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Sexual Harassment What Youre Liable For Now

October 1, 1998
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Sexual harassment is in the news every week. And on June 26, the topic made news again, as the United States Supreme Court issued rulings on the final two cases in a trio of sexual harassment lawsuits this year -- the first of which was ruled on March 4 -- having important implications for employers and HR managers.

In one case ruling, for the first time since Title VII of the Civil Rights Act of 1964 became law, employer liability for sexual harassment between members of the same gender was clearly defined. In another case ruling, sexual harassment by supervisors has been outlawed, and in the third case ruling, an employee can now sue an employer for harassment, even if the employee suffered no tangible job loss because of the misconduct.

Take a deep breath, folks, because these three cases mean big changes. Some of these changes are favorable for employers, but some aren’t. The implications of the Supreme Court’s decisions are clear: Sexual discrimination and harassment won’t be tolerated in America’s workplaces. The legal arena is making sure of it. Here’s what was decided and what it means for your organization:

CASE I: Oncale vs. Sundowner Offshore Services, Inc. (No. 96-568)

Decision date: March 4, 1998

Key question: Is it sexual harassment when misconduct is between members of the same gender?

Facts of the case: Joseph Oncale was hired as a roustabout (a deckhand or waterfront laborer) through Sundowner Offshore Services’ (SOS) Houma, Louisiana, office. He was assigned to work with an eight-man crew on a Chevron USA oil platform in the Gulf of Mexico.

In 1991, three of the crew members, including two supervisors, forcibly subjected Oncale on numerous occasions to humiliating, sex-related actions, some in front of the rest of the crew. The two supervisors, John Lyons, a crane operator, and Danny Pippen, a driller, physically assaulted Oncale in a sexual manner, and one of the supervisors even threatened Oncale with rape. A third co-worker, Brandon Johnson, also participated in the harassment.

Oncale complained of the blatant sexual misconduct to his supervisor, the company’s safety compliance clerk. But instead of doing anything about the problem, the clerk replied that he, too, had been picked on by two supervisors who had called him a name suggesting that he was homosexual.

Oncale also reported the misconduct to the highest-ranking supervisor on the rig, who neither investigated nor intervened. Oncale ultimately quit because of the verbal abuse and harassment. He testified in his deposition that he thought if he didn’t leave his job, he’d be raped or forced to have sex. SOS later explained the supervisors’ behavior as mere horseplay.

U.S. Supreme Court ruling: Unanimous (9 0)

The Supreme Court unanimously declared that sexual harassment is actionable, even when the people involved are of the same sex. In Justice Antonin Scalia’s opinion, what matters is the conduct at issue, not the sex of the people involved and not the presence or absence of sexual desire, whether heterosexual or homosexual. The Supreme Court noted that the law equally protects men and women against workplace discrimination.

CASE II: Burlington Industries, Inc. vs. Ellerth (No. 97-569)

Decision date: June 26, 1998

Key question: Is it sexual harassment when there’s no tangible job detriment?

Facts of the case: Kimberly Ellerth, a former marketing assistant at Burlington Industries’ mattress-fabric division in Chicago, claimed her boss, Theodore Slowik, a divisional vice president for sales and marketing, had made repeated “passes” at her in 1993 and 1994 during her employment. She claims he made inappropriate comments to her, such as “You know, Kim, I could make your life very hard or very easy at Burlington,” and “Are you wearing shorter skirts, yet, Kim, because it would make your job a whole lot easier.”

Despite rebuffing his advances, Ellerth never suffered any tangible job detriment because of the harassment. And although Ellerth was familiar with the company’s anti-sexual harassment policy, she never informed management about her supervisor’s misconduct. Ellerth even received a promotion before quitting. Fifteen months after resigning, she sued Burlington.

Title VII was unclear because of its original intent to prohibit employers from discriminating against women in jobs traditionally held by men.

