If you lead a business, you may need to address lewd sexual conversations in your company. Examples include a lewd joke by email or a sexual conversation in the workplace. Employees may defend this as locker-room banter. As a company leader, what are your legal duties? What are best practices?

Donald Trump made headlines when the Washington Post published a video of him boasting of sexual assault (grabbing women inappropriately) while at work. At the time, Mr. Trump was under contract with The Apprentice, either as an independent contractor or employee. Mr. Trump was boasting about his sexual advances on women in the workplace.

If you were a CEO, a board member, or another executive responsible for this project, how should you legally respond to an employee or contractor making such statements? What are your legal duties? How do you avoid a sexual harassment lawsuit? Are some sexual jokes and “locker-room banter” permissible in the workplace?

If you are dealing with sexual conversation in the workplace, your analysis will involve a few initial questions:

  1. Which laws apply?
  2. What are the facts? Were the statements truthful or puffery?
  3. What are you legally required to do?
  4. What are HR best practices?
  5. What is the right thing to do, based on our company’s core values, mission, and culture?

1. Which Laws Apply? Minnesota Law & Federal Employment Law

Minnesota law first recognized sexual harassment as a form of sex discrimination in 1980, in the case of Continental Can Company v. State. Two years later, the state legislature amended the Minnesota Human Rights Act (MHRA)  to include a definition of and specific prohibition against sexual harassment.

Minnesota’s Definition of Sexual Harassment

Under the MHRA, “sexual harassment” includes “unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature” if:

  1. Submission to that conduct or communication is made a term or condition, either explicitly or implicitly, of obtaining employment, public accommodations or public services, education, or housing;
  2. Submission to or rejection of that conduct or communication by an individual is used as a factor in decisions affecting that individual’s employment, public accommodations or public services, education, or housing; or,
  3. That conduct or communication has the purpose or effect of substantially interfering with an individual’s employment, public accommodations or public services, education, or housing, or creating an intimidating, hostile, or offensive employment, public accommodations, public services, educational, or housing environment.

Federal vs. Minnesota Law

Due to substantial similarities between the MHRA and Title VII, the federal law prohibiting discrimination in employment, Minnesota courts apply the principles developed in Title VII cases in analyzing cases brought under the Minnesota law. Under both federal and state law, to move forward with a case in an employment context a person must establish:

  1. Membership in a protected class (Under the MHRA sexual orientation is a protected class. Title VII does not provide protected class status for sexual orientation)
  2. Occurrence of unwelcome harassment
  3. That the harassment was based on a person’s status in the protected class
  4. That the harassment affected a term, condition, or privilege of employment or created a hostile work environment

2. What are the facts?

Your company will need to conduct an investigation to determine what happened. For example, was this locker-room banter an exaggeration, or did sexual assault or sexual harassment actually occur? The investigation’s scope should be determined by an attorney experienced in HR investigations in compliance with your state’s employment laws.

It is essential that the investigation be conducted immediately by a competent, disinterested investigator (either a company employee trained to do such investigations or an outside professional). Promises of complete confidentiality to the person filing the complaint may limit an employer’s ability to take adequate timely and appropriate action in response to a the complaint and do not remove the employer’s legal obligation to take such action.

One person at the company should be in charge of such complaints (although employees should be encouraged to bring their the complaints to the attention of any management member with whom they may feel more comfortable) and this person should receive all of the details of the complaint (who, what, when, where, witnesses) and have a discussion with the accused to get his or her side of the story. The company should not prejudge the problem before doing a thorough investigation, it should keep the entire matter as confidential as possible, and it should take great care not to defame (wrongly accuse) the accused or any other individual in the process of conducting the investigation.

3. Your Legal Response Required by Law

Sexual Harassment Discipline and Resolution

If the employer determines that harassment did occur, then the harasser must be disciplined. The extent of the discipline should depend upon the severity of the offense. A warning not to repeat the behavior may be appropriate in some situations while discharge may be appropriate in others. Sensitivity training, suspension and transfer are other options. However, the complainant should not be transferred unless he or she requests the transfer or agrees with it. A transfer against the wishes of the complainant could constitute unlawful retaliation.

If there is no proof of harassment following the investigation, the employer may not take disciplinary action against the accused. All parties can be reminded of the company’s policy and to come forward if any other problems occur.

Sexual Harassment Follow-up and Retaliation

The employer should follow up after any harassment incident to make sure–if the investigation resulted in a finding of harassment and the harasser is still employed–that no further harassment is taking place. In addition, it is extremely important for the employer to ensure that the complainant is not subject to retaliatory action of any kind following the complaint.

4. HR Best Practices

Every employer should have a written policy which:

  • Defines sexual harassment and other forms of unlawful harassment in the workplace
  • Emphatically states that the employer will not tolerate harassment
  • Encourages anyone who believes he or she is a victim of harassment to come forward and file a complaint
  • Assures a prompt and confidential investigation and resolution of the problem.

A sexual harassment policy is often part of a general harassment policy, which prohibits harassment toward employees on the basis of all legally protected classifications, including, e.g., age, disability and religion. A growing number of employers have broadened their sexual harassment policies to prohibit all types of unlawful harassment, and a number of employers have adopted further policies that call upon all employees to treat each other with dignity and respect.

The policy should describe the various individuals to whom harassment complaints can be directed, and it should assure the complaining employee that there will be no retaliation as a result of bringing such a complaint. The policy should set out some general procedures which will be followed when a complaint is brought. The employer is advised to provide every employee with a copy of the policy (e.g., through an employee handbook) and to have employee meetings from time to time to ensure that potential victims understand that they need not tolerate harassment and to warn potential offenders that they are subject to discipline and discharge for violating the policy. Small employers may find that informal complaint procedures are effective and larger employers may wish to adopt more formalized reporting and resolution procedures. However, regardless of the details, it is critical that all employers adopt and communicate the essential elements of a harassment policy.

Federal and state law regarding sexual harassment provides employers a major incentive for adopting and distributing a policy against sexual harassment. The United States Supreme Court has ruled that employers are

  • Liable for harassment committed by supervisors that leads to a tangible adverse effect such as termination or demotion
  • Liable for supervisor harassment with less tangible harm, unless they can show that they tried to prevent the harassment by adopting a policy and took appropriate corrective action when learning of the harassment.

Moreover, the Minnesota Court of Appeals has cautioned: “[c]ompanies that fail to institute such polices will naturally find themselves vulnerable to the likelihood that knowledge [of the harassment] will be imputed to them,” thereby increasing the risk that the employer will be liable for the harassment.

Additional Tips

  • Be consistent in your enforcement of company policy
  • Management should avoid participating in sexual conversation because courts often hold management to a higher standard because of their authority and influence over employees

5. What is the right thing to do, based on our company’s core values, mission, and culture?

You may decide to go above and beyond what is legally required, if your company’s core values establish a higher standard.