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The issue of sexual harassment has had a profound effect on business in the last decade. Lawsuits for sexual harassment, along with discrimination and unlawful termination, are one of the fastest growing areas of litigation. While court filings for auto accident cases have dropped by fifty percent over the last five years in California, filings in the area of sexual harassment, discrimination and unlawful termination have doubled. This same trend seems to be true all over the country.
Every business has substantial exposure to these types of claims. Most companies are not insured for this exposure. The effects from this liability can be seen in terms of the labor force, operation costs, and the very culture, traditions, and policies that businesses have operated under in the past. Companies have had to take strong, aggressive, and immediate actions in order to protect their assets and prevent large judgments.
Sexual harassment in the workplace has been around for years. As the number of women in the workforce increased dramatically in the last 50 years, sexual harassment became a problem that women no longer accepted as ¡§business as usual.¡¨ In 180, the Equal Employment Opportunities Commission defined sexual harassment, issued regulations regarding sexual harassment, and stated that sexual harassment was a form of job discrimination that was illegal under the Civil Rights Act of 164. However, it wasn¡¦t until the early 10¡¦s that public awareness increased due to incidents such as the Thomas-Hill hearings, the Paula Jones versus Bill Clinton harassment lawsuit, and the Navy¡¦s Tailhook incident. By the mid-10¡¦s, sexual harassment was a term that nearly everyone was familiar with, companies began assessing the liability risks associated with it, and women knew their rights regarding sexual harassment and how to fight it. It is estimated that 50% to 85% of women will experience some form of sexual harassment in their academic or working lives .
In Hutchison v. Amateur Elec. Supply, Inc., 4 F.d 107 (7th Cir. 14) , the owner/operator of Amateur Electric Supply, Inc. repeatedly quizzed his female employees about the frequency and nature of their sexual relations. He engaged in sexually explicit telephone conversations where employees were likely to overhear him, blocked doorways forcing female employees to brush against him when passing, and continually made remarks about their appearance. The court found Amateur liable for sexual harassment and ordered them to pay damages.
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The late 10¡¦s brought about the issue of same-sex harassment. The Supreme Court ruled in its precedent-setting decision in the Oncale v. Sundowner Offshore Services case in 18 that harassment is unlawful regardless of the gender of the victim or the harasser. The EEOC Chairwoman Ida L. Castro stated that, ¡§The scope of this settlement should put all employers on notice that sexual harassment, including male-on-male harassment, comes at a high cost.¡¨
The issue of female against male harassment is becoming more frequent today also. There is currently a case in the California courts where a woman supervisor hired a young boy as a stock clerk solely for the purpose of coercing him into having sex with her. There is another case on appeal in California where the jury awarded a male plaintiff $00,000.00 in damages because the female chief financial officer of the company required the plaintiff to have sex with her as a condition of his employment. In the case of EEOC v. Domino¡¦s Pizza Inc., 0 F. Supp. 15 (M.D. Fla. 15) , over a five-month period, the female supervisor continuously touched the male plaintiff and told him that she loved and cared about him. In this case, too, Domino¡¦s was held liable for sexual harassment.
Another area in which a company can be held liable for creating a hostile environment is in the instance of a customer, vendor, or someone other than an employee harassing an employee of the company. If the company does nothing to prevent or stop this harassment, they can be liable for damages to the employee. In the case of Menchaca v. Rose Records, Inc., 15 WL 151847 (N.D. Ill. April , 15) , a non-employee customer continuously made sexual comments to plaintiff. He propositioned her for sex, asked her out on dates, made unsuccessful attempts to grab her from behind, and once tackled her and held her upside down. Plaintiff complained to her manager, but nothing was done to stop the harassment. In this case, the employer was held liable for creating a hostile environment and the plaintiff was awarded damages.
Sexual harassment is defined as ¡§any unwelcome sexual advance or conduct on the job that creates an intimidating, hostile or offensive working environment.¡¨ This conduct can include, but is not limited to, verbal or physical conduct of a sexual nature; telling offensive jokes; posting pornography in the office place or through company communication such as e-mail; requesting sexual favors; basing salary, benefits, or advancement on sexual favors; or any other behavior that is sexual in nature, unwelcome, and/or offensive.
