Sexual Harassment in Illinois Family-Owned Businesses

 Posted on September 30, 2025 in Divorce

While a family-owned business may feel like an extension of home, sexual harassment in the close-knit dynamic of a family business can add extra layers of complexity. Employees may fear retaliation, not only from supervisors but also from relatives or long-time family friends. In the state of Illinois, the Human Rights Act makes it clear that family-owned businesses – like all Illinois businesses – must provide a workplace that is free from sexual harassment.

Sexual harassment in a family business tends to blur the lines between professional and personal relationships. Family dynamics may be impacted, and trust between family members and employees can be shaken. If a family member is the person accused of sexual harassment (775 ILCS 5/2-105), family loyalty can get in the way of doing the right thing.  Finally, when management and ownership are tied to family relationships, challenges are more likely in areas of liability and reporting.

If you are the victim of sexual harassment in a family-owned business you must have strong legal guidance. Consulting with an experienced Wheaton, IL sexual harassment lawyer is the best step you can take to protect yourself or your company.    

How Lines Are Blurred in Family-Owned Businesses

Professional and personal relationships are often intertwined, making a sexual harassment claim feel like a personal betrayal, rather than just a workplace issue. If one family member has been sexually harassed by another family member, reporting the issue can be seen by other family members as deeply disloyal. For an employee who is not a family member but feels like part of the family, the issue is the same.

Higher-ups in a family-owned business may be more likely to ignore reports of sexual harassment when it is a family member, perhaps saying things like "that’s just the way Jim is."  An internal investigation following allegations of sexual harassment against a family member can be biased, making it difficult to conduct a fair, objective process.

Since there may not be a formal, independent HR department, the issue is exacerbated, since it is likely the owner or manager (who are probably family members) who is responsible for taking action. Employees are much more likely to fear retaliation from the family unit or family members, making them less likely to report sexual harassment.  

Common Myths Associated with Family-Owned Businesses and Sexual Harassment

Many people believe that family-owned businesses are exempt from Illinois sexual harassment laws, but the Illinois Human Rights Act applies to all employers, regardless of ownership structure. Others may believe that if sexual harassment occurs between relatives in the workplace, it is not actionable. This is also untrue. Courts do not care about family ties.

It is widely believed that small businesses without HR departments cannot be held liable for sexual harassment. Again, this is not true. Employers must provide reporting channels and training regardless of size or whether they have an HR Department. Employees may believe they are risking more by reporting against a family member, but retaliation for reporting sexual harassment is illegal regardless of the type of business structure.

What Should Family-Owned Businesses Do?

Family-owned businesses face significant legal risks, including personal liability for owners and managers, potential state enforcement actions, reputational harm, and financial damages. Family-owned businesses – like all businesses – must establish clear, written anti-sexual harassment policies, designate a non-family reporting option, and provide state-mandated annual sexual harassment training. All complaints and responses must be meticulously documented to show good faith compliance.

Contact a DuPage County, IL Sexual Harassment Attorney

No workplace, including family-owned companies, is exempt from Illinois laws pertaining to sexual harassment. If you have experienced harassment in a family business, the guidance and advocacy of a skilled employment law attorney is crucial.

A  Wheaton, IL sexual harassment lawyer from Mirabella, Kincaid, Frederick & Mirabella, LLC will listen to your story carefully, then begin building a strong case on your behalf.  At MKFM Law, we believe that an informed client is better able to make effective decisions. Call 630-665-7300 to schedule your initial attorney meeting.