Cover Story
by john-edward alley & amy w. littrell
Sexual Harassment:
Shielding Your Company From Liability
The numbers are chilling. A small Miami company hit with a court award of more
than $1 million. A verdict of more than $7 million against a California law firm. Damages
of $50 million-plus against Wal-Mart.
Ever a threat to morale and productivity, sexual harassment is now becoming a threat to
corporate finances. In 1991, Congress allowed plaintiffs to collect compensatory and
punitive damages in successful sexual harassment lawsuits. As a result, more lawsuits are
being filed and the damages are becoming more costly, thereby increasing the importance of
corporate anti-harassment efforts.
One complication to the problem of sexual harassment in the workplace is determining
just what constitutes harassment. Statutes and case law provide broad guidelines but,
ultimately, the definition is subjective and circular. If an employee says the conduct is
unwelcome, then the conduct is presumed harassing. An employer will only get into trouble
if it tries to judge the merits of an employee's complaints.
Sexual harassment falls into two general categories. "Quid pro quo"
harassment is the kind where promotions and other conditions of employment are tied to the
granting of sexual favors. "Hostile environment" harassment occurs when
workplace behavior and conduct is intimidating or interferes with an individual's ability
to do the job.
An employer will always be found liable for sexual harassment if an employee complains
and the employer does nothing. But what if the employee doesn't complain and the employer
has no way of knowing that the harassment is occurring? If the harassment is of the type
that creates a hostile environment, the employer may be held liable even if it does not
receive a complaint about the harassment. All a plaintiff has to do is establish that the
level of harassment was so pervasive or severe, management should have known about it. In
the case of quid pro quo harassment, an employer generally will be held liable whether it
knows about the conduct or not. Quid pro quo harassment only occurs in the context of an
imbalance of power, meaning that the harasser has some authority over the harassee that
derives from the employment arrangement. Because the employer has delegated that authority
to the supervisory employee, it will be held liable for abuse of that power.
The only protection an employer has against what may seem like open-ended liablility
for complaints of sexual harassment is a vigorous and well-crafted anti-harassment
program. It must make clear that the company will not tolerate harassing behavior, and
will act quickly when it receives complaints.
Implementation of such a program is the right thing to do because it helps reduce
incidents of harassment. In addition, as some Florida cases recently decided by the 11th
U.S. Circuit Court of Appeals indicate, it erects a potential shield against liability. In
effect, the court has ruled that when a company adopts an effective anti-harassment policy
and pursues prompt remedial action, it receives a "get out of jail free" card.
THE IMPORTANCE OF PROMPT INVESTIGATION & REMEDIAL ACTION
One of the keys to avoiding liability is to take complaints seriously and to
act on them quickly. Since 1989, the 11th Circuit Court, the federal appeals court for
Florida, has held that an employer is not liable for a sexually hostile work environment
if the employer can show that it acted quickly to stop the harassment. The court recently
reiterated this position in Reynolds v. American Cast Iron Pipe Co. and reversed a
jury award of $500,000 to the employee alleging harassment.
The Reynolds case involved an employee who made a complaint to a manager about
inappropriate conduct. The manager immediately referred the complaint to the assistant
manager of employee relations. The assistant manager met with the employee that same day
and told her the complaint would be investigated. A written report on the complaint was
submitted to the employee relations senior director who began interviewing employees
within a few days.
At the conclusion of the investigation, the employer gave the alleged harasser a verbal
warning, ordered him to attend sensitivity training, took away his supervisory duties, and
transferred him away from the complainant. After this action by the employer, the alleged
harasser said nothing else to the complainant and he never touched her again. The court
held that the employer's discipline of the alleged harasser was action "reasonably
likely to prevent the misconduct from recurring" and, therefore, the employer
incurred no liability for the actions of this supervisor.
