If you don’t have a sexual harassment policy (or if no one pays attention to the one you have), watch out! You’ll have to pay compensatory damages if an employee can prove he or she was sexually harassed—and you also could pay punitive damages.
Punitive damages come into play if a supervisor acts with “reckless indifference” to federal rights. Just knowing that sexual harassment is illegal can be enough to expose employers to punitive damages.
And the costs can add up. While compensatory damages repay the employee for losses, punitive damages are meant to hurt the employer—as punishment for violating the law.
Advice: Protect yourself by training managers, supervisors and employees in appropriate behavior. Make sure you have a functional harassment policy.
Recent case: Ashley Bridges worked as a waitress at Café Italia for seven months. She claimed that one of the owners constantly made sexual comments to her and touched her. Café Italia had no sexual harassment policy.
Bridges was fired shortly after threatening to file an EEOC complaint. The EEOC filed suit, and a jury ruled that Bridges had been retaliated against for complaining about the harassment. But the trial court didn’t allow the EEOC to ask for punitive damages.
The 5th Circuit Court of Appeals reversed the trial court’s ruling and ordered a new trial. It concluded that there was evidence that the restaurant acted with reckless disregard when it fired Bridges. The court cited the lack of a sexual harassment policy at the restaurant and the testimony of one of the owners, who said he knew about sexual harassment and the possibility that Bridges might file an EEOC complaint. (EEOC v. Stocks, dba Café Italia, No. 06-10871, 5th Cir., 2007)
Final tip: The EEOC has realigned its legal staff to support aggressive action on harassment cases. Now, experts in specific forms of harassment can be assigned to any cases in any jurisdiction. Employers are now more likely to face expert attorneys in cases in which the EEOC files lawsuits on behalf of employees.