When Leslie Kohler sued under California’s Fair Employment and Housing Act claiming that her supervisor at Inter-Tel Technologies sexually harassed her, Inter-Tel said it wasn’t liable because it had taken reasonable steps to prevent harassment and Kohler had unreasonably failed to take advantage of the employer’s corrective opportunities by failing to report the incidents. Kohler argued that while that was a defense to federal harassment claims, under California law employers are automatically liable for harassment by supervisors. But in an important ruling for employers, the Ninth Circuit Court of Appeals has now said that the defense does apply to state-law claims. While it’s unclear whether the California Supreme Court would rule this way, it’s still wise to adopt an effective sexual harassment policy and complaint procedure, which can increase the likelihood of resolving harassment problems before they mushroom into a lawsuit.