All employers should take the time to examine and implement a risk management program that will minimize their exposure to employment discrimination litigation. This has become an essential integration to all businesses in the past couple of years as we have seen the number of these types of litigations increase substantially. As more and more employees become aware of their rights and what constitutes illegal behavior (and therefore litigation-worthy issues), the number of court cases as well as the costs incurred for the lawsuits have risen and may continue to rise.
As part of this program, your company should develop an employee handbook. If you already have one, make sure it is updated and that it contains adequate policies. Also be sure that copies are distributed to each employee and that copies can also be found in convenient places in order to be sure your employees are aware of your anti-discrimination and anti-harassment policies. The Supreme Court has held that an employer cannot be held responsible for the sexually harassing conduct of its managers if it has exercised reasonable care in order to prevent and/or correct the behavior.
When complaints are brought against an employee for sexual harassment, be sure to investigate the complaint as soon as possible and in a thorough and complete manner. Supervisors should accurately record the complaint so the company has a record of the happenings and findings in case of a lawsuit. Managers should also be trained in disciplining employees who violate anti-discrimination and anti-harassment policies. Holding seminars or meetings with supervisors and managerial staff to explain exactly what qualifies as sexual harassment as well as the potential liabilities of the problem and how the liabilities can be avoided is an effective way to arm your employees with knowledge and preventive techniques.
Although not a solution of the problem in and of itself, employment practices liability insurance (EPLI) can help in protecting your company's finances from such lawsuits. Better yet, the cost for obtaining such coverage has dropped significantly. This insurance is intended to cover employers from the costs of defending such lawsuits as well as the settlement expenses. There may be exclusions to the coverage however, such as punitive damages and intentional violations.