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8 Preventive L. Rep. 3 (1989)
Sexual Harassment in the Workplace Costly in Production, Absenteeism, Turnover

handle is hein.journals/prevlr8 and id is 27 raw text is: Only one way to deal with it:

Sexual harassment in the workplace costly
in production, absenteeism, turnover
Professor of Management, East Tennessee State University, Johnson City, Tennessee

he legal costs of sexual harassment in the workplace
are growing. In 1987 a former personnel manager
was awarded $1.4 million after being fired for
vigorously investigating a charge of sexual harassment,
while K-Mart settled a sexual harassment complaint for a
record $3.2 million. In 1988 a North Carolina jury awarded
$3.85 million to five women who had been sexually harassed
by one supervisor.
Legal costs of sexual harassment, while large for some
companies, might be a minor cost to American business
when compared to non-legal losses. A 1988 survey of 160
Fortune 500 companies, reported in the December 1988
issue of Working Woman magazine, showed an average
company loss of $6.7 million per year in decreased produc-
tivity, increased absenteeism and higher employee turnover
caused by sexual harassment.
Anecdotal evidence gathered by this author while prepar-
ing a manual and CLE course on sexual harassment
appears to show even larger losses relative to the gross
incomes of smaller companies. Although many companies
have adopted sexual harassment policies, a random survey
by the author proved many to be inadequate. Some directly
violate the principles of effective action as laid down in the
only U.S. Supreme Court decision on sexual harassment,
Meritor Savings Bank v. Vinson, 477 U.S. 57, 106 S. Ct. 2399
This article will discuss some aspects of the developing
law of sexual harassment, give a procedure for handling
sexual harassment complaints, and offer an example policy
and complaint form that companies may use to handle
sexual harassment complaints in-house, rather than in the
Sexual harassment in the workplace, as well as racial,
national origin and religious harassment, can result in
lawsuits against an employer for violation of Title VII of the
Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), most
state fair employment laws, and possible tort actions for
assault, assault and battery, intentional infliction of emo-
tional distress, negligent hiring, invasion of privacy, and
other causes of action.
One sexual harassment case even resulted in a judgment
under the RICO (Racketeer Influenced and Corrupt Orga-
nizations) Act, Hunt v. Weatherbee, 30 Fair Empl. Prac. Cas.
(BNA) 1469 (1986). Lawsuits against governmental employ-
ers may also be based upon the Equal Protection Clause or
the Civil Rights Act of 1871 (42 U.S.C. § 1983). Some of these

Survey by the author
shows many company policies
are inadequate and may
violate 'effective action.'
causes of action allow awards of attorneys' fees and the
imposition of punitive damages.
Most court decisions, including the Mentor Savings Bank
v. Vinson case cited above, give great weight to the EEOC
Guideline on Sexual Harassment that declares sexual
harassment to be a violation of Title VII of the Civil Rights
Act of 1964. The Guidelines define sexual harassment:
Unwelcome sexual advances, requests for sexual favors,
and other verbal or physical conduct of a sexual nature
(emphasis by the author) constitute sexual harassment
(1) submission to such conduct is made either explicitly
or implicitly a term or condition of an individual's
employment (or)
(2) submission to or rejection of such conduct by an
individual is used as a basis for employment decisions
affecting such individual, or
(3) such conduct has the purpose or effect of unreason-
ably interfering with an individual's work performance
or creating an intimidating, hostile, or offensive work
environment (emphasis by the author).
Under this Guideline and court decisions, sexual harass-
ment may be classified under the following categories:
1. Quid Pro Quo. Where an employer, manager or
supervisor demands sexual favors in return for tangible job
benefits such as a promotion, pay raise or continued
employment. This is the traditional type of sexual harass-
ment. Employers are automatically responsible for this type
of harassment.
2. Sexual Favoritism. Where an employee loses a pay
raise, promotion or other benefit due to discrimination in
favor of a co-worker who is sexually involved with a
manager or supervisor. This type of complaint has been the
least successful cause of action in sexual harassment lawsuits.
3. Retaliatory Discharge. Where an employee is fired for
Continued on next page

June 1989/Preventive Law Reporter 3

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