Sexual harassment is a term used to describe actions that make use of sexual comments or acts in order to intimidate those with whom one works. Sexual harassment is illegal. Sexual harassment is a form of sex discrimination, it is a violation of Title VII of the Civil Rights Act of 1964. Title VII applies to all employers with 15 or more employees. Many actions can be legally shown to be either sexual harassment or to contribute to a hostile or offensive work environment. The Equal Employment Opportunity Commission (EEOC) defines sexual harassment as follows: "Unwelcome sexual advances, requests for sexual favors, and other verbal or physical contact of a sexual nature constitute sexual harassment when: 1) Submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment. 2) Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individuals. 3) Such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment." But legal experts warn managers and business owners that definitions of sexual harassment extend beyond these boundaries. Although most people think that sexual harassment involves conduct of a sexual nature, based on a study of case law, this is not true. Sexual harassment includes acts that are not overtly sexual but rather are directed at individuals based on their gender. Therefore, profanity or rude behavior that is gender-specific may create a work environment that legally supports claims of sexual harassment.

Some observers believe that small businesses are particularly susceptible to sexual harassment problems. This is because small businesses often have an informal office atmosphere that may seem to allow sexual banter and innuendo. Small businesses are also less likely to have an official sexual harassment policy and training program than are larger firms. Savvy small business owners adopt proactive stances to make certain that their employees know that inappropriate behavior—whether it takes the form of displaying sexually explicit photographs, using offensive language, making suggestive or otherwise inappropriate comments, badgering an employee for dates or other interactions outside the workplace, or suggesting that one gender is inferior to another—will not be tolerated in their company. Indeed, firms that do not do so leave themselves open to financial loss via lawsuits as well as other problems like low morale, employee turnover, and absenteeism. These negative side effects can ultimately impact on financial performance. As EEOC guidelines state, "with respect to conduct between fellow employees, an employer is responsible for acts of sexual harassment in the workplace where the employer (or its agents or supervisory employees) knows or should have known of the conduct, unless it can show that it took immediate and appropriate corrective action."


Over the past several years, sexual harassment has become a subject of considerable discussion. Previous generations of business owners and managers rarely had to address the issue. Business historians and social observers point to several possible factors for this. Some note that women used to comprise a much smaller component of the workforce, and that various societal pressures may have made them less likely to come forward with complaints. Others point out that many of the legal protections that are now in place against harassment have only developed over the last 25 to 35 years. Still other observers contend that the rise in sexual harassment claims simply reflects a general decline in civility in American society. Whatever the reasons, sexual harassment complaints have risen throughout the 1990s and remained fairly steady throughout the first five years of the 2000s. The Equal Employment Opportunity Commission is the governing body that is authorized to administer laws prohibiting sexual harassment. Charges of harassment are filed with the EEOC. The EEOC reported that it received 12,679 charges of sexual harassment in fiscal year 2005, of which 14.3 percent were filed by men. The EEOC resolved 12,859 sexual harassment charges in FY 2005 (some charges take longer than a year to resolve and thus the number of charges filed in a single year may be lower than the number of resolutions) and recovered $47.9 million in monetary benefits for charging parties and other aggrieved individuals. This figures does not including monetary benefits obtained through litigation. To these totals, it should be understood that many charges of sexual harassment are resolved quietly, some at substantial cost, before they ever reach the point at which the charge is officially made with the EEOC. Clearly, the potential for losses, both financial and in terms of reputation, as a result of sexual harassment are great and it is a subject that should be dealt with in a very visible and up-front manner within companies of all sizes.

But small business owners and corporate executives alike need to make sure that in their zeal to protect the legitimate rights of employees not to be harassed in the workplace, they do not trample on the rights of those accused of misbehavior. Just because sexual harassment is a significant social and business problem does not mean it has in fact occurred in a particular instance. Indeed, an employee who is punished or dismissed on the basis of a frivolous sexual harassment claim has the same recourse to the law as the victim of sexual harassment who is left unprotected by indifferent managers/owners. Business owners and managers thus need to consider the rights of all parties involved when investigating sexual harassment complaints.


A well-drafted, carefully thought-out policy statement on sexual harassment is an important human resource policy for all companies. It's valuable in at least three major ways:

  1. As an employee relations tool
  2. As basic education for both managers and employees on the subject of sexual harassment
  3. As a way of minimizing legal liability to the organization in hostile-environment sexual harassment cases.

