How Do You Address Sexual Harassment Complaints? - In House
In House - The FindLaw Corporate Counsel Blog

How Do You Address Sexual Harassment Complaints?

When an employee at your company complains about sexual harassment -- and yes, it will eventually happen -- it's important to take swift action to investigate and address the claim. By doing so, you may be able to avoid or at least limit liability. If you ignore the situation, get ready to pay out the big bucks in a judgment or court settlement.

Let's look at two examples that demonstrate the wrong way and the right way to handle these situations. We'll start with what not to do.

KarenKim, Inc., (which operated Paul's Big M Grocery in Oswego, New York) is owned and managed by Karen Connors. In January 2001, KarenKim hired Allen Manwaring as a Store Manager. Within months, Manwaring and Connors became "romantically involved."

Various employees complained to Connors that Manwaring sexually harassed them. Connors' reactions varied between crying and disbelief, though she eventually fired Manwaring. By that time, however, it was too late.

After a trial prompted by an Equal Employment Opportunity Commission (EEOC) complaint, a jury found that KarenKim, Inc. had subjected a class of female employees to a sexually hostile work environment and sexually harassed certain employees in violation of Title VII and New York State law. The jury awarded both compensatory and punitive damages, totaling over $1 million.

Connors was understandably upset that her employees were accusing her significant other of harassment, but she lost a lot of money by ignoring their complaints.

Overstock.com, on the other hand, understands how such scenarios should be handled.

In November 2002, Elizabeth Bertsch began working next to Dustin Latimer, a coworker supposedly "notorious" for viewing sexually explicit videos at work, putting up a poster of a "scantily clad" woman in his cubicle, and making sexist comments.

Bertsch claimed Overstock knew about the problem, but ignored it.

The Tenth Circuit Court of Appeals ultimately dismissed her claim, noting that Overstock had taken prompt remedial action, which precluded liability.

An "employer's liability for allowing a sexually hostile work environment after it is reported to the employer by the employee arises only if the employer fails to take adequate remedial and preventative responses to any actually or constructively known harassment," and Overstock responded properly.

Investigating a harassment complaint may be a headache, but it's far better than the pain of an enjoyment lawsuit.

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