Limiting Sexual Harassment Liability; the Best Defense Is an Effective Policy against Harassment

The frequency of sexual harassment lawsuits is increasing, as are the monetary damages awarded to winning plaintiffs. Even firms that don't face lawsuits can be hurt financially. A recent study found the legal damages of sexual harassment suits were minor compared with the costs of lost productivity, increased absenteeism and turnover caused by sexual harassment. CPA firms are at risk for two reasons. First, both males and females are employed at various levels. According to one survey, 43% of responding CPA firms reported that women make up over half of their work force. In such situations, sexual interactions will inevitably occur. When the interaction is inappropriate, the victims in many cases are women who are well educated and understand the legal protection from harassment afforded them. Second, while CPA firms are more sexually mixed at the senior levels than either manufacturing or service firms, upper management remains predominantly male. The survey mentioned above found 35% of firms had women in less than 10% of senior staff positions and 39% reported that less than 10% of their middle managers were women. This means the tone set by top management may not include an awareness of and sensitivity to sexual harassment. The good news is firms can protect themselves from monetary damage awards and other losses by implementing a few simple procedures. WHAT THE LAW SAYS Sexual harassment violates Title VII of the Civil Rights Act of 1964 as well as state and local antidiscrimination laws. Equal Employment Opportunity Commission (EEOC) rules call sexual harassment any unwanted sexual advance that is related to employment status. The alleged misconduct must be sexual in nature. Either males or females may file charges for harassment that can be either heterosexual or h sexual. Harassment that is a significant term or condition of employment is called quid pro quo harassment. Charges also can be brought if sexual interaction creates a hostile or offensive work environment. This type of sexual harassment need not be tied to employment status but may simply be sexual teasing that creates a climate some employees believe is offensive. Even if the teasing is considered harmless by the majority of employees, it can create a substantial liability for the employer should someone file a sexual harassment charge. In judging whether or not sexual harassment has created a hostile or offensive work environment, the courts generally use a reasonable-person standard although consideration is given to the victim's perspective. A climate that most employees consider harmless or playful may still be judged hostile depending on the circumstances. While a single incident of physical harassment may create a hostile work environment, especially if committed by a supervisor, courts generally find that other types of sexual harassment create a hostile work environment only after repeated occurrences. A recent court decision also found that an individual doesn't have to be the target of sexual harassment to have a cause of action. The California Supreme Court ruled that an operating room nurse who was not the object of any sexual harassment but who had witnessed the harassment had grounds for a suit since she objected to a physician's sexual misconduct (Fisher v. San Pedro Peninsula Hospital, 262 Cal. Rep.842, 1989). In judging whether a sexual advance is unwelcome, the courts examine who made the advance, considering the circumstances on a case-by-case basis. An employee who solicits or entices a sexual advance may still be able to claim it was unwelcome. The victim's reaction to the alleged sexual harassment is evaluated, but his or her prior behavior and character usually are not given much weight. A detailed account of the alleged harassment may be persuasive even without corroborative evidence. A sexual harassment suit also may be expanded to a class action suit if an entire group of employees has been affected. …