Workplace Sexual Harassment: More HR Guidance Needed

From news anchors, to titans of the entertainment industry, to corporate executives, and elected officials, headlines show no one is above the fallout of sexual harassment in the workplace. Millions of dollars have been paid in settlements and the once mighty have fallen in disgrace.

Yet, a belated resignation or termination doesn’t absolve the employer from legal action—and often leaves the aggrieved and/or juries wondering how the employer might have handled the situation better.

How can risk managers, human resources (HR), executives and companies they serve help prevent sexual or other forms of harassment? The question becomes more pressing now with the “Ending Forced Arbitration of Sexual Harassment” bill. The proposed legislation voids forced arbitration and allows disputes to proceed in court rather than in a confidential arbitration setting. Proponents believe the prospect of making these cases public will reduce such activity in the workplace.

Smart employers aren’t waiting on legislation to make workplaces safer, however. They are planning and training now to reduce sexual harassment to mitigate risk, and therefore, potential damage claims affecting executives and employees across employer ranks. Ensuring such a workplace should result in fewer acts and reports of harassment and insurance claims. As all employers are interested in the bottom line as well as a positive work environment, a more defensible posture against future claims should be top-of-mind for every risk manager and HR Executive.

Old policies prohibiting harassment must be dusted off, reviewed, updated and publicized. These policies protect those whose accusations are proven to have merit or are brought in good faith, they create consequences for those proven to have abused others, and should clearly define expectations and ramifications.

These strategies can help risk managers, HR teams, and employers keep their organizations out of the headlines:

  • Review internal policies and procedures. When was the last time your organization reviewed the HR policies and procedures manual? Older manuals may ineffectively address the issue, including under the Equal Employment Opportunity Commission (EEOC) guidance. Once updated, make the document available to the workforce in print and online. However, a manual of policies is only the beginning.
  • Training is not a one-time event for select individuals. To paraphrase Aristotle, inclusion training in the workplace is not an act, but a habit. Hire a professional skilled in workplace diversity and inclusion training, and make courses mandatory from the rank and file to the C-suite. Refresh the training every few years, and make sure every new hire is trained as part of onboarding.
  • Create a “See something, say something” culture. Sexual harassment is avoided best in organizations with a culture of transparency and accountability. Management must welcome reports of unwanted sexual advances, and then investigate such claims. Such activity reported but not acted upon can worsen the environment, and become powerful evidence for claimants in harassment lawsuits.
  • Establish a realistic reporting procedure. If protocol urges an aggrieved employee to report harassment to a direct supervisor—and that supervisor is the alleged perpetrator—an obvious conflict arises. Encourage employees to speak directly to HR or a high level manager such as a division, general or plant manager. The reporting procedure should ensure that certain steps are taken so complaints are not swept aside.
  • Empower HR to investigate all claims. If HR receives a complaint, it has a legal obligation to investigate further. Even if the complainant fears an investigation could jeopardize the alleged harasser’s job, the law is clear that a prompt investigation occur to stop any alleged harassment from continuing. Termination or disciplinary action are not necessarily required; often, claimants just want the behavior to stop. It could be immature or otherwise benign playfulness that crossed the line—behavior a simple discussion could remedy. Follow up with the complainant to ensure the behavior has stopped and to document that follow-up occurred.

Effective policies and procedures in place and rigorously followed can help employees know the organization takes sexual, racial, and other forms of harassment seriously; insurers know you’ve established policies designed to protect both employees and the organization against incidents of harassment; and for those who might see million-dollar claims in the news and think they could be next, that you’ve set up your defenses.

Proposed Bills Highlight Legal Risks of Sexual Misconduct Claims

In the current climate of sexual harassment incidents being reported in a variety of industries across the country, organizations and their legal departments should be reviewing legislation and considering their legal risks, should they need to defend against sexual harassment or misconduct allegations.

Just this month, in fact, legislation was proposed at state and federal levels to keep employers from trying to silence accusers following mediation and settlements. The

Sen. Kirsten Gillibrand (D-N.Y.)

