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Sexual harassment is a form of discrimination recognized under the federal civil rights law Title VII of the Civil Rights Act of 1964, which is applicable to all public businesses.

Since 1991, when the Congress broadened the 1964 law, demonstrable acts of sexual harassment are punished via the civil courts through civil suits where the victim sues the harasser.

This may be an uncomfortable subject for many. As a small business owner, however, you need to be informed about not only the legal side of things, but how sexual harassment and allegations thereof can affect your employees and your overall business.

How Big of an Issue is Sexual Harassment?

The range of sexual harassment behavior is broad. A 2014 International Women’s Media Foundations survey of 683 employees found that nearly half answered “yes” to the question “Have you experienced sexual harassment in relation to your work?”

Although many of the sexual harassment complaints were probably not actionable, 45 percent of the harassment was physical groping or touching “sensitive” areas and 15 percent involved verbal threats of a sexual nature.

Some sexually harassing conduct does violate criminal law as well. For instance, it is a criminal offense to physically assault a co-worker. Sexual harassment can often lead to physical sexual assault, which may result in a criminal charge against the assailant and a civil sexual harassment lawsuit against the assailant’s employer for not preventing the civil rights violation in the workplace.

Criminal assault and battery charges may result from “offensive physical contact or threat of such physical contact.” This may be punished under state assault and battery laws and result in a lawsuit as well.

Sexual harassment may also result in the harasser’s efforts to restrain the victim. This restraint of action may result in criminal false imprisonment or unlawful restraint law. Bullying, stalking, or imposition of offensive pornographic images (including child pornography) may be punished under criminal law. Both the assailant and the employer may be charged.

The History of Sexual Assault Cases in the Workplace

On-the-job sexual harassment is not a recent problem, although the right of victims to legal compensation is. The first Title VII sexual harassment suit was decided in the District of Columbia in 1976. Current civil actions include pain and suffering allowances as well as back pay, lost wages, and job reinstatement to victims. Now sexual harassment suits are heard in jury trials where chances of findings for the plaintiff are higher.

The number of sexual harassment claims rose quickly. In 1991, there were 6,883 claims in the US. In 1997, there were 15,889 claims. In 2014, the number of claims levelled off to 10,364. According to the Equal Opportunity Commission, about 20 percent of those claims were judged in favor of the plaintiff and paid out almost $50 million.

Is an Employer Responsible in a Sexual Harassment Case?

In many cases, the employer is at least partially responsible for sexual harassment, especially if the harasser is working in accordance with the authority he or she is granted by the company, and if the company has made no attempt to correct conditions leading to the harassment.

The cost of sexual harassment to American business is high. In 1988, Working Woman Magazine compiled statistics indicating that a typical Fortune 500 company can expect to lose $6.7 million annually in sexual harassment civil suits. Losses can result from absenteeism associated with the harassment, loss of reputation, lower productivity and staff morale, a jump in health care costs, and employee turnover.

How Can Companies Protect Themselves Against Sexual Harassment Actions?

Prevention is the best defense against sexual harassment litigation. The most obvious protection for a company is to put a sexual harassment policy in place. In order to do so and have it be effective, here are a few important things to keep in mind:

  • Instances of sexual harassment must be recognized and policies must be enforced and violations sanctioned in the strongest terms.
  • Everyone in the company must be aware of the nature of sexual harassment and what will happen to anyone who breaks the rules.
  • The name of anyone who makes a complaint about sexual harassment should be kept completely confidential.
  • Employees must feel that they can freely report sexual harassment without fear of reprisals from their superiors or anyone else.
  • All employees must know that sexual harassment complaints will be thoroughly (and confidentially) investigated.
  • Companies must provide the lists of state and federal agencies where sexual harassment complaints can be made.
  • As much as possible, the company must not be perceived as complicit in sexual harassment by way of supervision policies or lack of policies.

Almost any company can and should create a sexual harassment policy to protect their employees. Most insurers require inquiries about past sexual harassment cases and the nature of the human resources department in the company. The sexual harassment coverage may be part of an employment practices liability insurance policy that also covers invasion of privacy, libel, slander, wrongful dismissal, and other forms of discrimination suits.