Are You Leaving Your Business Exposed to a Sexual Harassment Lawsuit?


Sexual harassment claims continue to dominate headlines and remain at the forefront of social awareness. As is apparent from the news, social media, and the #MeToo movement, many women have been exposed to sexual harassment at work.

Sexual (or any unlawful) harassment can be devastating to a business. It erodes employee morale and productivity, negatively impacts employee retention, and  exposes a business to significant liability and legal costs. There are, however, steps business owners can, and should, take to protect their employees from being subject to sexual harassment in the first instance, as well as protecting their businesses if an incident does occur.

 1.  Update your business's written anti-harassment policy.

 Every employer should have a written anti-harassment policy, which is updated regularly. This policy is typically contained in an employee handbook. I had previously written of the importance of a business having an updated handbook in a prior post

 2.  Establish a complaint procedure for employee's to report harassment.

 As part of its anti-harassment policy, every employer should establish a complaint mechanism for employees to report incidents of sexual or other harassment. The complaint mechanism should designate at least two points of contact for employee complaints. In addition, supervisors should be obligated to report any incidents of unlawful harassment that they witness or become aware of.

 3.  Establish a process to investigate and address harassment complaints.

 Employers should establish the process by which harassment complaints will be investigated, documented, and handled before a complaint is received. This will allow the employer to be proactive in handling a complaint. Additionally, having an investigation process in place before a complaint is received will allow an employer to promptly investigate and respond to the complaint. This can help reduce the risk of litigation, resolve workplace problems, and provide defenses to sexual harassment lawsuits.

 4.  Provide regular anti-harassment training to employees.

 Anti-harassment training is a crucial aspect of a business's anti-harassment policy and procedures. I had previously written of 10 reasons businesses should provide anti-harassment training to managers and staff.

Ideally, training for supervisors will be conducted separately from the training for staff and no employee, no matter how senior, should be exempted from attending anti-harassment training.

 5.  Obtain Employment Practices Liability Insurance.

 Sexual harassment lawsuits are expensive to defend and expose employers to significant liability. Employers can be held liable to a victim of sexual harassment for lost wages, emotional distress damages, punitive damages, and reimbursement of the plaintiff's attorneys' fees. 

 Commercial and business insurance policies generally exclude claims for sexual or other unlawful harassment from coverage. EPLI policies are designed to cover such claims and can significantly lessen the cost of, and potential exposure from, sexual harassment and other covered employment claims. Thus, in addition to the above steps, employers should consider obtaining Employment Practices Liability Insurance (EPLI).

 The current awareness on sexual harassment provides an opportune time for business owners to ensure that they have taken appropriate steps to prevent sexual harassment. This will protect the business as well promote employee well-being. Please contact us at (201) 345-5412 or if you have any questions about your business's anti-harassment policies and procedures.