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In June 1998, the Supreme Court changed the legal landscape of employer liability for sexual harassment when it held in the companion Ellerthand Faraghercases that employers are vicariously liable for the conduct of their supervisors that create a hostile work environment, unless the employer can satisfy the elements of a newly promulgated affirmative defense. [FOOTNOTE 1]The new legal rule makes no change in established law where the supervisor’s conduct constitutes a “tangible economic action” of the employer, such as discharging or denying a promotion to a woman who resists the supervisor’s sexual importuning. But it did, on the surface at least, set a new legal regime in so-called “hostile environment” cases because under Ellerth/Faragher, the employee does not have to show some reason to charge the employer for the supervisor’s act; rather, the employer has to show a reason not to. The new rule of sexual harassment was readily extended by the lower courts to harassment based on race, national origin or any other protected classification. [FOOTNOTE 2] Despite initial concerns that the Ellerth/Faragherstandard might dramatically alter employer liability for sexual harassment, the bulk of decisions since the Court’s ruling have merely confirmed the principles that employment attorneys have been counseling for years: implement a well thought out and effective harassment policy with complaint procedures; treat complaints of harassment seriously, act on them promptly and respond with appropriate corrective action; and be proactive in training in how to avoid sexual harassment problems or deal with them should they arise. In fact, post- Ellerth/Faragherdecisions may in some ways give employers protections that did not exist or were not clearly defined under prior law. To benefit from the new affirmative defense, employers must show two things: first, that they exercised reasonable care to prevent and correct promptly any sexually harassing behavior; and, second, that the suing employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. [FOOTNOTE 3] WHAT IS A TANGIBLE EMPLOYMENT ACTION? Because an employer can take advantage of the affirmative defense only if the affected employee did not suffer a “tangible employment action” (if she did, the employer is strictly liable), the meaning of that new legal jargon might seem to be the first order of business. It has not turned out that way. The new term of “tangible economic action” actually covers what courts used to call ” quid pro quo” harassment. The one controversy that has arisen concerns constructive discharge, which occurs when the victim is so oppressed by the harassment that he or she justifiably quits rather than endure it any longer. In the some jurisdictions, including the Second Circuit, a constructive discharge is not considered a tangible employment action, and that permits employers to assert the affirmative defense that the offended employee failed to report her supervisor’s harassment before she quit. [FOOTNOTE 4]Other courts have suggested otherwise. [FOOTNOTE 5] Being clear about which supervisors subject employers to strict liability for which employees was implicit in Ellerth/Faragherbut not well highlighted by commentators at the time. Ellerthand Faragherimply that vicarious liability attaches only for acts of the employee’s immediate supervisor or one with “successively higher authority.” [FOOTNOTE 6]One district court applied this logic, deciding that an employee’s termination was not a “tangible employment action” because the employee was terminated by her supervisor and not the supervisor who had been harassing her. [FOOTNOTE 7]That allowed her employer to assert the affirmative defense for harassment by a supervisor who was not hersupervisor. DISSEMINATING AN EFFECTIVE ANTI-HARASSMENT POLICY IS A “MUST” The first prong of the affirmative defense — that is, reasonable care to prevent and promptly correct — can be satisfied only if the employer has in place a “reasonably designed and reasonably effectual” anti-harassment policy. [FOOTNOTE 8]A policy that does not expressly include complaint procedures is probably a non-starter. [FOOTNOTE 9] The Ninth Circuit has chosen to “suggest” that an effective anti-harassment policy should contain four elements: (1) a definition of sexual harassment; (2) an effective complaint procedure (allowing for multiple avenues of complaint); (3) a description of disciplinary measures that may be taken if sexual harassment is found to exist, and (4) a statement that retaliation will not be tolerated. Except for its focus on discipline of wrongdoers rather than corrective action to solve workplace problems, these elements are a good place for employers to start. The Seventh Circuit is less demanding, holding recently in Hill v. American General Finance Inc., that the employer’s anti-harassment policy, though not perfect, was good enough to “get the job done.” [FOOTNOTE 10] Some employers feel the need to state in their anti-harassment policy not only that retaliation for complaining is prohibited, but also that bad faith complaints are subject to discipline. This may not be a good idea. The Fourth Circuit (not known to be pro-employee) recently denied an employer the affirmative defense, in part, because its policy failed expressly to ban retaliation against those who complained and instead warned that false reports of harassment would be subject to discharge. [FOOTNOTE 11]Employers who want to deter