BURLINGTON and FARAGHER:
NEW U.S. SUPREME COURT RULINGS ON SEXUAL HARASSMENT AND DISCRIMINATION

by Aegis Frumento, Litigation Partner.
For more information contact him at
afrumento@singerfru.com or at 212-809-8550

The United States Supreme Court recently handed down two important decisions in the field of sexual harassment and discrimination, which will have deep implications for all employers. We write to keep you informed of the developing law in this area, and to give our views on how best to minimize your exposure to lawsuits charging sexual misconduct.

The two cases, decided together, held that employers are liable for the sexually harassing conduct of their supervisors, and can be sued for damages by a harassed employee even if there was no adverse job action, the harassing conduct was unknown to the employer, and the employee did not report the conduct to the employer.

Burlington:
The facts of the two cases illustrate the point. In the first, Burlington Industries, Inc. v. Ellerth, the employee, after being subjected to crude remarks and suggestions by a superior, quit her job after 18 months. The employee did not report the incidents, even though the employer had an anti-sexual harassment policy in place. Although the employee's superior had suggested that she might not get promoted if she did not "loosen up," she in fact did receive a promotion. In other words, the harassment did not result in any loss of job status. The court still ruled the employer could be liable for damages to the employee.

Faragher:
In the second case, Faragher v. City of Boca Raton, a woman lifeguard was subjected to sexual advances and other crude sexual conduct by her supervisor, resigned and sued the city of Boca Raton, the ultimate employer. The City argued that it knew nothing of this conduct, that this conduct was contrary to its stated policies against sexual harassment, and that the offending lifeguards were acting outside the scope of their official duties when they harassed the employee. The Court rejected those defenses and again held the City liable for the acts of its supervisory employees.

Basically, the Supreme Court reasoned that since the laws against sexual misconduct in the workplace are intended to prevent sexual harassment, the employer, being in the best position to take steps to prevent harassing conduct, will be held accountable for any such conduct that does exist. However, by the same logic, the Court created an incentive for employers to enact policies designed to prevent workplace harassment.

What is sufficient to make out the affirmative defense will be determined by the lower courts as cases come up for review. Nevertheless, at least three things can definitely be said about the affirmative defense that will be helpful to employers, and that can be used to begin crafting anti-sexual harassment programs designed to take advantage of it:

1. It is not enough to have written policies against sexual harassment. Both employers in these cases had such policies.

2. It is not enough to show that the employee did not report the incidents. Neither employee did so in these cases.

3. It is not enough to show that the employer did not know about the harassing conduct. Neither employer did in these cases.

What, then, will be considered enough? The best we can do for now is carefully read the Supreme Court's rulings and try to decipher how an employer can best raise the defense created by the Supreme Court. We have the following thoughts.

First, a successful defense requires an employer to show both that it acted reasonably to prevent or promptly correct the harassing behavior, and that the employee acted unreasonably in not taking advantage of opportunities to avail herself of corrective measures. What if the first part is true and the second is not, that is, the employer promptly acts to correct a harassing situation, which the employee promptly brings to its attention? Then the defense is not available, but also it is may not be needed, since elsewhere in the opinion the Court makes clear that harassing conduct cannot be the basis of a lawsuit unless it is continuous and pervasive, not isolated and sporadic. If the employee promptly brings harassment to the employer's attention and the employer promptly corrects the matter, then the harassment of that individual will not be continuous and pervasive, and therefore will not give grounds for a lawsuit.

Second, an employer obviously cannot take prompt corrective measures if it does not know of the harassing conduct. But lack of knowledge alone is not a defense, as the principle holdings of these cases make clear. Therefore, it seems the key to the employer’s defense is that the employer has in place mechanisms to ensure that it is promptly made aware of any harassing conduct. This is also suggested in the second requirement of the affirmative defense, that the employee unreasonably failed to take advantage of opportunities to correct the harassing conduct. In other words, the employer must have in place some program to detect and correct harassing conduct such that if the employer does not learn of such conduct it can fairly be said that the employee's failure to bring such conduct to the employer's attention was itself unreasonable.

Third, in order to show that the employee acted unreasonably in not reporting the harassing conduct to the employer, something more is needed than the existence of an anti-harassment policy with a reporting procedure. Both the employers in these cases had such policies, but the Court found both to be insufficient to show that the employee was unreasonable in not taking advantage of them. In Ellerth, the policy required reporting to the employee's immediate supervisor, who would then be required to report to his supervisor, who was the very person being complained about. In Farragher, the City had not properly disseminated its policy to the division where the harassment took place.

Putting all this together, we can divine a few rules for designing an anti-harassment policy that should pass muster under the new affirmative defense:

1. The policy must be expressly clear that sexual harassment will not be tolerated and will be promptly corrected. In practice, corrective action can be any action that ensures the harassment will stop, up to and including dismissal. The strongest policy would dictate "zero tolerance," that is immediate termination upon a finding of harassment. Lesser actions might include the gamut of adverse actions, commencing with reprimands and warnings. Clearly, however, repeat offenders should be dismissed.

2. The policy must be executed without fail or exception. In other words, there cannot be selective enforcement such that employees have no faith in the employer's commitment to the policy.

3. The policy must be publicized, so that everyone not only knows of the policy but is reminded of it on a regular basis. This serves not only to keep everyone's consciousness raised to the issue but also gives victims of harassment a heightened sense of support that will encourage prompt reporting of incidents.

4. The policy should be coupled with a monitoring program to check for compliance. This program should include regular observance of the workplace and even periodic questioning of employees whether they have been the victim of or know of any harassing conduct. In other words, the employer should be more proactive than is normal now to ferret out incidents of harassment, and should not be content to rely passively on employees reporting incidents.

5. The policy should contain a reporting procedure that victimized employees will not be afraid to use. For example, as was the case in Ellerth, an employee is not reasonably likely to report harassment to her supervisor, when that supervisor or one of his or her bosses is the harasser. Ideally, the reporting procedure should be outside the operational chain of command, and reports should be made to someone who the employees can trust will be able to exercise independent judgment and authority. The person who best fits that description in most firms is the general counsel, whether in-house or outside.

6. The policy should also establish a procedure for periodically giving employees a written opportunity to report harassing conduct or to confirm that no harassing conduct has occurred. Again, this should come from an independent monitor, such as general counsel. For example, each employee could be made to return a statement to the general counsel periodically reporting incidents of harassment or, just as important, confirming that there have been no such incidents. In addition to being another reasonable avenue of prompt reporting, the negative responses on such statements provide evidence against any later charge of harassment.

The implementation of new policies against sexual harassment is necessary in light of the Supreme Court's recent rulings. We have extensive experience in litigating sexual harassment cases, and we can assist you in formulating and implementing policies designed to take the most advantage of the affirmative defense outlined in the Supreme Court decisions.