By now, most employers understand that sexual harassment is unlawful, but court decisions over the years have broadened what counts as harassment and expanded employer responsibility for preventing a hostile work environment.
Work-related harassment and discrimination claims have grown since changes to federal law allowed for jury trials and damages, and the volume of workplace harassment filings has increased substantially over time.
Any employer that has faced a sexual harassment suit knows the financial and operational toll: average awards and settlements can be very large, and there are additional costs from lost productivity, reputational harm, and absenteeism.
What Constitutes Sexual Harassment?
State and federal law prohibit behavior in which a person in authority bases professional decisions on an employee's willingness to submit to sexual requests.
- Altering expectations of job performance when an employee repeatedly refuses advances.
- A superior demanding sexual acts in exchange for a raise or promotion.
- Disciplinary action, including termination, after an employee refuses sexual advances or ends a relationship.
Harassment does not require an authority/subordinate relationship; the offender can be a coworker, customer, vendor, supervisor, or anyone who creates an offensive or hostile work environment.
Anyone affected by offensive behavior can be a victim, including employees who overhear sexual discussions or see explicit material that makes the workplace hostile.
Verbal, visual, physical, or written conduct that focuses on a person’s sexuality or gender and is unwanted may constitute harassment, such as suggestive comments, displaying explicit images, or repeated requests for dates or sexual favors.
Protection with Employment Practices Liability Insurance (EPLI)
Employers can mitigate financial risk through Employment Practices Liability Insurance (EPLI), which generally covers defense costs, settlements, and judgments stemming from employment-related claims.
Coverage varies by policy, so review terms carefully; for an overview of how policies typically respond to these risks, see Understanding Employment Practices Liability Insurance (EPLI).
EPLI typically does not cover criminal fines or certain punitive penalties, and it often includes reporting requirements, options for extended reporting periods, and limits tied to specific covered parties such as employees or contractors.
Coverage considerations
Decide who the policy should cover (full- and part-time employees, contractors, supervisors, subsidiaries, etc.) and confirm how prior acts and reporting windows are handled before purchase.
Premiums are influenced by the type of business, number of employees, and the company's loss history, so underwriting varies by carrier.
For more background on workplace sexual harassment and related protections, see Understanding Sexual Harassment in the Workplace.
Prevention of Harassment Lawsuits
Prevention is the best way to reduce the risk and cost of a harassment claim; effective programs combine clear policy, training, reporting, and documentation.
- Report any incident to your insurer promptly if you have EPLI.
- Create, communicate, and enforce a zero-tolerance harassment policy.
- Maintain an effective complaint process and take consistent, timely action when complaints arise.
- Document all complaints and any investigations or corrective steps taken.
If you need help reviewing options or coverage limits, consider talking to an agent.
Frequently Asked Questions
Who can be held responsible for sexual harassment in the workplace?
Employers can be liable for harassment by supervisors, coworkers, customers, or vendors if the conduct creates a hostile work environment or results from inadequate policies or response.
What kinds of behavior commonly qualify as sexual harassment?
Unwanted sexual advances, requests for sexual favors, explicit images, suggestive comments, and conduct that creates an intimidating or offensive workplace can qualify as harassment.
Does EPLI cover all costs related to a harassment claim?
EPLI typically covers defense costs and settlements or judgments but often excludes criminal fines and some punitive damages; terms vary by policy.
What should an employer do first when a harassment complaint is received?
Take the complaint seriously, investigate promptly and impartially, document actions taken, and follow your established policy and reporting obligations.