U.S. Supreme Court ruling: Majority vote (7 2)

An employer can be liable for sexual harassment and can be sued regardless of whether a supervisor’s threats against an employee -- for example, no promotion without sexual favors (quid pro quo) -- are carried out. However, the Supreme Court says employers can assert an “affirmative defense” -- meaning that an employer may be relieved of liability in the absence of tangible job detriment if it can show that it exercised reasonable care to prohibit and remedy sexual harassment, and if it can show that the employee unreasonably failed to take advantage of the corrective opportunities offered by the employer.

CASE III: Faragher vs. City of Boca Raton, Florida (No. 97-282)

Decision date: June 26, 1998

Key question: Is an organization liable for sexual harassment when the organization is unaware of a supervisor’s misconduct?

Facts of the case: Once an ocean lifeguard for the city of Boca Raton, Florida, Beth Faragher claimed she endured repeated sexual harassment from two male supervisors during the five years she worked on the city’s beaches.

Now a lawyer, Faragher says she and seven other female lifeguards worked for two men, Bill Terry and David Silverman, who would request sexual favors, grab them by the breasts and buttocks, try to break into their showers and referred to them regularly by vulgar epithets. Faragher says she didn’t report the problem to higher-ups because she feared retaliation. However, Faragher did speak to one police lieutenant about the behavior, but he didn’t think it was his place to act upon workplace complaints.

Attorneys for the city of Boca Raton argued that the city shouldn’t be held liable because it had a clear policy against sexual harassment since 1986, and because the male supervisors were acting on their own -- not as representatives of the city. The city, however, had failed to disseminate the policy to its lifeguard employees or supervisors. Therefore, neither Faragher nor her supervisors had any knowledge of the policy.

U.S. Supreme Court ruling: Majority vote (7 2)

The Supreme Court said that an employer is liable for a pervasive, hostile atmosphere of harassment, and an employer is potentially liable for its supervisors’ misconduct, whether the company was aware of the harassment or not.

Sexual harassment: Unlawful between people of the same gender.
Of the three sexual-harassment cases decided this year, Oncale vs. Sundowner was the only unanimous decision handed down, which means a clear message for employers: Harassment between two or more men, or between two or more women, is still harassment. However, while on its way to the High Court, the Oncale case was perhaps the most misunderstood of the three harassment cases.

The confusion probably stems from the fact that whenever the word “sex” is involved in a discussion about sexual harassment, people get confused about what the term means. Does “sex” refer to the gender of the harasser or the victim? Or does it refer to the type of behavior? Or all three? That’s exactly the confusion that plagued lower courts with this case, and it was the issue that the nine Supreme Court justices agreed to answer.

Here’s what they had to work with: Title VII of the Civil Rights Act provides, in part, that “it shall be an unlawful employment practice for an employer ... to discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment because of such individual’s race, color, religion, sex or national origin.” It’s the “because of ... sex” phrase that has created all the controversy and confusion over the years.

Until now, Title VII was unclear whether it covered sexual harassment between members of the same gender because of its original intent to prohibit employers from discriminating against women in jobs traditionally held by men. Because of the law’s origins, some lower courts ruled that in cases like Oncale, same-sex sexual harassment lawsuits could be brought to court only if the harasser was gay, but dismissed lawsuits when the harasser was heterosexual. Other courts suggested that in cases in which the victim was gay or lesbian, he or she wasn’t protected because the harassment was considered sexual-orientation discrimination, which Title VII has been held not to prohibit.

In an amicus brief sent to the Supreme Court to consider while deciding this case, Lambda Legal Defense and Education Fund -- a legal organization based in New York City that defends the civil rights of lesbians, gay men and people with HIV and AIDS -- urged the Supreme Court to recognize that Title VII should be applied without regard to the sex or sexual orientation of the harasser or victim.

“Lambda, with the ACLU, NOW, Women’s Legal Defense Fund and many other civil rights groups, urges the Supreme Court to recognize that sexual harassment is about subjecting employees to unfair working conditions by taking advantage of them at a very vulnerable, sexual level,” said Ruth E. Harlow, Lambda managing attorney, who assisted in writing the brief, and who was quoted in an article compiled by Badpuppy’s GayToday, a daily news publication for the global gay and lesbian community. “Every instance of severe sexual harassment plays upon the sex of the targeted employee and is unlawful under Title VII, regardless of the gender or sexual orientation of the perpetrators,” she said.

