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Property & Casualty

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by Richard Ollis

As an employer, it is critical to understand the issues surrounding sexual harassment and eliminate or reduce the possibility of a situation occurring in your workplace.

There are basically two kinds of sexual harassment: quid pro quo, or something for something, has been the violation that most people are familiar with. It normally involves a relationship between a superior and a subordinate.

Unwelcome verbal or physical contact of a sexual nature is the leading cause of this type of harassment. Many cases involve a superior requesting certain sexual favors as a condition of employment or advancement within the company.

The second type of harassment typically involves a hostile environment. Instances can be between a superior and a subordinate, but often arise between co-workers. This usually involves an intimidating, hostile or offensive work environment. An example might be a group of individuals who tell off-color jokes, use foul language or tell sexual stories.

This type of harassment can be either direct or indirect and can interfere with work performance or be considered offensive. Almost 50 percent of American workers claim to have witnessed offensive and uninvited sexual conduct, including jokes, remarks and suggestions. Not only are these situations becoming more common, workers are understanding this behavior is unacceptable and are filing suits in record numbers.

In addition to these types of behavior in the workplace, employers also need to be concerned about their employees' behavior with prospective customers, clients and suppliers. This type of harassment is third-party harassment and is covered under Title VII of the Civil Rights Act of 1964. Key factors involving these incidents are:

?That the employer knew about the situation or should have known.

?Whether immediate and appropriate action was taken.

?Was it a situation the employer had control of and legal responsibility for?

If you think sexual harassment doesn't apply to your firm, consider the following:

?Three employees sued their law firm due to the sexual advances of one male attorney and were awarded $592,000 in damages (Reichert vs. Lowery & Lowery PC, Denver, Colo., July 1994).

?A female commercial real estate broker claimed she was fired because she complained of sexual harassment by her boss and won $200,000 (Davis vs. LaSalle, Denver, Colo., April 1994).

?A female nurse who complained of a male co-worker who gave her long hugs and neck massages won a $40,000 verdict plus $45,000 in attorney fees. (Mullin vs. Sequoia Pathologist Medical Group No. 363771, Superior Court, San Mateo County, July 1994).

?A female police officer who endured a constant barrage of sexually explicit comments and gestures by male co-workers won $150,000 for pain and suffering (Ridgley-Fortimiato vs. Hollywood Police Department, December 1994).

?A female loan officer claimed she was sexually harassed by her supervisor and eventually resigned. No action was taken to stop the harassment and she won $350,000 in damages. The award was later reduced to $246,270 (Lyons vs. First VA Mortgage Company, E.D.VA, May 1994).

What can you, as an employer, do to reduce or eliminate the possibility of this happening in your workplace?

1. Implement and communicate a written sexual harassment policy statement. This typically is part of an employee manual and communicates that the company maintains an environment free of sexual harassment; this behavior will not be tolerated; and if any incidents occur, they should be reported promptly.

2. Implement and communicate a written complaint and suggestion procedure. This should outline to the employee what steps to take in the event that harassment occurs. It also may have an alternative method to report violations in the event your supervisor is the offending party.

3. Implement and communicate disciplinary procedures involving incidents of this nature. All of these procedures should be in writing and included in your employee handbook with approval of your corporate attorney.

4. Consider the purchase of an employment practices liability insurance policy. Key factors to look for in the purchase of such a policy include whether prior acts are covered, if punitive damages are covered and what types of policies and procedures need to be in place in order to qualify for coverage. Also consider that the limits of liability and deductibles, have an impact on the premium.

Employment issues are fast becoming the next "hotbed" of litigation. Even if an employer is exonerated, defense costs can be exorbitant.

(Richard Ollis is a commercial insurance specialist with Ollis & Company Insurors.)

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