Huffington Post reported that the bipartisan legislation from Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Cheri Bustos (D-Ill.) would ban employers from holding employees to forced arbitration clauses, which often prevent sexual misconduct survivors from speaking publicly about abuses in the workplace.

Similarly, legislation targeting nondisclosure agreements was recently introduced by state officials in New Jersey, California, New York and Pennsylvania to their respective legislatures. These involve standard confidentiality contracts that companies use in the event of a lawsuit so that the terms of a settlement do not become public knowledge. Depending on if, and with what wording, these bills are passed it will almost certainly affect companies’ and leaders’ policies and behaviors.

Linda B. Hollinshead, a partner in the employment law practice of Duane Morris told Risk Management Monitor that if confidentiality cannot be guaranteed during a settlement, there could be less mediation and arbitration and more courtroom battles as a result.

“If these bills are passed into law, I will be curious to see how employers change the way they handle these issues—because one of the things you hope to buy when you settle, is quiet,” said Hollinshead. “I would presume that if this is the direction in which things are going, employers may become increasingly more vigilant on preventing [misconduct] in the first place.”

Regarding the New Jersey legislation, advocates seem to be pleased with the bill’s introduction but do not disregard the value confidentiality can provide for a victim of sexual misconduct.

“While we are in favor of the intent of the bill, we do want to make sure survivors have the option to confidentiality,” said Patricia Teffenhart, executive director of the New Jersey Coalition Against Sexual Assault. “Many survivors might wish to engage in a nondisclosure agreement, and we need to expand the opportunity for them to have the option to pursue nondisclosure.”

According to XpertHR’s Top 15 Most Challenging HR Compliance Issues for 2018  small, medium and large employers across the country expect sexual harassment to be a top matter of urgency moving forward. The report reminds that misconduct can occur between co-workers, both in and out of the workplace:

Harassment also may involve a wide variety of conduct—physical, written or verbal, as well as conduct over the internet and social media including cyberbullying.

For more legal risks to consider, visit www.rims.org to download the new RIMS Professional Report, The Top 8 Legal Developments You Need to Know About in 2017.

Deer Collision Costs on the Rise

Drivers beware: Whether operating a company or personal vehicle, it’s that time of the year again—mating season for deer, causing them to be more active and more than doubling the likelihood of a collision through December. What’s more, State Farm reports that the national per claim average—from July 1, 2016 through June 30, 2017—rose to $4,179 from $3,995 during 2015-16.

State Farm warns that, “Whether you hit a large animal, or it jumps into the side of your vehicle, such collisions can cause significant injuries and property damage.” Although more prevalent in some states than others, drivers everywhere need to be alert and focused on the road.

In its 15th annual deer claim study, State Farm ranks states by a driver’s likelihood to hit a large animal such as deer, elk, moose or caribou. According to the study, while West Virginia continues to lead the nation, the state saw a 4.7% decrease from 2016, with one out of every 43 drivers likely to hit a deer or other large animal.

There were also some increases among the top 10 states over last year’s study. Montana drivers have a one in 57 chance of a collision—a 1.8% increase; and Pennsylvania drivers have a one in 63 chance of a crash, a 6.3% increase.

The top 10 states where a driver was most likely to have a large animal insurance claim remain fairly consistent, State Farm said. Wisconsin moved into the top five, swapping positions with South Dakota. Wyoming moved into the top 10 at number eight. North Dakota moved up to number 10 and South Carolina is no longer in the top 10. Thirteen states had no change in ranking.

The Property Casualty Insurers Association of America (PCI) offers these tips for drivers:

• Buckle up. Seat belts save lives and help prevent injuries.

• Time of day is critical. Deer are generally more active during dawn and dusk hours, so pay attention to your surroundings and stay alert.

• Avoid distracted driving. Put the phone down, and never text while driving.