Interestingly enough, Oncale identifies himself as a heterosexual, and didn’t realize that he would become an icon for gay-rights advocates. “He started out living a very closed existence, not having much contact with gay people,” his lawyer told The Advocate, a gay issues publication, last year. “But during this process, he has learned what gay people face in terms of discrimination. If his case can help them out, he’s happy about that.”

The Supreme Court affirmed that when harassment has a tangible consequence, like a poor work assignment, employer liability is absolute.

In the end, sexual orientation wasn’t the issue. Disparate impact “because of sex” was the issue. In its final decision, the Supreme Court held that Title VII showed “a congressional intent to strike at the entire spectrum of disparate treatment of men and women in employment.” So even though sexual harassment isn’t expressly prohibited in federal employment discrimination statutes, the Supreme Court has said it is actionable as a form of sex discrimination under Title VII.

In making the decision, the Supreme Court looked to the law of racial discrimination, which makes it clear that it’s possible for an employer to discriminate against members of its own race, not just members of another race. The Supreme Court bolstered its opinion with a sports metaphor to connote that context is everything: “A professional football player’s working environment is not severely or pervasively abusive, for example, if the coach smacks him on the buttocks as he heads onto the field, even if the same behavior would reasonably be experienced as abusive by the coach’s secretary (male or female) back at the office.”

“I think for most major employers, [the Oncale case decision] is just a blip on their radar screen because their policies already prohibit harassment of any form -- not only sex, but also racial, religious, ethnic and any type of harassment based on any protected characteristic,” comments Paul Salvatore, a New York City-based labor and employment law partner and an expert on sexual harassment issues at Proskauer Rose LLP. “It came as no great surprise, I think, to most employers of any size with any sophisticated human resource function that this was the way the Supreme Court was going to go on this case.” Salvatore emphasizes that this case isn’t a big deal for most big employers that already have had policies against same-sex harassment in place for a while.

That’s exactly how Bob Hamilton, human resources diversity consultant for E.I. du Pont de Nemours and Co. (DuPont), based in Wilmington, Delaware, sees it. “We’ve always treated sexual harassment among the same gender as inappropriate,” says Hamilton, “but up until the Supreme Court rulings, it depended on the various district courts as to whether it was actionable [under the law] or not. So the Supreme Court finally made clarity around this issue.”

DuPont’s HR team, which won the 1997 Workforce Optimas Award for its laudable approach to diversity issues, identified same-sex harassment as a “no-no” years ago. Since 1988, before most companies had even acknowledged the term “sexual harassment,” DuPont had its training program, “A Matter of Respect,” up and running.

The training, which involves a series of video vignettes that emphasize nondiscriminatory behavior in the work environment, clearly shows workers how to treat each other on the job -- and serves as a model program for other employers to emulate. “From our nondiscrimination policy and from our policies about treating people with respect, we try to let people know that whether it’s [happening between members of] the same sex or not, [discriminatory] behavior is inappropriate.”

Although it’s been a no-brainer to treat same-sex harassment the same as opposite-sex harassment for big-name firms like DuPont, the majority of most larger, mid-sized and smaller organizations aren’t quite so enlightened. Most experts say there’s going to be quite a bit of tweaking of policies, practices and training going on over the next few years to comply with the new law because of the Oncale case. Says one attorney who wished not to be identified: “We all know same-sex harassment is now covered. But it’s a little unclear under what circumstances.” The lower courts are bound to have to address that question over the next several years.

There doesn’t have to be a tangible job detriment for harassment to be actionable.
The key question raised by the Ellerth vs. Burlington Industries case was if nothing happened to an employee in terms of a tangible job threat or detriment, such as a salary reduction, a less-desirable job assignment or denial of a promotion, could he or she claim sexual harassment? The Supreme Court affirmed that when harassment has a tangible consequence, like a poor work assignment, employer liability is absolute.

