John A. Klassen, PA Minnesota Employment Law Attorney
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Employers have financial incentive to stop sexual harassment

Many Minnesotans who have been the victims of sexual harassment at work suffer in silence. Often, victims fear that no one will believe them if they report what is really going on, or that no one will do anything about it. They may fear that the powerful forces at their workplace are too entrenched to change anything when an employee reports harassment. But, one thing that gets the attention of an employer is money, and sexual harassment can be very expensive for employers.

According to some analysts, the cost to a company of defending against a sexual harassment lawsuit by an employee is at least $100,000, even if the company ultimately wins. Most such cases are settled before they go to trial, but when they do go to a verdict, the awards in these cases can be very big.

Minnesota and federal laws place caps on the amount of punitive damages that can be awarded in sexual harassment cases. The maximum amount is tied to the size of the company. Under federal law, the cap is about $300,000 for large companies. However, that cap only applies to punitive damages. Compensatory damages, such as lost wages, may be much higher, and courts may have discretion to set an award at triple the amount of actual losses. There are cases in which the award is in the multiple-million dollar range.

Employers can limit the risk of being hit with this kind of payout if they properly handle sexual harassment cases in-house, as they are supposed to do. The laws prohibiting sexual harassment are designed to compensate the victims, but a big part of their purpose is to give employers a financial incentive to make sure that more sexual harassment does not happen in the future.

Minnesota workers may fear the hassle and risk of complaining about sexual harassment, but when they do not report it, employers have no incentive to stop it. Victims of harassment should stand up for themselves and for the rights of workers like them who may face similar issues in the future.

Source: The Fiscal Times, "The High Cost of Sexual Harassment," Beth Braverman, Aug. 22, 2013

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