Appeals Court raises the stakes significantly for employers who tolerate, neglect or ignore workplace harassment complaints.

Last week, while many of us were packing our bags for the long Memorial Day holiday weekend, an Illinois Court of Appeals ruled, for the first time, that a legal entity, such as a corporation, can be sued under the Illinois Gender Violence Act (IGVA or Act), for sex discrimination. By doing so, the court dramatically increased the possible liability a business could face when it mishandles employee complaints of harassment if the target of those complaints later sexually assaults a coworker.

The IGVA, passed in 2004, outlaws “gender related violence” as a form of sex discrimination, and empowers victims to file a lawsuit against any person who commits an act of gender related violence or personally encourages or assists the act or acts of violence. Unlike other sex anti-discrimination statutes, like Title VII or the Illinois Human Rights Act, the IGVA grants courts discretion to award victims uncapped damages for emotional distress and punitive damages, on top of attorney’s fees and costs. By comparison, Title VII caps distress and punitive damages, and the IHRA doesn’t authorize courts to award punitive damages at all. The IGVA also provides for longer statutes of limitations so victims also have more time to sue.

Since the IGVA’s passage, employment lawyers have debated whether a business could be found liable under the Act for sexual violence committed against its workers, since the IGVA allows for suits against “persons” who either commit the violence or “personally” encourage or assist it. In Gastic v. Marquette Management, Inc the Court of Appeals Third District ruled that business entities, like corporations, could in fact be sued under the IGVA “under some circumstances.”

The court’s ruling leaves open many questions, including under what specific circumstances would a business potentially face liability. However, if prior federal court rulings are a guide, there’s a good chance the court will hold a business liable to a victim when, at a minimum, the circumstances indicate that it knew or should have known of the sexually deviant or violent propensities of the perpetrator before the violence occurred and unreasonably failed to take steps that likely would have protected the victim from harm – such as enacting and enforcing zero-tolerance policies for violence and workplace bullying, conducting anti-bullying and harassment prevention training, and investigating and responding to harassment complaints as they arise.

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Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. in Chicago. Gary regularly advises human resources professionals on recently enacted employment laws.