Thanks to recent disclosures of sexual harassment in the workplace - and elsewhere - increased awareness is at the forefront of each of our minds.

In Congress, shocking revelations persist – with justified criticism of their “management” of this risk. The current system is cloaked in secrecy plus taxpayer funding.

Is there a better solution? Absolutely!

In 1992, Employment Practices Liability Insurance (EPLI) became available for employers to transfer this risk to commercial insurers. Today, a major increase in the purchase of EPLI protection is in evidence.

However, the federal government – like most local governments – is self- insured for even minor “slip and fall” liability claims as well as major sexual harassment allegations.

That’s good, of course; however, the source of funding is still taxpayers’ pocketbooks. It’s strictly actuarial and not a “slush fund” as some have incorrectly indicated.

In the private sector, risk funding comes from employers’ operating budgets. Congress should be no different. Each member of Congress needs “to have some skin in the game” (no pun intended). Such funding should impinge on members’ operating budgets – not from some amorphous source where “no pain is felt.”

Yet this doesn’t resolve the other major criticism of the current system in Congress – and elsewhere – where NDAs (Non-Disclosure Agreements) keep harassment cases out of the courts, out of the media – and, in my opinion, out of control.

Still, some victims do not want anyone to know what they have endured. They, no doubt correctly, believe such openness can adversely affect their careers. Others believe transparency is important and can bring almost immediate cessation of any cycle of harassment. That, too, can be correct.

California is the first state to prohibit NDAs in civil cases where a felony could be prosecuted as a sex crime. New York has introduced legislation to invalidate employment agreements in which an employee is precluded from “going public” with allegations of sexual harassment.

Transparency is a highly effective deterrent. When this “risk control” measure is taken, it virtually eliminates this risk. This becomes even more important than transfer of this risk to an insurer (except to pay for expensive legal defense fees and court costs where an unfounded – even frivolous - accusation is litigated).

Additional proactive risk control measures are important for employers – including members of Congress. One is a formal policy statement. It should include a definition of “sexual harassment” and describe examples.

It should also include an unequivocal provision that such behavior is strictly prohibited – and retaliatory action is not condoned.

Each employee should be asked to sign a written statement that attests to their having received – and read – the policy statement. This policy should be included in the employee handbook given by many employers to new employees to review and acknowledge (in writing) they have read its contents.

Any employer without such a policy statement – and evidence of its enforcement – will be at a great disadvantage during any litigation that may ensue.

Yet it’s still a delicate balance. If a victim wants to keep this experience to herself, she should be able to do so – but at her discretion, not that of her employer.

Also, lines need to be drawn between levels of harassment – from simple consensual “petting” to non-consensual behavior that leads to civil liability and ultimately to criminal prosecution. That’s for the courts to determine, of course.

Finally, this is treating sexual harassment solely as a legal issue. It’s also a moral issue. Consent may alter legal outcomes; however, the consensual act still may not be moral. Morality should be our personal standard of behavior, not legality. This dimension is rarely mentioned in the media.

Management of this risk – including the cultural shift we’re seeing in the recent ”#me too” movement - is essential not only for organizations to avoid legal judgments in the foreseeable future but also to help each of us individually avoid “higher level” judgments that are eternal.

 

John Pryor is a local risk management consultant, author, and adjunct professor of risk management at CSU Bakersfield.