But what’s more interesting is that the court took the law a step further by saying that even when there’s no tangible job detriment to an employee because of sexual harassment, an employer may still be responsible. The Supreme Court is saying, in effect, that harassment is defined by the ugly behavior of the perpetrator, not by what happens to the worker subsequently.

And the Supreme Court clearly outlined employer liability when this concrete tangibility isn’t present. Employers can be held for liability or damages unless: 1) They have a clear policy against harassment, including how to report such behavior, and 2) Such a policy exists, but the employee bringing suit “unreasonably” failed to take advantage of it. These two conditions of liability are called, in legalese, an affirmative defense.

“The million dollar question now is what impact will the affirmative defense have? Will it be a complete defense to liability? Or will it simply be a defense that lessens the amount of damages for which the company is responsible?” asks Gerald L. Maatman, Jr., a partner in the law firm of Baker & McKenzie in Chicago, specializing in sexual harassment issues. The Supreme Court has made it unclear because it used the word “or” -- liability or damages. There’s no way of predicting exactly how lower courts may interpret this in future court decisions.

The good news for employers is that the second prong of the affirmative defense implies employees have a bigger role to play than they previously had to. Under the old rules, workers needed to tell someone if they were experiencing sexual harassment. Under the new rules, workers now need to tell someone with decision-making power if they’re experiencing sexual harassment. Both the Ellerth and Faragher cases make it clear that a worker who’s being harassed must report it. The employee has “a corresponding obligation of reasonable care to avoid harm.” The Supreme Court made it more of a two-way street.

Says Salvatore: “Before, we were kind of reading the tea leaves and reading between the lines. Now we have a definitive statement from the Supreme Court.”

Employers are now liable for supervisor misconduct.
Up until now, most sexual harassment cases have been known as “hostile work environment” -- when someone is the victim of a pervasive pattern of unwanted advances, touching and other misbehavior in a given workplace.

Many employers have had no trouble getting such cases thrown out of court. That’s been mostly because employee plaintiffs had to prove negligence -- that a company knew, or should have known, about the offensive behavior. Under the old rules, a manager who didn’t know about sexual harassment among his or her employees usually wasn’t responsible for the behavior. That has changed -- dramatically.

“There’s been a definite change in the standard of liability when the harassment is done by a supervisor in the hostile work environment context, changing from a basically negligent standard -- the ‘knew or should have known’ standard -- to vicarious liability with an affirmative defense,” explains Ellen McLaughlin, a partner in the law firm of Seyfarth, Shaw, Fairweather & Geraldson in Chicago. McLaughlin specializes in sexual harassment liability issues. Now, the manager will be held strictly liable for a harasser’s actions, unless a company has a strong system of dealing with such problems, as outlined in the previous section.

That means plaintiffs now have an easier path to sue because a company will be held liable for its supervisors’ misconduct. Supervisors need to be advised of their responsibility and know how to handle such problems.

“For once, being in Connecticut is an advantage,” quips Jim Carabetta, director of HR for Fosdick Corp. in Wallingford, Connecticut. He explains: “Connecticut has its own, more stringent harassment laws, which require every employee with the authority to hire, fire, promote, discipline, direct, review or effectively recommend any of the above within six months of hire or promotion into the mandated group, and have two hours of approved sensitivity/harassment prevention training in a course that meets the state’s criterion for content.” Carabetta says his firm sticks by these guidelines, and trains its managers accordingly. Because he’s already been up to speed with the supervisor training, the new rulings by the Supreme Court won’t have much effect on how he proceeds with sexual harassment training.

So where are we on the sexual harassment spectrum?
Employers are collectively standing at the crossroads on the issue of sexual harassment. These three cases make it clear that employers, and HR in particular, can’t afford to ignore the topic. This is happening with good reason: Everyone’s predicting more lawsuits. The courts are already flooded with such cases, especially since 1991, the year that the Anita Hill-Clarence Thomas hearings made headline news and plaintiffs were first eligible for punitive damages.

“If you’re trying to get ahead of the curve, you simply have to do what the Supreme Court is telling you a responsible employer should do,” says Maatman.

