Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth (U.S. Supreme Court).
In these two cases, the Supreme Court held that employers can be liable for sexual harassment perpetrated by supervisors even if they were unaware of the harassment and even if the harassment did not result in a "tangible employment action" (such as termination or demotion).
Implications for Employers:
Following these cases, employers can avoid liability only if they can demonstrate that (1) they exercised reasonable care to prevent and promptly correct any sexually harassing behavior; and (2) the employee unreasonably failed to take advantage of any available preventive or corrective opportunities. In plain language, this means that employers should act now to adopt rigorous anti-harassment policies. These policies must be clearly stated, widely publicized and rigorously enforced, following up on all complaints. Businesses that do not have the internal human resources staff to follow up on these matters should definitely seek outside, expert help. Money spent on preventive steps is infinitesimal compared to the cost of a lawsuit.
Source: Jackson, Lewis, Schnitzler & Krupman, White Plains, NY, December 14, 1998.