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YOU CAN BE LIABLE, EVEN IF YOU DIDN’T
DO IT
The Hidden Dangers in the Evolving Law of Sexual Harassment
Over the last ten to fifteen years, most companies have come to understand
the importance of preventing sexual harassment in the workplace. The number
of large, well-publicized sexual harassment verdicts has raised corporate
consciousness and put the subject on the business radar screen.
You would think that would translate into a reduction in serious sexual harassment
claims, but the reality seems to be otherwise. Our intuitive explanation for
that phenomenon is twofold.
First, employers aren’t the only ones who have become more cognizant
of potential sexual harassment liabilities. Employees, too, have become much
more aware of the right to seek damages for offensive conduct. Moreover, the
laws governing sexual harassment now provide for attorneys fees – an
undeniable incentive for lawyers weighing the benefits of bringing such suits.
The result: situations that used to provoke a “grin and bear it” response
now provoke an EEOC claim.
Second, when companies began to realize the importance of avoiding sexual
harassment claims, they were (properly) advised by their counsel that they
could minimize their exposure if they developed, published and enforced policies
forbidding harassing conduct. As a result, the policy manual became the sexual
harassment cure-all in the business community’s collective wisdom. But
in the late 1990's, the Supreme Court changed the rules, and the EEOC and various
courts took a more activist approach to sexual harassment. Two things evolved
out of all of this: the policy manual became only a first, and by no means
the only, step required by the law; and the definition of what was commonly
understood to constitute sexual harassment was itself expanded beyond the boundaries
of common understanding.
Our goal (among others) in publishing Avoiding Lawsuits is to shorten the
time it usually takes companies to recognize and implement major changes in
the law. Typically, there is a substantial interlude, often lasting years,
between changes in the law and changes in corporate behavior – even today,
for instance, many companies continue to believe that their policy manuals
are all that they need, and they continue to believe in the old definitions
of sexual harassment – right up until the time they get sued.
In prior issues, we explained both the importance, and the impotence, of the
policy manual. The United States Supreme Court has ruled, repeatedly, that
as significant as a company’s policy manual might be, it is virtually
worthless unless the company also trains its managers in the proper application
of the rules mandated by the manuals, and by employment law generally. See,
for instance, the January 2001 and February
2002 issues of Avoiding Lawsuits.
In this issue, we focus on the evolving definition of “sexual harassment.” In
some cases, the news for employers is good: that which you thought was sexual
harassment may not be. But in other cases, the news for employers is not
so good, and the failure to stay up to date can be devastating. Here’s
an important example of how these changes in the law are playing out in the
real world of employment practices and liabilities.
How Can I Be Responsible for the Conduct of Someone Else’s Employees?
We are seeing an increasing array of claims based on situations like these:
- A waitress at an all-night restaurant reports to the restaurant manager
that four, possibly-inebriated patrons at one of her tables are making
lewd and sexually-threatening comments to her, and she asks that someone
else be
assigned to that table. The manager tells her that it’s the kind
of thing that sometimes happens in the business, and not to worry about
it.
- A female employee in a consulting firm is assigned to work with one
of the firm’s best clients. She reports back to the partner in charge
that the client keeps inviting her to dinner and making suggestive comments,
all of which make her very uncomfortable. The managing partner does not want
to offend the client, who comprises a substantial portion of the firm’s
income. He tells the employee that it would not be a good career move to
alienate the client, and leaves it at that.
- A female aide in a nursing home reports to the administrator that
one of the male residents to whom she is assigned has attempted to grope
her, and she is very uncomfortable in dealing with the resident. The administrator
says she will talk to the resident if it happens again.
Most of the companies we deal with understand these kinds of issues as employee
relations problems, but they do not recognize them as potential “sexual
harassment” claims that can lead to substantial damages under federal
law. “My employees didn’t harass anybody,” they tell us. “How
can I be liable for sexual harassment by someone who doesn’t even work
for my company?”
