Founder and Managing Partner
With multiple allegations of sexual harassment against movie mogul Harvey Weinstein dominating headlines, employers may be wondering whether they are doing enough to protect themselves against liability for harassment—and their employees may be wondering whether they have valid claims to bring against them.
Workplace harassment, whether sexual or based on race, religion, or any other protected characteristic, violates California and federal employment law. The prohibition on sexual harassment was originally developed by courts as a natural extension of Title VII of the federal Civil Rights Act’s prohibition on sex discrimination. California’s anti-discrimination statute, the Fair Employment and Housing Act (FEHA), takes a slightly different tack and prohibits harassment based on any protected characteristic, separate from its prohibition on discrimination. The FEHA also sets out the conditions under which employers will be liable for harassment committed by their employees. The FEHA is very similar to federal law in many respects, but is more strictly construed against employers. As a result, employers should be most concerned with California law.
Unlawful harassment comes in two forms, “quid pro quo” harassment and “hostile work environment” harassment. Quid pro quo harassment involves the explicit or implied offer of favorable treatment in exchange for sexual favors, or threats of adverse treatment if sexual demands are not granted. As the Weinstein case shows, this conduct is still a problem. Nevertheless, the second form of harassment – hostile work environment claims – is more frequently the subject of complaints and litigation today, in part because hostile work environment encompasses a broader range of conduct.
Hostile work environment is commonly misunderstood as simply mean, disrespectful, or abusive behavior by supervisors and managers. However, while toxic leadership can be a legal or human resources problem in its own right, unlawful hostile work environment harassment only occurs when the harassment is based on a protected characteristic, such as race, gender, sexual orientation, or disability. Harassment can be explicitly related to the employee’s protected characteristic, such as racist slurs or jokes, or it can be superficially unrelated to, but motivated by, the employee’s characteristic.
It can be difficult to determine exactly when behavior crosses the line to unlawful hostile work environment harassment. As courts frequently say in harassment opinions, the FEHA is not a civility code and it is not meant to make all forms of inappropriate workplace conduct illegal. To rise to the level of illegality, the harassment must be sufficiently “severe or pervasive” to alter the conditions of an employee’s workplace. The more severe the conduct is, the less frequently it must occur to be found unlawful, and likewise less severe harassment can cause liability if it occurs commonly enough. A single instance of harassment can be sufficient to impose liability if it is very severe. The lack of a clear standard for hostile workplace harassment makes identifying it by employers difficult, and also makes it hard to dismiss even relatively weak claims before they reach a jury.
Whether an employer is liable for harassment depends in part on the status of the employee who committed it. Employers are strictly liable for harassment committed by supervisors, meaning they are liable to the harassed employee whether they knew about the harassment or not and even if they take swift action against the harasser. For non-supervisory employees, an employer is liable if they knew or should have known about the harassment and failed to take immediate and appropriate corrective action. Under certain circumstances, employees can even be liable for harassment their employees suffer from non-employees if the employer has the power to take action and fails to do so. The harassing employee can be held personally liable in all circumstances, including owners and senior leaders.
While technically a separate claim, if harassment is severe enough that the affected employee quits, that employee may also allege that they were “constructively discharged.” If the employee is able to convince a jury that the environment was so intolerable that a reasonable employee would feel compelled to resign, then the law will treat the resignation as a wrongful termination, allowing the employee to recover their lost wages and benefits.
As with all cases under the FEHA, if an employee prevails on his or her harassment claim they are entitled to recover their litigation costs and reasonable attorney’s fees. However, if the employer wins at trial, they can only recover attorney’s fees and litigation costs if the court finds that the employee’s lawsuit was frivolous. In a case where the jury finds that the conduct alleged actually occurred but was insufficiently severe or pervasive to rise to the level of unlawful harassment, it is nearly certain that the employer would not be able to recover litigation costs or fees. Plaintiff’s attorneys are fully aware of this imbalance and set their settlement negotiation postures accordingly.
So what can employers do to protect against harassment claims? First, employers should institute and distribute policies against harassment and retaliation for any complaints alleging harassment or discrimination. These policies should be independent from the employee handbook and separately acknowledged in writing by employees. The law requires a written harassment policy including specific examples of harassing conduct and such policies should be reviewed by counsel for completeness and compliance with applicable regulations. If you are using any materials provided by the Department of Fair Employment and Housing, make sure you are using the most recent versions of those materials. These policies should be frequently communicated to employees.
Next, employers are required by law to conduct training on sexual harassment prevention and abusive conduct for supervisors every two years and within six months of hiring in, or promotion to, a supervisor position. If such training does not occur and a harassment claim is brought, the lack of training will create a presumption that the employer failed to do everything reasonably possible to prevent the harassment. Effective January 1, 2018 employers must add training on harassment based on gender identity, gender expression, and sexual orientation, including specific examples of such harassment. Dealers are strongly advised to consult with counsel to ensure mandated training conforms to the applicable regulations.
Employers should also institute complaint procedures for employees, including a way to bypass their supervisors in case the supervisor is the harasser. A prudent way to do this is with an anonymous complaint hotline. It is a partial defense to harassment claims under certain conditions if an employee has an adequate complaint mechanism available but fails to use it. Making sure complaint procedures exist and they and the anonymous hotline number are frequently communicated to employees will further help this defense.
Additionally, while the legal line between lawful and unlawful behavior is uncertain, nothing prevents an employer from setting a stricter standard as a matter of policy. Employers should make clear that they have no tolerance for any workplace behavior that targets an employee because of his or her membership in a protected class. A jury verdict finding that alleged harassment falls just short of the legal standard for liability will be cold comfort after months of business disruption and substantial attorney’s fees.
Next, employers should strongly consider policies that address workplace romantic relationships to minimize the risk of quid pro quo claims. Forbidding such relationships raises legal issues of its own, but requiring disclosure can allow companies to take steps, such as transferring employees to other departments that reduce the legal risk such relationships pose while also minimizing the appearance of favoritism and other morale-sapping issues that could arise.
Finally, employers should quickly and credibly investigate any complaint of workplace harassment. Such investigation should potentially include placing the accused on administrative leave or otherwise ensuring that the conduct complained about immediately ceases. Above all, employers should refrain from taking any action against the accuser that could be perceived as retaliatory and protect the complaining employee from retaliation from other employees. If the investigation corroborates the employee’s allegations, a wise employer will take immediate action to ensure the conduct is not repeated, up to and including terminating the offending employee, thereby limiting liability for the company.
If you aren’t sure that your workplace harassment policies and procedures are sufficient, contact your dealership employment attorneys. Your attorneys can audit and strengthen your existing policies, conduct required anti-harassment training, and investigate complaints of harassment.