Fear of Lawsuits Spurs the Birth of New Industry

In his closing argument in a recent sexual harassment case, Santa Monica lawyer Steven J. Rottman accused the employer of neglecting something crucial: providing bona fide anti-harassment training for the entire staff.

That courtroom gambit apparently worked wonders. The Orange County jury that heard the case awarded $2.4 million to Rottman’s clients, two former waitresses at a Costa Mesa restaurant who said they endured unwanted grabbing, kissing and verbal abuse by busboys and kitchen workers.

The notion that employers should invest time and money in preventing sexual harassment has gained such wide acceptance that when juries conclude they haven’t, “it’s a red flag,” Rottman said.

In fact, the effort to rid the workplace of sexual harassment--driven by employers’ fears of costly lawsuits rather than by a hidden social agenda--has blossomed into a big business. And the field received an enormous boost Friday, when the U.S. Supreme Court issued a pair of major rulings involving harassment suits against employers.

The high court said employers can defend themselves in certain circumstances by exercising “reasonable care to prevent and correct promptly any sexually harassing behavior.” That instruction “will be a rocket booster for the anti-harassment training industry,” said Frank Cronin, an Irvine lawyer who advises companies on employment issues.

Already, training specialists, lawyers, investigators and human resources professionals boasting expertise in the field roam the halls of major companies and government agencies. Some employers even buy special software to block e-mail messages or jokes that may be sexually offensive.

The young industry of professionals employed to combat sexual harassment and other employment law problems took off after the Anita Faye Hill-Clarence Thomas showdown in 1991. Its size isn’t known, but the annual revenue is believed to be in the billions. The field has kept growing despite concerns that some supposed sexual harassment experts are amateurs who do little good in the workplace and, occasionally, even wind up damaging morale.

Meanwhile, the industry also may have produced its first big-name star: former Labor Secretary Lynn Martin.

She headed a task force that reviewed the management practices of Mitsubishi Motor Manufacturing of America after the auto maker was hit with a massive sexual harassment lawsuit by the federal government in 1996. The fee for her group’s work was about $2 million, but that’s only the beginning of what the company is paying: This month, Mitsubishi agreed to a record $34-million settlement.

Law firms are prospering handsomely too.

Not only are they busy with the traditional jobs of representing workers seeking damages or defending employers against allegations, they also are in hot demand as trainers. They are holding seminars to educate executives on pertinent court rulings as well as proper corporate policies and procedures.

In addition, attorneys are teaching corporate managers how to investigate internal complaints--when, that is, the law firms themselves aren’t retained to conduct these investigations, a booming area of the legal business.

Compared to traditional legal work, training “is more profitable in the long run,” said Garry G. Mathiason, a senior partner at San Francisco-based Littler Mendelson, a big management-law firm specializing in employment issues. Among other reasons, once a basic training course is written, it can be repeated for one client after another.

Littler Mendelson projects that U.S. employers will spend $10 billion annually on employment-law-related training by 2000, up from $5 billion in 1995, with sexual harassment prevention one of the main topics.

Seeking to profit further from the trend, Littler Mendelson took an unconventional step for a law firm last year by launching a sister business, Employment Law Training Inc. It markets training sessions, software and even a $99 board game called “Winning Through Prevention,” intended to teach companies how to stop harassment, thwart workplace violence and protect employee privacy, among other things.

Consultants with backgrounds in such areas as training, human resources and psychology have flooded into the business, too. Along with providing general awareness training, some counsel individuals accused of harassment and try to rebuild morale at the affected workplaces.

Monica Ballard, a harassment-prevention specialist, launched her Santa Monica consulting and training firm, Parallax Education, five years ago from her home. She said she expects revenue to exceed $1 million this year for the first time and that her staff has grown to include eight trainers. Much of the company’s revenue also comes from instructional videos.

“The market is growing and growing,” she said.

Aside from providing public relations benefits and some legal protection, it’s debatable how much good is done by some anti-harassment training.

In a 1994 study of more than 8,000 federal employees, 44% of the women and 19% of the men reported that they had received some form of unwanted sexual attention during the previous two years. That occurred even though 87% of the supervisors and 77% of everyone else received training.

Many experts say workplace behavior has improved but that the proportion of people who perceive problems has held steady due to heightened sensitivities and the expanding definition of sexual harassment.

There also is scattered evidence of training that has proven ineffective or even backfired. Because no certification is required, anyone can become a sexual harassment consultant.

“Whenever there is a new scare in the world, whether it’s sexual harassment or HIV in the workplace, there’s always a bunch of people trying to capitalize on that market,” said Barry Lawrence, spokesman for the Society for Human Resource Management, a national trade group based in Alexandria, Va. “You’ve got to be careful, because there are illegitimate firms out there.”

One notorious example involves a Federal Aviation Administration harassment-prevention training session in 1992. Male employees had to run a gantlet and were groped by female co-workers. One of the men sued for damages and won a small sum.

Partly as a result of such incidents, trainers in recent years have focused more on raising awareness of actions that can be construed as sexual harassment rather than on trying to change the underlying attitudes of employees.

The issue of training played an important role in a harassment case involving the Costa Mesa restaurant, Birraporetti’s.

Rottman, the lawyer for the two waitresses who filed suit, maintains that managers received anti-harassment training that was nothing more than window dressing. What’s more, he claims that hourly employees received no training at all.

If Birraporetti’s had put managers, busboys and kitchen help through serious training and followed through with proper enforcement procedures, Rottman said, “they would have known how to identify these problems. They would have known how to respond to them, and the employees who engaged in the conduct would have known it was not tolerated.”

Birraporetti’s, which is appealing the April jury verdict, counters that all employees were properly trained. Moreover, it says the alleged sexual harassment never took place.

A key point in the Birraporetti’s suit is that the two waitresses claim they had to quit their jobs because of the sexual harassment they endured. In cases where workers are forced out, fired or demoted because of their sex, no amount of harassment-prevention training will spare employers from liability, even under Friday’s Supreme Court rulings. At the same time, lawyers say, harassment-prevention programs often limit the damages.

Some firms now opt for a high-tech solution to fighting harassment. A Fairfax, Va., firm, SRA International, sells a program called Assentor that monitors e-mail.

It is specially designed for the securities industry, where sexual harassment and other employment-discrimination suits--including litigation in which offensive e-mail was submitted as evidence--have been a problem.

The software, which costs up to $125 per computer user, intercepts e-mail with sexual or racial references as well as potential securities law violations. For instance, it would seize any message using the term “inside information” and forward it to a manager for review.

But Jim McCollister, a senior vice president with Ragen MacKenzie Inc. in Seattle, said his company decided to buy the software after a female manager received, via internal e-mail, a sex joke with an anatomical reference.

Even though she shrugged off the matter, McCollister said the company concluded that “if we’re going to have e-mail here, we need to have something in place to make sure nonsense doesn’t go on.”

These days, he said, the software rarely detects sexually offensive messages. For McCollister, it’s an example of a success story in the effort by employers to prevent conduct that could be construed as sexual harassment.

“A pattern has already been established because Assentor is there. You don’t use bad language,” he said. “It’s just in bad taste.”

Times staff writer Davan Maharaj contributed to this story.

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Harassment Charges

Sexual harassment charges filed with the U.S. Equal Employment Opportunity Commission more than doubled from 1991 to 1997. The figures are based on the federal fiscal year, which ends Sept. 30.

In thousands

‘97: 15,889

Source: EEOC