Protecting your business from sexual harassment claims

Businesses and managers must be held accountable

For the past 20 years, sex-based workplace discrimination charges have been one of the most common employee-asserted claims before the federal Equal Employment Opportunity Commission, second only to race.

As the recent deluge of news headlines have brought to light, workplace sexual harassment remains both prevalent and underreported.

Yet all businesses, particularly new ones, tend to be naïve when it comes to the prevalence of workplace sexual harassment and the costly risks. Statements like “Most of our employees are women,” “Everyone loves working here,” “Our employees have thick skin,” and “Employees will tell us if something is wrong,” are, unfortunately, common misbeliefs that leave businesses vulnerable to preventable, costly legal claims.


The following story is from the February, 2018 issue of Marijuana Venture – on sale now. © 2018 Marijuana Venture

What Constitutes Unlawful Sexual Harassment?

Businesses owners and managers often misunderstand what actually constitutes unlawful harassment. Unlawful sexual harassment encompasses far more than the well-known example of a male supervisor’s demand for sexual favors from a female subordinate in exchange for a promotion or to keep her job.  Simply put, it is unlawful to treat an employee differently because of that person’s sex, including by harassing someone because of their sex.

In addition to unwelcome sexual advances or requests for sexual favors, unlawful harassment includes verbal or physical harassment of a sexual nature, as well as offensive remarks or jokes about a person’s sex, including gender-based stereotypes. For example, it is illegal to harass a woman by making offensive comments about women in general. This would include both generalized statements like “women are bad at math” or posting sexually explicit photos in the employee breakroom. Further, a harasser can be the victim’s direct supervisor, any manager, a co-worker or even a client or customer. Thus, a third-party product seller who often calls a retail store and continually makes sexual comments to a female employee may give rise to an unlawful harassment claim against the store. Additionally, the victim and harasser can be either a woman or man, or even the same sex; the disparate treatment need only occur because of the employee’s sex. It is thus also unlawful for a supervisor to promote only female employees.

Another example includes male co-workers repeatedly name calling and chastising a male co-worker for needing to “man up,” “be more macho” or “act like a man.” The law does not regulate simple teasing or offhand comments, but there is no clear line between what is an unserious, isolated incident and an actionable “hostile work environment.” The test for what is a “severe and pervasive” unlawful hostile work environment is fact-based, meaning it varies depending on the situation, and the victim’s perception of what is offensive and unwelcome is a large part of the test. Because each employee’s unique circumstances matter, these types of claims usually make their way to a jury and are not easily won by the employer.


Your Manager’s Misconduct is Your Misconduct

The test for legal liability for workplace harassment differs depending on who the harasser is and if submitting to the harassment carries workplace consequences. Employers are automatically liable when a manager commits unlawful harassment and takes a tangible employment action against the employee, like hiring, firing, failing to promote or an unfavorable job reassignment.

Going back to our very first example, this means that the company is automatically on the hook if a supervisor demands sexual favors upon threat of the victim’s termination. While the reality may be that company higher-ups are unaware of a manager’s actions, the law assumes the company knows all. In this instance, it is not a defense for the company to say it had no idea about what the manager was doing and that the victim failed to report it. The supervisor will also be personally liable under many states’ anti-harassment laws, but this is often cold comfort to the company, as the supervisor likely does not have the financial resources to defend against a claim or pay a settlement or judgment in the victim’s favor.


Responding to Claims

There is defense available where the harassing manager took no tangible employment action (such as firing or failing to promote) or if the harassment occurs between co-workers. In that case, an employer may be able to avoid liability or limit damages by establishing two necessary elements: (a) the company exercised reasonable care to prevent and promptly correct any harassing behavior, and (b) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

However, the law assumes that the company possesses the same the knowledge as its managers. A company cannot defeat a claim by arguing that it did not address the harassment because the employee failed to tell human resources or a specific department. It simply is not a defense that the front-line manager neglected to tell his/her boss or the human resources department about a complaint received, even if the employer has strong anti-harassment policies.


The Importance of a Strong Policy and Training

The availability of the above affirmative defense is one reason why companies have anti-harassment and workplace reporting policies and conduct investigations of complaints. It is also why the smart employer conducts anti-harassment training at least once a year, for both its employees and its managers.

The training should be of good quality and practically useful. The Equal Employment Opportunity Commission has opined in recent years that only in-person training by a qualified trainer works. A prudent employer will also realize the value of training managers separately for many reasons, including to drive home that the managers’ actions are the company’s actions and the importance of managers’ duty to report workplace complaints to their higher-ups or to human resources, depending on the company’s procedure.

Finally, new employers often miss that they have an affirmative duty to monitor and prevent unlawful retaliation, meaning a duty to protect complaining employees from being treated adversely because they complained. Not only should this be a standalone policy, but it must be included in any worthwhile manager training.


Catharine Morisset is an experienced litigator and partner in the Seattle office of Fisher & Phillips LLP (, a national law firm committed to providing business solutions for employers’ workplace legal problems. She and her colleagues counsel cannabis retailers, growers and other supporting industries with operations in California, Colorado, Oregon and Washington in all aspects of employment law.

Alex Wheatley is an attorney in the Portland office of Fisher Phillips. He defends employers in employment-related administrative claims and lawsuits and specializes in representing businesses in the cannabis industry to implement effective workplace policies.


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