Throughout the end of 2017, reports of sexual harassment and sexual assault dominated the news cycle.
Although initially focused on the entertainment industry, due to the explosive allegations leveled against Harvey Weinstein, the media has begun reporting almost daily on allegations spanning virtually every industry—technology, media, government, and others.
As awareness of the prevalence of this problem increases, so do the number of claims. And that could be a serious problem for businesses; especially considering that even in 2016, before the #MeToo movement became a cultural phenomenon, the Equal Employment Opportunity Commission (“EEOC”) reported there were 6,758 charges alleging sexual harassment, which cost companies over $40.7 million in monetary awards. Those figures do not include confidential settlement amounts or money obtained through civil litigation. The amounts paid by companies in those scenarios can reach eight figures.
For example, as recently as 2016, the parent company of the Fox News Channel paid Gretchen Carlson, a former broadcaster for the company, a $20 million settlement as a result of the lawsuit she filed against Fox News’ former CEO, Roger Ailes. Last year, Iowa jurors awarded $2.2 million in damages to a former Iowa Senate Republican caucus staffer who accused supervisors of fostering rampant sexual harassment.
Seeing an opportunity, even Silicon Valley venture capitalists have gotten involved. On November 8, 2017, a San Francisco-based litigation finance firm call Legalist, Inc. (“Legalist”) launched a new initiative called #MeToo Tales designed to provide litigation financing for certain victims of sexual harassment. In exchange for fronting the litigation costs, Legalist takes a cut of any proceeds obtained through settlement or a final verdict. By providing funding, Legalist removes a significant barrier to litigation.
Now that you are sufficiently scared, rest assured that it is not too late to protect your business against this potential litigation risk. Here are the five things you should do right now:
1. Understand What Does and Does Not Constitute Sexual Harassment
You cannot protect yourself against a risk that you do not understand – so educate yourself!
Generally speaking, sexual harassment is defined as unwanted sexual conduct of two primary types: quid pro quo harassment and hostile environment harassment.
Quid pro quo harassment occurs when employment is conditioned, expressly or impliedly, on the submission of unwelcome sexual advances. An example would be a film executive telling an actress “if you want that part in my upcoming blockbuster, you’re going to have to sleep with me.”
Hostile environment harassment is more insidious, and far more common. This type of harassment generally occurs when the work environment becomes hostile, abusive, or intolerable due to sexual misconduct. Examples include persistent comments about an employee’s appearance, intrusive questions about an employee’s sexual activity, unwelcome physical contact, offensive jokes, and sexist comments. To determine whether specific conduct constitutes hostile environment harassment, you may need to consult a legal professional.
2. Take Stock of Your Current Policies and Practices
Do you have formal written policies that address sexual harassment? If you do, when was the last time you updated them? It is easy to forget about updating these policies after organizational changes or new developments in the law, but a failure to do so can be costly both in terms of monetary payments and reputational damage.
If you don’t have any policies, write them. Or, better yet, have a legal professional write them for you.
It is also imperative that you assess your insurance coverage position. Review your existing policies to determine whether you would be covered in the event of a lawsuit. If you are not, explore your options for obtaining Employment Practices Liability Insurance.
3. Ensure That Your Policies Are Effective
Recent court decisions have made it clear that employers have a greater responsibility to establish policies that address sexual harassment in a more realistic and thoughtful manner. At a minimum, your policies should:
- Provide a clear explanation of prohibited conduct, including specific examples;
- Encourage employees to report concerns or complaints immediately;
- Make it clear that employees who make complaints or provide information related to complaints will not be retaliated against;
- Outline the complaint process, which, ideally, provides multiple, accessible avenues of complaint and provides for a prompt, thorough, and impartial investigation;
- Provide assurances that the employer will protect the confidentiality of harassment complaints when possible; and
- Provide assurance that you will take immediate and appropriate corrective action if you determine harassment has occurred.
You may also want to revise your employee handbook to include an arbitration clause for any disputes between the employee and the employer. These provisions can help keep lawsuits off the public docket and protect your business from bad publicity. While proposed legislation may curtail the use of arbitration provisions in sexual harassment cases at some point in the future (if ever), you should take advantage of this benefit while you still can.
4. Make Sure Your Employees Are Aware of Your Policies
The best sexual harassment policies in the world cannot help you if you never get them in front of your employees. Provide physical or electronic copies directly to each employee and ask them to sign acknowledgement forms. Keep detailed records about when the policies were distributed, how they were distributed, and who received them. And this means all employees! From the CEO all the way down to the lowest level employee, everyone needs to receive and review your policies.
A logical time to provide these policies is during the onboarding process for new employees, but if you are updating an existing policy, you will need to be more proactive. Having high-ranking employees send out the policies is a good way to demonstrate a top-down culture of zero tolerance for harassment. It is also a good idea to make your policies constantly available through a company intranet or web portal.
5. Train Your Employees
Passivity is your enemy. Just handing out the policies will not be enough to actually educate your employees on prohibited behavior or create a strong culture of compliance. Take the time to explain your employees’ duties and responsibilities with respect to harassment. If you have not provided formal training recently, do so now. The goal is creating a harassment-free workplace.
Training is especially critical for managers and supervisors. These key employees need to know how to foster an environment of inclusivity and how to identify problematic behavior and stamp it out. They also need to understand what to do when accepting and responding to a complaint. Something that will increase your business’s exposure to liability is a failure to take complaints seriously and not responding in a timely fashion. You should provide a detailed plan on how to adequately respond to a complaint, including best practices for a prompt and thorough investigation.
Do not forget to maintain these training materials and to update them periodically. You also need to keep detailed records about any training that is administered.
Unfortunately, sexual harassment is likely a reality for many employees. However, you can take a few simple steps to improve your culture and reduce the chance of a lawsuit being filed against you.
The members of our Employment Law Group are experienced in handling sexual harassment issues, and are prepared to assist you with any of your needs in this area. We have represented small, medium, and large employers with policy reviews, internal investigations, and civil litigation, including trials in both state and federal court.
 See Charges Alleging Sexual Harassment FY 2010 – FY 2016, available at https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment_new.cfm.
 See Fox Will Pay Gretchen Carlson $20 Million to Settle Sexual Harassment Suit, NPR (Sept. 6, 2016), https://www.npr.org/sections/thetwo-way/2016/09/06/492797695/fox-news-will-pay-gretchen-carlson-20-million-to-settle-sexual-harassment-suit.
 See Fired Iowa Senate Republican staffer awarded $2.2 million in sex harassment trial, Des Moines Register (July 18, 2017), https://www.desmoinesregister.com/story/news/crime-and-courts/2017/07/18/iowa-senate-republican-staffer-awarded-2-2-million-sex-harassment-trial/487997001/.
 See Bill would let silenced victims of workplace harassment take their claims to court, Washington Post (Dec. 6, 2017), https://www.washingtonpost.com/business/economy/2017/12/06/7eb36f84-daac-11e7-a841-2066faf731ef_story.html?utm_term=.46eb1ab7f1bf.