Sexual Harassment – legal responsibilities of employer and employee – Abstract
The Supreme Court’s message: Put your pokey in writing, communicate it to every employee, and follow up on complaints.
The Supreme Court issued two sexual-harassment rulings last summer that should both worry and hearten employers.
On the downside, the court ruled that under Title VII of the Civil Rights Act of 1964, companies can be held liable for the illegal harassing behavior of supervisors even when top managers had no idea that it was going on and were not negligent in any way. This was the strongest statement yet of employers’ liability for supervisors’ actions.
“It resolves all doubt about supervisors being liable for sexual harassment, whether the company knows about it or not,” says Ernest Rossiello, a Chicago attorney who represented one victorious plaintiff, Kimberly Ellerth. “The Supreme Court has made it clear that companies will virtually automatically be liable.”
On the upside, the court clearly explained for the first time how employers can insulate themselves from many if not all harassment suits.
The court’s rulings in the two cases thus gave both sides something to celebrate.
The plaintiffs’ supporters hailed what they called victories for harassed employees. “The court’s decisions will literally benefit millions of Americans,” said Steven R. Shapiro, national legal director of the American Civil Liberties Union, which had filed a brief in support of the plaintiff’s position in one of the cases.
Attorneys on the business side said, though, that the new rules are tougher than before but are much easier to follow.
Under the two court decisions, “both the employer and the employee have clear responsibilities,” says Stephen A. Bokat, executive vice president of the National Chamber Litigation Center, an affiliate of the U.S. Chamber of Commerce. “The employer is responsible for setting guidelines, and the employee is responsible for following them.”
Both cases–Faragher vs. City of Boca Raton and Burlington Industries vs. Ellerth–involved sexual harassment by supervisors rather than co-workers. (For a summary of the two cases, see “The Cases Behind The Rules,” Page 17.) In combination, the two cases–both won by the plaintiffs–reached these conclusions:
* If a supervisor takes a “tangible employment action” against a sexually harassed employee–if, say, a male manager fires or demotes a female subordinate because she rebuffed his advances–the employer is always liable for damages. It doesn’t matter if the owners or top managers of the company had no knowledge of the supervisor’s actions. Neither does it matter if they tried to prevent such harassment.
“There is no escape,” says David A. Copus, an attorney who specializes in employment law in the Washington, D.C., office of Jones, Day, Reavis & Pogue. “The employer is dead meat.”
* If a supervisor’s harassment of an employee is “severe or pervasive” to the point that it creates a “hostile work environment,” the company can be liable for damages even when the supervisor didn’t take any “tangible employment action.” But the court instructed employers on how to avoid liability in hostile-work-environment cases.
A company can defend itself successfully if it can prove that it had an effective policy against harassment and that the employee alleging harrasment failed to take advantage of it. That’s called an “affirmative defense,” as opposed to a defense based on the plaintiff’s failing to prove his or her case. (For what’s involved in setting up a successful anti-harassment program, see “Protecting Employees–And Your Business,” Page 18.)
An affirmative defense requires companies not only to have a policy against sexual harassment but also to put it in writing, disseminate it, and enforce it. The court’s decisions “create powerful new incentives for employers to formalize programs” that in the past were often informal, says Ronald W. Taylor, an employment lawyer with the Baltimore office of Venable, Baftjer and Howard, LLP.
The Key Words
The harried small employer, with many other responsibilities, might be tempted to ask why it is so important to draw up a written policy on harassment rather than come down hard on such behavior if it shows up. In the case of the affirmative defense, the answer lies in these key words: “reasonable” and “unreasonable.”
The employer must have made reasonable efforts to prevent and correct harassment; the employee must have unreasonably failed to take advantage of opportunities to prevent or correct the harassment.
“If the employer merely has an informal [harassment] policy, he’s going to have to go through trial” to establish whether the company’s efforts were reasonable, warns William J. Kilberg, a labor attorney with the Washington office of Gibson, Dunn & Crutcher, LLP Conversely, a formal, written policy whose effectiveness can be demonstrated through affidavits can result in outright dismissal of a case.
The affirmative defense is “the one bone that the employer community received” from the Supreme Court’s rulings, says Harry A. Rissetto, an attorney with the Washington office of Morgan, Lewis & Bockius, LLP. Rissetto represented the city of Boca Raton, Fla., in its case.
