Although it’s a slightly different issue, you are probably following the failure of Penn State to deal with the allegations of sexual assaults made against the football team’s former defensive coordinator. With two senior University officials resigning and facing felony charges alongside the alleged molester, the reputation of the football team and the University has taken a major hit.
If we translate this into slightly less extreme situations in the workplace, there are always opportunities for employees to “abuse” each other, using the word in its widest form. It can be a boss bullying staff in the hope it will encourage them to work harder, or one employee finding it offensive to work alongside someone thought to be gay. Once there’s a sexual element, the seriousness of the matter grows rapidly. Offering better working conditions or other rewards for sexual favors can quickly become sexual assaults. There are two quite different issues that arise.
The first is the need for all businesses to have a formal workplace policy defining the different forms of harassment and discrimination, backed up by mandatory training programs to raise awareness and produce a better atmosphere. There’s some evidence to suggest many abusers are unaware of the effect they have on others. By alerting them to the problem, some respond constructively. If the others fail to respond, this can trigger the first step along the disciplinary process to terminate their employment. From a legal point of view the aim should be to implement a zero-tolerance policy. While this will not prevent litigation against the business, it will certainly reduce the level of damages awarded against it. The second issue is to avoid any retaliation against the accuser. When a relatively new recruit into the business accuses a senior manager of sexual harassment, there’s a tendency to defend the reputation of the manager. After all, he or she may be a colleague or friend. This can result in pressure being put on the accuser to withdraw the allegations and, if this is refused, penalties being imposed. All forms of retaliation aggravate awards of damages against the business. If this employee makes a formal complaint, liability issues may bankrupt the business.
The Equal Employment Opportunity Commission reported more than 11,000 allegations of sexual harassment in 2010. Remember there’s no limit on the amount of compensation an employee can claim for sexual harassment. Even if you are fortunate and the award is low rather than in the millions, the loss of reputation and the legal costs can be enough to finish the business. So, as you are reviewing your own workplace policies, you should also be talking with your small business insurance advisor about the cover provided by the Employment Practices Liability Insurance Policy. Why should you insure? As a small business owner, you have a multitude of everyday tasks to keep the business on track. You have to delegate the operational side of the business to managers and rely on them to implement your strategies. The first you may know about a sexual harassment claim is when the law suit arrives. Small business insurances can protect you from financial disaster but this does not absolve you from responsibility. You should enforce a zero-tolerance policy in any event.