Crossing The Line: Sex Suits Are A Lose-Lose Affair

Even if a company successfully defends a sexual harassment lawsuit, the damage is often already done. There can be monetary losses, public relation hits and personnel problems suffered that no judge can solve with a verdict.

Lawyers say the first step to fend off such lawsuits is a strong human resources department with a legally binding employee policies and procedures manual.

Bob Still of the Bassett Law Firm in Fayetteville said statistics show that one in every four businesses is eventually going to be sued for harassment or discrimination. And according to a published report by Little Rock lawyer Denise Reid Hoggard, the national average award for sexual harassment and retaliation claims in federal court is $134,000. The average cost of defense is about $90,000.

But Still said companies today are better prepared than ever for such an event.

“Awareness of the law and the possible consequences have reduced the suits drastically,” Still said. “But as long as there are men and women working together, you are going to have some.”

The Northwest Arkansas Business Journal found several company Web sites that listed their policies concerning sexual harassment.

Opinions vary on the true definition of sexual harassment, but the following legal descriptions from Title VII of the Federal Civil Rights Act of 1964 are the standard in court:

• Threats or insinuations that another employee’s refusal to submit to sexual advances will adversely affect the employee’s employment, evaluation, wages, advancement, assigned duties or any other conditions of employment or career development.

• Any unwelcome sexual advances, flirtations or propositions.

• Any verbal abuse of a sexual nature, including sexually oriented jokes and comments.

• The display of sexually suggestive objects or pictures.

Title VII was designed to help both the defense and prosecution in sexual harassment suits.

“It is a defense to the employer if you had in place an anti-sexual harassment policy,” Still said. “One, if you have the policy in place. And two, if the claiming employee failed to take advantage of the policy. If you can prove those things, you can avoid vicarious liability. How can an employer have done anything about it if they didn’t know anything about it to begin with?”

If an employee reports a concern of sexual harassment in any manner, the following steps should be taken by the employer:

n The complaint should be investigated as promptly, thoroughly and as confidentially as possible.

• Appropriate, corrective action should be taken immediately to end the harassment and prevent the misconduct from recurring.

• Disciplinary action for the misconduct should range from reprimand to discharge.

• Follow-up inquires also should be made to ensure the harassment has not resumed and/or any retaliation has taken place.

In addition to the public relations damage such a lawsuit can do to a business, the monetary damages are great, too.

“It’s a big cost for a business if it ignores sexual harassment,” said Fayetteville lawyer William Mertins Jr., who concentrates on sexual harassment litigation and training.

“I’ve seen where cases settle for as little as $1,000, but I’ve also seen settlements and judgments in Northwest Arkansas of over $300,000. Certainly, the size of the jury’s verdict depends on the severity of the employer’s conduct and the strength of evidence.”

Sexual harassment suits are as expansive as they are expensive.

In a car wreck, Still said, there may only be one driver from each vehicle and maybe one witness. But in a sexual harassment suit, every person in the company may need to be called as witnesses. When the suit is tried, the defending employer almost always winds up suffering heavy losses because of legal costs.

“If a company can show the suit was filed in bad faith, there’s a chance the company could recover attorney fees.” Mertins said. “We have an excellent group of lawyers in Washington and Benton counties, so most of the cases I’ve seen filed have merit to them.”

Attorney fees, whether in state or federal court, can run anywhere from $15,000-$50,000 for a sexual harassment defense. So companies often select the lesser of two evils and shoot for a quick settlement, Mertins said.

“I would say less than 5 percent [of sexual harassment lawsuits] make it to trial,” Mertins said. “Juries can be very hostile to companies that do not act properly and provide a non-hostile working environment.”

Sexual harassment charges first must be filed with the Equal Employment Opportunity Commission. The EEOC will then investigate whether or not it believes the suit warrants going to trial.

Arkansas has its own state law that prohibits discrimination based on sex.

But jury judgments are limited under Arkansas state law. Companies with 15 or fewer employees can be sued for no more than $15,000 in combined compensatory and punitive damages.

That includes back pay, which is limited to two years prior to the filing of the lawsuit.

For a company with 16-100 employees, the maximum is $50,000. From 101-200 employees it is $100,000, from 201-300 it is $200,000, from 301-500 it is $300,000, and companies with more than 500 employees can expect a judgment of no more than $400,000.

One option is getting a lawyer to approve of the company policy manual and sign a document saying as much. That lawyer would then have agreed to pay for the liability if the judgment should go against that company in a lawsuit.