What Employers Should Cover in Their Sexual Harassment Policies

Providing employees with a carefully drafted sexual harassment policy communicates respect and helps everyone stay focused while doing their best work. To make sure you include the most critical legal passages, it’s always best to meet with your lawyer — who can also help you address any special needs of your workforce.

Here’s a brief overview of the most crucial components of this type of policy. As you read over the list, jot down any questions that come to mind since they may help you have a more productive meeting with your Houston employment law attorney.

Key information that should be included in most sexual harassment policies

  • A general statement about why you’ve created the policy. It’s important to note that your company recognizes that every employee has the right to work in a safe environment. No employee should ever be coerced into developing a sexual relationship in order to keep a job. Likewise, sexually suggestive or offensive behavior should never be inflicted on anyone;
  • A detailed definition of sexual harassment – preferably one that also provides specific examples of the different types of verbal and non-verbal behaviors that are covered. Clearly indicate that sexual harassment always involves unwelcome behavior that tends to offend, intimidate or upset others. It can even include something as simple as posting sexually suggestive cartoons and other materials in the workplace. Also note that your company will not tolerate any sexually harassing behavior between parties of the same sex;
  • A statement that your policy also provides protection against third-party harassment. Your company’s customers, clients, contractors and others will never be allowed to sexually harass your employees;
  • There must be a detailed description of your complaint procedures. Employees must be told that you’ll respond to all complaints in a private, confidential manner – and will conduct all necessary investigations in as professional manner as possible. It’s also important to note that you’ll try to have at least two senior staff members trained (and available) to handle these complaints – one woman and one man. Workers should be extended the courtesy of being able report their complaints to someone of their own gender.

Offer your employees both an informal way of processing complaints – and a more formal approach. After all, some employees aren’t interested in filing a legal claim against the alleged abuser – they’re mainly interested in stopping the abuse and returning to work (perhaps in a new department). However, you must provide clear information to each complaining party that s/he has the right to file a more formal complaint with the EEOC. Finally, you must also state that your company will not tolerate any type of retaliation against the alleged victim – regardless of the position held by the party who has been accused of the sexually inappropriate behavior;

  • Provide a commitment that your company will try to expedite the complaint process as much as possible, recognizing the needs of all involved. However, you should also explain the different types of interviews that may need to be conducted so that all parties have the chance to be fully heard. Employees must also be told that if the complaint involves unusually aggressive behavior – or if multiple complaints have been recently received regarding the same alleged offender, it may be necessary to turn over part or all of the investigation to an outside, objective party hired for that specific purpose;
  • Name some of the specific disciplinary steps that will be taken if the company’s investigation finds that harassment has occurred.
  1. The offending party will receive a written or verbal reprimand
  2. A negative performance evaluation will be placed in the wrongdoer’s personnel file
  3. There may be a reduction in wages
  4. A demotion or transfer may be imposed on the wrongdoer. In some instances, the victim may be allowed to obtain a transfer;
  5. The offending party may be forced to accept an immediate suspension — or just be fired. (Make sure all these possible forms of discipline are noted in your company’s employee handbook).

Be sure your company has a policy of requiring every new employee – regardless of rank – to undergo sexual harassment training as part of their initial company orientation. Furthermore, all employees should be required to take an annual refresher course on this topic. (You may want to include a statement about this training requirement in your sexual harassment policy).

When designing or choosing a sexual harassment training program for your employees, always make sure it includes a “question and answer” segment since employees often need to ask questions to be sure they fully understand the different behaviors that co-workers may consider offensive.

Our lawyers always welcome inquiries from both new and established clients seeking advice on employment law matters. We’re also fully prepared to draft the many contracts you may need to run your business as your clients obtain the many goods and services you currently offer. Feel free to contact us so we can schedule an appointment at your convenience.

Six Basic Types of Business Insurance You Might Need

Successful companies of all sizes readily address their insurance needs so they won’t later be caught off guard by either a baseless or valid legal claim. No matter how hard you try to provide flawless products and services to the public, there’s always a chance that a defective product or business transaction may render you liable for legal damages.

