Maurice Maio takes a look at avoiding sexual harrassment claims.

Sexual harassment claims can cost you and your business a lot of money, not to mention discomfort and embarrassment. And you can avoid such charges relatively easily - all you have to do is say no (and train your people to do the same).

I can't change your values and habits or those of your employees overnight. But I can save you untold problems and financial risks with some easy to follow guidelines É and a little common sense.

First, let's define sexual harassment in the way the plaintiff's (victim's) attorney would spell it out in court. Then I'll share a plan for minimizing your liability for such risks.

There are two main components of sexual harassment:

• Something For Something: This is the English translation of the familiar legal term, "quid pro quo." The victim in these cases is often faced with demands for sexual favors in return for a promotion, raise or even continued employment. That is the "Something For Something" either implied or specifically offered. A male business owner who suggested that the discussion of a female employee's raise should be held at the local motel soon found out the cost of his proposal in court. No actual contact or relationship is required, only the proposition.

• Hostile - Environment: A relatively recent Supreme Court decision holds employers liable for not just specific interactions between supervisors and employees, but for an overall environment that places employees in an uncomfortable position regarding sexual references or innuendoes.
  Displaying risqué calendars - the ones some of our suppliers used to send us - is a common example. Other activities, which may have been accepted as commonplace but are, without a doubt, harassment, include telling dirty jokes, making suggestions about someone's body, or commenting about sexual activity.

If a court finds either of these two matters to be present, they can hold the company liable for paying the victim substantial monetary damages.

Look Around

Now that you're aware of the legal grounds for sexual harassment, it's important to focus on specific action you can take to prevent it. One comment I think will help as much as anything else is to simply look around. Many claims of harassment concern behaviors or circumstances that everyone in the organization knew about but did nothing to stop. In other cases, these claims may have been treated as instances of bad taste and nothing more --certainly not as legal liabilities.

First, as a manager or owner, your leadership in avoiding unlawful behavior sets the tone for the company. Leading by example can assist you in keeping your employees from exposing your company to legal actions and negative publicity.

Another way to keep employees on the right track is to maintain a company policy manual. Your manual should include the following information about harassment:

A brief definition of typical behaviors, with examples that constitute sexual harassment.

A company policy statement condemning any such behavior and encouraging employees who believe they have been victims of such behavior to report it.

A detailed process outlining the steps the victim should follow for reporting harassment, and steps the company will take to investigate, confirm/deny the allegation and disciplinary action, should the claim be confirmed.

This last area is important since some companies with very sound and thorough policies have suffered large judgments. What went wrong? It was the enforcement of the policy, not the absence of one, that caused the losses. Courts are harsh on companies who have expressed a detailed policy, but ignored complaints. Failing to investigate or taking no action at all makes it appear the company intended to cover up any wrongdoing.

Good judgement and common sense go a long way to minimize your legal liability for sexual harassment claims. Following these guidelines will supplement your leadership skills and keep your company's resources in your company.

Insulate Your Company

It's important to recognize that companies do not have to face liability as a consequence of those employees who violate policies and the law. By acting in a timely manner and investigating, confirming/denying allegations, and taking immediate steps to stop the harassment (and discipline the alleged harasser), your company can usually reduce or avoid liability.

To further protect your company, you may elect to conduct formal training sessions reviewing your policy on harassment, steps for reporting such infractions and the penalties for such behavior. Being able to demonstrate that your company took every precaution available toward preventing harassment will further reduce any possible exposure to legal claims.

Whatever precautions you take, they are only as good as the proof you have showing you took them. Document, for example, who attends your training sessions. Document all reports of possible harassment. Document the action the company took following an investigation. You not only have to prove through documentation that you met your legal obligations.

In addition, it's a good idea to speak with newly hired employees so that they know what your policies are and so you are confident they understand the policies and will follow them. Pay particular attention to the procedure for reporting a sexual harassment claim. As part of your documentation process, have them sign a form, indicating they received information on the matter and are familiar with your company's policy manual.