A Workplace harassment lesson

Employers need to learn..now…the consequences brought on by workplace harassment. The young woman was terrified! First, she didn’t know what to do or whom to turn to. Secondly, as a single Mom of two, she could not afford to lose her new job.

How could she effectively communicate to her immediate supervisor that she felt harassed and disrespected without hurting his feelings or creating an internal office conflict? What could she do to avoid his constant come-ons? In what way could she let him know that his inappropriate, suggestive touches were keeping her from doing her job?

Why wasn’t he taking the hint that his constant asking for dates just made matters worse?

She had no choice. The situation was well out-of-hand by now. She needed to reach out to her employer’s Human Resources Department immediately. They would have the answer for her. She was absolutely certain that the H.R. Manager would take immediate action to correct this wrong. The firm was well-known for many years as a respected employer in the Miami area.

During the hour-long meeting, the H.R. Manager took both oral and written statements but recommended resolving the issue directly with her supervisor (The Molester!!) She was advised to warn him before filing formal charges.

How does this story end? This man was relentless. The situation was so out of hand that the young woman resigned after only 9 months on the job due to the mental and physical stress caused by the constant harassment at work.

Weeks later, her closest work colleague and friend visited her at home. When she found out what had happened, she referred her to an Employment Law Firm that specialized in sexual harassment.

The company was found negligent for several workplace violations and was forced to compensate the woman for compensatory and punitive damages. They settled out of court for a 7-digit dollar amount.

Furthermore, it couldn’t lower the settlement without going to court. Appealing the case was out of the question. It paid the full settlement out-of-pocket.

Sadly, due to his extensive international business travel obligations, the company’s founder/CEO wasn’t made aware of the situation until after the case had been filed in court. The financially devastating settlement forced the company out of business just 7 months after the verdict.

Ultimately, there were no winners in this sad but true story. While the monetary award was sufficient to allow the young woman to provide for her children, the psychological stress she endured continues to impact her physical condition. The damage caused has kept her under medical, psychiatric, and psychological counseling and treatment.

In yet another outcome, the company owner lost all that he had worked for. Needless to say, all 50 employees saw themselves unemployed indefinitely.

If you are a business owner, a situation like this can bankrupt you and your firm. It’s your obligation as an employer to provide a safe work environment. Workplace harassment is a serious issue that can have far-reaching consequences for both employers and employees. A company may also be obligated to compensate an unemployed worker for all lost wages suffered.

It’s essential for employers to take preventive steps to address workplace harassment and create a clear anti-harassment policy that promotes a positive company culture. This helps attract and retain top talent. It does, however, include investigating any reported incidents at once.

Employers need to learn that sexual harassment in the workplace can take many forms. Some common examples of workplace sexual harassment include:

• Inappropriate comments on your clothing, body, or personal life
• Sexually suggestive jokes
• Jokes or comments on your sexual orientation or gender identity
• Sharing pornographic or sexually suggestive content with you
• Requests for dates or sexual favors
• Inappropriate and/or unwanted touching

The court will consider factors such as the employee’s age and the likelihood of finding a similar job to determine the length of time you as an employer should pay. Federal protection includes gender, sexual orientation, pregnancy status, and gender identity.

During employment, bad managers are often an issue. Anytime someone makes an inappropriate comment within hearing distance of an offended worker, the company is usually liable.

To add further damage, former employees do not waive discrimination complaints by accepting a severance package or signing a waiver.

Here is something else that employers need to learn…now.

Employment-related claims impact organizations of every size, in every industry. They disrupt businesses, hurt employee morale, damage reputations, and cost businesses financially … even before going to court. The employer in this story found out just how expensive ignorance can be.

Alarming Statistics

Over 70,000 charges of workplace discrimination have been filed with the EEOC in each of the past five years.* (*https://www.eeoc.gov/statistics/charge-statistics-charges-filed-eeoc-fy-1997-through-fy-2019)

The Pandemic, economic conditions, demographics, and the evolving legal environment have brought about situations that have increased employment practice claims over the years. Exposures leading to employment practice claims continue to increase year after year. These types of lawsuits have become part of doing business in this litigious age, so how can employers protect themselves?

Why you and your firm need protection

Most employers aren’t financially ready to face these claims. To reduce these risks, the insurance industry offers a solution through a policy coverage named Employment Practice Liability Insurance. 

Employment practice liability insurance (EPLI) is specialized insurance protection against losses suffered in litigating and settling wrongful employment practices liability claims. EPLI is typically structured as gap insurance for the company and also provides lawsuit protection against discrimination, breach of contract, and wrongful discharge suits. Insurance brokers need to inform their commercial clients that their General Business Liability insurance policies exclude these risks.

If you’re still asking whether you need EPLI or not, does your business perform any of the following actions?

• Hire or fire employees
• Demote or promote employees
• Offer raises to employees
• Communicate to or about employees
• Manage benefits for employees

If so, you need EPLI coverage. Employers, large and or small, are subject to Federal, State, and local laws regarding employment practices. You do not have to become a statistic. You owe it to yourself, your firm, and your employees to seek the services of a seasoned professional insurance broker to help you understand and establish an Employment Practices Liability Policy.

Finally, employers need to learn and apply the age-old adage. You either pay now…or REALLY pay later.