Avoiding charges of sexual harrassment.




Sexual Harassment and Discrimination

The workplace today has become a melting pot of diversity that enriches the business environment by bringing together individuals with different ideas, enabling companies to offer clients better products and services. But diversity also can create problems when people are not accustomed to working with others whose backgrounds differ from theirs, possibly leading to discrimination based on age, sex, race, disability, religious belief and sexual orientation.

As a result of numerous laws—notably the Civil Rights Act of 1991, the Americans With Disabilities Act and the Age Discrimination in Employment Act—employers face more financial exposure than ever before. Companies—and their directors, officers and managers—that violate federal and state regulations prohibiting harassment and discrimination or that fail to adequately supervise their employees can be held liable for not taking steps to prevent those situations. A multimillion-dollar verdict could threaten a companys profitability or even its very existence.

This checklist outlines steps companies can take to help make their offices or plants places where diversity is welcome.

PRELOSS STRATEGIES Yes No N/A
Train senior management in employment practices issues and encourage them to treat all employees with respect.
Develop an educational program to help employees understand each others cultural backgrounds, religious beliefs, sexual orientations and other differences.
Post federal and state guidelines on sexual harassment and discrimination where all employees can read them.
Follow Equal Employment
Opportunity (EEO) hiring practices and adhere to the Americans With Disabilities Act (ADA).
Develop an employee handbook that includes clearly outlined sexual harassment and discrimination policies and procedures.
Maintain appropriate employment practices liability insurance to provide coverage for the costs associated with lawsuits resulting from harassment and discrimination.
POSTLOSS STRATEGIES Yes No N/A
Business owners or senior managers who notice harassment or discrimination against an employee should take prompt action. Management should meet with the individuals to let them know the company is aware of their actions. The company may need to report the incident to its insurance carrier and confer with legal counsel.
If the situation warrants, do not let the accused individual return to the workplace until all charges have been resolved.
Communicate promptly and honestly with employees about the situation and reinforce the companys stance on sexual harassment and discrimination. This will help eliminate rumors and counter any negative effect on employee morale.
If the situation is reported in the media, appoint one individual to speak for the company. Always confer with legal counsel before responding to media inquiries. The goal is to maintain the companys reputation, without disclosing confidential information.
Source: Adapted from The Rewards of Managing Risk , Chubb Group of Insurance Companies, Warren, New Jersey; http://www.chubb.com .

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