• Have a plan for roadside assistance. If an accident occurs, have the phone number for your insurer or roadside assistance ready. Some towing companies take advantage of drivers after an accident and you could find yourself facing excessive fees or complications recovering your car from the tow yard.

• Update your proof of insurance. Replace any expired insurance identification cards in the event you need to prove you have insurance after an accident. Although having a hard copy is best, don’t panic if you have misplaced yours—37 states have enacted laws that allow you to show proof of coverage on your smartphone. Find out if your insurer offers this feature.

• Watch for road signs that alert you to areas that are populated with more deer.

• Stay in your lane. If you see a deer, brake firmly but do not cross the center lane into potentially on-coming traffic.

If you do have a collision, State Farm recommends that you:

• Move your vehicle to the side of the road, if possible, and turn on your hazard lights. If you must leave your vehicle, stay off the road and out of the way of oncoming traffic. Deer are most active at dusk and dawn—times when you or your vehicle may be less visible to other motorists.

• Call the police. Alert authorities if the deer is blocking traffic and creating a threat for other drivers. If the collision results in injury or property damage, you may need to fill out an official report—this report also can prove useful when filing your insurance claim.

• Document the incident. If it’s safe to do so, photograph the roadway, your surroundings, damage to your vehicle, and any injuries you or your passengers sustained. If witnesses stop, take down their account of what occurred, and ask for their contact information.

• Stay away from the animal. A frightened, wounded deer could cause harm with its powerful legs and sharp hooves.

Words (and Clauses) Matter

A recent report published by RIMS highlights the importance for risk professionals—or the person within the organization tasked with the responsibility—to fully understand the language included in their insurance policies.

The report A Common Language: Aligning Third-Party Contracts with Insurance Policies, suggests that there are “clauses in contacts that may not be understood as well as others, and some people may be tempted to skim past those to move work along.”  But, in this haste, deciding to “skim” past those clauses may activate exclusions, limitations and even, unknowingly, nullify the transfer of risk to a third-party.

Authored for RIMS by Brenda Tappan of United Educators, the report defines key insurance terms that should be understood by contract reviewers, as well as common contract clauses that impact the validity of both the contract and insurance policies.

“At any given time, an organization could have hundreds of contracts with external stakeholders,” Tappan said. “With in-depth knowledge of coverages held by the organization, risk professionals can play an integral role in ensuring terminology is understood and that discrepancies between third-party contracts and insurance policies are identified.”

The report advises risk managers to be aware of the following insurance contract elements:

  • Indemnification Clauses – This clause delineates whether the parties of a contract wish to retain, transfer or share responsibility from a potential third-party. Be aware that not all “bodily injury” or “property damage” will be covered, even if you have stipulated everything correctly in the indemnification clause.
  • Additional Insured Status – This status provides proof of financial capability to cover what is assumed in the indemnity clause. Keep the additional insured provision separate from indemnification clause because if the latter is found unenforceable, the additional insured clause might be unenforceable as well.
  • Waivers of Subrogation – This says that the insurer has the right to stand in the place of the insured and go against the responsible party to make themselves whole. Risk professionals might consider requesting a Waiver of Transfer of Rights endorsement. Also, get as much in writing as possible – don’t leave anything up to chance or interpretation.
  • Primary and Non-Contributory – Essentially, the insured will not seek contribution from any other insurance available. When named an additional insured, you are afforded coverage as provided by the other insurance policy.
  • Excess and Umbrella Coverage – Organizations buy this coverage to increase the limits. It can be used for commercial general liability, commercial auto, employers liability, and other primary liability policies. As an indemnitor, you will want to ensure that for any coverage that taps into the policies that provide the upper limits, there is a specified cap to the coverage contractually offered to the indemnitee.
  • Limitation of Liability – It’s an attempt by third-party contractors to cap the amount of liability they will be responsible for to a set amount prior to an incident. Be on the lookout for these limitation of liability clauses. Generally, they are found toward the end of the contract, but can have a significant impact on indemnification.