We’re seeing more teenagers than ever reporting sexual harassment cases. In New York State, a telemarketing company had to pay more than $500,000 in damages and interest to satisfy a claim brought by 13 women, most of whom were teenagers. The managers made numerous sexual jokes and remarks and, on occasion, promised a raise in return for sexual acts.
Because the company was an “affiliate franchise,” the franchisor argued that the affiliate was not part of the company. The Second U.S. Court of Appeals rejected this argument and affirmed the jury verdict, including an award of punitive damages.
Lesson to learn: Have managers and employees trained in sexual harassment issues and make sure they know where and how to complain. You might go one step further and distribute the Employee Compliance Survey.
What’s more, franchisors that traditionally have stayed away from employee relations to avoid “co-employment” liability will have to offer their franchisees HR training. This is both a legal and a competitive issue.
