We asked journalist Elizabeth MacBride to explore what sexual harassment means in the world of small business. The names and identifying details of the people she spoke with have been changed. Continue the story with Part 2 and Part 3.

“Is it legal to fire a pregnant employee because she is pregnant?” Simon asked.

The question caused David Miklas, a small business attorney in Port St. Lucie, Fla., to wince. His client, Simon, was about to make a giant mistake.

Pregnant employees can perplex small business owners. They may need to take time off work and many states require paid family leave for new parents. For small businesses with tight margins, all of this can seem impossible to handle.

Most federal anti-discrimination laws don’t apply to businesses with fewer than 15 employees. The thing is, employees at tiny companies are just as likely to experience discriminatory behavior—yet only half of small businesses have policies that address sexual harassment and discrimination head on

Simon’s company had only three employees, so the federal anti-discrimination laws didn’t apply. But Miklas cautioned him against terminating his employee. It would be unethical and discriminatory to let her go.

Simon decided to fire her anyway.  

The employee’s husband showed up at the store, recorded a video, and posted it to Facebook with the caption: “You fired my wife because she was pregnant.”

Overnight, the video amassed 5,000 views. The business dropped from five stars to one on Facebook.

3 real-life examples of sexual harassment—and what to do to prevent them.

The ‘Time’s Up’ and #MeToo movements are exposing once-overlooked conversations about sexual harassment and gender discrimination.

Small businesses that lack formal HR departments are continuing to face disturbing—and daunting—situations with their employees.

About 42 percent of women and 22 percent of men report that they have experienced gender discrimination at some point in their work lives, including unwanted sexual advances, getting paid or promoted less, or being fired.

The challenge for small businesses is staying proactive. Because business needs—like maintaining sales and keeping enough cash in the bank—end up taking precedence.

I talked to small business owners to understand how these scenarios play out in real life, and how one might go about proactively addressing them.

Situation #1: When someone touches other employees.

Samuel, a manager at a newly acquired company in Florida, had a reputation for touching and massaging employees’ arms and shoulders. The company, with a few dozen employees, was too small to have an HR department and didn’t have a policy that explained how employees should respond.

So the team, uncertain about the new management, called the police.

Police discovered what had been happening, but before charges were made, the new owner found out about the investigation. Understandably shaken and fearing a lawsuit, the owner called Miklas, his attorney. The owner then fired Samuel based on the evidence gathered by police.

“It could have been handled months earlier if there was a policy telling employees what to do,” Miklas says.

Harassment can take many shapes. Understanding the different situations that qualify as harassment and explicitly spelling them out in your HR policies can help your employees feel safer since they’ll have a clear way to report things.

Rule of thumb:

Situation #2: When women quit more frequently than men.

Justin, a lawyer in a small firm in Washington, D.C., had a reputation. He was known for putting his hands on women’s shoulders and hips and inviting them to share his hotel room and showers on business trips. That common knowledge never turned into an actual complaint.

The firm had a formal training program that covered sexual harassment in detail. People in the room knew the behavior described in the training was exactly what Justin was doing, but no one pointed a finger—at least, not in the form of an official complaint.

“Everyone would just turn around and look at the same person,” says Rashida, another attorney at the firm.

Rather than take it to the family who ran the firm, Rashida warned other women about Justin’s behavior. In one case, she told a friend who was thinking of joining the firm. Rashida and other women also took the HR lead, another woman, out to lunch for tips on how to handle the situation.

The HR lead revealed that she knew about the behavior but didn’t want to bring it up with the executive team because Justin was a top performer, Rashida says.

Eventually, Rashida left the firm.

No matter how many formal policies you have in place, it still may not be getting to the root of the problem. If you suspect that employee morale is off and that you’re losing valuable employees—well, look into it.

Cultures of fear are often hidden to busy small business leaders. So if there’s not a clear reason why someone is leaving your company, it’s your job to investigate.

Rule of thumb:

  • If you lose female employees as they move up the ranks, you may have a hidden culture of fear. Track turnover patterns and see if you notice any trends.

Situation #3: When you fire a pregnant employee.

An employee’s pregnancy can be a challenging moment for a small business, especially in industries that juggle customers and low profit margins, like restaurant and retail.

The questions that come up are real and emotionally charged:

  • Will your pregnant employee be more likely to call in sick?
  • How long will they need to be off after the baby arrives?
  • If they’re covered by a health plan, will the costs associated with the birth drive premiums up?
  • If you rely on that employee for sales, will you lose money because of them taking leave?

Experts say the most important thing is to have an employee handbook and a policy to cover your bases. But you also have to rely heavily on your judgment. It comes down to this: How would you treat anyone who was pregnant, regardless of whether they were your employee?

Most likely, you would be there for them through all the ups and downs. You would support them so they could focus on the most important part of their life—their pregnancy.

For example, let’s say your employee comes to you saying they need to cut out a demanding aspect of their role, like standing on their feet for long stretches. Take what they say to heart, and find a way to accommodate them.

Pregnancy can become a high-water mark of discrimination for women. Getting fired or losing ground in your career because you’re pregnant or recently had a child means you’ve become a target. And it’s all because you have what’s traditionally a defining quality of womanhood: the ability to become pregnant and have children.

Of course, the best solution is not to put your company in a situation where an illness or a pregnancy could wreak short-term havoc on the business side of things.

Healthy businesses plan for those events in advance, with outsourcing if need be. Staff up appropriately so it’s not the end of the world if your employee cuts back hours, works more from home, and eventually, takes their parental leave.

Rule of thumb:

  • Follow the Americans with Disabilities Act (ADA), the Pregnancy Discrimination Act (PDA), the Family and Medical Leave Act (FMLA), and any state or local laws. And be supportive and understanding to anyone who is going through a life-changing event like having a child.

A public scandal is splashy—hidden harassment isn’t as obvious. However, it can still seriously shake up your business.  

The people profiled in this story survived the immediate aftermath of the incidents that took place. But each side has dings and bruises—some visible, some not.

Elizabeth MacBride Elizabeth MacBride is a journalist and communications consultant whose work has been published in outlets including Quartz, CNBC, Forbes.com, HBR.com, Advertising Age, Crain's New York, Newsweek, Atlantic.com, and many others.
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