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Employer Liability: Hostile Work Environment Harassment

Company usually liable if it knew about but ignored situation.

In hostile work environment cases, company liability depends on who created the abusive environment-a supervisor, a coworker, or a third party such as a client..

Harassment by Supervisors

The vast majority of courts have decided that an employer is liable for hostile work environment harassment by supervisors only if it:

  • actually knew of the harassment or

  • could have learned of the harassment, and

  • failed to take immediate and appropriate action to correct it.

Strict liability, as exists in quid pro quo cases, would not make sense in hostile environment cases because harassment is normally outside the scope of the authority granted by the employer.

Knowledge of Harassment

A court will find that a company knew of harassment where, for example,

  • a person in authority directly observes the harassment,

  • the victim lodges an internal complaint with someone in authority,

  • the victim files a charge with the EEOC or a local fair employment agency or a union, or

  • the harassment is widely and openly practiced.

A court will find that a company should have learned of the harassment where, for example,

  • the harassment was blatant,

  • employees raised complaints that were ignored, or

  • managers witness enough conduct of a sexual nature to indicate that they should undertake further inquiry.

A Note About Company Policies

A court will be more likely to hold a company liable for hostile work environment harassment if the company fails to enact a sexual harassment policy or enacts an ineffective policy or fails to enforce its policy. Sexual harassment policies often are part of a company's broad-based nondiscrimination policy.

On the other hand, if the company has a policy that clearly prohibits sexual harassment, and harassment occurs but is not blatant, a victim who fails to use the internal complaint procedure may have a hard time proving that the company should have been aware of the harassment.

Companies have been charged with knowledge of harassment where

  • foremen on the shop floor could easily see that male workers posted sexual graffiti and pinups in their work areas, and they often overheard sexual overtures being made to female workers;

  • a company responded to a complaint by saying "boys will be boys"; and

  • it was known throughout the company that an interviewer was in the habit of asking applicants inappropriate sexual questions, questioning coworkers about their sexual practices, and offering to pull down his pants for them if offered money.

COMPARE The court refused to charge a company with knowledge of harassment where the victim authorized a coworker to draft a letter notifying the company, but quit before the letter was sent.

Effective Remedial Action

Liability occurs in hostile environment cases when a company not only knows of the harassment but also fails to take action to end it. The company must act promptly, and the action it takes must be effective. An effective remedy is one that will stop the harassment and prevent it from recurring. It is important to note that, in hostile environment cases, if the company takes appropriate and effective remedial action, then it can avoid liability, even if sexual harassment did occur.

EXAMPLE A company was not liable where it got a harassment complaint, investigated it in three days, and then transferred the harasser.

EXAMPLE A manager witnessed verbal harassment. He spoke to the woman who had been the target of the remarks and then made sure that the coworkers who had made the comments were put on warning.

COMPARE A company received a complaint of severe verbal harassment, but the offender was merely sent to counseling; he was not disciplined in any way. Not surprisingly, the harassment recurred. The company had not devised an effective remedy.

Case Study: Effective Remedial Action

Carol was a proofreader for a publishing company. She complained that she was harassed by her supervisor, William, for several months. Carol alleged that she had been subjected to unceasing sexually explicit jokes and remarks and that William ogled her.

The company had a sexual harassment policy and an open door policy intended to allow employees to raise complaints about supervisors without fear of retaliation. Carol talked to the head of human resources about her problems with William, but no investigation took place, and no action was taken against William.

A while later, William gave Carol the option of being laid off or competing for a lower-level position that also reported to him. Carol chose to be laid off. She then complained to the company's attorney, who investigated her claim. As a result of this investigation, William was suspended for two weeks without pay and warned that any future misconduct could lead to his termination. The company did not offer to reinstate Carol.

The court ruled that, although the company may not have conducted a very timely investigation, it had taken appropriate remedial action under the circumstances. Carol should have made a renewed request for an investigation before she left her job.

A Stricter Standard in Hostile Work Environment Cases?

A small minority of courts takes the position that employers can be strictly liable, even in hostile environment cases, if the harasser is at a senior level and uses his authority to carry out the harassment. They believe that because supervisors, especially those at high levels, can wield power against subordinates and that power was given them by the employer, the employer should be liable when they exercise their power improperly.

Company Notice and Liability

A marketing assistant at a textile company claimed that she was harassed by the vice president for sales and marketing. The harassment began when she first interviewed for the job, when he ogled her and asked her about her sexual relationship with her husband. After she was hired, business calls that she made to the VP could not proceed until she had described in detail what she was wearing. He made comments about her breasts and legs and tried to touch and grab her. He told her that he could make her job "very hard or very easy."

The marketing assistant complained about the VP to other employees, but, because she was afraid of him, she never filed a formal internal complaint. She then quit her job a little over a year after she had been hired. It was not until three weeks after she quit that she told the company that she had left because of sexual harassment by the VP.

The company's defense to her sexual harassment claim was that, because the plaintiff had not used its internal complaint procedure, it had no notice of the hostile work environment and could not be held liable. The company also argued that it could not be liable because the VP's acts were outside the scope of his employment. Although a lower court agreed with these arguments, they were rejected on appeal.

On appeal, the court ruled that the assistant had both hostile work environment and quid pro quo sexual harassment claims. It said that a company's liability is determined by federal law and not by its internal procedures. The evidence suggested that the VP had taken advantage of his status when he harassed the assistant. Certainly, he had made it clear to her that he could influence her success at the company. Much of his conduct took place on company time. For these reasons, a jury could find that he was acting within the scope of his employment when he harassed the plaintiff. The company could not escape liability because it had not authorized or condoned his acts.

On the issue of whether the company was on notice of the harassment, the court ruled that, when an employee's authority, granted by the company, helps him carry out the harassment, then the company may be liable even if it was not formally put on notice of the harassment. This being the case, the company could not avoid liability because the assistant had not lodged an internal complaint before bringing suit.

In another case, a female correction officer for a sheriff's department was harassed by one of her fellow workers, who told her that he had a "big dick," and put a zucchini between his legs and poked her buttocks. A few days after this happened, the woman requested a transfer, citing a "personality conflict." Her supervisor, assuming that she meant a dispute she had previously had with a female officer, denied the request.

The harassment continued and came to include touching, which injured the correction officer. She then gave her supervisor a detailed written complaint about the harassment. Her complaint was investigated, and it was decided that no disciplinary action would be taken against the coworker. The correction officer left her job and went on disability leave. She sued the company for sexual harassment and brought criminal assault charges against her coworker. He was found guilty of sexual assault.

The correction officer lost her sexual harassment charge against the sheriff's department. The court said that her initial complaint had not been sufficient to notify her supervisor that she was being sexually harassed. She did not reveal that she had been harassed until after she had been assaulted. So, the department had no opportunity to try to protect her. The court said that, if employers were liable in these circumstances, this would lead to the illogical result that they would be forced to investigate every request for a transfer based on a personality conflict as a potential sexual harassment case.


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