Bears Business Brief: Aim for zero tolerance of sexual harassment

By: Richard Ollis

headshot Richard Ollis
Richard Ollis

Employment-related litigation is prevalent in the United States. In fact, according to a 2015 Hiscox report, U.S. companies have at least an 11.7 percent chance of having an employment charge filed against them. Missouri is rated as a high-risk state, where businesses are 15 percent more likely to be involved in litigation, and one of several states where state laws are more rigorous than some federal regulations.

Recently, numerous sexual harassment allegations have been in the headlines. In February, Susan Fowler, an engineer who worked at Uber, said her manager made sexual advances toward her. Uber told Fowler it was the man’s first offense and they wouldn’t feel comfortable punishing a “high performer.”  Uber’s CEO later announced an “urgent investigation” and said, “there can be absolutely no place for this kind of behavior at Uber.” After the story broke, a number of Uber customers deleted the Uber app from their phones to signal their displeasure with the perceived actions of the company.

That same month, Sterling Jewelers, the parent company of Kay and Jared Jewelers, was accused of allowing a culture of sexual harassment. Declarations from roughly 250 employees at Sterling have been filed as part of a class-action lawsuit. The lawsuit alleges that female employees at the company were routinely groped, demeaned and urged to sexually cater to their bosses in order to stay employed.

Although we could debate why such claims are being filed, investigated and litigated at such an alarming rate, we can all agree that the best course of action is to reduce and eliminate this type of behavior in the workplace. By implementing best practices around hiring, managing and employment policies, many of these instances can be mitigated to everyone’s satisfaction. Zero tolerance for this type of behavior should be everyone’s ultimate goal.

There are two types of sexual harassment defined as illegal by the federal Equal Employment Opportunity Commission:

  • Quid pro quo – a Latin term meaning “this for that.” The most blatant type of this sexual harassment occurs when employment decisions — hiring, promotions, salary increases, or performance evaluations — are based on a willingness to grant sexual favors.
  • Hostile work environment – when verbal, physical, or visible behavior is prevalent in the workplace. It can be sexual in nature, focused on gender, unwelcome, and affecting the work environment and the employees’ ability to perform their job.

Both of these types of harassment are serious and can cause significant harm to employees and to the company. It is critical for companies to employ good policies, training, investigation, discipline and documentation in this area. The key is to make it clear that this type of behavior will not be tolerated and, just as important, that it will be addressed immediately. Regular communication and training in this area also reinforce the idea that the company believes this type of behavior is unacceptable.

Developing proper policies and protocols will significantly reduce the likelihood of sexual harassment issues. However, financial protection from incidents, factual or not, is also worth considering. According to research by Thompson Reuters, incidents that end up in court have a median judgment of $200,000 plus defense costs, and about 25 percent result in a judgment of $500,000 or more.

A company can purchase Employment Practices Liability Insurance to provide protection — offering reimbursement for defense costs, and a judgment if applicable. Most policies also provide highly trained defense counsel who specialize in employment matters, specifically sexual harassment.

Sexual harassment is illegal. Prevention and swift action are among the best methods to address this type of employment exposure. Having financial protection can also mitigate unforeseen incidents. Being prepared for any potential claims of sexual harassment is the way for a company to benefit all concerned.

Richard Ollis is CEO of Ollis/Akers/Arney, an employee-owned business consulting and insurance advisory firm. 

This article appeared in the March 11, 2017 edition of The News-Leader and can be accessed online here.

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