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Court tells employer to tell customers: We’re sexual harassers

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in Discrimination and Harassment,Employment Law,Human Resources

In a startling court order, a judge has required a company to tell its customers about a sexual-harassment verdict that cost it more than $2.3 million. The verdict came in a Title VII Civil Rights Act case championed by the EEOC and was a major victory for the agency responsible for enforcing many of the nation’s employment-discrimination laws. (EEOC v. Custom Cos. Inc., No. 2 C 3768, N.D. IL, 2007)

The case

In a 50-page opinion, the court characterized the company’s behavior as “reprehensible” based on a “hyper-sexualized work environment” of touching, sexual advances, sexually explicit comments, pornography and jokes. The court also noted that the harassment came from individuals in the organization who held positions of power.

The case opens the floodgates for other judges to use the same tactic when punishing employers for harassment.

That’s bad news for employers, who would rather have the public know about their excellent products or services than their recent adventures in court. Just imagine the negative publicity the sued company has endured … the number of customers who’ve been turned off … the number of potentially great employees who will never apply to work there.

While the court subsequently cut the original jury verdict of $2.3 million in half, it also put a choke hold on the company by granting the bulk of the plaintiffs’ requests for nine nonmonetary measures. The company will be on the court’s closely watched radar screen for the next four years.

The remedy

The judge ordered the company to take remedial measures to assure that it won’t harass anybody else. Just a few of the items on the company’s long, new “to-do-or-get-in-more-trouble list” include:

Notifying all customers of the jury verdict and affirming the company’s commitment to equal employment opportunity in the workplace.

Posting a notice informing employees about the verdict and injunction in this suit, and of employees’ rights to contact the EEOC without fear of retaliation.

Notifying the EEOC of any sexual-harassment or retaliation complaints within 30 days of the date the complaint was made (with a description of the complaint, the company’s investigation and the result).

Reporting to the EEOC every six months all complaints made and all individuals terminated.

Conducting annual sexual-harassment training for officers, managers, supervisors and employees.

Avoiding a similar fate

Revamp your harassment program now if you don’t want to be on the receiving end of your own huge monetary verdict and mandatory training program. Avoid the EEOC’s wrath this way:

  • Provide employment-law training.  Either train your workforce to prevent harassment, discrimination and retaliation or have the courts force you to do it—along with a big splash of negative publicity. Think money is an issue? This case proves it’s at least $1 million cheaper to train proactively, never mind the costs associated with bad press, poor morale and litigation expenses.
  • Train everyone. That means your officers, executives, managers, supervisors, employees, sales force and part-time employees. It’s hard to believe that some organizations still fear training their nonsupervisory employees for fear that knowledge will create lawsuits. A recent study by American University’s Kogod School of Business revealed that training your workforce does not invite employment litigation. 
  • Train on your policy. Make sure the training focuses on your specific policy, including your procedure for reporting conduct inconsistent with the policy. Be sure to cover how to report retaliation.
  • Check your reporting procedure. Is it updated? Make sure it does not list people or positions that are no longer with the organization.
  • Understand: Notice means awareness. Make sure your managers, supervisors and executives understand that when they become aware of conduct inconsistent with your harassment-prevention policy, they must take immediate, effective action to investigate and levy the appropriate consequences.
  • Enforce consequences. Discipline violators. Fire them. If you think that’s hard, consider the damage they’re doing to your business.

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