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Policies, handbooks and procedures. Boon or albatross? Lawsuit prophylactic or damning trial exhibit? Useful management tool or confusing mishmash? Unfortunately, they often turn out to be more albatross, damning exhibit and mishmash. And, it’s not just the small companies, but also the larger ones ending up on the wrong side of these binary questions. Why is this so? Two reasons: Employment law is counterintuitive and technical. Consider how America West Airlines tripped up on a technical issue. Its Family and Medical Leave Act (FMLA) policy seemed a model of clarity: “Employees are entitled to up to 12 calendar weeks of unpaid FMLA leave within any 12 month period.” Sounds OK, doesn’t it? Not so, according to the 9th U.S. Circuit Court of Appeals. Let’s look at some basics first. The FMLA allows employees 12 weeks of unpaid leave in a “leave year” to take care of their own serious health condition or that of an immediate family member or for the birth or adoption of a child. But, what exactly is a leave year? The regulations say that it can be the calendar year — Jan. 1 to Dec. 31 — or a rolling 12-month period measured backward from the date an employee uses any FMLA leave. The problem with the calendar year is that employees can stack 12 weeks on the end of one calendar year and still be able to claim 12 weeks at the beginning of the new calendar year. The rolling method stops this cold in its tracks. Each time an employee takes FMLA leave, the remaining leave entitlement is any balance of the 12 weeks that has not been used during the immediately preceding 12 months. So, if an employee uses her full allotment of FMLA leave from November through January, she should be entitled to no additional days until November of the following year. But, here’s where America West got grounded. According to the 9th Circuit opinion in Bachelder v. America West Airlines (2001), an employee took substantial leave in 1994 and 1995 covered by the FMLA. In early 1996, she again took substantial leave and was terminated. America West erroneously believed it was using the rolling year, and contended that she had exhausted her full allotment in 1995 and that when it terminated her in 1996, she had no more FMLA leave. By contrast, the employee said the airline was using the calendar year, and that as of Jan. 1, 1996, she was bestowed yet another 12 weeks of leave. The court said she was right, that her termination violated the FMLA and that she was entitled to an additional 12 weeks. Why? The policy quoted above was vague, it could mean either calendar year or rolling year, and the employer who drafted it must live with the consequences of any vagueness. The lesson: Look at FMLA policies and consider revising them if there is any doubt about whether a calendar year or a rolling year applies. But remember that the regulations provide a procedure to follow to change from one method to another. You just can’t say abracadabra. Now, let’s shift gears. Remember seeing those “Where’s Waldo?” cartoons? We loved them. Waldo, a cartoon character, is hidden in the crowd. You must figure out where he is. Here’s a sexual harassment policy. There’s a fatal defect in it. Read the policy, think about it, and see if you spot the defect before you read on. Here goes:
It’s First Union [bank's] policy to prohibit sexual harassment of our employees. Sexual harassment means unwelcome, offensive sexual advances, requests for sexual favors, and other verbal or physical contact of a sexual nature. This policy applies to management employees, nonmanagement employees, outsiders, and customers.

Do you see Waldo? Here’s what happened when the policy collided with the real world. According to the 4th U.S. Circuit Court of Appeals opinion in Smith v. First Union National Bank (2000), a female employee sued First Union for sexual harassment because her supervisor allegedly made a variety of offensive remarks, including the following:

Males are “natural leaders.” Women are “too emotional to handle managerial roles.” Women need a “good banging.” The only way a woman can get ahead at First Union was to have sex with a supervisor.

The supervisor’s alleged conduct went on for a few years before the employee spoke up about it. Not a word from her. She didn’t complain to a soul. So when the employee sued the company it reasoned it would win because it had a sexual harassment policy that she did not reasonably take advantage of by waiting so long. But the court said, “Not so fast.” The employee said she didn’t think she could complain under the policy because it merely prohibited unwanted sexual advances and other sexually provocative misconduct. Because the policy implied that a sexual advance is required for there to be sexual harassment, the employee kept her own counsel. She didn’t recognize that the harassment, which was gender-based but not sexually provocative, was covered under the policy. Here’s Waldo: Sexual harassment is about more than just sex. So, corporate counsel need to look at their corporate policies to ensure they include broad prohibitions, such as prohibiting “unwelcome advances” or “all other verbal or physical conduct of a sexual or otherwise offending nature,” or that a hostile work environment includes “insults or inappropriate conduct based on protected status,” and then define “status” to include, among other things, sex. Here’s a simple question that should have a simple answer: What should a policy say about who an employee should report to if she believes she is being subjected to a hostile work environment? Let’s look at the city of Houston police department. Here’s what its policy said:

Ideally, any employee who believes that he or she has been the object of sexual harassment should ask the offender to stop using the offensive behavior. If such action does not cause the behavior to stop, then the employee should report the alleged act immediately to his/her supervisor. Supervisors, in consultation with the City of Houston’s Director of Affirmative Action, should make every effort to ensure that complaints of sexual harassment are resolved promptly and effectively. If the employee is not satisfied with action taken by the supervisor, or feels that the complaint would not be received objectively by that supervisor, the employee should bring that complaint to the attention of the Director of Affirmative Action.

