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Preparing for Sexual Harassment Claims

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November/December 2001 - Volume 80, Number 6

by Hunter Lott

I know we are all tired of hearing about sexual harassment, but this is the employment practices topic that will not die. In 1998, the Supreme Court expanded the definition of harassment and made it easier to file suit. The headlines continue to tell the story. Mitsubishi settled their suit for $44 million. The EEOC forced a $1.9 million settlement on a same sex harassment case. Last year the highest-ranking female in the Army complained that the Army was condoning harassment. Just this summer, the pastry chef at the White House was accused of sexual harassment. Attorneys continue to find new ways to sue for harassment. In Maryland, a "wrongful discharge" lawsuit is pending in a case where a worker was fired after she refused to have sex with her supervisor. The supervisor is accused of violating the state's public policy against prostitution.

In a recent article, written by an attorney, the statement was made that there were only a handful of harassment cases at the Circuit Court of Appeals level. That may well be true, but let’s talk to the business owners on these cases and see how much they have spent on defense costs, attorney fees, and what their time is worth. They may win their case, but spend $100,000 plus to do so. I don't know about you, but I don't consider that a win for the employer.

Ten years ago an attorney told me she was fed up with all this talk about sexual harassment. She said there was no need to keep beating this dead horse, people should just move on. I would love to find that attorney today. We are raising our sons and daughters differently than we were raised. They are not going to tolerate harassment at work. This is not going to go away.


Sexual harassment is an unwelcome sexual advance that creates a hostile work environment. Hostile is determined legally as quid pro quo, this for that. This is a situation of power and control, "sleep with me or you're fired." The target also can define hostile. If she/he doesn't like it, then that's all it takes. This can be both on the job and off the job, by members of management, co-workers, and even third parties.

Sexual harassment while communicating via any company outlet, i.e., e-mail, voice mail or Internet, is also the responsibility of the company. In June of 2000, the New Jersey Supreme Court ruled that Continental Airlines was responsible for a pattern of retaliatory harassment on the work-related electronic bulletin board. Even though the Court said that the company had no duty to monitor the electronic bulletin board, once the company had knowledge that this could be going on, then the company could be held accountable.

Most updated definitions also require a business to have an anti-harassment policy in place. The policy should include a prohibition of slurs or comments about gender, race, religion, national origin, age, or any other legally protected characteristic. This keeps the company current with the expanding definition of harassment in the courts.

Hostile Work Environment

Watch for an expansion of the definition of hostile work environment. States may set up standards on what is hostile, either through sexual harassment laws or workplace violence rules. If there is a manager at your workplace who yells at employees or quietly belittles as a management style, start to reel them in now. The old "baseball bat" theory of motivation doesn't work as well as it once did. When the unemployment rate is

4 % nationally and your supervisor is on the inside raving "my way or the highway," even good employees start to leave. This behavior, on the part of management, is no longer acceptable and may soon be problematic legally. Don't yell at bad employees, fire them.

Attitude vs. Behavior

Yes you can hire, fire, evaluate, and promote for attitude. However, take attitude out of the subjective and make it objective. Turn attitude into behavior. What you manage is an employee's performance and behavior. Some people do their jobs but are miserable about it. What is the employee doing that's driving you crazy? Rolling eyes? Sighing? Constant complaining? These are examples of behavior. Behavior can be measured, attitude cannot. If you can't measure it, it's hard to manage it. Whiny, complaining employees are not protected. Can you imagine a grumpy greeter at Wal-Mart? Can you imagine a slug at Nordstroms? You need to communicate that you expect the employee to "maintain a positive work atmosphere by behaving and communicating in a manner so that you get along with customers, clients, co-workers, and management."

One company put this in their job descriptions as a core value, and had applicants signed it. They now have attitude established as part of the company policy and documented with each employee before the company makes the hiring decision.

"That's not fair!" Work isn't fair. The closest you come to fair at work is consistent. Remember, what you owe to the employee is communication. If a code of conduct is in place and communicated, it is easier to defend your action in maintaining a harassment-free workplace.

