High Costs Of Harassment, Discrimination

In her widely publicized remarks at the Golden Globes Awards Show earlier this month, Cecil B. DeMille honoree Oprah Winfrey provided words to accompany the statement being made by the many women wearing black that evening. Their expressions of solidarity with the Time’s Up initiative against sexual harassment and inequality are continuing throughout the Hollywood awards season and reinforce the sentiment that “a new day is on the horizon.”

Arriving at a time “when nobody ever has to say ‘Me too’ again” has required a tremendous amount of courage on the part of many women and men who have been the victim of sexual harassment. As Nate Shannon, a board member of the Greater Orlando Society for Human Resource Management told MFM members during our 2017 conference, more than 12,860 cases of harassment were reported to the U.S. Equal Employment Opportunity Commission in 2016.

Settlement Costs

If you are looking for a more accurate estimate of the actual number of instances, increase that number by a factor of four. Shannon’s article in the January-February issue of MFM’s The Financial Manager magazine notes that the EEOC estimates 75% of women subject to harassment fail to report it for fear of retaliation.

The numbers are even more staggering if you factor in all cases of misused power. In 2016, the EEOC investigated more than 91,500 cases of discrimination (an increase of 5,000-plus from 2015). The result was $482 million in damages. That amount is only for cases settled by the EEOC. It does not include situations like the one involving Bill O’Reilly, which was settled privately for a reported $13 million.

Additional Costs

Fees paid to the victim are only part of the cost for this type of behavior. In the case of Bill O’Reilly’s show on Fox, dozens of advertisers reportedly boycotted the program.

Unfortunately, as a recent article published on HRAffiliates.com points out, unchecked discrimination and harassment typically results in other changes that ultimately affect the bottom line:

• Lost diversity, which affects creative problem solving.

• Increased absenteeism and lower productivity.

• More employee turnover.

• Lost market share.

Shannon reiterates these issues in his article for TFM.

While perpetrators may ultimately lose their livelihoods, employees who have been harassed or abused pay the highest costs. Victims often seek out a less lucrative position just to escape the stress.

The damage doesn’t stop there. Too many documented cases have demonstrated how victims of abuse are likely to experience humiliation and shame. These feelings can lead to alcohol and drug abuse, isolation and bouts of unexplained anger, wreaking additional havoc on their personal and professional lives for many years to follow.

Become More Proactive

What can be done to prevent further damage to colleagues and companies? “Companies,” Shannon writes, “need to take a more proactive approach to eliminate the possibility of this embarrassing and sometimes very expensive problem from occurring in their ranks.”

He reinforces this point by noting the findings of an EEOC task force, which “has made clear that workplace culture created by an organization’s most senior leaders is a huge factor in determining whether or not harassment will flourish.” With this in mind, “organizations must have systems in place that hold employees accountable.”

What Constitutes Harassment?  

HR experts like Shannon typically break harassment down to two key areas. The first category, which is often referred to as “quid pro quo,” describes offensive conduct that’s used as a condition of employment and typically involves employees in a superior/subordinate relationship. The scandals involving Harvey Weinstein, and more recently, James Franco, would fall into this category.

The second type of conduct includes offensive jokes, insults, threats and inappropriate pictures or gestures, which may interfere with another’s ability to perform their duties. Additional examples are available on the EEOC website  as well as resources from the Time’s Up coalition.

HR Training And Insurance  

Shannon notes in his piece that some 80% of organizations today conduct some form of harassment training. Many have also purchased employment practices liability insurance to help mitigate financial exposure. Of course, buying an insurance policy does nothing to prevent problem behaviors.

Rather, Shannon advises that companies “develop zero-tolerance policies against harassment and retaliation. They need to create a safe environment for reporting claims and clearly defined steps for reporting and investigating harassment.” Training will not, in itself, prevent harassment and discrimination, “but may prevent some, and may provide some legal defense when being sued.”

Managing Complaints

When abuses occur, Shannon stresses the importance of involving the HR department as quickly as possible. His advice is concise and straightforward. Take all allegations seriously. Ensure that alleged victims can continue their work without any negative effect on their paychecks. Additionally, reassure the alleged victims that retaliation will not be tolerated.

Don’t Underestimate Employer Liability

Keep in mind that the EEOC will hold an employer liable for harassment by a supervisor that results in negative employment actions, such as termination, failure to promote or hire, and loss of wages.

There can even be consequences for companies when negative employment actions haven’t occurred. Shannon points out that an employer can avoid liability only if it can prove that:

• It reasonably tried to prevent and promptly correct the harassing behavior.

• The employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.

Don’t Overlook Independent Contractors

Independent contractors used by the organization must also be familiar and in compliance with its harassment policies. In Shannon‘s words, “[The] employer will be liable for harassment by non-supervisory employees or non-employees over whom it has control (e.g., independent contractors or customers on the premises), if it knew, or should have known, about the harassment and failed to take prompt and appropriate corrective action.”

Welcoming The New Day

As Los Angeles Times editor, Mary McNamara commented in an editorial following the firing of Matt Lauer: “If you make a man a pasha, there is a good chance he will act like one.” The new day Oprah Winfrey described should bring about changes to ensure every woman receives the same dignity and respect as C-Suite executives.

A Distance Learning webinar offered by MFM on Feb. 13 will address ways to create the type of corporate culture that this new day deserves. Entitled “Creating a Respectful Workplace — it Pays,” the presentation by employment law attorney Sharon P. Stiller will outline the troubling costs of harassment and discuss ways to bolster policies and training so that businesses successfully meet their goal of creating a respectful workplace.

We will also be touching on the topic at the annual MFM CFO Summit in early March and in educational sessions slated for the Media Finance Focus 2018 conference, which will be held May 21-23, in the Washington, D.C., area.

In the meantime, I encourage you to read Nate Shannon’s article in TFM. Members’ copies were mailed at the beginning of the month. Both members and non-members will also be able to read an electronic copy on the MFM website in the coming weeks.

Articles like this can help to start internal conversations about the issue and identify behaviors that can no longer be tolerated.

The best approach to avoiding the many ways sexual harassment and discrimination can cost your organization is to join the companies that are leading the way in fostering a better work environment for all employees.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedIn, Twitter or Facebook sites.