Small Business

Training Can Keep Companies Out of Court


Under a new California law, all businesses with 50 or more employees must provide sexual-harassment prevention training for their supervisors. And although it's not required legally, smaller companies are also advised to hold the training sessions, both to prevent harassment claims and to offer an affirmative defense in case they are sued.

Eli Kantor, a Beverly Hills attorney who has represented employers in labor and employment litigation for 30 years, has posted tips for sexual harassment prevention and links to the new law on his Web site, Sexualharassmentprevention.net/sexual.jsp. He recently spoke to Smart Answers columnist Karen E. Klein about sexual-harassment prevention training and what some of the latest court rulings mean for small business. Edited excerpts of their conversation follow.

When did sexual harassment become such a major concern for employers?

Of course, harassment has been around forever, but it really emerged on the national radar screen when Anita Hill testified at the Clarence Thomas Supreme Court hearings and with the allegations made by Paula Jones against Bill Clinton in the 1990s. In 1998, the U.S. Supreme Court handed down two decisions that put the ball in the employers' court in terms of sexual harassment lawsuits. Basically, they gave employers what we call an "affirmative defense."

That means if a company is sued, they can counter in court by saying they have a policy in place that makes it clear the company does not tolerate sexual harassment. They also have to provide a means for an employee who is being harassed to complain to a third party and a mechanism by which to investigate that complaint and take prompt action if there is a problem.

What else do the courts require of employers?

Well, there was another decision that said businesses must communicate this anti-sexual harassment policy to their employees so they know about it and feel they'll be taken seriously if they do complain. After that, the courts started talking about companies needing to institute training. The first state to mandate it by law was Connecticut, and California is the second state.

Our state law went into effect on Jan. 1, 2006. It says all businesses with more than 50 employees have to provide a minimum of two hours of interactive sexual-harassment prevention training for their supervisors within six months of them being hired, and then provide a refresher course every two years.

This is mandated for companies with more than 50 employees. What about for smaller companies?

It's a great idea for all employers to schedule this training for their supervisors every year. First of all, it helps prevent harassment lawsuits from being filed, because supervisors know what kind of behavior to avoid. The thing is, the rules of the game are changing and our workplaces are increasingly multicultural. Different cultures have different sensibilities on this topic, so it's a combustible mix. It's like you're playing cards and you're in the middle of a hand where jokers are wild. Then suddenly someone comes in and says deuces are wild. So what is -- and isn't -- acceptable behavior in the workplace is changing on a daily basis.

Also, if a complaint arises, if your supervisors have been trained, they will know how to investigate, take prompt remedial action, and get it resolved right away, which reduces your chances of having a lawsuit filed. And, if things don't work out and you do get sued, one of the first questions you'll get in court is, "What have you done to train your supervisors about preventing sexual harassment?" You'd better have a good response.

How knowledgeable are most small companies about this topic?

In general, employers are becoming more sophisticated about it, and most of them at least have a sexual harassment policy in place. It used to be that small employers didn't even have policies, but they are definitely becoming more savvy. The problem with having a policy and not doing the training is that a court may question whether the policy was simply a piece of paper that wasn't communicated clearly to the employees.

What are the repercussions of having an employee sue for sexual harassment?

There's major business disruption, it hurts morale, dealing with it takes time away from operating the business, and companies can get hit with very costly verdicts if the employee prevails in court. In California, employees can sue not only for back pay and emotional distress but also for attorney's fees. There have been quite a number of six-figure settlements just to get rid of these lawsuits.

What recent court decisions on sexual harassment will affect small business owners?

A recent extension of the law is being called "paramour favoritism." This happens if a boss is having a consensual affair with one of his employees. While he's taking long lunches with her, the other employees are working harder to cover her duties, and they're also getting the message that if they want to advance their careers, they should have affairs with the boss.

The California Supreme Court recently gave those other employees a cause of action for what it's calling "environmental sexual harassment." I recommend to my clients that they institute prohibitions against dating between supervisors and employees that they directly supervise. Or, at the very least, they should transfer the employee to another department so she's not working directly for the boss with whom she's become romantically involved.

What other recent court rulings should small-business owners be aware of?

A couple of big punitive damage verdicts have been handed down in cases where managers were known to be sexual harassers, but they were not terminated -- instead, they were transferred to other divisions of the company. One involved an attorney who was a real moron, couldn't keep his hands to himself, and he had a pattern of being complained about by the women he worked with. But he was a major rainmaker, bringing in a lot of money for the firm, so no one in upper management did anything about him.

They just transferred him out of the office where he was complained about. This went on for several years. There was a multimillion-dollar verdict that resulted from that case. The jury thought if any company should know better, it would be a law firm. So, the really big verdicts come in not just for boorish behavior by an individual, but when management recognizes the problem but sweeps it under the rug.

Another case established that if an individual claims sexual harassment, but her claim is investigated and found to be non-meritorious, the company cannot retaliate against her for the complaint. You have to be very clear in talking to supervisors. [Let them know] that there cannot be any retaliation taken against anyone for making a claim, even if it turns out to be bogus.

Do these court rulings apply only to California-based businesses at this point?

Yes. But California is known as a bellwether state for legal decisions, so it's probably just a matter of time before these same rulings go east.

What does your sexual harassment training consist of, and how much does it cost?

I go out and meet with the company managers, I check their existing policy to make sure it's adequate, or I draft a policy for them if they don't have one. Then I meet with the supervisors, define sexual harassment for them, and go through some hypothetical scenarios with them so they understand what is and is not acceptable behavior in the workplace. Then I read the policy with them, have them sign off that they read it, have understood it, and will be bound by it. I tell them that if they violate the policy, it will cost them their job.

I charge $1,500 for the entire package -- the two-hour on-site training, the policy, and the materials I use in the class. Other law firms charge a lot more. Some employers may be able to get the training through an online provider for less. The only thing I would caution about online training is that it should be interactive, so make sure that any Internet training you sign up for has an interactive element and is not just a passive exercise.

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