Contractors Face New Sexual Harassment Rules

June 1, 1998

Staying out of court is a key to profits in any business. The construction business is no exception. Recently, the U.S. Supreme Court made this more difficult by rewriting the law of sexual harassment.

The Supreme Court announced these new rules on June 26, 1998, in two cases involving alleged sexual harassment by supervisors. In these decisions, known as Burlington Industries, Inc. v. Ellerth and Farager v. City of Boca Raton, the Court announced that an employer is liable for a supervisors' alleged sexual harassment of an employee even though the company was in no way at fault for the supervisors' actions.

How to Avoid Liability.

To avoid liability, an employer must be prepared to prove all three of the following:

1. The supervisor, in no way, harmed the employee's job (no demotion, discharge, etc.); and,

2. The employer exercised "reasonable care" to prevent and promptly correct any harassing behavior; and,

3. The employee "unreasonably" failed to take advantage of any preventative or corrective opportunities provided by the employer.

If the employer fails to prove any one of these facts, the employer is liable.  In addition, if the alleged "harasser" is a top management official, the employer may be strictly liable because the actions of the executive are legally treated as the actions of the company.

Managing the Risk

To manage the risk of sexual harassment lawsuits under the new Supreme Court ruling, Kentucky contractors should consider, at least, the following actions:

1. Establish a record of regular anti-sexual harassment training of all employees, including supervisors and all other managers.

2. Make sure you have a written, sexual harassment policy that is clear enough for both employees and jurors to understand what is forbidden, and how violations should be reported.

3. Obtain written confirmation from your employees that they understand your sexual harassment policy, agree to abide by it, and will report any incidents of sexual harassment that they observe or experience.

4. Learn how to conduct a sexual harassment investigation before you receive a complaint. Once you receive a complaint, it is important to begin your investigation immediately.

The recent Supreme Court decisions require Kentucky's contractors to rethink sexual harassment defense strategies. Advanced planning, however, can reduce the risk of sexual harassment litigation.