Maatman explains: “The bottom line is simple -- employers should be prepared to benamed in more lawsuits, and to incur a much greater risk of liability.” He says the net result of the rulings is that it’s easier for a plaintiff to state a case so that more people who go visit a lawyer will be told they have enough evidence to file a case. Whereas before, it might not be worth the time and effort to even file a lawsuit. “Also, it will be easier for a plaintiff to recover [damages], at least in a case of a company sued for what its supervisor does,” adds Maatman.

These three high-court decisions are forcing a lot of employers to take stock. “Employers are quickly revisiting their policies and modifying them,” says Seyfarth, Shaw, Fairweather & Geraldson’s McLaughlin, who recently gave a seminar on these Supreme Court decisions to a group of 260 people, mostly HR pros.

And she adds that companies are scrambling to get training programs together. “At many companies, especially if they’re having a bad financial year, training may be one of those things that goes. But I’ve heard some HR pros say, ‘I’m going back to my boss and tell him or her we really need to put training about sexual harassment back in the budget, given what’s occurred with these Supreme Court decisions.” Those who’ve already been vigilant on this issue remain convinced they need to stand firm in their actions. “Essentially, the rulings have no immediate effect on us because we’ve had a long-standing policy in place,” says DuPont’s Hamilton.

And Los Angeles-based Atlantic Richfield Co. (ARCO) is taking the same strong stance it has always had on the issue, as well. “For California employers, the Supreme Court cases, while interesting, aren’t that big a deal,” says Lloyd Loomis, the firm’s senior corporate counsel, employee relations. Of course, ARCO has also been a pioneer in taking zero tolerance to sexual harassment for years. Despite being in a male-dominated industry, the firm has created a system of awareness about such issues, including a 15-page section on sexual harassment on the firm’s intranet called “You Just Can’t Do That!” that’s available to all 20,000 employees. Even with such extraordinary measures, the company found itself firing an oil-tanker captain several years ago for sexually harassing co-workers. Clearly, even firms with the best of policies find themselves continually dealing with the issue.

“If you’re trying to get ahead of the curve, be practical and want to do the right thing, you simply have to do what the Supreme Court is telling you a responsible employer should do,” says Maatman. “Then if you still get sued, at least you have all the potential arguments available to you that [suggest] the case ought to be kicked out of the system in the first 30 days. If the court says no, it simply goes to damages, and you will be in the best and strongest position possible, should you have to face the jury and argue the case.”

The issue of sexual harassment isn’t primarily a legal one.
Employers should remember that sexual harassment is a behavioral and cultural problem in Corporate America, and it should be dealt with on both the individual and cultural level. Indeed, when 1,700 employees at medium- to large-sized U.S. companies were asked by Walker Information, a global research firm based in Indianapolis, to complete a national business integrity survey, employees said the top ethical problem in their organizations is sexual harassment.

Says Jennifer Blalock, a Cincinnati-based trainer who specializes in conflict resolution and preventing workplace harassment: “The issue of sexual harassment forces us to examine human behavior and ask, ‘Why does it require an elaborate set of laws to get people to respect each other? Where would we be if there were no laws holding us accountable for our behavior?’”

Blalock has a good point. She says companies should focus on the average individual. People need to learn how to communicate with each other. “A policy is useless unless people use it. Most research indicates that a small fraction of employees ever say or do anything about harassing behavior. It’s best to intervene and provide solutions before they escalate into full-blown, formal complaints,” Blalock adds. Which brings us back to the Supreme Court decisions.

“I don’t think that anyone is running for the hills or throwing up their hands and saying, ‘The sky is falling’ as a result of these three rulings,” says Maatman. “Instead, they’re redoubling their efforts at training, circulation and dissemination of policy statements.”

What employers should keep in mind is this: If you didn’t pay much attention to the issue of sexual harassment before, the Supreme Court just gave you at least three compelling reasons to do so. It has raised the bar, so to speak. If you already had a pretty good handle on the issue, make sure you tweak your policy and procedures so that they fall in line with the new rulings. As the experts say, this issue still isn’t going away -- so make sure you’re doing what’s appropriate to deal with it.

Workforce, October 1998, Vol. 77, No. 10, pp. 34-42.


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