Business Law

Sexual Harassment in Your Small Business

There are all kinds of anti-discrimination laws that are designed to help make sure that American workers are freely able to get and keep jobs without fear of being discriminated against on the basis of things like their age or disability. Another major employment-related discrimination issue that is frequently raised by employees is sexual harassment.

At the federal level, Title VII of the Civil Rights Act of 1964 (Title VII), is the primary law that governs sexual harassment, as well as many other types of work-related discrimination, such as discrimination based on race and religion. In addition, many states have anti-discrimination laws that prohibit sexual harassment in the work place.

So, if your small business has employees, it's critical that you understand how the laws will treat sexual harassment in your small business.

Who and What Title VII Covers

Title VII applies to employers with 15 or more employees. But, if your small business doesn't have that many workers, your state might have a sexual harassment law that might apply to your business, so be certain to check the laws in your area.

Title VII does not bar all conduct of a sexual nature in the workplace, but only unwelcome sexual conduct on the job that creates an intimidating, hostile or offensive working environment. For example, Title VII generally doesn't apply in situations like when:

  • The worker you select for a promotion is romantically involved with the boss
  • You fire an employee because he or she had consensual sex with a supervisor or co-worker

What's "unwelcome" sexual conduct is determined by looking at all the facts and circumstances surrounding the incident and whether the average, reasonable person would consider the conduct to be offensive. Also, the employee offended by the conduct must communicate that the conduct is unwelcome. It need not be expressed verbally. For example, when the employee walks away from sexual comments or removes her supervisor's hand in a case of unlawful touching, unwelcomeness is communicated.

Finally, Title VII sexual harassment claims are not limited to situations where male employees harass female employees; men can claim harassment by female employees. Also, same-sex harassment is illegal, and so Title VII can be violated by males harassing other males and females harassing other females.

Two Types of Harassment

Sexual harassment claims have usually been classified as either:

  • "Quid pro quo" harassment, which is what you would traditionally think of when the phrase "sexual harassment" is mentioned. For example, when one of your supervisors (or another employee in a position of power) demands sexual favors from a subordinate/worker either in exchange for a job benefit, like a promotion, or to avoid a job detriment, like getting fired.
  • "Hostile work environment" harassment, which is sexual conduct or behavior that unreasonably interferes with an employee's job performance or creates an intimidating, hostile or offensive work atmosphere. The offensive conduct must be severe or "pervasive" or common place. For example, a single "dirty" joke told by a male worker at the water cooler probably won't create a hostile work environment. However, telling such jokes at the water cooler every day probably would.

Your Liability

Generally, you are required to investigate any sexual harassment claim brought to your attention. If an employee complains about sexual harassment by a co-worker or a supervisor, or even a customer, and you fail to investigate, you can be liable under Title VII.

Generally, you can't be liable for harassment between co-workers unless you failed or refused to investigate the matter or did not try to stop it.

On the other hand, you can be liable if a supervisor or manager actually takes some adverse action against an employee, such as firing or refusing to promote him or her because he or she refused the supervisor's sexual advances.

Similarly, you can be liable if a manager creates a hostile work environment, such as by continuing the unwelcomed sexual conduct, or by continually making threats of adverse employment actions even without actually taking an adverse action.

How do you protect yourself? The best thing to do is to have and follow a written sexual harassment policy, which should:

  • Define what constitutes sexual harassment and provide real-life examples
  • Make clear that sexual harassment will not be tolerated in the work place
  • State that all claims of harassment will be investigated
  • Set forth an easy-to-use complaint procedure that designates at least two managers or supervisors to whom employees can address complaints as well as one person outside of management, such as a human resources employee
  • Require supervisors and managers to report any incidents of sexual harassment of which they become aware
  • State the corrective or disciplinary measures you'll impose for sexual harassment, up to and including discharging the harasser from his job

Generally, you can avoid liability under Title VII if you have and follow an anti-harassment policy, the policy provides a complaint and investigation procedure, and the employee failed to take advantage of those procedures by not informing you of the harassment.

Discrimination Claims

Typically, before an employee can file a lawsuit against you in court, he or she must file a sexual harassment complaint with the Equal Employment Opportunity Commission (EEOC), or the Fair Employment Practices Agency (FEPA) in your state if the employee is claiming a violation of a state law. Usually, the claim must be filed with the EEOC within 300 days of the claimed discrimination. Under some states' laws, the time might be less than that.

The EEOC or FEPA will investigate the matter, and if it thinks the employee has a valid claim, it will file suit against you on behalf of the employee. If it does not, it will typically give the employee a "right to sue letter," which authorizes the employee to file a lawsuit against you.

Sexual harassment suits can be complicated. So, if an employee makes a claim of sexual harassment, immediately contacting an experienced business law or labor law attorney is a good idea.

Questions for Your Attorney

  • If an employee files a sexual harassment claim with the EEOC, how long will it take to resolve?
  • Will the EEOC look at my anti-harassment policy and tell me if it will protect me from harassment claims?
  • An employee has complained that a delivery driver from one of my suppliers is making inappropriate comments to her. What can I do about it? Do I have to do anything?
  • A supervisor is complaining that a male employee is sexually harassing her? If I fire the employee, can he sue me for discrimination?
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