I don’t know the ins and outs of sexual harassment - I try to avoid that area. Not my cup of tea. Also, I am not a lawyer (yet), so don’t take what I say as actual legal advice.
First, my rant on this whole area. One thing to think about is how the definition of “harm” changes over time. Let me explain.
Let’s define harm as deviance from norms. To me, this seems the best way to really define it. (I could go more into it, but I won’t here.) All of us grow accustomed to a certain level of activity in society. This baseline, since it is imposed on everyone, makes you equal and thus not “harmed” relative you others around you.
Now, you’ve got a baseline from which to judge defiance and thus harm. Take a given action (X) which only slightly varies from the norm - such as an off color joke referring to panties. At a certain time X is only a slight variance from the baseline, so there is not enough harm/variance to cause alarms.
As time has gone on, however, that baseline has moved. Suddenly, expectations have been changed as companies put in stricter and stricter policies. Assuming X remains constant, once the baseline moves, X is of greater deviance and causes greater harm. So what barely raised an eyebrow before now gets huge attention.
So - in one sense, yes, we have become stricter (since X is now harmful), but in another sense, we haven’t (since the difference between the act and the baseline which is sufficient to cause a problem has remained constant).
If you ask me - that’s the negative slope that we’re walking down right now. Let’s say your buddy loses. Now the baseline moves again - since everyone will make a point of steering clear of X. It has a chilling effect on the conduct of others. The problem is - where does it end? Since this is all relative, in theory there is no point at which it will reach the absolute bottom.
This isn’t being done only with sexual harrassment. Look at the Establishment Clause (Church & State). As we’ve moved the baseline more and more toward an atheist view, small religious activities step further from the norm. So, before kids would read the Bible as a part of school work, we now have challenges to the phrase “Under God” or “In God We Trust.” And in fact, if you think about how we are going today, the atheist view has a one way rachet on the baseline (again thinking of the chilling effect) - meaning that we are going to adopt more and more of an atheist view as time goes on.
Okay, enough of the theoretical stuff…
Now for your buddy…
The good news is that some courts (at least here in MN) have been getting stricter on what constitutes systematic discrimination. So where one comment might have been enough a few years ago, the NUMBER needed today is increasing. Now, his job might just be trying to cover their asses, at which point I would tell him to get an employment lawyer to find out what his rights are.
As for actual cash - you really need to consider 2 things. First, is the woman going to want to sue him or the employer? Unless you’re buddy is rich, the answer should be clear. They are going to go after the ones with more cash. Second, even if they were to come after him, what would her damages be? Honestly, how much can a single joke be?
My friendly advice - if it gets ugly - go talk to an employment attorney and figure out his remedies.