There are two categories of sexual harassment, quid pro quo and hostile environment. Quid pro quo harassment is defined as conduct in which an employee demands certain sexual behavior from another employee in exchange for sexual favors. In many cases, this harassment is between supervisor and subordinate. In other words, unless the employee gives in to the sexual demands of her supervisor, she may be fired, demoted, not receive a promotion for which she is qualified, or not receive a pay raise or bonus, which she was due.
Hostile environment harassment is much more prevalent and consists of demeaning or offensive joke telling in the workplace, sexual photos displayed in the office, belittling comments that are sexual in nature, etc. In the past, this behavior was defined as a male on female occurrence; however, in the late 10¡¦s the EEOC began to see more and more instances of alleged sexual harassment of the male-on-male variety. In September 1, the EEOC filed a lawsuit against Burt Chevrolet, a Colorado auto dealership, charging them with creating a hostile work environment for their male employees. The harassing conduct included the touching and grabbing of genitals, exposing of a manager¡¦s penis in the workplace, vulgar sexual language, crude sexual jokes and innuendos, and referring to male employees in sexually obscene and derogatory terms. Primarily two male managers carried out the behavior, but numerous other managers were alleged to have knowledge of the behavior and even to have perpetuated the behavior by participating in and tolerating the offensive sexual conduct in the workplace.
The issue of sexual harassment impacts businesses in many different ways. One of the most important is monetarily. The costs of sexual harassment to employers include the expenses of litigation and damages paid to successful complainants. The average sexual harassment lawsuit costs $50,000 to defend and employers can be held liable under both state and federal laws for damages in sexual harassment suits. It is also important for employers to remember that the company can be held liable for harassing conduct by one of their supervisors, even if they were never aware of the conduct and had no knowledge of the harassment. Victims of sexual harassment can sue their employers for
„h Out of pocket expenses caused by looking for new employment
„h Loss of income, both past and future
„h Counseling expenses
„h Damages due to depression, stress, anxiety, etc.
„h Attorney¡¦s fees
There are maximum damages that can be assessed under Federal law, Title VII. They are
„h $50,000 for 15 to 100 employees
„h $100,000 for 101 to 00 employees
„h $00,000 for 01 to 500 employees
„h $00,000 for 500+ employees
The punitive and emotional stress damages that can be awarded under most state and civil torts is unlimited if you have 6 or more employees. Obviously, one sexual harassment suit can be extremely costly to a large company and be devastating to a small company.
Other costs involved are the expenses related to preventing sexual harassment incidents and lawsuits. Human Resources departments absorb the expenses of creating and distributing Sexual Harassment Policies, setting up procedures for receiving and investigating sexual harassment claims, and educating and training both supervisors and the general workforce on harassment issues.
Another area in which businesses are impacted by sexual harassment issues is in the workforce. Employers can suffer loss of productivity, loss of employee loyalty, and damage to the company¡¦s reputation, and problems with employee retention. Gone are days when it was permissible for supervisors and subordinates to ¡§party¡¨ during lunch or after hours at the local bar. Today, such an event would place the supervisor as well as the company at risk for any occurrences of alleged sexual harassment. Many businesses now require strictly business relationships between co-workers and discourage, if not outright forbid, any personal relationships between co-workers, especially supervisor and subordinate relationships.