The answer is that sexual harassment (and, for that matter, harassment based
on race, ethnicity and other protected characteristics) is not defined by who
does the harassing. So long as the harassment is work-related, all the same
rules apply, no matter whether the alleged harasser is or is not working for
the employer: if the employee is subjected to conduct that unreasonably interferes
with the employee’s work performance or subjects the employee to an intimidating,
hostile or offensive work environment, and the employer has some reason to
know about it, the employer must take some immediate corrective action. Don’t
allow the fact that the harassment is coming from a non-employee lull you into
a false sense of security.
What’s The Solution?
So what do you do? Even the courts recognize that it is often difficult to
control the actions of those who do not work for you. And from a non-legal,
business viewpoint, there are obvious issues to be confronted when the source
of the harassment is a valuable customer. Nevertheless, these cases are becoming
commonplace, and employees are winning verdicts.
Here’s our prescription for minimizing the dangers.
1. Set up a complaint procedure for non-employee harassment. Here’s
where a policy manual, though by no means a cure-all, can help you. You should
already have in place a policy manual that tells employees what sexual harassment
is, and tells them how and to whom they should report instances of harassment.
(If you don’t, stop reading this article, call us immediately, and find
some applicable employment practices liability insurance.) Make sure the manual
defines sexual harassment (and, indeed, workplace harassment in general) to
include harassment by non-employees. Why? This puts the burden on the employee
to tell you about the harassment so you can investigate and respond. If, in
the face of this policy provision, an employee harassed by a non-employee remains
mute, and then sues, and if you did not otherwise have reason to know of the
harassment, you’ll have a viable defense to the claim – you told
the employee to report it, you advised the employee how to report it, and the
employee did not do so.
2. Train your managers to recognize and respond to non-employee harassment.
One of the worst things that can happen to an employer in a sexual harassment
case is this: the employee reports the harassment to a manager; the manager
does nothing; and the employee proves that the employer never trained the manager
to do what was necessary to prevent or respond to the harassment.
If that is a risk in your company, prepare yourself to sit at the defense
table and look sympathetic while your employee’s lawyer makes the following,
impassioned jury speech:
Ladies and gentleman, the law, to say nothing of
common decency, says that companies must protect their employees from
workplace dangers. Companies have to take reasonable steps to protect
employees from explosions and chemical spills. But their responsibility
does not end there. As we all know, sometimes emotional injuries can
be more devastating than physical injuries. In a decent society, companies
have to protect their employees from that kind of harm as well.
Sometimes employers try their best to protect their employees, and
the employees still get hurt. Sometimes there are dangers that could
not be foreseen. You can’t blame an employer for that. But what
if an employer knew of a danger – actually knew about it – and
then turned a blind eye to it, doing nothing to keep the employee from
getting hurt? What if a company knew about the risk of an explosion or
a chemical spill, and just let it happen, because it was too much trouble
to do something about it? You would punish that company, wouldn’t
you?
Well that’s exactly what happened here. This company, like all
companies, knew about the dangers of sexual harassment. And yet it didn’t
do one thing to prevent it from happening. The least, the very least
it could have done was give its managers some training on recognizing
and preventing sexual harassment – just like any responsible company
would train its managers to recognize and prevent potential explosions
or chemical spills in a factory. But all this company did is put some
meaningless words in a manual, and then leave its employees to fend for
themselves.
Now that would have been bad enough. But in this case, one of the employees
was actually in harm’s way, and she told the manager, the company’s
representative, about the problem. This wasn’t a situation where
we might argue over whether the company had any reason to know that something
might hurt her. The company actually knew that she was in the process
of being hurt. She asked her manager to protect her in some way. And
he did nothing – not one thing.
We should all be outraged at the manager. But we should be even more
outraged at the company. It never took the trouble to train that manager
on what he was supposed to do once an employee was in danger. It wouldn’t
have taken much – a couple hours of professional training so he
would know what to do. But that was too much trouble for this company.
