Sexual Harassment in the USA: How Big a Deal Is It?

Sexual Harassment in the USA: How Big a Deal Is It?

Sexual harassment in the workplace is a big deal in the USA. Casual conversations or jokes that may sound acceptable (and legal) in your home country can easily lead to law suits here. Decisions that are motivated by business stakes (e.g. having an employee become a contractor) can be interpreted as harassment if some data can be found to substantiate such a claim.

Moreover, some states clearly favor employees over employers – a trend that is gaining ground in the USA – so you need to make sure that your company abides by the specific requirements set by the state(s) in which you have employees. For instance, some states require that you distribute a sexual harassment prevention policy to all employees along with a complaint form. Your responsibility as a company may even be engaged if business partners (e.g. contractors, vendors, etc.) file a claim.

Let’s explore the sexual harassment topic through an interesting case study (section 1) and the example of anti-sexual harassment laws in NY State (section 2).

1. Case study: An Unexpected Sexual Harassment Lawsuit

During the Spring 2017, ABCCo. opens a US entity in California with the goal of launching a new mobile advertising platform on the US market. The company hires a Sales Director and a Marketing Director to supervise him, along with sales representatives to cover the West Coast and Midwest territories.

About 2 months later, the US employees are invited to ABCCos.’s headquarters located in Europe. During that trip, the company organizes a few nights out to help employees build bonds. Strong bonds indeed… In June 2018, ABCCo. receives a 49-page legal notice announcing an upcoming law suit against the company, which is held responsible for 8 damages inflicted to its Californian Sales Director (among which sexual harassment and discrimination). What happened?

As the US sales team goes out to the restaurant, the Marketing Director (“MD”) engages a conversation with the Sales Director (“SD”). MD makes a few jokes about women and spontaneously expresses its taste for womanizing, asking SD about his own experience with women in California. SD remains impassive and tries not to escalate as he feels quite uncomfortable with that topic. A couple of nights after, MD invites the male sales team members to go to a strip club. As SD declines the invitation, MD inquires: why would he refuse to have some fun with the other guys? Does he like women? To which SD answers that he does not date women. Please note that these conversations were all private and happened between MD and SD only, during cigarette breaks for instance.

One month later, SD is fired. SD’s lawyers immediately react and build a case against ABCCo., accusing the company of sexual harassment, sexual orientation discrimination, gender expression discrimination, retaliation, failure to take all necessary steps to prevent harassment, wrongful termination, and defamation. Of course, lawyers gather female employees’ testimonies in the process: the sales representatives in the MidWest, all women, explain that MD often makes vulgar jokes and inappropriate comments targeting women. Moreover, it is clear to them that MD’s attitude towards SD completely changed after the trip to Europe, making it very difficult for SD to perform his job effectively (no answer to emails or calls, no feedback on the work done, no marketing support, etc.).

Key takeaways:

  • ABCCo. is entirely responsible for MD’s actions in this case.

  • It’s relatively easy to build a sexual harassment case in the USA: most conversations between MD and SD during the trip to Europe had no witness. The case can be substantiated by indirect testimonies (e.g. female employees’ remarks, MD not answering to SD’s emails after the trip, etc.) that resonate with the claim.

  • The 49-page legal notice requires a throrough answer from ABCCo. within 30 days: this answer must be prepared by a lawyer, and it must delineate the defendant’s strategy. It is somehow the first step in negotiating a settlement or preparing a trial. The lawyer needs time to think through the strategy and to produce the document, meaning that you, as a company, must be very reactive should you receive such a notice.

  • One of the claims made by SD’s lawyers pertains to ABCCo.’s failure to take all necessary steps to prevent sexual harassment. As a company, you must abide by state regulations regarding sexual harassment: please refer to the example below (New York State laws) to better understand what kind of requirements you must abide by in the state(s) you are doing business in.

  • The legal notice received by ABCCo. refers to events that did not occur at the office or during the normal course of daily business. The notion of “workplace” can be quite porous: basically, any interaction between employees, be it at work or not (and even in another country!), falls into Labor Laws’ scope.

2. State Laws: The Example of New York State’s Anti-Sexual Harassment Laws

In 2018, New York State has strengthened laws pertaining to sexual harassment. All employers must now meet specific requirements, such as adopting a sexual harassment prevention policy, and protection against sexual harassment has been extended in favor of both employees and employers’ business partners.

Mandatory sexual harassment prevention policy:

  • All employers in New York State are required to adopt a sexual harassment prevention policy and distribute it in writing to all employees (even those who work outside of NY State). This can be done electronically. Employers are also encouraged to have employees acknowledge receipt of the policy, and to post a copy where employees can easily access it. See sample policy and minimum standards checklist.

  • This sexual harassment policy must include a complaint form for employees to report alleged incidents of sexual harassment. See sample complaint form.

  • In addition, all employers are required to annually conduct anti-sexual harassment interactive training for all employees, including supervisors and managers. NY state has published a model training script along with slides and case studies to be discussed with employees. Companies can basically organize the training internally. However, payroll providers and other consulting companies also offer to conduct the training on behalf of employers to guarantee that all NY State standards are met.

  • Employers in New York City must also abide by specific requirements, such as posting an anti-sexual harassment rights and responsibilities poster in common areas where employees gather (in both English and Spanish) or to provide training (if counting more than 15 employees) within 90 days of hire for new employees who work more than 90 hours in a calendar year.

Extended protection for employees and business partners:

In 2018, protections against sexual harassment under the New York State Human Rights Law have been extended to “non-employees”, including contractors, subcontractors, vendors, consultants, job applicants, and other persons providing services pursuant to a contract.

The use of nondisclosure clauses in settlements or agreements relating to claims of sexual harassment are prohibited, unless the condition of confidentiality is the preference of the complainant. The same applies to mandatory arbitration clauses for claims of workplace sexual harassment.


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Disclaimer: The materials provided in this US Toolbox are for general information purposes only and are not intended to constitute comprehensive or specific legal, accounting, tax, marketing, or other advice. These materials may not reflect recent developments in the law, may not be complete, and may not pertain to your specific situation and circumstances.TradeSherpa, Inc. assumes no responsibility for errors or omissions in the materials, or for any losses that may arise from reliance upon the information contained these materials. Because these materials are intended to provide only general advice, specific advice should be taken from qualified professionals when dealing with specific situations and circumstances.