Perhaps more importantly, the Supreme Court, by laying out the elements of an affirmative defense, has told employers how to prevent a “hostile work environment” from ever arising, says Rissetto. “That’s a lot better than having an affirmative defense,” he adds, “because if there’s no hostile environment, there’s no liability”
In other words, if you prepare really well for an affirmative defense, you may never have to mount one. “Companies with effective anti-harassment policies do not end up in court,” says Chicago attorney Rossiello.
Even when a strong anti-harassment policy can’t protect an employer from liability-for instance, when a supervisor takes a “tangible employment action” against a harassed employee-it may provide a shield against ruinous awards of punitive damages. If an employer has an effective system and the employee didn’t use it, that could help reduce the damages even when the employer is unquestionably liable.
The Need For Communication
The court’s rulings point clearly to communication between the company and its employees as key to creating a strong and effective sexual-harassment policy It’s up to the company to articulate a clear standard of conduct in the workplace, says Rissetto. The company can communicate its standard through orientation for new employees, for example, or through an employee handbook.
But communication cannot be a one-way street. The company must “create an environment where it is likely that an employee will complain to someone, as soon as possible, when inappropriate conduct occurs, says Rissetto. Because “in most situations hostile environments tend to accrete” through a succession of inappropriate acts, he says, employers need to encourage harassed employees to complain early
Likewise, an employee who is the target of harassment now has less incentive to keep quiet until the harassment gets bad enough to reach the hostile-environment level-that is, bad enough to justify a lawsuit. Says employment-law attorney Taylor: “Employees have an affirmative obligation to come forward and complain to minimize their own damages.”
Says Rissetto, “I think the court believes that if the employer does it right, the employee will have the courage to complain.”
A Question Of Reasonableness
Reasonableness-the legal concept at the heart of the affirmative defense-also comes into play when evaluating the validity of employee harassment complaints. The courts have held that an alleged harassment has to be offensive not just in the eyes of the person who claims to have been offended but also in the eyes of a hypothetical reasonable person.
The problem is, “we don’t know what the [reasonableness] standard is,” says labor lawyer Kilberg. “We know that it is a ‘reasonable’ person’s standard, but we don’t know if that person is a reasonable woman or a reasonable woman in a particular industry.”
You won’t be safe just because coarse language and sexual horseplay have always been common in your workplace. One problem, Kilberg says, is that relying on such a company culture “doesn’t deal with the employee who starts work tomorrow.”
Beyond that, says Andrea S. Christensen, an attorney with Kaye, Scholer, Fierman, Hays & Handler, LLP, in New York City, “it’s very risky to assume that everybody in the workplace shares in the same sense of humor. A lot of times, these environments that have a lot of sexual horseplay are environments that have had single-sex employees in the past, both male and female. There’s a lot more freedom to engage in this kind of horseplay under those circumstances.”
Now, though, she says, “it’s not too difficult to pass over the line between social by-play and what becomes offensive, illegal conduct.”
(That can happen even when everyone in a workplace is of the same gender. The Supreme Court held unanimously in another case, earlier in 1998, that same-gender sexual harassment is also barred by Title VII. What matters is whether the conduct at issue is both sexual in nature and unwelcome.)
Assume A Strict Standard
To avoid inadvertent problems, an employer should assume that there is a single, nationwide, rather strict standard on what is acceptable conduct. “That would be the safest way to go,” Kilberg says. “All you can be certain of is that there is a heightened sensitivity and an aggressive plaintiffs bar.”
Media attention to high-profile sexual-harassment cases may also trigger more complaints from harassed employees, says Debra L. Shapiro, a professor of management at the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill. “People who have been afraid to report might gain some courage” from seeing that others have reported, she says, ”particularly when they see the size of some of the awards.”
Sexual-harassment charges filed with the Equal Employment Opportunity Commission (EEOC) totaled nearly 16,000 in fiscal 1997, up from less than 7,000 in fiscal 1991. The filing of such charges with the EEOC is a necessary prelude to filing a lawsuit in federal court.
