Harassment: A Concern For Dot-Coms
Halter tops, hot pants, long hours, close quarters, a casual environment and a young work force make the dot-com workplace a hotbed for potential sexual harassment lawsuits.
Problems with failed romances among managers and employees, explicit Web sites and off-colour jokes are causing a number of managers at Internet companies to rethink their corporate culture and institute policies and procedures for preventing hostile workplace environments.
Legal experts predict sexual harassment lawsuits will escalate as stock prices drop, companies teeter on bankruptcy and workers become disenchanted with crass co-workers.
"Internet start-up companies by their nature are major targets for sexual harassment litigation," said Shawna M. Swanson, senior associate specialising in employment law at law firm Fenwick & West in Palo Alto.
The dot-com companies have a young work force with a casual environment, which sometimes includes in-office happy hours. Also, sometimes the entrepreneurs who start the companies have an anti-corporate outlook that keeps them from instituting policies and training programs to prevent problems.
"They try to make it a very fun place to work, and that can lead to problems," Swanson said. "Without policies in the workplace, that means anything goes. Employees tell dirty jokes or check out pornographic sites on the Internet."
Long hours at work also mean employees turn to each other for a social life and dating. And managers sometimes forget they need to treat everyone with respect, both in and out of the office, Swanson said.
A few high-profile sexual harassment lawsuits have already been filed against Internet companies.
In January, a former employee sued Pseudo Programs, an Internet TV network in New York, claiming male employees at Pseudo often called female employees "bimbos'' and forced them to look at sexually explicit material on the Internet.
Pseudo called the accusations "completely without merit."
Another New York Internet company, Juno Online Services, was slapped with lawsuits by two former female employees last fall. The women alleged they had been told they would lose their jobs if they broke off their relationships with the senior executives they were dating.
Juno's spokeswoman said the company denies the accusations. Both cases have been referred to arbitration.
"I'm seeing a number of sex harassment claims by small start-up companies," said Brian Greig, a litigation and employment lawyer and partner at law firm Fulbright & Jaworski in Austin, Texas. "They usually coincide with some point in the company's financial life, either another round of funding or an initial public offering. Most of them are settled. When there is a lot of money at stake, the companies don't want the attention a lawsuit might bring."
About 90 percent of sexual harassment complaints are settled before they get to the lawsuit stage, according to legal experts. A lot of start-up companies do not have policies to help prevent harassing behavior, making them ripe targets for lawsuits.
Many of the start-ups do not even have human resources managers to handle employee complaints, and many of the laws don't apply to companies until they have 15 employees.
As a company grows, managers sometimes get too wrapped up in raising capital and expanding their business, so they forget about hiring someone to take care of employee concerns, said P.J. Bouchard, a human resources consultant in Phoenix.
"If you have a really young founder, they sort of just go down a path of destruction," said Bouchard, who is co-author of Getting Your Shift Together: Making Sense of the Organisational Culture and Change. "They go from one extreme to the other," she said. "They equate structure in the workplace with rigidity."
Then they begin to learn that if they don't have some layers of structure, they have complete chaos, Bouchard said.
That's why many Internet companies are beginning to use employee handbooks, hire or outsource human resources, and send managers to training classes to comply with federal laws.
TouchScape, an online customer service and marketing company in Phoenix, hired an executive coach and consultants to provide structure for its 40 employees, said Brian Hoover, the company's president and chief executive.
"It's just good business to establish the appropriate culture," Hoover said.
Those who do not take employee issues seriously are simply looking for trouble, said Heather Gatley, a labor and employment attorney at law firm Steel, Hector and Davis in Miami.
As long as the economy is robust, the sexual harassment lawsuits will just trickle in, Gatley said.
"Some employees leave a company if things get too bad and they've got six other job offers waiting," she said. But if the economy heads south, disgruntled employees with fewer opportunities will head to the nearest law firm. "It's only a matter of time before we see more complaints from these companies," Gatley said.
