E-Newsletter

September 2008

Harassment: Very Costly No Matter How You Look at It

Deborah A. Krukowski, Esq.
dak@kclegal.com

Approximately one-fifth of all women report being sexually harassed at work. Sexual harassment costs a typical Fortune 500 company $6.7 million per year in absenteeism, low productivity, and turnover. Sexual harassment happens every day and is costly no matter how you look at it. Employers, not just individuals, get sued.

Half of all women will be sexually harassed during their working life. Last year, there were 12,510 sexual harassment charges filed---almost 50 per day! Fifty million dollars were spent by employers to settle sexual harassment lawsuits last year alone. These settlement numbers do not include all of the claims successfully litigated.

In a sexual harassment verdict against agriculture industry giant Harris Farms on April 25, 2008, the Ninth Circuit in California affirmed the judgment on a jury verdict in favor of the EEOC and farm worker Olivia Tamayo in a sexual harassment and retaliation lawsuit, awarding over $1,000,000, including attorney's fees. The court specifically noted that punitive damages were appropriate because of Harris Farms' retaliatory tactics, including suspending Tamayo after she reported the harassment, to deter her from pursuing her complaint.

In another case involving Tavern on the Green restaurant in New York, the EEOC announced on June 2, 2008 the settlement of a harassment and retaliation lawsuit for $2.2 million. The alleged sexual harassment included graphic comments and demands for various sexual acts, as well as allegations of groping.

What makes sexual harassment a troublesome legal and personnel issue? Sexual harassment is based on your employees' perceptions. Claims of harassment may reflect a breakdown of your communication system. The costs of sexual harassment can include decreased profitability, an inability to pay future wage increases, and even layoffs or terminations if the cost of a lawsuit cuts into profits. These are direct costs. Most companies do not budget each year for potential sexual harassment lawsuits.

Sexual harassment is unwelcome sexual advances, requests for sexual favors, or visual, verbal or physical conduct of a sexual nature which is made a term or condition of a person's job, used for employment decisions, or conduct which substantially interferes with a person's work.

When a supervisor engages in harassment, vicarious liability results. He or she can cause liability by creating a hostile environment or by taking a tangible job action against an employee. A supervisor is someone with authority to affect the terms and conditions of a victim's employment and who has the authority to affect tangible job decisions such as termination of employment, demotion with reduction in wages, assigning a less distinguished job title, reducing or taking away benefits and/or continuing or increased sexual harassment.

It is important to review your policies to determine if you have the anti-harassment policy basics: a definition of sexual harassment, a statement of zero tolerance, a detailed complaint reporting mechanism, a provision that discipline, including discharge, will result if an employee has been found to have engaged in harassment, and a policy against retaliation, identifying the consequences.

For more information on this subject, or for more information about customized in-house anti-harassment training for your company, contact Krukowski & Costello, S.C.'s educational services department at (414) 988-8400.