Such a policy statement is evidence of a company's good-faith effort to provide a work environment that is free of harassment. When coupled with a proper investigation that successfully ends illegal or inappropriate conduct, it can also provide a major offensive weapon in employer efforts to demonstrate that all reasonable steps were taken and that they were effective in the case of a sexual harassment charge.

Indeed, business consultants universally counsel both small businesses and multinational corporations to establish formal written policies that make it explicitly clear that no forms of sexual harassment will be tolerated. Some companies prefer to disseminate this information as part of their larger general policy statements because of their sensitivity to giving extra attention to a sometimes awkward subject. But others believe that doing so can have the effect of burying the company's sexual harassment policies under the weight of all its other statements. These observers claim that dissemination of a separate policy statement not only better informs employees of the policy itself, but also underlines the company's serious approach to the subject.

Whether a business chooses to distribute its policies on sexual harassment via general information sources (employee handbook) or separate statements, its policies should list all the various forms that sexual harassment can take (sexually loaded "compliments," sexual advances, denigration of a person's gender, etc.) and explain how the company proceeds when confronted with a sexual harassment complaint. The policy statement should also discuss possible disciplinary consequences for workers who are found guilty of engaging in harassment.

Other steps that businesses can take to establish an harassment-free workplace include: establishing internal procedures that address complaints promptly and thoroughly; establishing training programs that educate workers—and especially managers, supervisors, and other people wielding power—about components of sexual harassment and their responsibilities when exposed to such behavior; establishing alternative routes for workers to lodge complaints (in instances where his or her supervisor is the alleged harasser, for instance).


Legal experts warn businesses that they need to make certain that their policies reflect a true understanding of the legal responsibilities of the employer, and a full recognition of the multitude of forms that sexual harassment can take. They point out that some companies have put together policies that, while sensible and effective in some or even most areas, are flawed in other areas, either because their policies did not adequately cover all the ways in which sexual harassment can occur, or because their understanding of sexual harassment was incomplete from the outset. For example, many people have long operated under the misconception that for sexual harassment to occur, the harasser must have a bad intent. The reality, however, is that what may be viewed as perfectly harmless by some people, may be viewed as offensive by others. Courts have dealt with this difference by developing a new standard for analyzing claims of sexual harassment. The old standard was the traditional gender-neutral reasonable person standard, which is thought to be biased toward the male viewpoint. Sexual harassment claims are now analyzed in many jurisdictions from the perspective of a reasonable person of the same sex so as to eliminate the potential for differences in perspective that are based on gender.

Another important factor that is not always sufficiently appreciated by employers is that they can be held liable for harassing conduct by a third party such as a customer or vendor. Cases of this type are rare. Nonetheless, business owners should be aware of their responsibility to address complaints of this type. Just as an employer is responsible to provide employees with a safe work environment, it is responsible to confront customers, clients or other third parties if they harass employees in any way.

Sexual harassment complaints often arise after the failure of a romantic liaison between employees. As a result, many companies attempt to limit such romantic involvement between employees by establishing anti-nepotism and anti-dating policies. Assessments of the dangers of office romance vary dramatically. Some observers view it as a wholly undesirable condition that should be avoided by business owners and managers if at all possible, while others view it as a potential positive development, provided that the relationship lies within certain parameters. But what happens when a philanderer dates and discards casually within a company, leaving angry, litigation-prone employees in his/her wake? Reasons for dating policies to address supervisors, subordinates, and clients, not to mention patients and vendors, are understandable.

The risks that a deteriorating romance poses for a company that employs both parties are undeniable. Perhaps, however, the benefits of happily partnered employees is another possible outcome to an office romance. Famous cases abound: Microsoft's founder Bill Gates and opera impresario Luciano Pavarotti both married employees of their organizations. Obviously, businesses create dating policies to try and manage the negative aspects of office romances, and those that crash and burn. But, since perfectly happy relationships may result from office romances, policies that are clear and specific about exactly what they prohibit are best. The subject is complex, the potential threats serious, and the need for clarity is essential.