Lawsuits and Liability

The courts look for patterns. A one-time incident has a tougher time getting to court. It doesn't mean that we should condone these incidents, but liability goes up the more we ignore the complaints. If the company knew, or should have known, then the liability goes up. The question becomes, "what is reasonable?" Did the company show reasonable care? What would a reasonable man, woman, person tolerate given the work environment? The liability is different at the construction site versus the 28th floor of an office building. This is one of the few areas of employment practices where the supervisor can be held personally accountable. In California, there is pending legislation that would hold non-supervisory co-workers personally liable for workplace harassment, regardless of whether their employer knew or should have known about the conduct. We see this word "reasonable" in all kinds of lawsuits. Is there a working definition of "reasonable"? Yes! Think "60 Minutes!" Would you want to go on "60 Minutes" and defend a dumb blond joke to Diane Sawyer? No, so don't let the kind of behavior exist in your workplace either.


Each situation has to be handled on its own merit. When a complaint is made, don't jump to any conclusions. Do not commit to personal confidentiality. If you tell the employee "this will go no further," you are accepting personal liability for this situation. Without a guarantee of confidentiality, the employee may refuse to go forward. "Well if you're not going to keep this a secret then I'm not going to tell." This is, of course, the employee's right. The manager then responds that, "We will have to investigate regardless. We hope that we keep this on a positive tone, but ultimately the burden is on the employer to guarantee a harassment-free work environment."

In April of 1999, the Federal Trade Commission ruled that a sexual harassment investigation done by an outside party (consultant or attorney) would trigger disclosure guidelines under the Fair Credit Reporting Act. (No kidding!) Basically, we have to tell everyone involved everything we find out. It's not quite that bad, but good grief! Doesn't the FTC have better things to do? Congress has legislation pending that would fix this. But until this happens, check with local legal counsel before having a third-party investigate the claim.

Alert, Alert!

This past July, a National Labor Relations Board ruling was on the front page of almost every legal and human resource practices publication. The ruling applies to nonunion companies in all 50 states. It said that if an employee thinks that a meeting with the manager is to investigate some workplace issue that could lead to discipline, the employee has the right to ask for a co-worker as a witness, and the request cannot be denied. This NLRB ruling will be appealed, but in the mean time, don't be the test case.

This right does not have to be communicated to the employees. Check with local legal counsel before turning down an employee's request for a witness.


Another legal technique is to add a charge of retaliation on any discrimination case.

This means that the company, and especially the front line supervisor, must treat any employee who files charges against the company no better or worse than any other employee. This involves controlling the emotions. You don't want to go to court and win the discrimination case but lose $700,000 for retaliating against the employee who filed the charge.

What To Do

Given this workplace and legal environment, what can you do to protect your company?

1. Have a company policy on sexual harassment including the following:
  • Zero tolerance policy
  • Anti-harassment statement
  • Definition of sexual harassment
  • Procedures whereby employees can easily complain
  • Disciplinary action up to and including termination
  • Investigation procedures
2. Documentation. Include an entry on the new employee orientation checklist about the company policy.
3. Training. Train employees on the company policy against sexual harassment and train managers on handling sexual harassment investigations.
4. Behavior. Add behavior to your workplace vocabulary and hold employees accountable.
5. Legal counsel. Set up a meeting with employment practices legal counsel to discuss the company’s exposure and updates on the recent FCRA and NLRB decisions that affect sexual harassment and workplace investigations
6. Take action. Ignoring sexual harassment issues at work can only add to the potential liability and financial damages.

Sex Audit

1. True or False - Management cannot be held financially liable for sexual harassment done by their employees?
2. True or False - There is a difference between sexual harassment and anti-harassment?
3. True or False - An accused harasser can demand a co-worker of their choosing be present during a sexual harassment investigation?
4. True or False - Same sex sexual harassment doesn’t count?
5. True or False - Off-the-job harassment doesn’t count?


1. False. Although the big bucks are really with the company, the law does allow the target of harassment to go after the individual manager.
2. True. Starting with some Supreme Court rulings in 1998, the definition of "harassment" has expanded.
3. True. A July 2000 NLRB ruling has made this true for any investigatory interview. 
4. False. In 1998 the Supreme Court ruled same sex counts.
5. False. If the conduct meets the definition of sexual harassment, it doesn’t matter if it’s on or off the job.

Hunter Lott is the owner of Encore Information Network specializing in training managers and business owners on employment practices. He can be reached at For sample sexual harassment policies visit This article is an excerpt from Hunter’s presentation at the 2000 ALTA® Annual Convention in Hawaii.

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