THE SUPREME COURT OPENS THE FLOODGATES FOR SEXUAL HARASSMENT LITIGATION, BUT PROVIDES EMPLOYERS A DEFENSE BASED ON PROPER POLICIES AND TRAINING

In two recent opinions, the United States Supreme Court opened the floodgates for a wave of new sexual harassment claims based on alleged misconduct by supervisors. The result is a new set of rules that imposes strict liability on employers for sexual harassment by supervisors if the alleged victim suffers any adverse employment action (such as a demotion, a discharge, or even an undesirable reassignment). If no adverse employment action was experienced by the employee, the employee may still seek to impose liability on the company for a supervisor’s sexual harassment, but the employer can avoid liability by establishing an "affirmative defense" that requires the employer to come forward with evidence sufficient to prove to the jury that:

(1) The employer exercised reasonable care in implementing policies, procedures, training, investigations, and discipline that were reasonably designed to prevent and to correct promptly any sexually-harassing behavior; and

(2) The plaintiff/employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or failed to take reasonable steps to avoid harm otherwise.

These two Supreme Court cases, Faragher v. City of Boca Raton and Burlington Industries, Inc. v. Ellerth, expand the universe of sexual harassment claims that can be filed against employers, as well as the number of claims that will survive summary judgment and be subject to a trial by jury. Prior to these two decisions, rendered in late June, an employer’s liability for unreported supervisor harassment, as a general rule, had been limited to cases that resulted in tangible job detriment to the victim. These were often "quid pro quo" cases, where an employee alleged that, because she had rebuffed her supervisor’s "unwelcome" sexual advances, she had suffered a tangible adverse employment action.

The new rules announced by the Supreme Court make it clear that an employee no longer has to demonstrate that the sexual harassment by the supervisor resulted in a tangible job detriment in order to hold the employer liable. Under these new rules, even if the employee rebuffed the harassing supervisor and suffered no job-related reprisal, she will have an opportunity to hold the employer liable for unreported harassing conduct by the supervisor, unless the employer can establish this newly-articulated affirmative defense.

Practical Steps To Develop An Anti-Harassment Program That Will Help Employers Establish A Legal Defense

What can a company do to ensure that its policies, complaint procedures, investigations, and training are sufficient to meet the Supreme Court’s rather vague requirement that companies must show that they "exercised reasonable care to prevent and correct promptly" any sexually-harassing behavior? Here are some practical suggestions:

Steps Designed To Prevent Harassment

• Have an attorney review your current sexual harassment policy, to ensure that it adequately defines harassing conduct (under current case law and federal regulations) and that it provides multiple avenues to report the harassment, bypassing the supervisor if he/she is the alleged harasser. It is a good idea to provide some real life examples that would fit your business.

• Make sure your policy prohibits all types of sexual harassment (both "quid pro quo" and "hostile environment"), requires all employees to report any harassment that they have suffered or observed, and strictly prohibits any retaliation against complaining employees and witnesses. Some large companies with multiple locations have established toll-free numbers that employees can call to report problems.

• Develop a system, preferably using signed and dated acknowledgments, to ensure that the company can prove that every employee has received the policies regarding sexual harassment and notice of the complaint procedure. For example, in the recent Supreme Court case in which a former lifeguard sued the City of Boca Raton, the City tried to deny liability because the alleged "hostile environment" at the beach was not reported to top management. The City lost its ability to raise this affirmative defense, however, because the sexual harassment policy it had adopted in 1986, and sent out in a formal memorandum addressed to all employees, was never disseminated to the City's lifeguards.

• Demonstrate strong support from the very top management of the company (e.g., the CEO, COO, or Chairperson of the Board), for the anti-harassment program.

• Make clear in your policies that even the highest levels of management, including the CEO, CFO, and COO, are covered by the policy, and establish avenues so that those individuals can be reported to someone who has authority to investigate them. (This can be a particularly sensitive area, as CEO’s sometimes cost companies hundreds of thousand of dollars for unreported or undisciplined sexual harassment.)

• Develop a customized training program, suited to your business, and require every employee, including the CEO, to take the training, ensuring that everyone is aware of the company’s policies on sexual harassment. It is generally a good idea to provide supervisors and top level management with a different type of training because of the huge potential liability they can create for the company if they engage in harassment or if they fail to report harassment they observe. A more general education/ awareness program should be provided for all rank and file employees. A written record of attendance at these seminars should be required. Annual updates for super- visors are recommended.

Steps Designed To Correct Harassing Behavior Promptly

• Adequate resources and training should be devoted to your investigation function. Special training should be provided to those who handle investigations, and they should be provided with sufficient time and resources to make sure all investigations are conducted promptly, fairly and thoroughly.

• Establish procedures and policies during the investigation to eliminate retaliation claims and ensure a high level of confidentiality.

• In particularly sensitive investigations, you may want to bring in outside counsel to handle the investigation.

• Make sure that there is a company-wide review of disciplinary decisions, to ensure consistency across the workforce, and thus avoid claims of discriminatory enforcement and discipline.

• If the investigation reveals a problem, impose sufficient discipline such that a jury would agree that it was reasonably calculated to stop the harassing conduct immediately. The discipline often should include training as well as punishment.

• Set a timeline for further monitoring to ensure that your discipline has been implemented and is effective, that no new problems have surfaced, and that no retaliation has occurred.

Can You Be Sued For Disciplining The Alleged Harasser?

Sadly, in our legal system, anyone can sue you for anything. However, a California Court recently held that an employer does not have to conduct an FBI-quality investigation, nor does it have to prove, in a lawsuit brought by the harasser, that the alleged harassment actually occurred. An employer can avoid liability for discipline it imposes on the harasser if the employer conducted a good faith, fair, and reasonable investigation, and, as a result, reasonably concluded that the misconduct did occur.

How We Can Help You?

Our Employment Law Practice Group is experienced in providing training for supervisors and employees, in helping review anti-harassment programs and policies, and in setting up complaint procedures and training those who will conduct the investigations. If we can be of any assistance in any of these areas, please call Charles T. Huddleston, Chairperson of the Employment Law Practice Group at Arnall Golden Gregory LLP at (404) 873-8674.

August, 1998

 

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