A Small Business Owner's Guide To Handling Workplace Discrimination and Harassment Claims

This guide provides a step-by-step process for small business owners to handle claims correctly, protect their business, and ensure a fair process for everyone involved. If you’re currently dealing with a discrimination or harassment claim, consult with a local employment law attorney to learn more about your options. The federal Equal Employment Opportunity Commission (EEOC), the government agency that enforces anti-discrimination laws, also provides online resources for small business owners.

How To Recognize Harassment and Discrimination

Harassment and discrimination often come up in the same conversations, but they’re not the same thing. Business owners must understand the difference between these two related but distinct types of illegal conduct.

Employment discrimination occurs when an employer makes an adverse employment decision (such as in hiring, firing, pay, or promotions) based on an employee’s protected characteristic. These characteristics include:

• Race/ethnicity
• Gender or sexual orientation
• Religion
• National origin
• Disability
• Age (40 and over)

Harassment is unwelcome conduct based on a protected characteristic that is so severe or pervasive it creates a hostile work environment. Harassing behavior can include, but is not limited to:

• Teasing, taunting, or improper joking
• Offensive graffiti, pictures, or cartoons
• Racial or ethnic slurs
• Unwanted physical contact
• Sexual harassment, such as demands for sexual favors, including quid pro quo propositions (e.g., demanding sex for a promotion)

Employers must take any claims of harassment and/or discrimination seriously.

Having a clear, written complaint process in your employee handbook is your first line of defense. Beyond setting clear expectations and protecting employee morale, a proper investigation process can also provide a strong legal defense if a claim escalates to a lawsuit. An employer’s prompt and effective response is a key factor courts consider.

How To Respond to a Complaint: A Step-By-Step Guide

Employees must be able to report harassment and discrimination without fear of retaliation. Federal and state laws protect workers who file good-faith complaints. When you receive a complaint, follow these steps:

Step 1: Take Every Complaint Seriously

Treat every report with the seriousness it deserves, whether it’s a formal written complaint or an informal comment. Don’t dismiss or ignore any harassment complaints. Make it clear to the employee that you appreciate them bringing the matter to your attention and that you will conduct a thorough investigation.

Step 2: Implement Interim Measures

As soon as you receive a complaint, take immediate steps to separate the involved parties and ensure no further potential harm can occur while the investigation is pending. These measures must be non-punitive. For example:

• A temporary schedule change
• A temporary transfer to another department
• Placing an employee on paid administrative leave

This step protects the complainant and the integrity of your investigation.

Step 3: Begin the Investigation Promptly

A timely investigation is critical. Designate a neutral, impartial investigator, such as someone from Human Resources or an outside party. The investigation should include:

• Interviewing the complainant: Get the facts about what happened, when and where it occurred, who was involved, and if there were any witnesses. This shouldn’t be conducted like an interrogation. Make sure the victim feels as safe and comfortable as possible.
• Interviewing the accused: Inform the accused person of the allegations without revealing confidential information. Give them a full opportunity to respond to the specifics of the claim.
• Interviewing witnesses: Speak with anyone who may have seen or heard the alleged conduct. Ask open-ended questions to gather facts, not opinions.

Do your best to ensure the investigation is conducted fairly and evenly.

Step 4: Review Evidence and Make a Determination

After conducting interviews, review all the gathered evidence. This should include notes, emails, text messages, security footage, and other relevant documents. Based on the available evidence, determine what you believe most likely occurred.

Step 5: Take Appropriate Corrective Action

Your response will depend on the outcome of your investigation.

• If the complaint appears to be valid: Your disciplinary action must be prompt and proportional to the severity of the offense. For minor, first-time issues, this might mean mandatory training or a formal warning. For severe or repeated behavior, it could mean suspension or termination of employment.
• If the complaint is not substantiated (inconclusive): It may not be possible to definitively prove or disprove the allegation. If this is the case, document your findings, reissue your anti-harassment policy to the involved parties, and consider broader workplace training.
• If the complaint appears to be groundless or malicious: In rare cases where an investigation reveals a complaint was knowingly fabricated, you may take disciplinary action against the person who filed the false report. Proceed with caution and only with clear evidence.

If you don’t have in-house counsel, meeting with an employment law attorney to confirm your decision and subsequent actions are legal is an excellent idea.

Step 6: Document Everything

Thorough documentation is your best defense. Keep detailed records of every step in the process: the initial complaint; your investigation plan; interview notes; evidence collected; your final determination; and the actions you took. Keep these records in a confidential, secure investigation file.

Step 7: Follow Up and Prevent Retaliation

After the investigation is complete, inform the complainant that you have concluded the investigation and taken appropriate action. You are not required to share the specific disciplinary details.

Protect the complainant and all witnesses from retaliatory acts. Monitor the work environment to ensure that no one is being punished or ostracized for participating in the investigation.

Get Legal Help To Handle a Harassment or Discrimination Claim

Harassment and discrimination complaints can upend your business. If you’re unsure how to manage a complaint, discuss your situation with an employment law attorney. They can provide personalized legal advice on how best to proceed and help ensure your investigation is compliant with the law.