The unusual nature of some cases could pique the interest of potential plaintiffs. In one recent Virginia case, for example, a federal jury awarded $300,000 in emotional-distress and punitive damages-the maximum for such damages under federal law-to a male wrangler on a ranch who alleged that he had been sexually harassed by a female office manager with whom he had been intimate.
“It makes very good business sense” for companies to deal with sexual harassment forthrightly, Shapiro says, because the problem can be so costly-not simply in awards for damages and in the public embarrassment that can attend them, but in lost productivity on the job.
When people are mistreated, Shapiro says, “there’s quite a consistent body of literature that shows that work performance declines, and as a result quality of performance, and attendance. All of that ultimately has to hurt the company.”
New York City attorney Christensen says that complaints of sexual harassment may be symptoms of a much more widespread problem. She cites cases in which “the individual was charged with specific acts of sexual harassment, but when you investigated the general perception of this individual throughout the workplace, you d get a very negative response: that the person was a bully, was a yeller, would insult and humiliate employees, and was generally disliked.”
Supervisors aren’t the only source of charges of sexual harassment, of course. The Supreme Court’s decisions left undisturbed the law as it applies to harassment of one co-worker by another. In such cases, the company isn’t liable except when its negligence has permitted the harassment to occur.
The law recognizes, Christensen says, that “it’s different when a co-worker does it and when a supervisor does it.” What may be simply a lewd remark when a coworker says it may carry a veiled threat when a supervisor says it.
Even though the negligence standard remains intact, the courts may now be more likely to find negligence when an employer doesn’t have a written anti-harassment policy and a formal procedure for enforcement. As Rissetto says, “courts will be more ready to find, in a co-worker situation, that the employer should have known” the harassment was occurring.
“The Real Exposure”
Some pro-business attorneys warn that the Supreme Court’s recent sexual-harassment decisions have created an unfounded sense of relief in the business community Although verdicts in federal cases can lead to awards of hundreds of thousands of dollars for damages (on top of awards for economic damages and attorneys’ costs), cases brought under state laws have resulted in multimillion-dollar awards for plaintiffs.
“The real exposure for employers is not under Title VII,” says labor lawyer Copus. “These cases are a footnote. Even though they get all the attention, they’re not where the action is. Any winning claim under Title VII will also, by definition, he a winning tort in any state in the country.”
In such cases, liability may be imposed not for sexual harassment per se but for intentional infliction of emotional suffering, negligent supervision, invasion of privacy, assault, battery, or any number of other torts.
“Those torts are where the megabucks are going,” Copus says, “and they’re all state-court common-law claims.”
Moreover, many states’ laws addressed specifically to sexual harassment apply to companies with as few as one or two employees and impose no ceiling on damages. (By contrast, only companies with 15 or more employees are covered by Title VII.)
Christensen argues that the threat is not severe, despite the “potentially much higher damages available under state laws.” That is because, she says, “when you’re talking about common-law torts- assault and battery and that kind of thing-you’re talking about very serious misconduct. Most sexual harassment does not rise to that level.”
In addition, she says, state courts tend to follow the Supreme Court’s lead in its interpretation of Title VII. “Many states’ statutes read very similarly to the federal statute,” she says, “so that the interpretations by the federal courts do tend to have an impact on many state courts.”
Whether a case is being heard in state court or federal court, many attorneys who represent management agree that having employment decisions come under review by a jury is, as Copus says, “a scary proposition.” It is the powerful role of the subjective element-the emotional distress that harassment supposedly causes-combined with the jury trial that makes sexual-harassment cases so dangerous for employers.
There’s evidence in the huge awards for damages under state law that juries can respond emotionally to claims of sexual harassment or other kinds of employment discrimination. Given the potential dangers of such lawsuits, Copus advises small firms: “Adopt the best policy-and pray”
The Cases Behind The Rules
The Supreme Court ruled on two sexual-harassment cases just before it adjourned last summer. Although neither case involved a small business-the defendant in one case was a city government, in the other a large company-the facts in both cases could easily be duplicated in companies with only a few dozen employees. Here are summaries of the cases:
Burlington Industries vs. Ellerth: Kimberly Ellerth, a former employee of Burlington Industries in Chicago, sued the company because of constant harassment she was subjected to from one of her supervisors, a sales manager. Among other things, the Supreme Court said in its opinion, he advised her to “loosen up” in the office and told her, “You know, Kim, I could make your life very hard or very easy at Burlington.”
