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Exec level terminations like this typically involve very serious misconduct – fraud, theft, misappropriation. But in this new climate of intense ethical scrutiny, office romances now fall into mix of unforgiveable transgressions. By loosing his job to his libido, Everson now joins the prestigious ranks of Paul Wolfowitz of the World Bank, and Harry Stonecipher of Boeing. The Red Cross took a hard line with Everson, and now begins the process of managing the fallout.What a tremendous blow to an organization that’s already had its fill of challenges. Everson was the 5th CEO in 5 years, and had only been in office for 6 short months, brought on board chiefly to clean up the Katrina mismanagement mess. (Washington Post: President of Red Cross Forced to Resign; CBS News.com: Red Cross President Ousted Over Affair). With his departure, the organization will now be on its 6th leader. And the Red Cross is still tackling its mission critical challenges – like getting itself back on course with preparing for and responding to emergencies.

The damage from this kind of scandal doesn’t just stop at the risk of litigation. (Remember that “sexual favoritism” is a growing claim – meaning that coworkers who witness a consensual relationship between a supervisor and subordinate can make a case.) The harm goes much deeper.

Start with the hard costs of just replacing Everson – it’s not cheap to find a suitable executive to lead a high profile organization that’s under constant scrutiny. Managing an exec level search twice in one year is a lot of money down the drain. Then there’s the inevitable loss of employee confidence and productivity that follows this kind of an announcement – not to mention the potential for increased turnover. Employees start to jump ship when they think it might be sinking, and when they associate their employer with corruption and embarrassment. And we can’t forget the bad PR and loss of confidence by the community. Just think of all the corporate sponsors and individual donations that have been compromised by a little consensual sex in the workplace.

What happened at the Red Cross can happen in any organization. No one is immune. It’s why compliance and prevention efforts around workplace harassment are so pervasive and top of mind for employers. Organizations know they can’t just stand by, awaiting their turn on the front page of the newspaper. Incidents like these are inevitable.

This is where sexual harassment training comes in. While romancing a subordinate may seem like an obvious no-no, educating employees about workplace harassment (particularly fraternization policies) is still desperately needed. This is especially true for senior execs. The landscape has shifted in recent years. Conduct that was once “acceptable” or at least ignored at the Board level, is no longer okay – and is ripe fodder for the media. When the rules shift, it’s up to the organization to make sure that everyone gets the message loud and clear, especially the top brass. Executives may think they don’t need to be part of sexual harassment training efforts, but cases like Everson’s make it clear they do. (ELT Blog: Don’t Forget Your Senior Execs—They Need Compliance Training Too).

And remember that harassment training is not a one time event. Laws change and issues evolve. People come and go. And when it comes to curbing bad behavior – especially the kind that comes from a heady mix of sex and power – folks need their memories jogged from time to time. Guess that’s why the US Supreme Court, the EEOC and many state laws call for “periodic” sexual harassment training. It’s legal speak for “keep reminding them.”