For business owners, minimizing the risk of civil liability is one of the most effective ways to avoid impacting your profitability by unnecessary lawsuits. A sexual harassment lawsuit by an employee can result in a substantial award paid by the employer.
In 2019, Employers paid out a record $68.2 million through the Equal Employment Opportunity Commission (EEOC) to employees. Even in cases that settle before trial, the average cost to an organization for a harassment claim can be between $75,000 – $125,000.
As an employer, reducing the likelihood of such lawsuits requires taking proactive steps to ensure that you do not run afoul of state and local law. It can also make sense to speak with an employment attorney conversant in those laws.
But what exactly are the duties of an employer with regards to preventing sexual harassment claims from arising? Below are three of the most common ways to reduce this potential liability and add an extra layer of protection to your business’s bottom line.
Reducing Your Exposure to Sexual Harassment Litigation
It is essential first to understand the various laws subject to a business owner.
At the federal level, under Title VII of the Civil Rights Act of 1964 (commonly referred to as “Title VII,” employers have a responsibility to maintain a workplace free of sexual harassment and to “take all necessary steps to prevent sexual harassment from occurring.”  To help accomplish this, the EEOC has issued regulations and guidance on the definition of sexual harassment and the employer’s responsibilities. Courts use these guidelines to decide whether to hold an employer liable in a sexual harassment case (29 C.F.R. § 1604.11(e).
According to state law, each state has a similar commission or guidance; in Pennsylvania, for example, the Pennsylvania Human Relations Commission, according to state law, issues guidance and provides another way for employees to bring claims against an employer (43 P.S. § 955.)
1. Address sexual harassment before or at the start of employment.
Sexual harassment claims by employees often revolve around the conduct of a co-worker rather than the actions of a manager or a third party. At the same time, this varies by industry.
Educating your employees at their pre-employment orientation or the first day of work is key to protecting against later liability. However, liability for sexual harassment turns on whether an employer permits an intimidating, hostile, or offensive work environment to exist. Employers, therefore, have a duty to proactively prevent sexual harassment, including expressing strong disapproval to employees, developing a procedure for handling complaints (and informing new employees of the existence of these procedures), and educating employees about their rights under state and federal law.
Under U.S. Supreme Court precedent, employers who take reasonable steps to prevent and correct sexual harassment have a strong defense should a claim ever arise. Equally important is ensuring that these preventative measures and the availability of corrective actions are open and available to employees at all times.
While there is no definitive list of pre-employment practices to follow, at a minimum, having a stated anti-harassment policy would establish that the employer attempted to prevent harassment before it began. The more thorough your orientation training and educational practices are, the less likely you will face liability down the road.
2. Develop a system or procedure for handling complaints and follow it.
As mentioned above, informing employees of how you will handle sexual harassment complaints is an essential component of preventing such harassment before it can occur.
Nonetheless, employers who fail to follow a set practice for addressing complaints or who do not take such complaints seriously when made open the door wide open for a later lawsuit. Time and again, failure by business management to take swift action when an employee complains of sexual harassment invites more of the same conduct.
From a legal standpoint, when an employer fails to take corrective action, it opens the door to a sexual harassment suit. That failure can lead to substantial fines and costly settlements. When a procedure is put in place to address instances of sexual harassment, following through on those policies is an excellent way to reduce liability. An employment lawyer can help draft those policies to make sure you avoid potential issues.
3. Avoid retaliatory actions.
While it may seem common sense, employers unknowingly expose themselves to lawsuits and administrative sanctions when they take disciplinary action against the employee complaining of the harassing behavior. A surprisingly high number of complainants, perhaps as high as 75%, face some form of retaliation from their employers after reporting the harassment.
While it may be tempting to transfer, demote, or otherwise discipline an employee who is causing disruptions at your business, employers need to think carefully before taking such action if they have voiced complaints about sexual harassment. While the discipline might seem unrelated to you, an arbitrator, judge, or jury may think differently.
To avoid litigation (which may be costly even if you win), be sure to work with your Human Resources department or employment lawyer before taking any action against an employee in this situation.
Implementing solid policies and a workplace culture that disapproves of sexual harassment is the best way to prevent unwanted conduct from becoming a costly problem.
Talk with an Employment Lawyer Near You
Implementing solid policies and a workplace culture that disapproves of sexual harassment is the best way to prevent unwanted conduct from becoming a costly problem. In addition, consulting with an employment lawyer near you experienced in employment discrimination can give you the best course of action for keeping your business running smoothly. Our law firm has offices in Montgomery and Bucks County. We can help create effective policies and deliver appropriate guidance for sexual harassment in the workplace claims.
 Phila. Hous. Auth. v. Am. Fed’n. of State, Cty. & Mun. Emples., Dist. Council 33, Local 934, 956 A.2d 477, 483 (Pa. Cmwlth. 2008).
 The sources of sexual harassment vary based on the work environment; for example, roughly 90% of women in the restaurant/foodservice industry reported some form of sexual harassment in a 2018 study by Harvard Business Review. https://hbr.org/2018/01/sexual-harassment-is-pervasive-in-the-restaurant-industry-heres-what-needs-to-change.
 Faragher v. City of Boca Raton, 524 U.S. 775, 806 (1998); Burlington Indus. v. Ellerth, 524 U.S. 742, 766 (1998)
 See https://pubmed.ncbi.nlm.nih.gov/14570522/