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Are huge legal payouts for employee misconduct encouraging employers to cover it up?

Obviously, a scenario where the employer had credible evidence of abuse and ignored it and let the employee continued the abuse is one thing. The employer is responsible for the new victims and deserves to be punished. I'm talking about scenarios where the employer is finding out for the first time about credible allegations of abuse.

1) Don't cry witch hunt.
2) Cooperate with law enforcement completely.
3) Make every attempt to protect the anonymity of all parties until the investigation is completed. Every attempt.
4) Retrain the employee or revisit the company's code of conduct or something similar. Reinforce with the employee that this is not an implication of suspicion, just policy.
5) If you have an HR department, follow their recommendations to the letter

I'm probably missing a lot of details, but strictly following those 5 steps should save you a lot of grief.
 
If I hire a sexual abuser, and all his background checks came out clean, and he assaults a customer or two, I am now on the hook for a multimillion dollar settlement.

If someone complains about the employee, I now am extremely disincentivized to turn over the information to law enforcement. If they discover credible evidence, I'll lose millions. In other words, the legal system penalizes me for doing the right thing. It encourages me to hide the evidence and/or rationalize it away as not something serious enough to get law enforcement involved and to perhaps pay hush money instead. This also means the abuser avoids prison and can continue the abuse, creating more victims.

If I was not in responsible for the abuse, why does the legal system penalize me to the tune of millions for each incident of misconduct by the employee?

Obviously, a scenario where the employer had credible evidence of abuse and ignored it and let the employee continued the abuse is one thing. The employer is responsible for the new victims and deserves to be punished. I'm talking about scenarios where the employer is finding out for the first time about credible allegations of abuse.

It's an error or omission. Why would you be on the hook for a settlement instead of your Employer's Liability Insurance policy?

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