Richard Schulze founded Best Buy, but is stepping down as chairman after a company inquiry found that he failed to reveal the CEO's relationship with a female employee. CEO Brian Dunn resigned last month for violating Best Buy's policy . He had an inappropriate ("close personal") relationship with a female subordinate. The female employee was much younger than the CEO, according to reports. The Associated Press reported , "The company probe found that although Dunn did not misuse company resources or aircraft related to the relationship, he and the employee were in significant contact for no identifiable business purpose. For example, during one four-day and one five-day trip abroad in 2011, the CEO contacted the female employee by cell phone at least 224 times, including 33 phone calls, 149 text messages, and 42 picture or video messages." Problems affect productivity. Both Schulze and Dunn forgot that company policies, procedures, and rules are important. They are written to take care of problems which occur again and again. Companies have an incentive to implement and enforce strong policies prohibiting harassment and effective complaint procedures. Furthermore, employees have an incentive to alert management about harassment before it becomes severe and pervasive. The " Facts About Sexual Harassment " below is from the U.S. Equal Employment Opportunity Commission (EEOC). Sexual harassment is a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964 . Title VII applies to employers with 15 or more employees, including state and local governments. It also applies to employment agencies and to labor organizations, as well as to the federal government. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile, or offensive work environment. Sexual harassment can occur in a variety of circumstances, including but not limited to the following: The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex. The harasser can be the victim's supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee. The victim does not have to be the person harassed but could be anyone affected by the offensive conduct. Unlawful sexual harassment may occur without economic injury to or discharge of the victim. The harasser's conduct must be unwelcome. It is helpful for the victim to inform the harasser directly that the conduct is unwelcome and must stop. The victim should use any employer complaint mechanism or grievance system available. When investigating allegations of sexual harassment, EEOC looks at the whole record: the circumstances, such as the nature of the sexual advances, and the context in which the alleged incidents occurred. A determination on the allegations is made from the facts on a case-by-case basis. Prevention is the best tool to eliminate sexual harassment in the workplace. Employers are encouraged to take steps necessary to prevent sexual harassment from occurring. They should clearly communicate to employees that sexual harassment will not be tolerated. They can do so by providing sexual harassment training to their employees and by establishing an effective complaint or grievance process and taking immediate and appropriate action when an employee complains. It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on sex or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under Title VII. Dating a co-worker has resulted in the Best Buy CEO losing his job. Not sharing the information with the board has resulted in the chairman of Best Buy's board losing his position. Do you think any others at Best Buy knew the CEO and employee had a relationship? If so, do you think there was office gossip? Could employees see this relationship as a sign of favoritism? Should the CEO fear blackmail, the possibility that she would accuse him of hierarchical harassment or blackmail?