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Fear of Lawsuits Spurs the Birth of New Industry


In his closing argument in a recent sexual harassment case, Santa Monica lawyer Steven J. Rottman accused the employer of neglecting something crucial: providing bona fide anti-harassment training for the entire staff.

That courtroom gambit apparently worked wonders. The Orange County jury that heard the case awarded $2.4 million to Rottman's clients, two former waitresses at a Costa Mesa restaurant who said they endured unwanted grabbing, kissing and verbal abuse by busboys and kitchen workers.

The notion that employers should invest time and money in preventing sexual harassment has gained such wide acceptance that when juries conclude they haven't, "it's a red flag," Rottman said.

In fact, the effort to rid the workplace of sexual harassment--driven by employers' fears of costly lawsuits rather than by a hidden social agenda--has blossomed into a big business. And the field received an enormous boost Friday, when the U.S. Supreme Court issued a pair of major rulings involving harassment suits against employers.

The high court said employers can defend themselves in certain circumstances by exercising "reasonable care to prevent and correct promptly any sexually harassing behavior." That instruction "will be a rocket booster for the anti-harassment training industry," said Frank Cronin, an Irvine lawyer who advises companies on employment issues.

Already, training specialists, lawyers, investigators and human resources professionals boasting expertise in the field roam the halls of major companies and government agencies. Some employers even buy special software to block e-mail messages or jokes that may be sexually offensive.

The young industry of professionals employed to combat sexual harassment and other employment law problems took off after the Anita Faye Hill-Clarence Thomas showdown in 1991. Its size isn't known, but the annual revenue is believed to be in the billions. The field has kept growing despite concerns that some supposed sexual harassment experts are amateurs who do little good in the workplace and, occasionally, even wind up damaging morale.

Meanwhile, the industry also may have produced its first big-name star: former Labor Secretary Lynn Martin.

She headed a task force that reviewed the management practices of Mitsubishi Motor Manufacturing of America after the auto maker was hit with a massive sexual harassment lawsuit by the federal government in 1996. The fee for her group's work was about $2 million, but that's only the beginning of what the company is paying: This month, Mitsubishi agreed to a record $34-million settlement.

Law firms are prospering handsomely too.

Not only are they busy with the traditional jobs of representing workers seeking damages or defending employers against allegations, they also are in hot demand as trainers. They are holding seminars to educate executives on pertinent court rulings as well as proper corporate policies and procedures.

In addition, attorneys are teaching corporate managers how to investigate internal complaints--when, that is, the law firms themselves aren't retained to conduct these investigations, a booming area of the legal business.

Compared to traditional legal work, training "is more profitable in the long run," said Garry G. Mathiason, a senior partner at San Francisco-based Littler Mendelson, a big management-law firm specializing in employment issues. Among other reasons, once a basic training course is written, it can be repeated for one client after another.

Littler Mendelson projects that U.S. employers will spend $10 billion annually on employment-law-related training by 2000, up from $5 billion in 1995, with sexual harassment prevention one of the main topics.

Seeking to profit further from the trend, Littler Mendelson took an unconventional step for a law firm last year by launching a sister business, Employment Law Training Inc. It markets training sessions, software and even a $99 board game called "Winning Through Prevention," intended to teach companies how to stop harassment, thwart workplace violence and protect employee privacy, among other things.

Consultants with backgrounds in such areas as training, human resources and psychology have flooded into the business, too. Along with providing general awareness training, some counsel individuals accused of harassment and try to rebuild morale at the affected workplaces.

Monica Ballard, a harassment-prevention specialist, launched her Santa Monica consulting and training firm, Parallax Education, five years ago from her home. She said she expects revenue to exceed $1 million this year for the first time and that her staff has grown to include eight trainers. Much of the company's revenue also comes from instructional videos.

"The market is growing and growing," she said.

Aside from providing public relations benefits and some legal protection, it's debatable how much good is done by some anti-harassment training.

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