vindictive complaints should be more subtle, saying for example that all those who make “good faith complaints” will be protected from retaliation. Having a well-written policy is, of course, only the beginning. It must also be effectively disseminated to employees. [FOOTNOTE 12]Having a signed acknowledgment by the employee that he or she has received the anti-harassment policy will, it is safe to assume, automatically satisfy this requirement. [FOOTNOTE 13]It is, however, not required and may raise evidentiary problems if, under Murphy’s rule of personnel administration, the only signed acknowledgment lost by the company is the one of the employee who chooses to sue. The bar for policy dissemination may be lower than many employers had originally thought. In Hill, the court found that the employer’s harassment policy contained in a notebook that was left in a public place was sufficient to establish that the employer maintained an effective anti-harassment policy. [FOOTNOTE 14]It may be ill-advised for employers to be quite so cavalier. But posting the anti-harassment policy throughout the workplace or distributing it to employees as a stand-alone document or as part of an employee handbook will probably satisfy the employer’s obligation, even without an acknowledgment of receipt by each and every individual employee. THE EMPLOYEE’S DUTY TO REPORT HARASSMENT IS BEING STRICTLY APPLIED The second branch of the Ellerth/Faragheraffirmative defense requires the employer to establish that the complaining employee “unreasonably” failed to avail herself of the employer’s preventive or corrective opportunities. After Ellerthand Faragher, courts have held that when the employer’s own anti-harassment policy specified the steps a complaining employee should take to alert the employer to potential harassment, the employee who fails to follow those steps has “unreasonably failed” to prevent the harassment. [FOOTNOTE 15]In one case, the Eleventh Circuit concluded that the plaintiff’s protests to mid-level managers in a social setting were not enough to deprive the employer of its affirmative defense. [FOOTNOTE 16]This result is fully consistent with the Supreme Court’s approach, which was that an employee’s failure to use the employer’s prescribed complaint procedures will “normally suffice” to avoid liability. [FOOTNOTE 17] Employers, however, should not become smug in this regard. While the designated complaint procedure is a starting point, it will not necessarily end the court’s inquiry. In another case, the court found that the filing of a union grievance regarding alleged harassment, although not specified as an avenue of complaint in the employer’s anti-harassment policy, was adequate. [FOOTNOTE 18]Therefore, supervisors should be trained to report to appropriate company officials any harassment complaint they find out about, and employers should proactively respond even to informal complaints that are made outside the defined parameters of their published policy. When employees fail to utilize provided avenues of redress but, nevertheless, sue, they will most likely contend that they did not previously complain because they were afraid of retaliation. One post- Ellerth/Faragherdecision to squarely address this issue held that an employee’s “subjective fear of retaliation” would not obviate her duty to alert her employer to the hostile environment. [FOOTNOTE 19]On the other hand, another court found that the plaintiff could have reasonably concluded that the employer’s stated prohibition against retaliation would not actually be enforced against her harasser because he had often flouted the company’s rule against drugs and alcohol without penalty. [FOOTNOTE 20]This means that renegade supervisors are a problem for employers not only for their actual conduct but also for what it communicates to its workforce about the employer’s seriousness of purpose for other standards, including those related to sexual harassment. Employers have tried to take advantage of the affirmative defense even when the employee complained by contending that she did not complain soon enough. These arguments have not been well received by the courts. When the offended employee alleges that the earlier harassment was manageable but later became more severe or intensive, courts have held that it was not unreasonable for her to have delayed complaining until the higher intensity harassment occurred. [FOOTNOTE 21] These decisions seem to overlook that the second prong of the affirmative defense is triggered by either the affected employee’s failure to use the employer’s preventive or corrective opportunities or her “failure to . . . avoid harm otherwise.” [FOOTNOTE 22]This aspect of Ellerth/Faragherholding was recently applied in a Fourth Circuit decision holding that the employer established its affirmative defense, in part, because the employee voluntarily entered the alleged harasser’s hotel room after a night of bar hopping when the same harasser had six months earlier made unwanted advances towards her. [FOOTNOTE 23]The court noted that the victim “unnecessarily put herself in a situation that permitted repetition of precisely the same kind of advances” she was objecting to. Using this analysis, it could be argued that employees who do not timely object to offensive behavior they find tolerable failed to avoid the harm that results when the harasser’s behavior intensifies. EMPLOYER’S MUST PROMPTLY RESPOND TO HARASSMENT COMPLAINTS Employers have a duty to take prompt and effective