They preferred to risk the welfare of their employees in order to save
a few bucks and a few hours .
The next time, it may be your daughter, or your mother, or your friend,
or your wife or yourself who’s at risk. It’s up to you to
tell this company, and the business community at large, whether or not
they can get away with this. It’s time to take the profit out of
this kind of corporate irresponsibility. I urge you to send a message
that is unmistakable, and unforgettable. |
3. Take your employee out of harm’s way. A basic precept in any sexual
harassment situation is this: once you have reason to suspect that an employee
is being harassed, use all reasonable efforts to remove the employee from the
harasser (at least until a proper investigation documents that there is insufficient
basis for the harassment allegation), without prejudicing the employee’s
position or standing in the company.
In a situation where there is no time to investigate – the waitress claims
she is being harassed by patrons, for instance – that might require nothing
more complicated than re-assigning the table, or accompanying the waitress
to the table. In a situation where the employee must deal with the harasser/customer,
for instance, use creative means to protect the employee without compromising
the company’s business relationship with the client or the employee’s
job – accompany the employee on all future meetings, or tell the customer
that employee was diverted to an emergency situation requiring the employee’s
expertise.
4. Investigate the allegation as you would any other allegation of sexual
harassment. The law requires that you investigate sexual harassment complaints – the
investigation of a sexual harassment complaint must be conducted in accordance
with strict procedural requirements. Do not ad lib. If you have not established
a compliant procedure or, even better, outsourced responsibility for sexual
harassment investigations, do so. For present purposes, remember this: an allegation
of sexual harassment by a non-employee must be investigated in the same way
as an allegation of sexual harassment by an employee.
5. Beware of the retaliation claim. Here’s what frequently happens in
scenarios like those described above. The manager, untrained in the nuances
of employment law, tells the employee that she has to do her best, and get
back to work. The employee, perhaps after another incident, ultimately refuses.
The manager feels backed into a corner, and either disciplines the employee,
or fires her.
In those circumstances, the employee is likely to bring a “retaliation
claim” – that is, a claim that asserts that her employment position
was compromised because she reported a harassment claim. You can avoid such
claims by getting the employee out of harm’s way (without demoting or
prejudicing the employee’s position in he company) and investigating
the claim before taking action, but the reflex reaction of many managers, particularly
when a relationship with a customer is implicated, can be problematic.
6. Confront the source of the harassment. As a necessary part of any investigation,
you will have to confront the alleged harasser with the fact that an allegation
of harassment has been made. That will not be difficult if the alleged harasser
is a delivery service, or a restaurant patron, or a minor customer. But if
the alleged harasser is, for instance, a substantial account, business reality
will require a balancing of interests, and a hefty dose of creative diplomacy.
There are no pat formulas that can be applied. We have helped clients through
this on frequent occasions in the past, and it requires a skillful, strategic
approach. For instance, in many cases, a “blame the lawyer” approach
works. Tell the customer who has asked one of your employees to dinner that
the employee felt that her job would be in danger unless she accepted, and
that counsel has advised you to ask the customer to back off or you will all
risk liability. In other cases, a different approach might be merited. Just
don’t ignore it.
7. Document what you did. Recognize that you are in a situation which might
explode in your face. As was discussed in the January 2004 issue of Avoiding
Lawsuits, it’s not enough to do the right thing; you have to be able
to prove you did the right thing.
A common scenario: you discuss the matter with your customer, who assures
you that he will make no further aggressive approaches to your employee, and
after a week or two he does so anyway. Your employee quits and files suit for
sexual harassment, claiming you did nothing to protect her. You assert that
you approached the customer, and the customer, now in self-protection mode, “remembers” your
conversation with him in a vastly different way. How will you prove that you’re
right and they’re wrong?
8. Consider an indemnity agreement. Many companies lease employees from other
companies, or they hire a consultant who brings in ten consulting employees
to the workplace, or. they hire a contractor to do some work in the office.
