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Examining Sexual Harassment in the Workplace

Litigation Column
S exual harassment continues to be a concern for corporate legal departments, as some high-profile companies have faced headlines accusing them of “sexist” and “toxic” workplaces. Although it has been approximately 30 years since the US Supreme Court recognized sexual harassment as an unlawful form of discrimination under Title VII of the Civil Rights Act of 1964 (Title VII), these cases prove sexual harassment persists in the modern US workplace and should not be ignored.

In hopes of better understanding modern workplace harassment and appropriate responses, the US Equal Employment Opportunity Commission's Chai R. Feldblum and Victoria A. Lipnic published Select Taskforce on the Study of Harassment in the Workplace in June 2016. The authors note that in their time with the commission, they have been “deeply troubled” by the nature and prevalence of harassment claims, including those based on sex. Taking a look at legal trends and what these authors have learned can provide insights into keeping your company out of the limelight for the wrong reasons.

Litigation: How big a problem is sexual harassment litigation?

The statistics in the US Equal Employment Opportunity Commission (EEOC) report are eye-opening. According to the report, nearly a third of the EEOC’s 90,000 charges from private, state government, and local government employees in fiscal year 2015 included claims of workplace harassment. Of those, 45 percent included allegations of sexual harassment. These numbers don't tell the whole story, as the study also reveals that 90 percent of those who have experienced harassment take no formal legal action against the employer.

Despite underreporting, employers are paying considerably for violations. For example, in fiscal year 2016, the EEOC recovered US$164.5 million from employers for various sorts of workplace harassment. In 2012, there was a jury award of US$168 million in a sexual harassment lawsuit. These significant financial penalties are not the only price employers pay. Costs are compounded outside the courtroom with added costs associated with employee turnover and other setbacks characterized below.

Obligation: Why should employers care about sexual harassment?

Employers certainly care about the bottom line, and financial penalties for sexual harassment claims can be significant. However, employers must recognize factors beyond legal penalties in consideration of their efforts to root out sexual harassment. The EEOC study reminds us of additional harms stemming from unchecked harassment, such as mental health problems, drug and alcohol abuse, job dissatisfaction, and job disengagement among employees. Costs and disruptions associated with employee turnover and falling production rates are a significant consequence as well.

In addition, the pace and span of news and social media mean that bad press circulates faster and wider than ever before. Publicized sexual harassment allegations can jeopardize a company's goodwill and, as a result, its capacity to attract top talent or secure significant sales. If that were not enough to get an employer's attention, sexual harassment prevention training is legally mandated in some jurisdictions.

Foundation: What is sexual harassment?

The primary federal statute prohibiting sexual harassment is Title VII. State and local laws may create additional legal requirements. No matter the statutory source, sexual harassment can take a number of different forms. Traditionally, these forms are referred to as quid pro quo and hostile work environment harassment.

Quid pro quo means “this for that” and, as it suggests, involves a person with direct or indirect authority subjecting someone to unwanted sexual conduct and conditioning elements of employment (pay or other terms, conditions, or benefits of employment) on the response to that conduct. A typical example of quid pro quo harassment involves a supervisor requesting that an employee perform a sexual act in order to keep his or her job.

Hostile work environment harassment is more common and more subjective because it does not require a connection to identifiable professional consequences (referred to legally as an adverse employment action). In addition, hostile work environment harassment can come from any number of sources, such as managers, colleagues, clients, customers, vendors, or other third parties. Hostile work environment claims involve unwelcome conduct because of sex, attributable to the employer, that is severe or pervasive enough to alter the conditions of employment and form an abusive atmosphere. That atmosphere must be both objectively and subjectively abusive for liability to attach. A typical example of hostile work environment harassment involves a workplace where graphic sexual banter, sexual imagery, unwelcome touching, and degrading commentary run rampant and remain unchecked. The intent of the harasser and gender of the parties involved are irrelevant.

Elimination: What are the best techniques to root out sexual harassment?

Creating a workplace free from sexual harassment is a challenge for any employer, but the recipe for success overlaps significantly with good practices for eliminating discrimination, as I characterized previously in "How to Handle the Aftermath of Discrimination Claims." There are a number of sound approaches to combatting sexual harassment in the workplace. In addition, the EEOC report suggests additional considerations to supplement those tactics for those employers willing to go beyond just compliance and focus on building a harassment-free culture.

Compliance: Sound approaches

Many of the sound approaches to eliminating discrimination ring true for eliminating sexual harassment as well. Employers should draft, circulate, and regularly review policies prohibiting sexual harassment and containing procedures for employees to report harassment without retaliation. Policies should specifically prohibit harassing behavior on the job and on social media platforms. Employers should require supervisors and other employees to undergo training to better understand their own role in creating a harassment-free work environment. In jurisdictions where training is required, employers must ensure that legally mandated training elements are included.

In addition, employers should clarify for themselves their own comfort level with workplace romance. Although many people meet their significant other on the job, an office romance gone sour can create legal liability. Employers need to create policies that set expectations for employees and managers about how to handle these delicate situations.

Beyond compliance: Building culture

The EEOC report informs some of these longstanding best practices with its empirical findings and recommendations. In particular, the EEOC study emphasizes two elements vital to combatting the problem: leadership and accountability.

The study also stresses that leadership from the top of the organization must commit to combatting sexual harassment. That message must go beyond compliance and move toward “an overall diversity and inclusion strategy.” Leaders should treat sexual harassment as a problem requiring urgent attention and send that message to the entire company through assessment of harassment risk factors and employee surveys. The report outlines risk factors for a variety of harassment situations, including lack of diversity, younger workers who are unaccustomed to workplace norms or unaware of their rights, groups with “high value” employees regarded as too valuable to lose or discipline, isolated workspaces, and workplaces that promote alcohol consumption.

The study confirms that training is key, but it also suggests supplementing training with follow-up to assess its effectiveness. In addition, companies have to demonstrate their commitment to the cause with their most valuable resources: time and money. As the report suggests, nothing sends a message about what leaders truly prioritize than “what gets paid for in a budget and what gets scheduled on a calendar.” Finally, those tapped to introduce reforms to combat sexual harassment must have actual authority to implement changes.

In addition to strong leadership, employees throughout the company should be held accountable. Accountability involves doubling down on the reporting and investigation processes to ensure that employees feel comfortable speaking up about sexual harassment and confident that appropriate action will be taken. The study emphasizes the importance of making penalties proportionate to the offense committed, both for the sake of those subjected to abuse and to deter those who might follow suit in the future. Employers must move away from protecting superstar performers in favor of protecting the greater good.

The bottom line

Training, policies, and functional mechanisms for reporting and responding to sexual harassment complaints are crucial to eliminating sexual harassment. However, those resources will never fully function on their own without the proper context in which to operate. Building and maintaining a culture in which sexual harassment is unacceptable and respect is fundamental toward protecting your staff, your good reputation, and your bottom line.

About the Author

Kate BallyKate Bally is the director of labor and employment at Practical Law.

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