Sexual Harassment Cases Can Harm Company, Too

Article excerpt

Byline: ON THE JOB By Bureau of Labor and Industries

Question: I've been reading quite a bit about sexual harassment in the news lately and wonder if I should be concerned. I'm a shareholder and member of the board of directors of a corporation. The president of the company is known for being a bit of a ladies' man. In fact, he boasted at the annual board meeting that he has a "close working relationship" with one of his attractive subordinates, and seemed to imply that the relationship had become intimate. Is this something the board or the shareholders should be worried about or would any potential issue be the president's problem alone?

Answer: You have good reason to be concerned. Any sexually inappropriate conduct in the workplace on the part of the president may create problems not only for him but also for the company itself. If the misconduct is sufficiently severe, as with a sexual assault, it may result in criminal sanctions against the offending party.

Typically, in the case of an alleged sexual assault, a complaint is filed with a local law enforcement agency. If an unwanted sexual touching can be proved beyond a reasonable doubt, the district attorney may prosecute the perpetrator of the assault.

Even if there is not enough evidence to prosecute him criminally, there may be significant liability for both the offending president and for the company under state and federal laws against sexual harassment.

As a shareholder, your financial stake in the company may be at risk. The standard of proof required to prevail in a civil or administrative action is much lower than in a criminal case. The plaintiff or complainant need only prove that sexual harassment was more likely than not to have occurred.

Sexual harassment is a form of discrimination that generally involves repeated unwelcome behavior directed at an individual because of the individual's gender. …