Flirting With Disaster

Protect your employees and your firm’s assets by stopping sexual harassment before it starts. Knowing the law will save you money, time and heartache.

In the 1980 movie “Nine to Five,” three women fantasize about getting even with their boss for his lewd behavior: hunting him on safari, poisoning his coffee, and lassoing and hog-tying him. If the movie were reality, however, it wouldn’t be a comedy—it would be a legal drama.

Why? Recent U.S. Supreme Court decisions hold employers responsible for sexual harassment on the job, whether or not the company knew it was occurring. To help employers avoid sexual-harassment liability, the U.S. Equal Employment Opportunity Commission (EEOC) recently issued new guidelines. By knowing how sexual-harassment law affects small businesses, you can help your firm steer clear of the courtroom.

A Law With a Past

Let’s review the basics: Sexual harassment isn’t about sex. It’s about abusing power to control someone’s paycheck or career. And it’s illegal.

The legal issues involved in a harassment case are: whether the conduct was sexual in nature; whether the conduct was unreasonable; whether the conduct was severe or pervasive in the workplace; and whether the conduct was unwelcome. Conduct of a sexual nature includes outright hostility toward a certain gender; sexual advances or propositions; attempts to get sexual favors; and lewd pictures, language or jokes. Whether or not a direct correlation between sexual harassment and job status exists is no longer as important as whether the facts indicate that harassment has occurred.

Federal sexual-harassment laws apply to businesses with 15 or more employees. Title VII of the Civil Rights Act of 1964 says race, color, religion, gender or national origin can’t be used as the basis for nearly any aspect of employment decisions. (If an employer is hiring clergy, religion can be a basis for the decision.) Cases involving businesses with fewer than 15 employees usually fall under state civil-rights laws similar to Title VII.

Prior to the U.S. Supreme Court’s recent decisions, illegal sexual harassment occurred in primarily two ways: when sex was demanded in direct exchange for promotions or other employment benefits (quid pro quo), or when requests for sexual favors or other verbal or physical conduct of a sexual nature created a hostile work environment (hostile environment). When either of those situations was proven, the harasser was found liable. If the company knew about the harassment and did nothing to stop it, the employer was also liable.

But two recent cases blurred the lines between quid pro quo and hostile environment. The legal standards became more complex, and the responsibility of employers increased.

Recent Cases

In the 1998 case Faragher v. City of Boca Raton, city lifeguard Beth Ann Faragher sued the city because her supervisors created a sexually hostile atmosphere by repeatedly subjecting Faragher and other female lifeguards to offensive touching and sexist remarks. It was clear that the nature of the harassment in this case was very severe.

But while the court held the city liable, it also said the city has a right to show that it had taken reasonable steps to prevent harassment and that the victim hadn’t taken advantage of those opportunities. In this particular case, though, the court concluded that the city hadn’t taken reasonable steps; supervising lifeguards weren’t informed of the city’s sexual-harassment policy. The court reasoned that employers bear responsibility for ensuring that all supervisors are aware of sexual-harassment policies and that all employees know how to report harassment. Because the supervisors didn’t know the city’s policy and Faragher didn’t know the complaint procedure, the city of Boca Raton was held liable for the acts of its supervisors, even though the city didn’t know about the harassment.

The Supreme Court took the issue of employer responsibility even further in the 1998 case of Burlington Industries v. Kimberly Ellerth. According to Ellerth, she left Burlington after 15 months of enduring constant sexual harassment by one of her supervisors. She wasn’t fired or demoted, and she hadn’t reported the harassment. Based on the theory of strict liability, the court allowed Ellerth to sue Burlington without showing that the company knowingly allowed the offensive conduct to occur. Ellerth won the case.

With these cases in mind, what can you, as an employer, do to protect your business?

Cover Your Bases

A written harassment policy and complaint procedure is necessary for avoiding employer liability, but this alone isn’t sufficient. According to EEOC guidelines, employers should publicize and enforce sexual-harassment policies by posting them in central locations, incorporating the rules into handbooks, and/or giving a copy of the policy to all employees.

Your firm’s harassment policy and complaint procedure should include:

  • A clear explanation of the prohibited conduct
  • Assurance against retaliation
  • Confidentiality protection
  • Prompt and thorough investigation procedures
  • Guarantees that immediate and appropriate corrective action will be taken.

The EEOC states that employers with 15 or fewer employees may not have to implement such formal policies and procedures. But they should incorporate an informal policy to prevent and correct harassment. This may be as simple as saying to the employee, “If you have a problem, please come and talk to me.”

In order to protect themselves, employers want to be able to take advantage of the “unreasonable failure to complain” defense and to prove that the employee unreasonably failed to complain about the harassment. This defense clearly would’ve been available to Burlington in the Ellerth case, but may not have been available to the city of Boca Raton in the Faragher case.

The key element here is that the failure to complain has to be “unreason- able.” For example, if the employee feared that using the complaint mechanism entailed a risk of retaliation from her employer, her failure to complain wouldn’t be unreasonable. Employers should eliminate difficulties or intimidation for employees who want to report harassment. Complaints should never be ignored.

The Verdict

No employer can afford to be ignorant of how to handle sexual harassment. Harassment can cost the company money, and it lowers productivity. For years it has kept women from advancing at work. Men are increasingly subject to harassment, too.

Fortunately, keeping harassment out of the workplace isn’t a difficult task. Basically, as a pamphlet published by the Federally Employed Women Legal and Educational Fund explains, “To end sexual harassment is to separate work and sex and thus improve both.”

HOW February 2000