Although only certain types of companies must carry workers compensation, disability and unemployment insurance to meet federal guidelines, all businesses can benefit from protecting their company assets by purchasing basic and special types of business insurance.

Fortunately, there are only six basic types of business insurance that you and your business partners must carefully review while trying to protect your company against future legal challenges. All six are set forth below with additional information.

Six common types of business insurance

Before reviewing the following types of insurance, be sure to thoroughly discuss the precise nature of all your business transactions with your insurance agent.

  1. General liability insurance. This will provide you with legal defense support for a variety of alleged wrongs. For example, your company may be sued based on a personal injury claim or the alleged statements of one of your employees. For example, if one of your customers is seriously injured while visiting one of your offices or factories, this policy can help you compensate the injured party for all bodily injuries and medical expenses. In addition, this same type of policy could protect you if a court holds one of your employees liable for business libel or slander — for damages up to the maximum amount of coverage stated in your policy.
  2. Product liability insurance. Even some of the most reliable products on the market will occasionally malfunction and harm a consumer. For this reason, you must secure an ample amount of product liability insurance coverage for this type of claim.
  3. Professional liability insurance. If your company provides any types of services to customers, you must carry this type of policy – often referred to as “E and O” (errors and omissions) coverage. This policy will cover the costs of defending your company in a civil lawsuit that may be based on the alleged grounds of malpractice (often medical or legal). The insurance industry doesn’t view these types of claims as eligible for coverage under either general liability insurance or a homeowner’s insurance policy.
  4. Commercial property insurance. Industrial fires, floods, windy hail storms and other natural disasters can quickly destroy critical manufacturing plants, office buildings and valuable inventory. Always be sure to carry ample coverage under this type of policy — based on recent property value appraisals.
  5. Home-based business insurance. This type of policy is usually offered as a rider to a person’s homeowner’s insurance. It provides limited coverage for such problems as business equipment and inventory damages. This type of policy can also provide funds to cover liability claims brought by injured third parties.
  6. A business owner’s policy. This general type of coverage can let you bundle nearly all (or most) of your insurance needs into one policy. If you pursue this option alone – make sure it adequately protects you regarding all the most unique aspects of your company’s goods and services.

When discussing your insurance needs with your lawyer and insurance agent

Always talk about every reasonable type of harm that your business might suffer. Also, make sure you’ve chosen the best type of partnership or corporate structure to further protect your personal and business assets. Once you fully understand all the risks your company might face, find a highly respected business insurance broker. Always ask trusted business peers for their recommendations for this type of agent.

Finally, speak with your Houston business law attorney about all the specific types of insurance required by the state of Texas for a company like yours. And be sure to address all the federal government’s insurance requirements. Keep in touch with your insurance agent and lawyer throughout each year so they can each readily update you about new legal or policy requirements that may affect your current coverage during the upcoming year.

Please feel free to contact a Murray Lobb lawyer so we can talk with you about the legal aspects of obtaining adequate insurance coverage for all your business needs.

Shareholder Agreements Require Flexible Buy-Sell Provisions

There are many reasons why shareholders in closely-held corporations may need to quickly sell their shares to others. Therefore, its important when drafting a shareholder’s agreement to cover every basic aspect of buying and selling shares – in addition to the general administrative matters that must normally be addressed.

Depending on a corporation’s number of major shareholders and business pursuits, a flexible framework helps facilitate every goal. The following list sets forth some of the main terms that shareholder agreements should cover, separate and apart from the buy-sell provisions that will be discussed in greater detail below.

Common Administrative Topics Set Forth in Many Shareholder Agreements

  • Voting rights. Always describe each shareholder’s voting rights and when they can be properly exercised;
  • Qualifications for serving as corporate officers. Basic requirements must be stated so that only fully qualified individuals can serve as corporate officers at any level;
  • Noncompete provisions. All parties involved with a corporation must agree to avoid compromising its trade secrets or later leaving and then trying to compete for its clients for a limited time;
  • Preferred groups to consult with when internal disputes must be resolved. Include the names of specific mediation or dispute resolution services that can be contacted and how the corporation should decide when such outside help is required;
  • Inclusion of anti-dilution provisions to protect stock values;
  • A description of major shareholders’ “tag-along” rights;
  • Registration rights must be explained and how they apply to certain restricted stocks;
  • Stock valuation procedures must be described and closely followed.

