The High Cost of Harassment – Part 1
Brian Kilcoyne
This article was written by , and originally appeared in NECMA Now Emagazine.
It’s the Member-Guest weekend and everyone is enjoying cocktails and dinner after a long day of golf. “Jim Fairway,” a member at the club, has had too much to drink. Jim has always liked waitress, “Kelly” and frequently comments on her looks. Tonight he says, “I like what you are wearing tonight. Do you have any shorter skirts you can model for me after you get off work?” Kelly had enough of the unwelcome advances, dysfunctional environment and moral devastation. She demands that her supervisor take proper action.
I bet many, if not everyone reading this article has a real Jim Fairway at their club. You probably even know of clubs that have been sued because of sexual harassment.
Did you know that the dangers of harassment at a country club are extremely high, not only personally but financially? In fact, clubs have a quadruple threat because an employee, management, members or guests can harass an employee. In addition, the manager and all board members can be liable for not resolving the dispute properly. Furthermore, without the right insurance coverage in place, the board members’ personal assets and money could become a part of that lawsuit.
Millions of sexual harassment cases are filed every year, and many of these are settled out of court. However, several recent cases nationwide that were litigated were awarded six figure settlements and some criminal charges.
So, how can country clubs minimize the risk of potentially devastating allegations and legal action? One of the most effective actions is to purchase EPLI, or employment practices liability insurance.
EPLI provides protection against employee lawsuits, not just sexual harassment. Other coverages include:
- Discrimination
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
The cost of EPLI coverage depends on the number of employees you have and various risk factors such as whether your club has been sued over employment practices in the past. The policy will reimburse your club against the cost of defending lawsuits in court and for judgments and settlements. The policy covers legal costs whether your club wins or loses the suit.
Strong preventative policies should also be put in place to minimize risk, including,
- Having a written procedure that employees can access in the employee handbook.
- Reviewing policies with all new hires, and have them sign off on the training.
- Holding an annual meeting with all employees to review the procedures. These procedures may be different based on who the harasser is (supervisor, member, guest, or other employee).
- Training supervisors on what behaviors are not permissible and the importance of following procedures.
If an employee does bring a harassment case to management, make sure you document everything that had occurred, the steps your club is taking to prevent and resolve the employee dispute. If the dispute is not resolved and you are dragged into court, then the importance of documenting would be key to a more favorable outcome.