Ellerth chose not to report any of the manager’s boorish behavior, and she eventually quit, citing other reasons for her departure. It was not until three weeks after her resignation that she sent Burlington a letter complaining of the harassment.
When she sued, Ellerth offered no evidence that she had lost a promotion or suffered any retaliation-what the Supreme Court called a “tangible job action”-for resisting the supervisor’s advances. A federal district judge in Chicago threw out her suit. A federal appeals court reversed that judgment, and Burlington appealed to the Supreme Court, which agreed with the appeals court and sent Ellerth’s suit back for trial.
Supreme Court Justice Anthony M. Kennedy wrote for the majority that even in the absence of a tangible job action, Burlington would be liable for the manager’s behavior unless the company could prove that it had “exercised reasonable care” to prevent it and that Ellerth herself had unreasonably failed “to take advantage of any preventive or corrective opportunities provided by the employer.”
Faragher vs. Boca Raton: Beth Ann Faragher, a former lifeguard, sued the city of Boca Raton, Fla., because she had been subjected to lewd comments and grabbing by two beach supervisors. She won in federal District Court, but that judgment was reversed on appeal.
A federal appeals court agreed that the supervisors’ conduct was sufficient “to create an objectively abusive work environment,” but it declined to hold the city liable for their conduct. The supervisors’ conduct was a “frolic” unrelated to their work, the court said.
The Supreme Court reversed that ruling, saying that the city was liable for abuses of what it called “virtually unchecked authority” by the supervisors.
Although the city had a written policy against sexual harassment, it had never distributed that policy; the offending supervisors were unaware of it. Neither had the city tried to keep track of the supervisors’ conduct.
Faragher was awarded only one dollar in damages in District Court. The city appealed, though, because “the recovery of even nominal damages entitled her to attorneys’ fees,” says Harry A. Rissetto, who represented Boca Raton in its appeal to the Supreme Court. The District Court awarded $50,000 in attorneys’ fees, and Rissetto says the total-not yet determined-will now be some multiple of that, thanks to the cost of the appeals.
Protecting Employees-And Your Business
As a practical matter, under the Supreme Court’s most recent sexual-harassment rulings, companies of any size must have:
* A written policy outlawing all forms of sexual harassment.
* Sexual-harassment training for supervisors.
* A strategy for responding to sexual-harassment complaints.
Such requirements, says Baltimore attorney Ronald W Taylor, are likely to “Spill over” into other areas of employment-discrimination law, making it all the more imperative for small businesses to bring their harassment policies into line with recent court rulings.
On the positive side, drafting a sexual-harassment policy “is not like doing an income-tax return,” New York City attorney Andrea S. Christensen says. “It’s not particularly complex.”
Washington, D.C., attorney Harry A. Rissetto believes that the courts will give companies “quite a bit of leeway in terms of the content” of a sexual-harassment policy But “the policy has to be part of a program” to prevent sexual harassment at the company, Rissetto says, and the program has to embrace communicating the policy to employees.
“One of the suggestions that we have been making to our clients,” Christensen says, “is that employers annually put out a policy on harassment, deliver it to every employee, either personally or by mail, and require that the employee return it, signed.”
Clarity is important, says Debra L. Shapiro, a professor of management at the University of North Carolina at Chapel Hill, because if there’s ambiguity in the written policy, “there’s always the risk that someone will claim that it happened when it didn’t; or, when it did, someone will claim that it didn’t. There has to be a very clear understanding of what behavior constitutes sexual harassment.”
In addition to defining prohibited behavior, lawyers specializing in the subject say that a written policy should:
* Make clear that the company won’t tolerate misbehavior from anyone, including supervisors and customers.
* Encourage harassed employees to complain to their supervisor–or, if the supervisor is the harasser, to some other designated person
* Assure employees of confidentiality-but only up to a point, Christensen says. “You almost have to say to the individual, ‘I’m going to investigate, and I’ll do the best to maintain your confidentiality, but ultimately I may have to disclose your name.
* Assure employees that retaliation will not be tolerated.
