Commentary: Finally, A Corporate Tip Sheet On Sexual Harassment

A chill wind ran through corporate boardrooms on June 26 as the Supreme Court handed down two landmark rulings on sexual harassment. The justices ruled that companies can be held liable for a supervisor's sexually harassing behavior even if the offense was never reported to management. And the high court said an employer can be liable when a supervisor threatens to punish a worker for resisting sexual demands--even if such threats aren't carried out.

At first blush, the decisions sound like a prescription for a flood of new lawsuits. But take a deep breath, Corporate America. There's actually some good news for employers in the fine print of the justices' decisions. For the first time, the court is giving companies guidelines on how to protect themselves against sexual-harassment charges. There are no guarantees, of course. But, if companies get serious about stamping out harassment and sustain the efforts, they can be better protected in court--and their employees can feel safer at work.

"AFFIRMATIVE DEFENSE." The court's advice: Develop a zero-tolerance policy on harassment, communicate it to employees, and ensure that victims can report abuses without fear of retaliation. "Employers should feel safe as long as they are vigorous," says Susan R. Meisinger, senior vice president at the Society for Human Resource Management.

So even though the court has broadened the conditions under which suits can be brought, a company can deflect sexual-harassment charges with a two-pronged "affirmative defense," the justices said. First, it must take "reasonable care to prevent and correct promptly any sexually harassing behavior." Then, it must show that an employee failed to use internal procedures for reporting abusive behavior. This defense won't work when a supervisor retaliates against a worker for resisting sexual advances. But it will protect a company from charges that it tolerates a hostile work environment.

That means if a company has a strong antiharassment policy and a worker doesn't report an incident of sexual harassment and later sues, an employer can use that as part of a defense. Says Boston employment lawyer Marilyn D. Stempler: "The court places obligations on employers to set up policies, but it also places an obligation on the victim to come forward."

Not every nuance is spelled out. The court didn't describe, for example, what constitutes "reasonable care" for preventing or halting harassment. But employment consultants say companies should now publicize the policies as aggressively and regularly as possible--in handbooks, on posters, in training sessions, and in reminders in paychecks. Line supervisors and employees should be given real-life examples of what could constitute offensive conduct.

Companies also must ensure that workers won't face reprisals if they report offending behavior. Employment experts say companies should designate several managers to take these complaints, so that employees don't find themselves reporting to their immediate supervisor--very often the abuser. Managers should be trained in sexual-harassment issues. And, experts say, punishment against harassers should be swift and sure.

With legal costs for a jury trial running as high as $200,000, it's cheaper for most companies to put in place a basic sexual-harassment program. Still, none of this is simple. Small companies may not have the expertise to investigate complaints. And for all companies, once a complaint is filed, employers will face increased pressure to sort out who's telling the truth and to mete out serious punishments.

But by both expanding a company's potential liability and offering a valid defense, the Supreme Court noted that it was giving employers "an incentive to prevent and eliminate harassment." That means companies can protect themselves while doing right by their workers. That's an opportunity for Corporate America, not a threat.

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