Once these and other crucial topics have been covered, your and your Houston corporate law attorney should discuss the best buy-sell provisions suited to your corporate structure.

Basic Buy-Sell Provisions – Events That Often Trigger Their Use

Your shareholder’s agreement should always include a very detailed explanation of how shares should be sold when one of the following events takes place.

  • The death of a shareholder;
  • The termination of an employee shareholder – whether “for cause” or without cause;
  • The disability of a shareholder;
  • A shareholder’s retirement

When trying to draft the best buy-sell procedures to address these situations, it’s often wise to sit down and review your corporation’s main concerns and interests with your lawyer.

Should the Selling of Shares Be Mandatory — or Provide Parties with Greater Choice?

When trying to answer this question, you may want to provide different answers, depending on whether the sales are to the corporation itself, other shareholders – or to third parties.

  • Should your corporation be given the first right to purchase (or redeem) the stocks? If you and the controlling officers of your corporation wish to include this provision in your shareholder agreement, be sure to first consider the possible capital gains tax issues involved;
  • Do you want to automatically offer the available shares to other general shareholders if the corporation isn’t interested in redeeming the shares after a set deadline? If so, it’s important to indicate if majority shareholders will have the first opportunity to buy the shares;
  • Are you willing to allow outside third parties to buy the newly available shares? If so, you must decide in advance the types of criteria that such buyers must meet.

Other Key Issues Involved with Drafting Your Buy-Sell Provisions

  • Setting the proper price to be paid for the stocks. In general, if the available shares are to be purchased by the corporation or one of its current shareholders, you should have already created a clear formula in your shareholder’s agreement for determining the current, proper valuation of the stock. However, if the shares are to be sold to an outside third party, that outsider’s offer will normally be determined by the current market price for the type of shares involved;
  • How should the price be paid? Most corporations will benefit from establishing a basic buyout procedure within its shareholder agreement so that these common transactions can be handled according in a very clear, pre-determined manner. Since lump-sum payments are usually not preferred, you will need to decide if you prefer such options as:
  • A buyer-financed buyout
  • A seller-financed buyout, or
  • Some type of financing arrangement involving insurance or a trust

Since a corporation’s success is often determined by the terms and quality of its shareholder’s agreement, please feel free to contact our firm so we can provide you with our general legal advice or help you draft a new agreement. 

Electronic Notary Services Will Soon Be Available in Texas

HB 1217, passed during the 85th legislative session and effective January 1, 2018, provides amendments to the Texas Government Code and the Civil Practice and Remedies Code so that Texas can soon begin offering electronic notarization services. In general, online notaries will need to meet the same qualifications as all traditional notaries and must offer their services in accordance with all applicable laws.

Prior to these amendments becoming effective, the Texas Secretary of State’s Office must adopt rules that will govern how audio conferencing and two-way radio will be used to facilitate online notarizations. This same office is also finalizing the requirements for properly applying to become an online notary — or to expand one’s current services to include online access to them.

HB 1217 Amendments Provide Certain Online Notary Service Limitations

In general, online notaries will be allowed to provide online notarizations for paperwork that falls into the following categories;

  • Documents related to real estate here in Texas;
  • Instruments or agreements that secure a debt payable somewhere in Texas;
  • Agreements or documents pertaining to a transaction involving at least one party who is a Texas resident – or at least legally authorized to handle business in Texas;
  • A document that is being notarized so it can be filed in Texas public records;
  • An instrument containing an affirmation or acknowledgment issued by a person while that individual is here in Texas;
  • An instrument signed by a Texas resident, as documented by a current, valid Texas-issued government ID or credential that includes the person’s photograph and current address within this state.

At present, some individuals and businesses remain concerned about privacy and security issues involved with notarizing sensitive documents online. However, the fact remains that the federal government and other states have been successfully using advanced photo ID technologies online while handling important business transactions for many years.

We will keep you advised about when these online notary services have become fully viable. We can also share our professional advice with you about how and when to include these types of services in your daily workflow.