Many dealers took notice of the recent sexual harassment jury verdict against a Massachusetts Lexus dealer, in which a jury awarded $500,000 in punitive damages against the dealership although it awarded only $40,000 in emotional distress damages. Punitive damages are not covered by insurance in Massachusetts, but can be avoided or limited if you take proper measures to prevent, investigate and address allegations of sexual harassment early on. Below are some steps you can take to help you avoid lawsuits, defend against them effectively when they do arise, minimize punitive damages and create a more productive work environment.

1. Post the “Fair Employment in Massachusetts” poster where your employees can see it. It’s easy and cheap, so there’s no reason not to do it. Posting is required by Massachusetts law and failure to post conspicuously can interfere with your ability to assert the best defense to a sexual harassment claim – the employee didn’t raise the issue within the statute of limitations (the timeframe required by law).