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How can advisory firms prevent sexual harassment in the workplace and mitigate the impact if it occurs? It's a hot issue during these times of #MeToo and Time's Up.
Even before The New York Times broke the story about Harvey Weinstein's sexual harassment history in early October, the XY Planning Network, a group of fee-only advisors working with Gen X and Gen Y clients, began its annual conference in September with the introduction of a new code of conduct that prohibits discrimination and sexual harassment. Its conference app even included a function to report any inappropriate conduct.
There are many reasons financial advisory firms should take steps to avoid incidents of sexual harassment, key among them the need to attract more female advisors to an industry dominated by men. Women control more than half the wealth in this country, tend to outlive men and more often than not often switch advisors once they are widowed.
Companies should take action to prevent sexual harassment in the workplace because it's the right thing to do and for business reasons as well, says David Gabor, a partner at the Wagner Law Group, which specializes in employment and business law and issues arising from the employer-employee relationship.
Charges of sexual harassment not only can damage company morale and a firm's reputation, making it more difficult to attract talent, but can also result in the release of confidential corporate information, bad publicity and millions of dollars in fines. Once a harassment complaint is filed with the federal Equal Employment Opportunity Commission (EEOC) or the equivalent state offices, for example, they cannot be settled with confidentiality provisions even if there is no trial, says Gabor.
The federal EEOC reports that it recovered $164.5 million for workers alleging sexual harassment in 2015, and those costs don't include "decreased productivity, increased turnover and reputational harm." They also exclude legal fees.
In addition, under the newly enacted tax law, employers who settle sexual harassment claims can no longer deduct that payment or attorney's fees related to the settlement if the settlement is subject to a nondisclosure agreement.
Gabor, who recently led a webinar on sexual harassment, has developed a top 10 list for how companies can protect themselves and their employees from incidents of sexual harassment and potential fallout, much of it centered on training and hiring.
1. Training must be relatable to the audience with a clear set of expectations for employees, and preferably live and interactive.
"We have to get people talking," says Gabor. "Canned, web-based training minimizes the message." They also appear as if the employer is more interested in limiting its liability rather than creating a safer and proper workplace and shift the burden of addressing sexual harassment from the employer to the employee, says Gabor.