An important element of prompt remedial action is communication. The results of the
investigation should be made known to the involved parties, including the alleged
harasser. The results of the investigation may also warrant announcements to others in the
workplace to clarify or reinforce the employer's harassment policy. In making such
announcements, however, the employer take care not to defame anyone involved. The employer
may want to consider additional harassment training if it finds that employees do not
appear to be sufficiently familiar with its harassment policy.
In light of the court decisions, the employer's prompt investigation and action in
response to a claim of harassment is essential to its defense in a lawsuit. But what
happens when the employer doesn't get the opportunity to investigate a complaint and take
action?
THE "SHOULD HAVE KNOWN" ARGUMENT
An alleged victim doesn't have to complain about hostile environment harassment to win
damages. All the plaintiff has to do is establish the harassment was so severe or
pervasive that the employer should have known the offensive conduct was occurring. A
company may also incur liability when an employee confides in a low-level manager and
subsequently claims that the conversation put the employer on notice of the alleged
harassment.
Recently, the 11th Circuit Court of Appeals, in Farley v. American Cast Iron Pipe
Company, narrowed the employer's potential liability in these situations. In Farley,
the employer had implemented a comprehensive anti-harassment program that included the
following:
- adopting an effective sexual harassment policy and communicating it to employees
through training
- providing several alternative avenues for employees to complain without requiring that
employees go to their immediate supervisor to lodge a complaint
- taking complaints seriously by investigating them and taking prompt remedial action
based upon the results of the investigation
The court stated the general rule as follows:
In sum, we hold that an employer is insulated from liability under Title VII for a
hostile environment sexual harassment claim premised on constructive knowledge of the
harassment when the employer has adopted an anti-discrimination policy that is
comprehensive, well-known to employees, vigorously enforced, and provides alternate
avenues of redress.
Another recent 11th Circuit decision, Faragher v. City of Boca Raton, involved
complaining employees at a remote location controlled by the supervisors who allegedly
harassed them. The court held that the fact that the employees failed to complain to
higher management at another location precluded them from successfully proving employer
liability for hostile environment harassment. (The U.S. Supreme Court has decided to
review this decision, which may ultimately lead to an opinion from that court on these
issues.)
Faragher and Farley both emphasize the importance of utilizing the
employer's established complaint procedure. As the court said in Farley,
Once a company has developed and promulgated an effective and comprehensive anti-sexual
harassment policy, aggressively and thoroughly disseminated the information and procedures
contained in the policy to its staff, and demonstrated a commitment to adhering to this
policy, it has fulfilled its obligation to make reasonably diligent efforts to know what
is going on within the company; beyond this point, it is incumbent upon the employee to
utilize the procedural mechanisms established by the company specifically to address
problems and grievances.
The existence of such a policy, however, may not protect the employer if it has actual
knowledge of an incident of sexual harassment and fails to take prompt remedial action.
Employers should still encourage all supervisory employees to report complaints of
harassment to the appropriate top-level managers so that action may be taken. Based on Farley and Faragher, however, an employer can protect itself against liability for a
supervisor's failure to do so as long as the company has taken the steps outlined in these
decisions. These two decisions set up what might be called a "Triangle of
Protection." The employer is protected against liability if (1) it has a vigorously
enforced and widely disseminated policy prohibiting sexual harassment that (2) has been
made known to the employees through training, and (3) it takes complaints seriously,
investigating promptly and taking remedial action calculated to end the harassment.
ANTI-HARASSMENT VACCINATION PROGRAM
The implementation of an effective and well-disseminated anti-harassment policy, and
the training of managers and employees, are effective ways to take control of litigation
costs and reduce potential liability. They may also be essential to the very survival of a
company if it were to face a harassment claim in the future.
The first step is to adopt a general harassment policy that includes sexual harassment
provisions but also informs employees that any type of harassment based upon a category
protected by law (including age, religion, national origin, disability, race, color, and
marital status) is strictly prohibited.
