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Sexual Harassment and Employer Liability

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  • 1. www.BusinessControls.com Sexual Harassment and Employer LiabilityImportant legal developments in recent years have made it clear that failure totrain employees to recognize and prevent sexual harassment can exposeemployers to liability and financial risk. This is especially relevant regardingtraining members of management. In 2010, the EEOC received 11,717complaints of sexual harassment in the workplace.1 Of those complaints, nearly30% resulted in some type of monetary settlement, totaling approximately $51.5million dollars. Employers who opt for litigation over settlements can be expectedto pay monetary awards up to and including millions of dollars, in the event theyare found to be liable.The two landmark cases that set the standard for employer liability in sexualharassment suits occurred in 1998: Burlington Industries v. Ellerth and Faragherv. City of Boca Raton. Liability for employers, as defined by these two cases, isbased upon two factors. First, liability is established under the principle that anemployer is responsible for the actions of its managers. Secondly, employersshould promote the prevention of harassment, meaning employees should beencouraged to avoid or limit the harm resulting from the harassment. This can beestablished through providing reporting mechanisms for employees to utilize andproviding regular harassment training.The Supreme Court has held that under the aforementioned principles, anemployer is always vicariously liable for harassment perpetrated by a manager ifa “tangible employment action” is taken against the harassed employee. Theseactions can include firing or demoting an employee, not providing similar trainingor promotional opportunities, or transferring the employee arbitrarily. If suchaction has not been taken, there are avenues an employer may create anaffirmative defense in the event a sexual harassment claim is made. One suchavenue is to demonstrate that the employer “exercised reasonable care toprevent” or remediate, a behavior deemed to be harassing in nature.The most effective way through which an employer can show they in fact, tookmeasures to prevent sexual harassment, is by providing all employees, and to agreater degree managers, training regarding sexual harassment. Additionally,when a complaint arises, the organization must immediately investigate theconcern and follow up to ensure the behavior does not continue.In some states, including California, Maine, and Connecticut, sexual harassmenttraining is mandatory. While the remaining states have no legal obligation foremployers to conduct such training, it is a best-practice to provide training for allemployees and managers. Employers may assume that providing employees 5995 Greenwood Plaza Boulevard, Suite 110 ● Greenwood Village, Colorado 80111 ● Office 303.526.7600 ● 800.650.7005 ● Fax 303.526.7757
  • 2. www.BusinessControls.comand supervisors a company policy that prohibits sexual harassment is enough toprove “reasonable care;” however, a recent court case in Tennesseedemonstrates that a policy is simply not enough. In Bishop v. Woodbury ClinicalLaboratory, the employer disseminated the company’s anti-harassment policy toemployees, but failed to provide training on the policy. A sexual harassment caseensued and the court denied the employer’s affirmative defense stating it had notmet the “reasonable care” provision required by the Faragher and the Ellerthcases.Essentially the court held that simply providing a policy is not sufficient for anaffirmative defense, rather an employer must demonstrate that supervisors andemployers understand and were educated about the policy. While the case lawresulting from the Bishop decision is not binding in courts outside of the MiddleDistrict of Tennessee, the conclusion demonstrates a growing trend of requiringemployers to take more proactive measures to prevent sexual harassment.Additionally, when compared to a potential million dollar lawsuit, the cost oftraining is negligible.Overall, employers who provide training on sexual harassment are better able todefend themselves against any claims which may later arise. Moreover, propertraining for all employees will diminish the occurrence of sexual harassmentclaims as employees who are aware of what constitutes sexual harassment areless likely to engage in harassing behavior. Being able to prove that training hasbeen provided to your workforce may also diminish the amount of damagesawarded to the plaintiff in the event liability is found to lie with the employer.Finally, more employers are training their supervisors and employees on how torecognize and prevent sexual harassment, further supporting an affirmativedefense in the event a harassment claim is filed. 1. U.S. EEOC, Sexual Harassment Charges FY1997-FY2010TIP: Keep employee training up to date with annual Sexual Harassmenteducation. Consistent, scheduled training not only ensures compliance withstate laws, but it also allows for your policies and expectations to be clearlycommunicated to your workforce. The more knowledgeable your managers andemployees are, the easier it is to recognize and address situations when theyarise and will assist in decreasing the organizations liability.BCI conducts Sexual Harassment training for organizations, in-house, to helpreduce incidents in the workplace. For more information, contact us at800.650.7005. 5995 Greenwood Plaza Boulevard, Suite 110 ● Greenwood Village, Colorado 80111 ● Office 303.526.7600 ● 800.650.7005 ● Fax 303.526.7757