Ensuring Proper Handling
Writing a policy and communicating it to your employees gets you only to first base. Once you have invited complaints, they must be handled properly
“Before you get complaints,” Taylor says, “think about who you want investigating them, and train those people.” Such training, at a minimum, should make supervisors aware of the law’s requirements. “You really only need one lawyer for a couple of hours, at most” to provide such training, Taylor says. “It’s the kind of thing that ought to be done on a regular basis.”
Washington attorney William J. Kilberg advocates more-extensive training. “I’ve been advising smaller employers to set aside some amount of money during the course of the year for whoever is playing the role of intake officer to attend some seminars, one or two a year,” he says. ‘There are plenty of them around.
“Then,” he adds, “you’re able to put that person on the stand, if necessary, as support for the adequacy of both the intake procedure and the investigation. That person can say, ‘Yes, I have received training. I know what I’m doing.'”
Shapiro says it’s important for supervisors to respond to complaints “in a supportive fashion.” They shouldn’t dismiss or minimize complaints, she says, but “seek full understanding of why [the complainant] believes harassment has occurred.”
She says a study she conducted found that a supportive supervisor, rather than a formal policy, generally determined whether someone who had been harassed would report it.
“If they believe that in the end they’re going to be harmed for talking,” Shapiro says of employees who have been harassed, “I don’t care what the law says, they’re not going to do it.” An employee’s refusal to go to a supervisor would thus be “reasonable”- the Supreme Court’s test-and the company would be exposed to liability.
You must provide alternative channels for complaints. “The frequently,” Christensen says, “it is the immediate supervisor or the immediate supervisor’s best friend” who is the alleged harasser. “The courts have made it pretty clear that telling the employee that you’ve got to go to your harasser and complain is not an effective complaint procedure.”
Procedures In Writing After complaints are in hand, Taylor says, “it’s going to be important to any employer’s affirmative defense to show that they conducted prompt and thorough investigations, that they enforced their policy rigorously. If you have complaints that go uninvestigated and unremedied, an employee’s reluctance to use the program is not going to be unreasonable.”
The procedures you’ll follow in investigating a complaint should be set out “in writing, as part of the policy,” Rissetto says, “so that the employee has confidence that if he or she complains, the employer intends to do something about it.”
The policy should impose obligations on the complaining employee, too, Kilberg says: ‘There should be a requirement that complaints be made as quickly as possible, and when the complaint comes in, either the complainant or the intake officer needs to reduce the complaint to a written form, so you know who made it, when it was made, all the facts that can be had, and the scope of it.
“You don’t want somebody to reconstitute their complaint a month later and assert that it was much broader than it was.”
Similarly, he says, if an employee doesn’t want any action taken on the complaint, “the employee has to be told that that’s unacceptable,” that the employee has an obligation to provide the facts and the employer has an obligation to investigate.
Start by interviewing the complainant, Taylor advises; take notes and document what he or she says. Then interview the person who has been accused as well as witnesses who may have been offered by either side.
What maybe at issue is not what happened but what it meant. Nonetheless, where there’s disagreement on the facts, he says, “you’re going to have to make a credibility determination: Whose story do you believe? Does this person’s story make sense, or is it just unbelievable?”
Making A Response
Whatever the ultimate resolution, Taylor says, “you need to go back to the accuser and convey generally that something happened,” that some concrete step was taken, as a result of the complaint.
The consequences as well as the definition of sexual harassment should be spelled out clearly, Shapiro says, “otherwise the policy will be seen as merely symbolic and ineffective.”
Taylor advises, though, that you not lock yourself into certain kinds of punishment. You may want to say that harassment is a major offense that would support discharge, but you don’t want to make discharge automatic.
There is, after all, the possibility that an unjustly accused harasser could wind up taking you to court. ‘You’ve got two potential plaintiffs,” Kilberg says, “the person who’s making the allegation and the person against whom the allegation is being made.”
Washington attorney David A. Copus recommends that employees be required to accept mandatory arbitration of sexual-harassment cases as a condition of employment-they would be barred from taking harassment claims to court- with a limit on damages like that in the federal civil-rights law. (To learn more about arbitration and other forms of alternative dispute resolution, see “A Working Alternative For Settling Disputes,” July.)
By limiting liability in that way, Copus says, “you eliminate the risk of an enterprise-threatening damage claim”-and you dampen the enthusiasm of plaintiffs’ attorneys for taking such a case.
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