How much should sexual harassment cost a company?

What’s a fair price, in your mind, for a company to pay when an employee has endured sexual harassment that’s put his or her career in jeopardy and caused serious emotional harm?

Right now, federal law says the maximum any sexual harassment case is worth — no matter how extensive the damage done — is $300,000. That’s the maximum possible under a Title VII claim.

Back in 1991, when that figure was established, $300,000 was considered a huge step forward. Prior to that time, someone who proved a case of sexual harassment at work could only expect to receive their lost pay. However, the financial cap on awards hasn’t been adjusted for inflation since then.

Well, a professor of economics and law at Vanderbilt University set out to determine what the cap really should be — in today’s economic climate. Ultimately, by applying methods of risk analysis and thinking of sexual harassment as a damage to one’s dignity, she determined that the real cap on damages should be $7.6 million.

Do you think that’s high? The victims who have had to endure unwanted sexual advances, sexual innuendo, unwanted touching or worse probably don’t. The consequences of sexual harassment in terms of psychological harm and losses to a victim’s career can actually last a lifetime — and that’s surely worth a lot more than just $300,000 to many victims.

The professor’s work, which was published in the Journal of Risk and Uncertainty, provides a solid foundation for her figures. It also offers a big idea: If victims were compensated more fairly for their psychological and professional damages due to sexual harassment, companies would have more incentive to make sure the behavior stopped. For many large organizations, $300,000 simply isn’t enough to provoke serious internal action.

By opening the debate about what sexual harassment should really cost a company, there’s a possibility that someone in power will start to rethink the way things are done now — and provoke some change for the better.

If you’ve been victimized by sexual harassment at work, you have legal rights. Don’t let your abusers get away with their actions. Find out more about your options today.