding the risks involved in blurring the line between business and personal relationships.
“Managers and supervisors can have friendly relationships with subordinates, but they should not be friends with subordinates,” McDonald says. Failure to maintain a professional distance, he says, can lead to situations that may not appear initially as harassment but could result in such charges down the road.
What are some signs of danger? “The subordinate may start to feel he or she can take liberties, such as texting the manager after business hours about personal problems,” McDonald says. “Or the subordinate may ask for advice on relationships or financial issues, or ask to borrow money, or invite the supervisor to a social outing with a friend. These kinds of liberties can create situations that backfire on the manager.”
In such instances, backing off is a wise idea—and so is a reluctance to go one step further and engage in a romantic dating relationship with a subordinate. (For more on this, see story on page 48.)
Avoiding other mistakes
While a conscientious employer can go a long way toward creating a respectful workplace, it’s easy to let the ball drop in the rush of daily business.
“Employers tend to make several common errors,” Harkins says. “One is not repeating training frequently enough. Sometimes they will do a large training session and then ignore the issue for five or 10 years.”
A second mistake is not escalating complaints high enough up the chain of command. “Higher level people, including those in human resources or in the legal department for those businesses that have them, should review every reported incident,” Harkins says. Smaller organizations should have top executives handle the complaints.
A third mistake is giving a harasser too many chances. “Sometimes a second chance is in order,” Harkins says. “Perhaps an ordinarily well-behaved person commits an aberrational infraction or there are some questions about proof.” Other times a complainant will ask that a person not be fired for a single infraction. “In such cases, an employer might take other remedial action,” Harkins says. “But if there is a second incident of harassment, the employer should move to termination.”
Greater profits
While every business wants to avoid the financial penalties resulting from sexual harassment, there’s more at stake than simply avoiding costly lawsuits.
“People are often concerned about the legal liabilities for sexual harassment, and that aspect of the problem has certainly been making the headlines recently,” Gregg says. “But legal liability should not be what drives the topic. It should be the realization that a respectful workplace leads to higher profitability.”
Employees are more productive when they are not sidetracked by the need to protect themselves from sexual advances, Gregg says. “Create a respectful workplace not because the law makes you do it,” he says, “but because it is to the benefit of your organization and your employees.”
Workplace dating: Is it OK or not OK?
Dating between supervisors and subordinates is a fact of life in many workplaces. What seems like a harmless relationship on the surface, however, can lead to disaster.
Bad things can happen when a workplace romance comes to an end. “If a manager breaks off a relationship, the subordinate may start to view it as nonconsensual from the beginning,” says James J. McDonald Jr., managing partner at the Irvine, California, office of Fisher & Phillips. “And if a subordinate breaks it off, any later enforcement of an organization’s usual rules and standards may be interpreted as a form of retaliation.”
Either situation can spark a sexual harassment lawsuit. To lessen the danger, attorneys advise employers to draw up clearly defined policies. “Organizations are free to establish any policies they want regarding workplace dating,” says Bob Gregg, co-chair of the employment practice law group at Boardman and Clark LLC in Madison, Wisconsin. “Some employers state that no one may date any co-worker or any supervised employee. Others allow consensual relations, but require the parties to notify management, which can then assess any conflicts of interest.”
While blanket prohibitions obviate immediate dangers, they can lead to secret romances with unreported conflicts of interest. And still more serious ramifications may occur later if the relationship turns nonconsensual and long-term sexual harassment finally comes to light.
“I personally do not like the ‘no one will establish a relationship with anyone here’ policy,” Gregg says. “It’s hard to enforce and people think it’s draconian.”
So, what’s a better idea? Gregg sometimes suggests a policy like this: “No one will use the workplace to make romantic advances or to be overtly demonstrative. If you have a relationship with someone you supervise, or otherwise might have some impact on your work, we need to know promptly.”
To eliminate conflicts of interest or favoritism, individuals involved in romantic relationships may need to be transferred, but that can be difficult at smaller organizations with a limited number of unrelated departments. “Smaller organizations have more issues resulting from romantic involvements,” Gregg says.
McDonald sometimes recommends that employers go further by requiring involved parties to sign a document formally agreeing to the following terms:
- they acknowledge the relationship is consensual
- they agree to avoid a conflict of interest or the appearance of one
- they agree to not carry on the relationship in the workplace
- they acknowledge that the company has a policy against sexual harassment
- they understand company procedures for reporting incidents of sexual harassment
- they agree to report any change in the relationship to a nonconsensual status.
“I have never had anyone sign one of those agreements and then turn around and try to sue,” McDonald says.
No matter what policy your company adopts, individuals in supervisory positions may want to think twice about engaging in workplace romances with subordinates. “I can think of no faster way to end a manager’s career than to engage in a dating relationship with a subordinate that ends badly,” McDonald says. “A lot of managers have felt they could handle it, when, in fact, they couldn’t.”