Companies must investigate every sexual harassment complaint seriously and thoroughly, and take action accordingly. A key foundation of this process is to make certain that the person who will investigate the complaint has credibility with the workforce. Ideally, the individual will be knowledgeable about the legal dimensions of sexual harassment, experienced in handling employee issues, familiar with the organization's policies, and socially and organizationally distant from both the alleged victim and the alleged harasser (the investigator should not be friends with the alleged victim, nor directly report to the alleged harasser, or vice versa). With smaller companies, however, it can be more difficult to adhere to such guidelines. If a small business owner has only four employees, and two of them become embroiled in a harassment case, finding an investigator with the above qualities is next to impossible. The owner may be tempted to look into the complaint him or herself in such instances, but business advisors often counsel against this. Instead, they recommend that the owner turn to an outside counsel or external consultant to pursue the complaint.

Whether the person doing the investigating is a third party, an employee, or the owner of the business, he or she should have a focused, carefully thought-out investigation plan designed to settle the issue in as timely a fashion as possible. This typically includes a review of relevant organizational records, including complainant's personnel file, alleged harasser's personnel file, performance reviews, and promotional and salary records. Such reviews can turn up everything from prior disciplinary warnings aimed at the accused to possibly relevant indications that the involved parties had previously competed against one another for promotions or other job opportunities. Such data may well be completely irrelevant to the legitimacy of the complaint, but it is the investigator's duty to check into all possible aspects of the complaint.

Every claim should be treated seriously, no matter how unusual or seemingly frivolous it might first appear, until an informed decision can be made. Conversely, an investigator should also suspend judgment on complaints that seem obviously legitimate until a thorough investigation has been completed. This may seem obvious advice but it is as difficult to adhere to as it is obvious.

The first step in an investigation usually involves an in-depth interview of the complainant. Areas that should be pursued during this interview include the cultural background of the complainant (if dramatically different from that of the accused), a detailed reconstruction of the incident(s) that prompted the complaint, the context and circumstances in which it occurred, the involved parties' prior relationship (if any), the nature of the allegations against each individual in instances where incidents involved the participation of more than one person (common in hostile workplace complaints), and the complainant's expectations regarding how the alleged offender should be disciplined.

The investigation then turns to getting the accused's account of events. This step has different nuances, depending on whether the alleged harasser is a supervisor, a coworker, or a third party such as a customer, but basically this part of the investigation aims to secure the accused's perspective. In some instances, the accused may appear angry or shocked when confronted with a sexual harassment charge, so the investigator needs to allow time for the return of some measure of emotional equilibrium. When the initial reaction has subsided the investigator should ask the worker to relate what he or she believed happened during the incidents cited. Allow the accused to relate his or her understanding of the situation completely once, then return to it for specific, step-by-step review. As with the complainant, make sure the discussion is specific and detailed enough to provide the necessary information for later decision making. Note dates, times, places, circumstances, dress, words exchanged, as well as the specifics of the alleged acts. Again, issues such as prevailing work environment, prior relationships, etc. should be discussed.

Once the investigator has finished gathering information from the principal parties, he or she should then turn to possible witnesses. These could range from coworkers who were present when the alleged incident took place to those who have relevant information on either or both of the parties involved. The investigator should not be concerned with unsubstantiated rumors at this juncture; rather, he or she should concentrate on gathering factual data. This can be a very important part of the investigation, for accusations that turn into basic "he said, she said" disputes can be profoundly difficult for employers to resolve. Immediate action may be almost impossible when an employer is faced with unsubstantiated accusation on one side and a categorical denial on the other. But experts point out that workplace behavior often can be corroborated by other staffers. Employers need to interview these witnesses carefully, being careful not to fuel rumors, and/or be seen to have taken sides. The objective of these interviews is to gather factual data, nothing more. It does offer the opportunity, however, to show that the company is handling the investigation seriously, professionally, and carefully. Securing written statements is helpful.

Once the investigation into the sexual harassment complaint has been completed, corrective action (if any) needs to be implemented. When corrective action is warranted, it can range from counseling to transfer to dismissal. The key factors that usually determine the severity of the corrective action are: 1) the nature of the offense, 2) the desires of the complainant, and 3) the impact that the incident had on the workplace as a whole.


Self-employed individuals who work as independent contractors enjoy fewer legal protections from sexual harassment at the hands of clients. Experts recommend that self-employed people confronted with such unpleasantness react strongly and decisively. They should make it immediately clear that the harassment (which in these situations typically takes the form of unwanted sexual advances) is unwelcome, and that they would prefer to keep their association with their client a professional one. If this line of defense does not work, the self-employed worker may wish to consult an attorney about his or her state's tort law, which regulates conduct between people and provides monetary damages. In addition, national women's organizations can often provide guidance and legal assistance in these matters.


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