Outsourcing Investigations of Sexual Harassment: The Unexpected Consequences of Good Intentions

During the 1990s, claims of sexual harassment rose significantly, increasing liability risks for all organizations, large and small, for-profit and not-for-profit.Ever since sexual harassment took center stage during the 1991 confirmation hearings of Clarence Thomas as associate justice of the United States Supreme Court, the number of charges filed with the Equal Employment Opportunity Commission (EEOC) has risen substantially.Because federal law caps damages at $50,000 to $300,000, depending on the number of employees within the organization, many claims are litigated in state courts where total damages may not be limited.For meritorious cases, out-of-court settlements and jury-trial awards increasingly reach six or seven figures.These heightened economic risks require businesses to take a special interest in understanding sexual harassment law and avoiding sexual harassment litigation.Two recent U.S. Supreme Court decisions, Burlington Industries v. Ellereth 1 and Faragher v. City of Boca Raton 2 reaffirmed the principle that employers may be held liable for not establishing, disseminating, and consistently enforcing a policy that prohibits sexual harassment.Also, if a complaint alleging sexual harassment arises, these cases confirm the need for employers to conduct a "reasonable" investigation.As a result, the EEOC issued revised enforcement guidelines regarding employer liability for sexual harassment committed by supervisors. 3The EEOC emphasized the importance of prompt, thorough, and impartial investigations conducted by well-trained investigators.