Given the extraordinary risks and costs involved in sexual harassment issues, how does a business begin to protect itself?
a) The first step is to develop and distribute a formal Sexual Harassment Policy. In some states, just the ¡§failure to provide information to employees concerning harassment¡¨ can be a violation of state law. The policy should contain the definition of sexual harassment, state that sexual harassment is illegal, give descriptions and examples of harassment, detail the procedure to be followed when filing a sexual harassment complaint within the company, outline the process used by the company to investigate a complaint, a statement that any management employee who suspects that sexual harassment may be occurring is required to report this information to the appropriate personnel, and information available through the Department of Fair Employment and Housing on legal remedies and complaint processes. This policy should address all forms of harassment, not just sexual harassment, and be an all-inclusive anti-harassment policy.
b) Once the policy is developed, it should be distributed to each employee. The Anti Harassment Policy should be included in the employee handbook along with an Anti Harassment Policy Acknowledgement Form that each employee signs confirming that they have received, read and understood the policy. There is a poster distributed by the Department of Fair Employment and Housing that addresses harassment and guidelines to be used. These posters should be placed on company bulletin boards, in the lunchrooms, break rooms, near time clocks, etc. On at least a yearly basis, the policy should be re-distributed to keep awareness up and to serve as a reminder of the company¡¦s stand on and procedures regarding harassment. Also, the policy should be re-distributed when any instance of harassment or alleged harassment occurs.
c) Training of every employee on a regular basis is another way that businesses can protect themselves against sexual harassment complaints. Every new employee should receive training and company-wide training should occur at least once a year. The human resources department should have staff who are trained in anti harassment issues, and who can explain that the company aggressively follows its anti harassment policy and takes a proactive stance against sexual harassment. The content of the training sessions will be slightly different for supervisors and managers than for the general workforce, so it is suggested that employers have separate training session for each.
The training for the general workforce should consist of a thorough explanation of the anti harassment policy, along with the procedure for filing a complaint. Businesses must be certain that they convey the fact that there will be zero-tolerance of any type of sexual harassment, that it will be investigated, and that disciplinary action will be taken. In the past, many businesses have failed to inform employees of the laws regarding sexual harassment because they feared that the knowledge would encourage employees to make fraudulent claims of harassment and file frivolous lawsuits that would be costly for the businesses to defend even if they were false. While this may be true in a small number of cases, the risks assumed in not informing employees about sexual harassment can far outweigh the costs of a few fraudulent suits. In taking the appropriate educational and training steps regarding sexual harassment, businesses can reduce the potential for damages or avoid liability altogether because businesses can defend themselves against sexual harassment charges by showing that they acted reasonably to prevent them.
The training for the supervisory staff should contain all of the elements mentioned in connection with the general workforce training plus ¡§specific action plans for supervisors to follow when they learn about, know about, witness, or are complained to about sexual harassment.¡¨ Managers and supervisors should be informed that they could be held personally liable for damages in sexual harassment cases and that the company does not always hold full and complete liability.
d) Businesses have a legal, ethical, and social responsibility to take seriously charges of sexual harassment, to investigate those charges thoroughly, and to administer discipline to offenders. There should be a written, detailed procedure in place and supervisors and the general workforce should be aware of this process. The process should contain the following
„h Who can receive reports of perceived sexual harassment, i.e., the employee¡¦s supervisor, other management personnel, a human resources staff member, etc.
„h A guarantee that the charge will be held confidential as much as is reasonable and possible
„h Assurance that the complainant will not suffer any retaliation from the accused or anyone else
„h Information regarding the legal rights of the complainant
„h A prompt, thorough, and impartial investigation of the complaint
„h Informing the complainant of the results of the investigation, and, if found necessary, the disciplinary options available to the employer
„h Appropriate disciplinary actions against any employee who is found in violation of the sexual harassment policy, up to and including termination
„h Appropriate disciplinary actions against any employee who retaliates against an employee who files a complaint
„h Continued follow-up procedures to be sure the harassment and/or retaliation are not still occurring.
e) Finally, businesses must take swift and aggressive corrective action against employees who are found to be guilty of sexual harassment. An employer cannot defend itself against liability in sexual harassment suits if they do not have a history of total intolerance of harassment and discipline and/or termination of those employees who harass their fellow employees. Detailed and complete documentation of each step of the complaint procedure should be kept.
