This month the spotlight is on Stan, the Vice President of Sales. This post involves a workplace investigation involving sexual harassment allegations, but Stan is neither the accuser nor the accused. Rather, both of those individuals work for Stan.

The Situation

Marilyn and Jim are both sales representatives in Stan’s department. They have fairly regular contact with each other, and Marilyn has complained to HR for the second time about Jim’s highly off-color comments, unabashed internet surfing of sexually explicit material, and very inappropriate comments about Marilyn appearance.

Jim does not deny some of the comments, though generally his version of events involves less offensive statements than Marilyn’s. But third parties have witnessed some of the communications and there is no question that Jim is way over the line.

After the first complaint, Jim received a written warning and a series of counseling sessions with a coach to give him some training on appropriate workplace behavior. And Jim did well for a few months after that. But just six months after the first complaint, Jim was at it again, Marilyn was back to HR, an investigation was conducted, and again there was little doubt about Jim’s conduct. He is a repeat offender, and one has to wonder if he is incorrigible.

Manager’s Dilemma

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It will be no surprise to readers of this blog that HR and legal counsel have determined that more serious action needs to be taken against Jim. Termination is recommended, though a significant unpaid suspension might be acceptable to the HR/legal team.

When Stan is confronted with this recommendation, however, he is adamantly opposed to any such action. Of 17 sales reps in the department, Jim is the second most productive. The pressure is on to have a great year and Stan cannot afford to have Jim on the sidelines, not for a significant suspension, and certainly not terminated. Stan is taking this to the CEO.

Of course, this is a common scenario – a manager who is reluctant (at best) to lose an otherwise productive employee because of a harassment complaint or other disciplinary issue. It is a classic conflict in many organizations.

High Risk of Liability

The liability prevention answer to this predicament is not particularly difficult given the fairly extreme version presented here. If the company lets Stan’s opinion carry the day, Jim will likely continue his conduct, and Marilyn – or some other employee offended by Jim already or in the future – would seem to have a lucrative potential claim on her hands. The company has failed to adequately address a known serial harasser. Not to take strong action against Jim is high risk behavior from a liability prevention standpoint.

And there are CEOs (though I think a shrinking small minority) who would acknowledge that risk, yet yield to Stan’s argument on the basis that the cost of terminating Jim from a production standpoint is greater than the cost of the risk of continuing to employ Jim. Given the cost of a harassment verdict with these kinds of facts, that balancing decision is probably factually incorrect these days (again, noting I have set out fairly extreme facts), but it is a decision that will sometimes be made.

Individual Liability

Are there any strategies that can be employed with Jim and/or Stan and/or the CEO by the investigator to reduce the likelihood of such a standoff? One, to the extent there may be individual liability for any or all of them under the applicable state law, that is usually compelling information to a manager. To the extent Jim may have personal liability (less likely given his co-worker status unless his behavior is so egregious as to raise possible tort claims against him), that should be made clear to him in the investigation process under any circumstances.

Stan and the CEO as managerial employees are more likely to have individual liability under various states’ laws. There may be court decisions in your state underscoring that risk. Make sure your counsel makes all affected parties aware of any such exposure, not only in the investigation stage but also when conducting managerial training.

Concessions to Reduce Risk

Two, while it seems clear that Jim is a walking liability who may never get the wake-up call, and if he does it will only be if he gets hit hard in his wallet, if Jim is not to be terminated, perhaps some adjustments to the workplace can reduce the ongoing risk of Jim’s behavior. Perhaps his office can be relocated to a place where he can be more closely observed and monitored. If he is on the road a lot, does he need to be in the office at all?

Certainly Marilyn should be assured of no contact with Jim, but in a way that cannot be perceived by her as limiting her opportunities. For example, relocating Marilyn to another location in the office may be perceived – not only by her but by judges and juries – as a retaliatory adverse action against her. In limited circumstances Marilyn might agree to such a relocation, but that is something that needs to be handled very delicately because of the retaliation risk.

As noted, the fairly extreme facts presented here – no question as to the harassment and an openly opposed supervisor – are unusual, but the general tension between managing harassment or other kinds of liability related to compliance failures on the one hand, and keeping otherwise productive employees, is very common. And it is legitimate for a company to be balancing those two considerations. The most successful companies seem to be those that have a culture of being utterly mission-driven, and intolerant of things that distract from that mission and will likely have little ambivalence about taking against Jim the action warranted by the facts uncovered in the investigation.