Several allegations against high-profile individuals in both public and private-sector organizations recently highlighted how prevalent sexual harassment is. The #MeToo movement took many by surprise because sexual harassment is an issue that’s more pervasive than many thought.52 Now, leaders in many organizations are reviewing their strategies for preventing and addressing sexual harassment.

Despite the apparent frequency of sexual harassment, only between 6,500 and 8,000 complaints are filed with the Equal Employment Opportunity Commission (EEOC) each year,53 with more than 16 percent of those filed by males.54 Settlements in some of these cases incurred a substantial cost to the companies in terms of litigation. It’s estimated that sexual harassment is the single largest financial risk facing companies today—and can result in decreases (sometimes greater than 30 percent) in a company’s stock price.55 At Mitsubishi, for example, the company paid out more than $34 million to 300 women for the rampant sexual harassment to which they were exposed.56 But it’s more than just jury awards. Sexual harassment results in millions lost in absenteeism, low productivity, and turnover.57 Sexual harassment, furthermore, is not just a U.S. phenomenon. It’s a global issue. For instance, nearly 10 percent of workers responding to a global survey reported that they had been harassed sexually or physically at work. The survey covered countries such as India, China, Saudi Arabia, Sweden, France, Belgium, Germany, Great Britain, and Poland, among others.58 Even though discussions of sexual harassment cases often focus on the large awards granted by a court, employers face other concerns. Sexual harassment creates an unpleasant work environment for organization members and undermines their ability to perform their jobs. But just what is sexual harassment?

Any unwanted action or activity of a sexual nature that explicitly or implicitly affects an individual’s employment, performance, or work environment can be regarded as sexual harassment. It can occur between members of the opposite or of the same sex—between employees of the organization or between employee and nonemployee.59 Although such an activity has been generally prohibited under Title VII (sex discrimination) in the United States, in recent years this problem has gained more recognition. By most accounts, prior to the mid-1980s, occurrences were generally viewed as isolated incidents, with the individual committing the act being solely responsible (if at all) for his or her actions.60 Today, charges of sexual harassment continue to appear in the headlines on an almost regular basis.

Most of the challenges associated with sexual harassment involve determining what constitutes this illegal behavior.62 The EEOC explains that it is unlawful to harass a person because of that person’s sex. Harassment can include sexual harassment or unwelcome sexual advances, requests for sexual behavior, and other verbal or physical harassment of a sexual nature. However, harassment does not have to be of a sexual nature and can include offensive remarks about a person’s sex. Simple teasing, offhand comments, or isolated incidents that are not serious are not prohibited by the law unless it becomes so frequent or so severe that it creates a hostile or offensive work environment or it results in an adverse employment decision (such as being demoted or fired).63

For many organizations, it’s the offensive or hostile environment issue that’s problematic.64 Managers need to know what constitutes such an environment. How do you determine whether something is offensive? For instance, do off-color jokes in the office create a hostile environment? How about classical artwork that shows nude men or women? The answer is it very well could! It depends on the people in the organization and the environment in which they work. The key is knowing what makes fellow employees uncomfortable—and if we don’t know, we should ask!65 Also, managers must understand that the victim doesn’t necessarily have to be the person harassed but could be anyone affected by the offensive conduct.66

Organizational success will, in part, reflect how sensitive each employee is toward another in the company. At DuPont, for example, the corporate culture and diversity programs are designed to eliminate sexual harassment through awareness and respect for all individuals.67 It means understanding one another and, most importantly, respecting others’ rights. Similar programs exist at FedEx, General Mills, and Levi-Strauss, among other companies.

If sexual harassment carries with it potential costs to the organization, what can a company do to protect itself?68 The courts want to know two things: (1) Did the organization know about, or should it have known about, the alleged behavior? (2) What did managers do to stop it?69 With the number and dollar amounts of the awards today, it’s even more important for organizations and managers to educate all employees on sexual harassment matters and to have mechanisms available to monitor employees. In addition, organizations need to ensure that no retaliatory actions—such as cutting back hours, assigning back-to-back work shifts without a rest break, etc.—are taken against a person who has filed harassment charges, especially in light of a U.S. Supreme Court ruling that broadened the definition of retaliation.70

Finally, in a sexual harassment matter, managers must remember that the harasser may have rights, too.72 No action should be taken against someone until a thorough investigation has been conducted. Furthermore, the results of the investigation should be reviewed by an independent and objective individual before any action against the alleged harasser is taken. Even then, the harasser should be given an opportunity to respond to the allegation and have a disciplinary hearing if desired. Additionally, an avenue for appeal should also exist for the alleged harasser—an appeal heard by someone at a higher level of management who is not associated with the case.