Businesses must take all of the above listed actions if they want to have any hope of defending themselves against sexual harassment claims. The case of Faragher v. City of Boca Raton, Florida is a prime example of this. The claimant sued the City of Boca Raton for sexual harassment. Faragher reported the harassing behavior to a supervisor who told her there was nothing that he could do about it. When sued, the City of Boca Raton claimed that they had no knowledge of the harassment and, therefore, the liability should fall on the supervisor and not the City. The Supreme Court disagreed and ruled that the fact that the City had a written policy against sexual harassment was not enough. They did not distribute the policy to employees nor did they have any kind of procedure in place for handling complaints. These facts, the Supreme Court found, show that the City of Boca Raton acted unreasonably and did not protect itself against sexual harassment claims.
In the case of Burlington Industries, Inc. v. Ellerth , the Supreme Court found that an employer may be liable for sexual harassment even if an employee does not succumb to the sexual advances or when the employee does not suffer negative job consequences. In this case Ellerth claimed that she was the victim of sexual harassment by a company vice president. She did not give in to his demands nor did she report the harassment to company management. She also did not suffer any negative impact on her job.
Interestingly, in the Burlington case, the Supreme Court looked at the agency laws regarding employers-employees in determining whether or not the company was responsible for the actions of its supervisor. They stated that the general rule is that sexual harassment by a supervisor is not conduct within the scope of employment. Therefore, Burlington could not be held liable for their supervisor¡¦s harassing conduct under agency law. The Supreme Court stated that Ellerth did not suffer quid pro quo sexual harassment but that there was definitely a ¡§hostile work environment¡¨. Therefore they found that Burlington could be held liable for the actions of their supervisor but should have the opportunity to assert an affirmative defense and prove that they acted reasonably in the matter.
In the case against Burt Chevrolet, the court found that although they had a written policy in place that prohibited sexual harassment of any kind and stated the company¡¦s commitment to promptly investigating any allegations, the complaints by the salesmen went unheeded by management for nearly a year. Even when the behavior was acknowledged by management, it was initially dismissed as ¡§horseplay¡¨ or ¡§locker room antics.¡¨ The policy alone was not enough to provide Burt Chevrolet with a defense against the allegations.
The long term implications of sexual harassment in the workplace will be seen in greater expense to businesses in terms of legal expenses for defense against harassment suits, training expenses for businesses to ensure that their general workforce and supervisors are knowledgeable of the sexual harassment policy and the complaint procedure, and the expense of either having on-staff or independent consultants to handle sexual harassment complaints. The face of the workplace today has changed dramatically due to the emergence of the sexual harassment issue and businesses will continue to make changes in order to meet the challenge of protecting their employees against sexual harassment and protecting the business against large judgments in court due to harassment suits.
BIBLIOGRAPHY
1. Bendavid-Arbiv, Sue, Esq., A Responsibility to Inform Are You Effectively Communicating Your Companys Anti-Sexual Harassment Policies?, Arter Hadden, LLP, 000.
. EEOC Press Staff, EEOC Settles Same-Sex Harassment Suit for a Half Million Dollars Against Major Colorado Auto Dealership, August 4, 000, http//www.eeoc.gov/press/8-4-00.html.
. Greenberg, David H., Sexual Harassment, Discrimination & Wrongful Termination, ¡§The Outlook¡¨, California, 001.
4. How to Address an Employee Sexual Harassment Complaint, http//humanresources.about.com, 001.
5. Kopp, Jeffrey S., Employment Law Update Courts Expand Employer Liability For Sexual Harassment, The Employment Law Update, Gray Care Ware & Freidenrich, LLP, May, 18.
6. Mathis, Robert L. and John H. Jackson, Human Resource Management, South-Western College Publishing, Ninth Edition, 000.
7. Ramey, Drucilla Stender, Sexual Harassment Policy ¡V Bar Association of San Francisco, San Francisco, CA, 1.
8. Repa, Barbara Kate, Sexual Harassment Decisions From the Supreme Court, http//Nolo.com, 001.
. Sexual Harassment, http//www.humanresources.about.com, 001.
10. Supreme Court Decisions, http//www.findlaw.com/courtcasesandcodes.
11. www.Findlaw.com/cases.
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