The ROI from Employee Training


To train or not to train. Because most companies are driven by return on investment (ROI), training employees on proper workplace behavior is often not a priority, since it means dedicating financial resources to the training and having employees spend work hours in training and not producing a product or service. Many companies, however, have learned the need for and value of such training the hard way.

In Massachusetts, during the last two years, in virtually every case before the Massachusetts Commission Against Discrimination (MCAD) in which the employer was found to have engaged in unlawful harassment or discrimination, the remedy included back pay and emotional distress damages (usually starting at $10,000), with interest at a rate of 12% per annum from the date the complaint was filed until the damages were paid, and an attorneys' fees award. Most remedies also included some form of training, often annual training of at least three hours in length for non-supervisory employees and at least six hours in length for supervisory employees, that must be repeated annually for a period of five years.

At the federal level, since the twin cases of Burlington Industries v. Ellerth, 524 U.S. 742 (1998) and Faragher v. City of Boca Raton, 524 U.S. 775 (1998), federal courts have looked to the employers' efforts in preventing and addressing harassment and discrimination complaints in determining (i) whether or not the employer is liable for the acts of its supervisory employees; and (ii) whether or not the damage awards should be decreased, even where employers were found liable for their supervisor's acts. Although many states have not adopted this defense, a few states have advanced the law at the state level, at least in theory, to permit employers to assert an Ellerth / Faragher-type affirmative defense.

Even the MCAD, which has a reputation for being biased in favor of employees, has not ignored the elements of the affirmative defense in assessing liability and/or damages to an employer for its supervisory employee's conduct. In fact, Massachusetts General Laws, chapter 151B, encourages employers to conduct education and training programs on sexual harassment and discrimination prevention. Further, the MCAD's Sexual Harassment in the Workplace Guidelines emphasizes that "an employer's commitment to providing anti-harassment training to its workforce may be a factor in determining liability or the appropriate remedy [MCAD, "Sexual Harassment In The Workplace Guidelines," Section VB, issued October 2, 2002]." The footnote accompanying this statement specifically states that "[i]n court cases where punitive damages may be sought, evidence of training may also mitigate damages [Id., at n. 85.]."

In Connecticut, training is required for employers with 50 or more employees. It must last for two or more hours for supervisory employees, must be conducted in a "classroom-like" setting that permits participants to interact with the presenters by asking questions and receiving answers, and must be provided for new supervisors within the first six months of their employment. [Regulations of Connecticut State Agencies, Section 46a-54-204.]

In some cases, the employer's failure to train its employees can be deemed to be a "reckless indifference" of the law that warrants an award of punitive damages. However, where proper training is conducted, employers may escape liability for its employee's harassing conduct, or, at the very least, escape a punitive damage award even if it is found to be liable.

In addition to the potential savings in damage awards and prevention of claims being brought, there are other advantages to companies in voluntarily providing training to create a workplace environment free of discrimination and harassment. These advantages include the following: employer productivity is likely to increase; supervisors are likely to spend less time embroiled in harassment and discrimination complaints; and the employer is likely to be susceptible to fewer lawsuits - resulting in a significant return on investment that is often overlooked by employers. Although an employer cannot control whether or not the employee who was allegedly subject to the sexually harassing behavior takes advantage of the preventive or corrective opportunities that the employer provides, the employer certainly controls the "reasonable care" that it takes to prevent and correct promptly any discriminatory behavior of its supervisory employees. At a minimum, every employer should (1) have a written policy that follows their respective state's model anti-harassment and anti-discrimination policy; (2) distribute it annually to all of its employees; (3) periodically train all employees on its policies and preventing and correcting harassing and/or discriminatory conduct in the workplace; and (4) periodically train its supervisory employees on preventing, identifying, reporting, investigating and correcting harassing and/or discrimination conduct in the workplace.