corrective action with regard to complaints of harassment. Investigations into complaints of harassment should begin immediately or at least as soon as practicable. Generally, courts will find an employer’s unreasonable delay in responding to complaints of harassment reason enough to deny application of the affirmative defense. [FOOTNOTE 24] If the results of the investigation indicate inappropriate conduct, the offending supervisor should be subject to corrective action that is reasonably likely to prevent future harassment and proportional to the seriousness of the harassment that has occurred. [FOOTNOTE 25]The corrective action does not have to succeed in preventing future harassment; however, it must be reasonably calculated to do so under the circumstances. [FOOTNOTE 26] Though not required under Ellerth/Faragher, courts continue to look favorably upon employers who provide harassment awareness training. [FOOTNOTE 27]Parenthetically, in Kolstad v. American Dental Assoc., the Supreme Court held that the implementation of anti-harassment policies and grievance mechanisms along with the education of the workforce could eliminate the imposition of punitive damages made available to plaintiffs with the passage of the Civil Rights Act of 1991. [FOOTNOTE 28] But, as our parents taught us, anything worth doing is worth doing right. If training is not taken seriously and if, in particular, inappropriate comments are allowed to be made during the training itself, the affirmative defense may be denied on the theory that the employer’s anti-harassment efforts were ineffective. [FOOTNOTE 29] Furthermore, the New York City Civil Rights Law affirmatively requires employers to have “[a] program to educate employees and agents about unlawful discriminatory practices under local, state and federal law” if they are to avoid vicarious liability for supervisory acts. [FOOTNOTE 30]By failing to provide supervisors with sexual harassment training, employers who satisfy the affirmative defense with respect to federal discrimination claims may nonetheless remain liable under the New York City law. CONCLUSION The Supreme Court has provided employers with an avenue to avoid liability based on a proactive effort to prevent harassment before it occurs or to promptly and effectively respond to harassment complaints when made. The courts are interpreting these standards in ways protective of employers who take the proper preventive steps, which must include not only the dissemination of an acceptable paper policy but the implementation of practices that can reasonably be expected to be effective. Michael Starris Chairman of the Employment and Labor Relations Department of Squadron Ellenoff Plesent & Sheinfeld, LLP , practicing from the firm’s New York office. Adam Blankis an Associate practicing in New York with Squadron Ellenoff’s Employment and Labor Relations Department. ::::FOOTNOTES:::: FN1 Burlington Industries, Inc., v. Ellerth, 524 U.S. 742 (1998); Faragher v. City of Boca Raton, 524 U.S. 775 (1998). FN2 See Allen v. Michigan Dept. of Corrections, 165 F.3d 405, 411 (6th Cir. 1999). FN3 Ellerth, 24 U.S. at 765; Faragher, 24 U.S. at 807. FN4 See Caridad v. Metro-North Commuter R.R.,191 F.3d 283, 294 (2d Cir. 1999); see alsoWatts v. Kroger Co., 170 F.3d 505, 510 (5th Cir. 1999). FN5 See Montero v. AGCO Corp., 192 F.3d 856, 861 (9th Cir. 1999); see also Pollock v. Wetterau Food Distribution Group, 11 S.W.3d 754, 765-766 (Mo. Ct. App. 1999). FN6 See Ellerth, 524 U.S. at 761-762; Faragher, 524 U.S. at 807. FN7 See Corcoran v. Shoney’s Colonial, Inc., 24 F.Supp.2d 601, 606 (W.D. Va. 1998). FN8 See Caridad, 191 F.3d at 295. FN9 See Brown v. Perry, 184 F.3d 388, 396 (4th Cir. 1999). FN10Hill, 2000 WL 536670 at *4 (7th Cir. May 4, 2000). FN11 Williams v. Spartan Communications, Inc., 2000 WL 331605 at *3 (4th Cir. March 30, 2000). FN12 Pollock, 11 S.W.3d at 765. FN13 See Shaw v. Autozone, Inc., 180 F.3d 806, 811 (7th Cir. 1999). FN14 See Hill, 2000 WL 536670 at *4. FN15 See Coates v. Sundor Brands, Inc., 164 F.3d 1361, 1364 (11th Cir. 1999). FN16 Madray v. Spartan Communications, Inc., 2000 WL 373956 at *10 (11th Cir. April 13, 2000). FN17 Faragher, 24 U.S. at 807-08. FN18 Watts, 170 F.3d at 511. FN19 Shaw,180 F.3d at 813. FN20 Pollack, 11 S.W.3d at 764; see also Caridad, 191 F.3d at 295 (suggesting, in dicta, that an employee might be able to survive application of the affirmative defense by establishing that her failure to utilize the employer’s complaint procedures was based on apprehension of the employer’s response). FN21 See Watts, 170 F.3d at 510; Corcoran, 24 F.Supp.2d at 606; but see Montero, 192 F.3d at 863 (holding that an employee’s two year delay in lodging a complaint because she was not confrontational and WAS afraid of losing her job was unreasonable). FN22 Ellerthat 765; Faragherat 778. FN23 Brown, 184 F.3d at 397. FN24 See Watts, 170 F.3d at 508 (holding that the employer’s three month delay prior to investigating the employee’s claim of harassment was unreasonable); cf. Montero, 192 F.3d at 863 (finding that the employer’s completion of an investigation eleven days from the day that the complaint was reported was reasonable for purposes of the affirmative defense). FN25 See Wilson v. Tulsa Junior College, 164 F.3d 534, 542 (10th Cir. 1998). FN26 Brown, 184 F.3d at 396. FN27 See Shaw, 180 F.3d at 812. FN28527 U.S. 526 (1999). FN29 See Williams, 2000 WL 331605 at *4. FN30NYC ADMIN. CODE � 8-107 (13)(d)(1)(iii).

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