Recently, I gave a presentation on sexual harassment to a group of compliance professionals from some of the largest organizations in the Midwest. At one point, an audience member called me a Sexual McCarthyist because I said CEOs shouldn’t have relationships – even consensual ones – with anyone in the company. Given the news out of Chicago on Sunday, let’s go over why.
When a CEO engages in sexual harassment, the organization is vicariously liable for the conduct Citing U.S. Supreme Court case Faragher v. City of Boca Raton, 118 S. Ct. 2275, 2284 (1998), here’s what the EEOC’s Guidance says:
An employer is liable for unlawful harassment whenever the harasser is of a sufficiently high rank to fall “within that class . . . who may be treated as the organization’s proxy.”
The Guidance goes further and lists individuals who could be considered an organization’s proxy, including president, owner, partner, and corporate officer – like a CEO. Vicarious liability means the organization has no defense to a harassment claim and is automatically liable if the conduct was indeed harassment.
So, was the conduct harassment? Well, let me take all of your hopeless romantic hearts and crush them. Relationships fail at a remarkable rate. Think of all the people you have to date before you find “the one” and then “the one” has a better-than-fair chance of ending in divorce.
Now, imagine you’re a CEO. You have a significant amount of authority over everyone in your organization. You start flirting with an employee. The employee may feel that they don’t have the option to say no to a couple of dates. Things start to heat up, but something is not right. The employee feels they can’t break up for fear of losing their job or ending their career (like blacklisting, etc.). So, even though they may have liked the attention at the start, they can’t stop when it turns ugly. Now, the relationship is no longer consensual. This is harassment.
Or, what if the break-up is consensual but now the CEO has to rate the employee’s performance? The employee is afraid that the CEO will be vindictive or will treat them unfairly because of the break-up. This could be retaliation.
The best thing an organization can do is prohibit CEOs (and other C-suite individuals) from having relationships at work. Period. Institute a policy. Talk with the board and leadership. Explain you will enforce this. Then, if it happens, take action. This was what happened at McDonald’s. This is what happened at Intel.
As my grandfather said (to his 14-year-old granddaughter (see, I was made for this work)), “Don’t get your money where you get your honey,” and “Don’t dip your pen in the company ink.” If you’re a CEO out there, take these idioms to heart. Not following them could end your career.