During the latter part of 2017, we saw a steady flow of news reports about claims of sexual harassment by Hollywood power players, media personalities and politicians. While these high-profile cases get the headlines, discrimination and harassment in the workplace is a disturbing behavior that affects business of all types and sizes.
By now it's clear that the swirling headlines about workplace harassment are not going away. #MeToo and #TimesUp, are part of a full-fledged movement that is shining a spotlight on sexual assault, harassment and gender pay inequity. Indeed, a cursory look at data around sexual harassment seems to underscore what we already know - this type of harassment is vastly underreported. According to the Equal Employment Opportunity Commission (EEOC), there were 12,860 reports of workplace sexual harassment in 2016. Of these, 6,758 resulted in charges being filed. Although more than half of these cases were dismissed due to no reasonable cause being found, the EEOC was still involved in non-litigation monetary benefits of $40.7 million for sexual harassment victims.
While many of the recent news headlines have focused on sexual harassment and pay in entertainment and media, business owners in all industries have a lot to learn. Claims against an employer can occur when an employee or job applicant feels they have been discriminated against in the workplace for reasons including, but not limited to, their age, disability, religion, race, color, and more. According to the EEOC, employees who file a discrimination charge may also face retaliation; retaliation was the most the prevalent charge category in 2016.
The Hiscox Guide to Employee Lawsuits™ found that the cost of an employment charge is significant, in both dollars and time. The average cost of a case that required a legal defense and resulted in a settlement payment was $160,000. The average claim took 318 days to be resolved.
Many employers, particularly small- to medium-sized companies, never think they could be sued by an employee, but this is a real risk for companies of all sizes. Here a few steps you can take to protect your business and employees against discrimination or harassment in the workplace.
1. Prevention Starts with Awareness
You need to be sure that your employees are aware of the various laws that affect your business at both the federal and state level. Conduct ongoing training so your employees stay up to date on changes in employment law. You should maintain an employee handbook and alert employees to changes or new requirements. I always recommend giving an updated copy of the employee handbook to your employees at least once a year, and make sure they sign an acknowledgement form.
2. Encourage Reporting of Misconduct
There are many potential reasons why people don't tell their employers about harassment they experience or witness, including the fear of being fired or retaliated against, damage to their reputation and demotion, among others. You need to make it clear that any claim of harassment will be taken seriously and that no one will be retaliated against for reporting or corroborating such behavior. Make sure they know that their wellbeing and safety is your number one concern.
3. Always Investigate Every Harassment Claim
Employees need to know that you will investigate every claim of discrimination or harassment and that this type of behavior will not be tolerated in the workplace. Launch an investigation immediately. You need to remain vigilant at all times to protect your company and employees.
Mitigate the Impact of a Lawsuit
As an executive in the insurance industry, I recommend that you have the appropriate insurance to protect your company against a potential employee lawsuit. Speak with your insurance broker or agent to learn more about the appropriate level of coverage for your particular business.
There is just over a 10 percent chance that your business will have an employment charged filed against it. By taking preventative and mitigation measures, such as maintaining an up-to-date employee handbook and conducting proper training for employees, you can minimize the risk of an employee lawsuit and protect your business.