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Holiday Work Parties and Sexual Harassment: What Every Employer Needs to Know

A company holiday party is a beloved tradition at many businesses. It’s a chance for employees to celebrate the work year and blow off steam before a new one begins. But what if an employee takes the fun too far and makes unwanted sexual advances toward a fellow co-worker?

And what if that co-worker decides to sue the company, claiming officials didn’t take the proper steps to prevent this type of harassment? 

It’s not unusual for holiday parties to result in sexual harassment claims. Just search on the Intern et for “holiday parties” and “sexual harassment" and you’ll see a long list of news stories focusing on the rise in harassment claims that stem from these parties.

Sexual harassment both inside and outside of the workplace has been front page news most of this fall. Movie producers, actors and politicians across the nation appear to be having a day of reckoning for alleged abuses. Accusers have become emboldened by the stories of others, especially with the #metoo campaign on Twitter. It was started as a way to support those who have been victimized and empower others to come forward.

Workplace sexual harassment is a problem all year long. The U.S. Equal Employment Opportunity Commission reported that it received 12,860 claims of sexual harassment in 2016, up from 12,573 in 2015 and 12,146 in 2014.

So where does that leave employers who want to protect workers from unwanted advances and protect their companies from any financial fallout?

When employees file harassment claims against their employers, the financial results can be devastating. Even when a company successfully defends itself, the legal bills can run into the tens of thousands of dollars.

It’s important, then, that companies do everything they can to protect themselves from the harassment claims that can follow a holiday party.

The time to start taking protective measures is long before a holiday party even begins.

Set the 'right tone' to discourage harassment

Deborah Sweeney, chief executive officer of Calabasas, California-based document-filing service MyCorporation, says that companies shouldn't encourage drinking at their parties and that their leadership and human-resources departments clearly communicate to employees that they must always act professionally toward each other.

"Set expectations with your team in advance," Sweeney says. "Stay in control yourself, as a leader, and make sure that the event is less of a crazy drinking party and more of a team-building type of party. Don't let the event run too late, and ensure that everyone has a safe ride home."

If complaints do arise at or after the party, companies need to act quickly, Sweeney says.

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"Make sure it is addressed right away," she says. "Do not sweep problems under the rug."

Legal experts agree that the steps companies take before a holiday party are often the most important when it comes to protecting themselves from liability in the case of harassment claims.

Lawrence Schaefer, president and head of litigation for Minneapolis-based law firm Schaefer Halleen, focuses exclusively on representing people who have been subject to employment discrimination. He said that companies can protect themselves from liability and decrease the odds of harassment occurring during holiday parties by reminding employees of their sexual harassment policy, maybe in the form of an email, before the party begins.

"You should also use this as an opportunity to let your employees know that Christmas party fun is not an excuse to violate company policy," Schaefer says. "If your company does not have a policy, the perfect time to write one is before any company party."

And if an employee does claim harassment during a company policy? Schaefer says that companies need to investigate the claim quickly. If an employee is found to have harassed a fellow co-worker, the company must take some form of action against that employee.

"I am a firm believer that companies need to take steps to ensure that the complaints of their employees aren't just resolved privately and for compensation alone," Schaefer says. "Companies should have a 'zero tolerance' standard when sexual harassment occurs in their office."

Zero-tolerance against harassment a good first step

David Grinberg, a public relations consultant and former national media spokesman for the U.S. Equal Employment Opportunity Commission, said that even if companies take the proper steps to prevent bad behavior at holiday parties, there are no guarantees that trouble won't happen.

"Despite a company's best efforts to prevent harassment claims, there can always be some bad apples in the bunch who ignore written and well-communicated anti-harassment internal policies and procedures," Grinberg says.

But that doesn't mean that companies shouldn't take certain steps to limit their legal liability.

The first? Companies should establish a zero-tolerance policy against harassment and retaliation, a policy that is in effect all year, and is not just trotted out during the holiday party season.

The policy needs to be specific, Grinberg says, and should list the steps employees should take internally if they feel they have been harassed. Companies need to create a confidential internal complaint procedure with the help of human resources and legal counsel. This policy needs to spell out where employees can go to report claims and have them investigated.

Grinberg recommends, too, that companies set up a voicemail hotline or email inbox where employees can anonymously voice their concerns if they fear coming forward in person.

"The biggest deterrent for victims in coming forward and speaking out is fear of retaliation for complaining, which can include a company blaming the victim or responding with some kind of adversarial action against them," Grinberg says.

Those adversarial actions can include a job loss or demotion. Employees, then, need to know that they can report instances of harassment without fearing for their future at the company.

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Also important? Grinberg says a company's chief executive officer and other leaders should be vocal in their support of the business' anti-harassment policy. These high-ranking officials need to clearly communicate what these policies are themselves. They can't just rely on lower-ranking human-resources professionals to spread the word. 

"It's not enough to simply put something in an employee handbook and then put it on a shelf to gather dust," Grinberg says. "It's key that the anti-harassment message comes from the very top of the company so it filters down to mid-level managers and front-line supervisors."

Grinberg says that companies that already have a well-established anti-harassment policy and procedures in place will have the greatest amount of protection should an employee file a harassment claim against them.

And those companies whose top leaders periodically communicate these policies to all staffers increase their odds of being shielded from legal liability if an alleged victim files a case with a federal, state or local government agency or in a court without first going through the company's internal grievance process.

What shouldn’t companies do when an employee brings an harassment claim? Executives should never ignore the claims or dismiss them without an investigation.

"A company should take all complaints serious, even if they appear frivolous on the surface or if the alleged harasser denies liability," Grinberg says.

And companies should never retaliate against alleged victims for exercising their federally protected rights to speak out.

Consider an employment practices liability policy

It's important, too, for companies to take the financial steps necessary to protect themselves against harassment claims.

John Espenschied, agency principal and owner of Insurance Brokers Group in Missouri, says there's no way for companies to ever guarantee that an employee won't harass another worker, even if they do everything right when it comes to creating and promoting anti-harassment policies.  

Companies, then, should invest in an employment practices liability insurance policy. This type of policy, referred to as an EPLI policy, provides companies with financial protection if an employee files a harassment claim against them.

Companies can take out an EPLI policy for as little as $1,000 a year.

"EPLI is the key to defending your business," Espenschied says. "Don't let your company get put out of business because of the acts of one employee. The defense costs alone can run in the tens of thousands even if the business is cleared of any wrongdoing."

And if you're really worried about exposing your company to harassment claims because of holiday parties? Perhaps skip the parties altogether.

Robby Slaughter, principal of Indianapolis-based AccelaWork, says the best way to avoid harassment claims from too much holiday celebrating is to simply not have a holiday party. Executives might be surprised at what little impact canceling holiday parties really has on employees, Slaughter says.

Companies who want happy employees should just give their workers a holiday bonus instead of throwing a party, Slaughter suggests.

"Surveys indicate that employees would rather just have the cash than the money spent on an event."

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