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Mitigating Corporate Liability for Sexual Harassment

By Casey C. Sullivan, Esq. on August 01, 2016 | Last updated on March 21, 2019

Roger Ailes isn't the only (alleged) sexual harasser in corporate America. Ailes stepped down as head of Fox News recently, following a harassment lawsuit by former Fox star Gretchen Carlson and an internal investigation that "sealed his fate." And he's got company. The EEOC alone took nearly 40,000 sexual harassment enforcement and litigation actions in 2014.

Those sexual harassment claims can expose businesses to significant liability, even when all the proper policies are in place. Thankfully, there are a few steps companies can take to mitigate their liability, should a member of the company, be it a CEO or janitor, be accused of harassment.

The High Cost of Harassment

A successful sexual harassment claim can carry a big price tag, including multimillion dollar verdicts, legal fees, and reputational damage. In one of the largest sexual harassment verdicts in history, a California doctor was awarded $168 million after suing her hospital for sexual harassment. And while that's at the top of the charts, million dollar verdicts for harassment are not uncommon.

Such cases typically fall in to two categories: those where the employee experienced a tangible employment action connected to their harassment, such as termination, and those in which a hostile work environment alone existed. For hostile work environment cases, companies can negate liability by showing that they took reasonable and prompt action to correct harassment and that the employee failed to make use of the company's corrective or preventative measures.

Mitigating Liability

How a company responds to a report of harassment can have a major effect on its liability going forward. This can include everything from discharging an offender to written reprimands or training and counseling. (For a more detailed discussion of mitigation actions, see FindLaw's Corporate Counsel's article, "Sexual Harassment and Corporate Liability.")

A response should not be one-sided, however, focusing only on the alleged harasser. Companies may also mitigate harm to the victim through a variety of measures. That could include compensation, revision of negative evaluations stemming from the harassment, or monitoring to ensure that no future harassment against the victim occurs.

Of course, preventing harassment before it occurs is ideal. But when the company is informed of alleged harassment, an employer's prompt and thorough response can go a long way to reducing liability and preventing expensive litigation.

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