The training program for management employees should cover the basics of workplace
harassment, including sexual harassment, and the pitfalls and dangers of office
socialization, including interoffice dating. Supervisors and managers should also be told
about issues of liability, including personal liability for the costs of defense, as well
as the possibility of liability for damages awarded to the plaintiff, and the irreparable
damage to a supervisor's personal and professional reputation. The steps each manager and
supervisor should take to avoid liability, both corporate and personal, for any kind of
harassment should be covered in detail.
A training program for non-management employees should focus on the issues relevant to
employees who are not in supervisory positions. It should be designed to cover the basics
of harassment and educate the employee on how to make a complaint pursuant to the
employer's harassment policy. This program should also cover the pitfalls and dangers of
office socialization, including inter-office dating; liability for harassment; and the
potential damage to an employee's reputation. Finally, the program should also cover, in
detail, what steps can be taken to avoid harassment, as well as the importance of seeking
help and reporting problems sooner rather than later.
While some employers fear that harassment training for non-management employees will
encourage them to file complaints, the focus of this program should be on the prevention
of harassment, including sexual harassment. Emphasis should be placed on the employer's
policy prohibiting harassment, and the importance of seeking assistance from the employer
first (as opposed to a third party such as a lawyer, labor union, or governmental agency).
Training assists in more than the prevention of harassment, however. It also is an
element in the protection against liability. Together with vigorous enforcement, training
programs act as a vaccine against costly sexual harassment claims. To put your company on
an anti-liability treatment program, contact an employment lawyer or human resources
professional. They can assist you in developing an anti-harassment program for your
company.
John-Edward Alley and Amy W. Littrell are with
the law firm Alley and Alley/Ford & Harrison LLP, where Alley is a partner.
SIDEBARS
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How to Recognize Illegal Harassment
Unwelcome sexual advances, requests for sexual favors, and other verbal or physical
conduct of a sexually harassing nature, constitute sexual harassment when:
- submission to such conduct is made either explicitly or implicitly a term or condition
of employment
- submission to or rejection of such conduct is used as the basis for employment
decisions
- such conduct has the purpose or effect of unreasonably interfering with an individual's
work or creates an intimidating, hostile, or offensive working environment
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Some Common Forms Of Harassment
Verbal
- sexually oriented noises, remarks, or jokes
- negative stereotyping
- sexual propositions
- unwelcome remarks about a person's body, color, physical characteristics, religion, or
appearance
Nonverbal
- displaying sexually suggestive or demeaning material
- leering or lewd gestures
- unwelcome notes or letters
- displaying material that depicts any protected category (disability, race, national
origin, etc.) in a demeaning manner
Physical
- intentional physical contact such as touching, brushing, pinching, grabbing, or
patting
- date rape, sexual assault, attempted sexual assault, etc.
- engaging in horseplay or practical jokes targeting employees because of their protected
status
Retaliation
- changing work assignments, demoting, refusing to promote or refusing to cooperate
with a person who has complained about or resisted harassment or discrimination
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Anti-Harassment Policy
An effective anti-harassment policy should include the following provisions:
- a statement that harassment is prohibited
- a general definition of prohibited harassment, which goes beyond that which is illegal
- examples of types of conduct that are prohibited (indicating the list is not exclusive)
- specific identification of managers to whom harassment complaints should be directed,
with phone numbers and/or office locations
- a statement of commitment to the eradication of prohibited harassment but warning that
management can only take action about conduct of which it is made aware
- a statement that confidentiality will be protected to the extent possible, but that
complete confidentiality cannot be guaranteed
- an assurance to employees that they will not be subjected to retaliation for
complaining of conduct they believe to be prohibited harassment
- informing both management and non-management employees of the anti-harassment policy
- providing a form for employees to sign indicating they have received and read a copy of
the harassment policy and understand it
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May/June 1998 -- Florida Business Insight, 501 N. Adams St., Tallahassee,
Fla. 32302
(850)224-7173, insight@aif.com
