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The real cost of sexual harassment in 2019

When the victim of sexual harassment on the job files a lawsuit against his or her employer, the most that victim can claim in damages is $300,000.

Does that sound like a lot? It’s not. That figure was considered fair back in 1991 — and hasn’t budged in the decades since. At the time, the figure was meant to do two things. First, it was to compensate the victim for a damaged career, reputation, emotional state and other direct consequences of the harassment. Second, it was meant to pinch the pockets of the companies that allowed sexual harassment to flourish. If it’s expensive to settle a sexual harassment suit, the logic goes, companies will do more to prevent it from happening in the first place.

Well, in today’s dollars, $300,000 isn’t nearly enough to fully compensate most victims. It certainly isn’t enough to make larger companies flinch — which means that it isn’t much of a deterrent anymore. So, a professor at Vanderbilt University decided it was time to recalculate the figure and determine what the true cap should be on a sexual harassment case today.

The figure she ended up calculating came out to $7.6 million — which is her estimation of the statistical cost of sexual harassment in today’s dollars. Not only would this figure better compensate the victims of sexual harassment for the disruptions to their careers and lives, but it would also serve as an effective financial motivator for companies to clean up their acts and get rid of the harassers.

It’s probably unlikely that the federal cap on a sexual harassment claim will be raised that high any time soon — but that doesn’t mean that victims can’t still make an impact. The more victims who come forward and hold their harassers accountable, the greater the financial and reputational costs to the companies involved.

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