How Can Harassment Affect Employers?

The Costs of Harassment

Harassment is expensive. A harassing atmosphere at work will cause low employee morale and high turnover. Low morale usually translates to low production or poor quality work. Many times a victim of harassment will simply quit and leave a job rather than have a confrontation about it. This costs money for the employer to hire and train new workers.

There are costs involved if a harassment complaint is filed internally with the employer, i.e., staff time needed to investigate and resolve the complaint. If a complaint is filed with an enforcement agency, there will be additional costs for staff time and legal counsel to respond to the complaint.

If there is an adverse decision from the enforcement agency or a court, the employer may have to pay damages for lost pay or emotional distress. If a charge of harassment becomes public knowledge, a business could suffer a loss of customers and public good will.

Employer Liability

When a termination has been made that harassment did occur in the workplace, the follow liability standards apply:

• Harassment by a supervisor or manager involving a "tangible job action": the employer is always liable. A "tangible job action" includes such things as hiring, firing, failure to promote, loss or raise, etc.
• Harassment by a supervisor or manager involving hostile environment: employer is liable unless the employer proves that they exercised reasonable care to prevent and remedy any harassing behavior, and that the complainant filed to take advantage of preventive or corrective measures or otherwise avoid harm.
• Harassment by a supervisor or manager: the harasser may be individually liable, as well as the employer.
• Harassment by a co-worker, non-employee or other outside person: the employer is liable if the employer knew or should have known about the harassment and did not take prompt remedial action.
• Co-workers may also be individually liable for damages caused by harassment.

Owners, managers and supervisors need to be aware of the provisions of the laws prohibiting harassment in order to handle problems if and when they occur.