According to the 5th U.S. Circuit Court of Appeals opinion in Williamson v. City of Houston (1998), an employee complained to her sergeant, who was her supervisor. The sergeant, except for one instance, allegedly didn’t take appropriate remedial action. Ultimately, she filed a complaint with the Internal Affairs Division, an investigation was conducted and prompt action taken. But the jury didn’t let the city off the hook and awarded her $120,000 (including attorney fees), and the 5th Circuit didn’t set it aside. The 5th Circuit reasoned that if the sergeant’s knowledge of the complaint is imputed to the city, then the city loses because prompt action was not taken. Because the city’s own policy said that employees could report alleged harassment to their supervisors, and the sergeant was in a position to take action and address the problem, the sergeant was the city. The 5th Circuit rejected the city’s argument that if the employee did not care for the actions taken by the supervisor, she could have gone up the chain of command. The sergeant’s alleged actions (or in this case alleged inactions) lost the case. What’s a GC’s office to do? First, know what this case does not stand for. An employer can still have a supervisor be the point of contact for a complaint provided that it allows the employee to bypass the supervisor if she is the one doing the harassing. If a nonharassing supervisor is the point person for complaints though, remember three words: training, training, training. If supervisors take the point, they need to understand they have a duty to listen to the complaint. In addition, they must be trained to pass the complaint on for investigation — to either a higher managerial level employee or the human resources department. They must understand they cannot sit on it. If you don’t go with the supervisor as a point person, then have a designated job classification in HR as the person authorized to take the complaint. LOVE CONTRACT Finally: “Should we do the love contract?” We know this sounds like a Barry White song, but it isn’t. Rather, it’s an increasingly common question being asked by corporate counsel. What’s a love contract? If employees date at work, they must sign an agreement promising that if anything goes askew in their relationship neither will sue for sexual harassment. Here’s the nitty-gritty: The “love contract” acknowledges they are engaged in a consensual, romantic affair and that there was neither coercion nor promise made (if one is a supervisor) to enter into the relationship. A variation provides that both parties absolve the employer of any liability and promise not to sue for sexual harassment or discrimination. We doubt if any court will approve a future waiver of a sexual harassment claim. Further, we question the wisdom of a management style that requires employees to lay out the terms of their personal relationships in writing. A better solution is to simply say: “Let us reason together.” Think about developing a “Relationships at Work Policy” that includes not only those that become romantically involved but also those with supervisory authority over an immediate family member or employees who live together (nonromantic). Remember the issue is one of conflict of interest or the appearance of a conflict. It’s not always about love. With this policy, provide that it is the responsibility of the supervisor — not the employee — to bring the matter to the attention of HR or the GC’s office. What happens then? One of the employees gets reassigned or must resign. But, too often, companies with these policies automatically reassign the female employee (if it’s a romantic relationship) and let the male employee stay put. An alternative is to let the involved employees — not the company — decide which one will be reassigned or resign. If you go that route, the company must be willing to cede some measure of its authority to the employees. Too complicated? Try the “off with their heads!” policy. It’s drastic: Fire any supervisor who enters into a romantic relationship (even a consensual one) with a subordinate. Some employers go so far as to extend this prohibition to all situations, even those in which the supervisor is not supervising the subordinate. But as with many things in life, this alternative’s greatest virtue also is its greatest flaw. Invariably, employers with this type of policy find that it’s their most loyal or most productive supervisor or manager who runs afoul of it. If it happens, fire him or her — no exceptions. If a policy applies, it must apply to everyone equally. Policies are prophylactic. Procedures are proactive. Handbooks are, well, handy. But, none are a substitute for good judgment, fair treatment, or a corporate culture of integrity and respect. When in doubt, ask: “If there were no rules, what would we do?” One question is worth a thousand words. Michael P. Maslanka is chairman of the labor and employment section at Godwin Gruber (www.godwingruber.com) and writes the Texas Employment Law Letter, which can be accessed at HRhero.com. Burton D. Brillhart is a partner in Godwin Gruber. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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