If you’ve seen news stories recently about corporations that have had to make large payments to settle sexual harassment claims against employees, you may be wondering how your business could be affected.
Most news coverage has been about sexual harassment at large corporations, such as Amazon, Bank of America and Uber. But the fact is that if you own a business and have employees, you could be responsible if any of your employees engage in the sexual harassment of another employee.
According to a recent issue of the Harvard Business Review (HBR), 43 percent of all Americans work for companies that have 50 or fewer employees. If your business is among companies of that size, don’t think that you are less likely to have problems with sexual harassment because of the size.
In fact, says the HBR article, if you have a small business, you may be even more susceptible to the impact of sexual harassment. That’s because, in smaller companies, employers work more closely together, increasing the risk of harassing behavior, and making it more difficult to separate employees when there is an issue.
Also, the legal costs and any settlements you may have to pay can cripple your company, if not put it out of business. Fortunately, there are things you can do to protect your business.
EPLI Can Protect Your Business From Sexual Harassment
There is insurance available that can protect your company from financial losses if one of your employees is accused of sexual harassment. It’s called employment practices liability insurance (EPLI), and it protects companies from claims for sexual harassment and other employment issues. Among those issues that EPLI can protect you from are discrimination, wrongful termination, and many others. According to a 2017 article in the Washington Post, the market for EPLI plans has been growing steadily as companies of all sizes purchase the insurance.
There are some things that an EPLI policy does not cover, such as violations of the National Labor Relations Act, or violations of regulations from the Occupational Safety and Health Act (OSHA). Most EPLI policies must be in effect when the event took place and when a complaint or lawsuit is filed. That means you cannot wait until you think sexual harassment has occurred before you purchase a policy.
Here’s a side benefit: When you have an EPLI policy, it provides an alternate way for an employee who believes he or she has been harassed to file a complaint and reach a settlement without going to the federal Equal Employment Opportunity Commission (EEOC). That means you can avoid getting federal authorities involved in the case and looking at your business operations.
Call us to discuss how to protect your business from sexual harassment.
Call us at 215-997-5800 if you want to know more about how you can protect your business from sexual harassment complaints. We’ll review your current insurance coverage and suggest ways you can protect your business from the financial hardship that can result from a single complaint.
How to Limit Your Risk of Sexual Harassment Liability
In addition to protecting your business with an EPLI policy, there are several steps you should also take to protect yourself and your business and to minimize your liability should a harassment event occur. Among those steps are:
- Establish clear policies for your workplace. Create written policies that cover sexual harassment in the workplace. Make sure those policies are in your employee handbook and posted in conspicuous places. Your policies should define behavior that you will not tolerate. You should have two policies. The first should state that sexual harassment is not permitted in the workplace. The second policy should establish procedures for employees to report any concerns they might have and for management to respond to those concerns.
- Hold training sessions. Work with all your managers, supervisors and employees to teach them about workplace practices that are legal, ethical and acceptable. Be sure to provide the same level of training for sexual harassment that you provide for diversity and other workplace training.
- Make sure you do not have a workplace culture that encourages sexual harassment. Examples of such a culture can include a predominately male management staff or a history of ignoring past concerns about sexual harassment.
- Enforce your policies. Designate clear roles for everyone in your company. Make it clear to employees who they should go to if they have a complaint or concern about sexual harassment. Decide in advance what steps you will take if an employee does file a complaint. For example, you may want to place on leave any employee who has allegations filed against them.
- Be clear there will be no retaliation against employees who come to you with a complaint or a concern.
Accusations of sexual harassment have received a lot of attention in the news recently, but that is largely due to the celebrity of those accused. Thousands of businesses, just like yours, operate every day without complaints about sexual harassment or assault. Help ensure that your business continues without complaint by following the tips listed above and by looking into employment practices liability insurance to protect yourself in case an event does take place.