In each of these instances, there is a risk that the non-employees in the work
place will harass the employees in the workplace, leading to lawsuits and liabilities.
Why not protect yourself contractually? Include a provision in the employee
leasing, consulting or contracting agreement that requires the other party
to defend and indemnify you against any claim which results from the acts of
any person they assign to your workplace. Also consider a provision requiring
that all outsiders brought into your workplace must comply with your policies,
and any violations of such will result in termination of the contract at your
option.
It’s never easy. But, our clients tell us, once you attack these issues,
it’s not nearly as difficult as it seems. Let us know if we can help.
WHAT DO YOU THINK?
This month’s WHAT DO YOU THINK? poses the following issue:
Do you feel that your Company’s training programs effectively prepare
managers to properly handle employment law issues? If so, why? If not,
why not?
Click here to give us your
point of view. Next month we will share your input
(but we will never disclose your name, e-mail address or other identifying
data without your permission).
ANALYSIS AND REVIEW:
WHAT DO YOU THINK? -- JANUARY 2004
Our January 2004 WHAT DO YOU THINK? raised this issue: can you look
at your employees’ e-mails?
Some of your comments:
“If the employees never agreed to be monitored, it is an invasion of
their privacy rights.”
“
Under the Patriot Act which was enacted post - 9/11, all emails are subject
to scrutiny.”
“
In my Company, we are reminded every time we log on that all electronic equipment
is Company property and that the Company reserves the right to monitor how
that property is being used. Given that notice, I think an employer can monitor.”
“
If an employer allows its employees to use email for personal use, the employer
would have a hard time proving it wasn’t on a witch hunt.”
“
Our computers are password protected so our employees we have an expectation
of privacy. The employer has to demonstrate that it has a legitimate business
purpose in looking at emails and has to have more than mere suspicion.”
“
I work from home on a company laptop. My wife and kids also use it. How can
they legally monitor my 16 year old?”
Analysis:
In this age of seemingly endless electronic communication options (email,
voicemail, internet, text messaging, Palm Pilots, Blackberrys, cell phones,
video conferencing, webinars, etc.), employers are constantly challenged to
re-evaluate if (and how) existing policies and procedures apply to new technologies.
Lawmakers are challenged to balance employers’ business interests with
individual privacy rights. And employees are challenged not to cross the fine
line separating their personal and work lives.
The three questions any employer should ask itself before monitoring employee
communications are: “Can you?” “Should you?” and “What
do you do with the ‘stuff’ you find?”
There are federal statutes governing this issue, including the USA Patriot
Act of 2001, along with state statutes, state constitutions and state tort
(e.g. invasion of privacy) laws. Generally speaking, these answer the “can
you” questions. In states that permit monitoring, an employer will
not go wrong by having at least a clear and well-publicized policy regarding
electronic communications and the use of Company equipment, a notice regarding
its intent to monitor, and a consistent application of these policies and
procedures. However, the federal, state and in some cases local laws are
complex and should be discussed with counsel before instituting a monitoring
policy.
As to the “should you” questions, some employers feel the threat
of criminal activities, workplace violence, theft of trade secrets, software
piracy, and of course, legal liability, all justify monitoring. In many cases,
that’s true, but employers should not forget that company culture, employee
morale, and a host of other HR factors need to be evaluated as well.
Once an employer decides to monitor and does so legally, then the issue becomes, “what
do you do with what you just discovered?” You monitor for internet abuse
and find out your employee has AIDS . . . you intend to catch a thief but instead
discover a highly inappropriate office romance . . . you think Ed is your best
employee, but find out he is using the Company’s systems to pirate software.
What do you do? Can you use the information you discovered? As any good lawyer
will tell you – maybe, maybe not. But one thing’s for sure: trying
to find your way through this complicated maze is dangerous at best. Let us
know if we can help.
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