How do I protect my company from sexual harassment claims?

The cost to defend a sexual harassment lawsuit, regardless of the outcome, can be up to $75,000, according to Entrepreneur.

Smaller businesses tend to have a less formal working environment and relationships, so it’s important the business owner create a sexual harassment policy that outlines acceptable and unacceptable workplace behavior.

About 67 percent of small business owners do not have an anti-harassment policy or training in place, according to a poll by Manta, an online resource that provides services, products and educational resources to small business owners.

However, employers are still liable for their employees’ actions, and employees may intentionally or unintentionally make sexual comments to one other with the intent of joking or in a meaningfully friendly way. Sexual harassment as deemed by Title VII of the Civil Rights Act of 1964 prohibits unfair employment practices and discrimination based on sex. It is the unwelcome conduct and behavior of a sexual nature that creates an uncomfortable and possible hostile work environment.

One of the easiest ways to prevent sexual harassment is to educate everyone on the job site by creating an anti-harassment policy, according to Entrepreneur.

The policy should:

• Define sexual harassment and provide an overview of the law

• Explain that sexual harassment or any harassment will not be tolerated

• Address how incidences of sexual harassment will be handled, as well as explain the reporting process, how the reporting employee will be protected from retaliation, and confidentiality issues

• Cover the two types of sexual harassment: quid pro quo, meaning “this for that” and hostile work environment. Quid pro quo is typically when a supervisor or someone in an authoritative position demands sexual favors from an employee in exchange for job security, a promotion or a raise. A hostile work environment is repeated unwanted comments or behavior in a sexual manner either by an employee or directed toward an employee.

• Give examples of the kinds of behavior and actions that are prohibited

• Describe situations in which office relationships are off limits such as whether a supervisor can date an insubordinate. Business owners also should never date an employee.

As with any policy, the owner or manager should publish the policy in the employee handbook, ensure employees are made aware of the sexual harassment policy, mandate they receive training that addresses types of harassment, and lead by example.

One of the most important parts of the policy is the reporting process. A specific human resources employee or manager should be designated to receive and investigate any complaints. Both parties should be allowed to tell their side of the story.

Company officials are expected to quickly take action and resolve any complaints. Many can be resolved within the company and will not result in a lawsuit, according to Entrepreneur. However, this will be more likely if the complaint is taken seriously and addressed immediately.