Do you have a sexual-harassment policy? Yeah? So what! So do tons of companies that ended up paying a lot of money for the inappropriate actions of some of their employees.

So what is sexual harassment and what constitutes inappropriate actions? Well, the courts are still deciding this year by year. In 2002 the courts determined that staring can constitute sexual harassment, a decision that further broadens the definition and proves that many more behaviors are subject to this law than was commonly thought.

A good definition of sexual harassment can be found in Robert Mathis and John Jackson’s book Human Resource Management: “Sexual harassment refers to actions that are sexually directed, are unwanted, and subject the worker to adverse employee conditions or create a hostile work environment. Sexual harassment can occur between a boss and a subordinate, among coworkers, and among nonemployers who have business contracts with employees.”*

Technically, there are two types of sexual harassment. The first type is quid pro quo, which is a fancy Latin term that means this for that. This type of harassment involves linking any condition of employment (like pay, promotions, or a nice office) to sexual favors. This is the type that most people think of when they hear of this topic, but it’s not the type that most commonly gets a company into trouble. That’s because even the saltiest and most offensive types of managers understand that this behavior is crossing the line.

The more confusing form is called hostile work environment, and this is where most companies will find themselves wondering where they went wrong. This type is based on the premise that “the creation of a hostile work environment related to sexual harassment is illegal even if the employee doesn’t suffer loss of wages or their job.”* This means that an employee can sue your company if you do–or allow–anything in the work environment that can be construed as threatening, humiliating, or offensive. And who decides that? The employee, the courts, and possibly a jury. In short, any random person walking down the street may help decide your fate.

All right, given the complexity of the issue, you may be wondering, “What should I do to protect my company?” Although the answer to this is not clear, your company must be able to show that they have affirmatively defended against offensive behaviors in the workplace. First, have a sexual-harassment policy designed to fit the needs of your company and stick to it, especially when the situation gets sticky. The courts upheld previous decisions last year that basically say that an effective anti-harassment policy can provide a defense to a harassment claim. So if your company has it and lives by it, you are less likely to lose a court case. Developing an effective anti-harassment policy is not as difficult as it may seem. Four of the major issues to be included are:

1. Procedures on reporting complaints and how to circumvent a supervisor if he or she is involved. Yes, he or she, because anyone can harass another employee. This year even saw some same-sex complaints.
2. Assurances of confidentiality and freedom from retaliation by those named in complaints.
3. A promise of rapid investigation.
4. A guarantee that disciplinary action will apply to offenders, which may lead to termination.

So you have this great policy, designed by a pro, and now it needs to be implemented and maintained. First, develop a training and communication plan to be delivered to employees. This plan needs to educate employees as to what is considered sexual harassment and what to do in the event that it’s experienced or witnessed. Employees should be made aware of the repercussions of any intolerable action, and guaranteed that these policies will be followed.

The nuts and bolts of training are pretty simple, but keep in mind there really are three elements instead of one that you must coonsider:

1. New-employee orientation training.
2. Existing employee training.
3. Ongoing maintenance training.

To get the legal benefits of having a sexual-harassment policy and training surrounding it, you must really show good-faith efforts at educating your employees. One good method for this is to test them after the training to show that they have actually learned the material. Be careful, though–if they fail to pass these post-training tests, then you have just proven your own training to be ineffective and therefore fairly useless as a defense in court. Remember, having a policy isn’t enough–you have to live it.

This is arguably the most important part: What do you do if somebody makes a complaint? And the answer is investigate and act! Final answer!

It doesn’t matter how ridiculous the charge or how valued the accused is as an employee–get someone to investigate who can be seen as an impartial expert. This is often an experienced human-resources (HR) professional who is equipped with the necessary skills and talents to complete this task impartially. In some cases companies hire outside investigators to maintain the appearance of objectivity.

The procedure the investigation will follow should be outlined in your company’s published harassment policy. Follow it, and follow it diligently! If you take one thing away from this article, it should be this: A harassment policy alone is not enough. One court case finding explicitly stated that by failing to investigate, the company actually condoned the harassment. Make sure that employees who file charges experience no retaliation as a result of their claims. The courts really don’t like it much when that happens!

Finally, act upon investigations. This goes back to your published policy–act in accordance with the punishments that are outlined in your plan, regardless of who the offender is. Most often newer or more junior employees charge senior, more vested employees with sexual-harassment claims, and companies fear the loss or punishment of these employees. They’ve been there for so long, they are valued, and they deliver time and time again. It’s hard, but this is where bad decisions or failure to make any decision at all is going to cost you, and cost you big.

Every year sexual harassment continues to be redefined. Old ideas are challenged and new ones are tested, keeping labor attorneys and consultants in business. One thing is for sure, though–it’s not going away. If it hasn’t touched you or your company yet, you’re lucky and may not want to test that luck much further.

Dale Harris is vice president, client services consultant, at Right Management Consultants, a global human-resources consulting firm in San Diego. He can be reached at: (858) 320-7788.

* Mathis, Robert L. & Jackson, John H., Human Resource Management 8th Edition, 1997, West Publishing Co., St. Paul Minnesota. Much of the information in this story is covered in Human Resource Management.