Sandra Marsh couldn't quite decide whether to sign up her two small health care companies for the Harassment Hot-line offered by a consultant.
Then the Supreme Court made up her mind.In a landmark pair of decisions Friday, the high court opened companies to more sexual harassment suits by ruling that employers can be sued for harassment they didn't even know about.
"After looking at the Supreme Court rulings, I got there very quickly," said Marsh, chief executive of the Culver City, Calif., companies Pain Net and All Care. "Although we think we're proactive in many areas, just when we think we've met the measure, we find out we haven't."
Other business leaders are also taking a closer look at their defenses. They are rewriting company manuals and policy statements and asking outside lawyers to brief the board of directors or review harassment rules.
"I'm getting calls in large numbers saying, `Let's review. Let's tighten it up,' " said Laurel Bellows, an employment lawyer and past chairwoman of the American Bar Association's Commission on Women. "For the most part, the concern is, `What is the extent of my liability?' "
While past court rulings focused on the liability of the harasser, Friday's decisions said companies can be held responsible for harassment even if top executives didn't know about it. Even when no injury such as a demotion occurs, employers can be held responsible.
Companies are protected if they exercise "reasonable care" to prevent and correct harassment, or if the employee "unreasonably" failed to make use of the company's anti-harassment procedures, the justices said.
"It makes it abundantly clear that employers can't rely on ignorance as a defense," said Jonathan Turley, professor of law at George Washington University.
Yet, companies can't simply slap down a policy and settle back, Turley said. "They will need to show that their procedures are more than paper tigers and that they represent serious efforts to detect and correct harassment."
IBM said it gives new managers harassment training and all managers periodic diversity training, and it tries to make its "zero-tolerance" policy clear to all employees. As a result, the company said, it isn't jumping to make changes in response to the rulings.
But other companies are worried.
Marsh signed up Monday for the Harassment Hotline run by human resource consultants T.R. Anton Inc. The service, which costs $695 a year and up, investigates employee complaints and reports back to employers.
Marsh, whose 300 employees are spread across 12 states, is also planning to set up annual harassment training for new managers. Currently, new employees simply sign an anti-harassment policy.
"Zero-tolerance isn't enough, not in looking at what the court has come to," she said.
Texas Instruments has brought in its sexual harassment consultant to comb all company materials and update them to reflect the rulings. The Dallas-based company will emphasize the existence of its complaint procedure, said diversity manager Tegwin Pulley.
ICN Pharmaceuticals Inc. has a different reason to be ultra-cautious: The Costa Mesa, Calif., company and its chairman and chief executive, Milan Panic, are being sued for sexual harassment. In the suit coming to trial July 13, former human resources director Mary Martinelli charges that executives knew that Panic was harassing her but failed to act. The company denies the allegations against it.
Last month, ICN completed its annual review of its sexual harassment policies, but Friday's rulings will prompt an immediate reassessment, said ICN general counsel David Watt.