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You know you have an obligation to eliminate discrimination, harassment and retaliation. You know you have to make sure employees don’t harass co-workers or subordinates, or harm customers and others. On the other hand, you know applicants and employees have a right to privacy that is protected by state and federal laws.

It’s a balancing act: Just how do you protect workers on the one hand, while respecting their privacy on the other?

Fortunately, the U.S. Supreme Court has provided guidance. When the high court decided the landmark Faragher and Ellerth cases in 1998, it laid out a step-by-step way to avoid liability for workplace harassment. Employers that follow the court’s suggestions can substantially limit their exposure to liability.

The Supreme Court says an employer can avoid liability for unlawful workplace harassment by demonstrating it took three affirmative steps designed to (1) prevent, (2) detect and (3) remedy such harassment. Consider it a blueprint for employee selection and retention, handling complaints and grievances, conducting investigations and designing training programs.

Preventing claims

Focus initially on avoiding hiring employees who might discriminate, harass, retaliate or engage in workplace violence. Using effective selection and retention guidelines shows you exercise reasonable care to identify dangerous or irresponsible employees while not running afoul of federal, state and local employment laws. Such policies should:

  • Identify “sensitive” or “high risk” positions and determine what type of background check should be conducted for each position.
  • Review background checks delegated to consumer-reporting agencies to ensure they don’t contain obvious mistakes or omissions.
  • Train supervisors who interview applicants.
  • Don’t make job offers until after completing the entire screening process.
  • Don’t rely solely on employment agencies to check references. Remember, they don’t get paid if they don’t place applicants.

Detecting harassment and discrimination

Detection is just as important as prevention. That’s because employees can change after you hire them, and even the most cautious and thorough hiring practices won’t—in and of themselves —insulate employers from liability for employment claims. Simply put, you must identify unfit employees before they cause harm. Here’s how to do it:

  • Follow up on and thoroughly document all reports of employee misconduct, suggesting possible problems with employees.
  • Require employees, customers, contractors and vendors to report all misconduct, accidents and other incidents. Document that you followed up.
  • Identify and use available monitoring tools, such as post-accident drug testing.
  • Designate and train employees to handle investigations.
  • Make sure background-check consent forms permit checks at any point during the employment relationship.
  • Conduct exit interviews and customer surveys to ask about discrimination, safety and security.
  • Train supervisors to detect warning signs.

Remedying the damage

Prevention and detection aren’t enough to protect employers from all discrimination, harassment and retaliation claims. You also have to consider the remedy, including taking appropriate, corrective action after you have identified an unfit employee (and, hopefully, before he or she does any harm). Here are steps to take:

  • Discipline, discharge, transfer or change the job duties, assignments or shift of the employee.
  • Train or retrain the employee (e.g., sensitivity, EEO, safety).
  • Offer a leave of absence, counseling, therapy or rehabilitation, perhaps through an employee assistance program.
  • Make sure insurance covers substance abuse and mental health counseling.
  • Place the employee on probation, with agreed-upon conditions for continued employment.

If you find it necessary to terminate the problem employee (or even in the event that he or she leaves voluntarily), you can take action to reduce the chance of a successful post-employment lawsuit. You should:

  • Require that all reference requests go to the HR office or another designated employee.
  • Provide only neutral references, such as confirming dates of employment, position held and salary.
  • Require former employees to provide a release before providing information.
  • Recover keys, access cards and any identification so a former employee can’t easily access the workplace.
  • Change locks, key codes and other access systems, as appropriate.
  • Notify employees and customers if the discharged employee may be dangerous.

Final tip: Employers should document every step they take to prevent, detect and remedy potential unlawful or negligent acts or omissions by their employees. Such records can be powerful evidence in court.

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