The Knicks Mess

November 12, 2007
In the wake of the $11.6 million jury award (with the potential for $9.6 million more in compensatory damages), commentators have flooded print and the airwaves with discussions of the offensiveness and ham-handedness of Madison Square Garden executives and New York Knicks coach and president Isiah Thomas toward former Knicks senior vice president (and now plaintiff) Anucha Browne Sanders.

    Here’s what stood out to me as I watched the newscasts and read more about the case: the defendants went way past just being pinheaded, as you will soon see. Here’s how it all began:

    Browne Sanders filed suit against CEO James Dolan, Thomas and executives of Madison Square Garden, claiming she was discriminated against and forced to work in a sexually hostile work environment, and then was fired in retaliation for making a complaint.

    On December 22, 2005, the plaintiff’s attorney met with the attorney for Madison Square Garden, and told for the first time of Browne Sanders’ complaint of sexual harassment. The attorneys agreed to "attempt to expedite a negotiated, good faith resolution" of Browne Sanders’ claims.

    At one point, Browne Sanders offered to settle her claim for $6 million, which was more than 20 years of front-pay compensation. According to court documents, she threatened to go public with a lawsuit to "teach Madison Square Garden a lesson" if she did not receive "money, lots of money." Madison Square Garden also began an internal investigation conducted by a company vice president and an in-house attorney for Madison Square Garden’s parent company.

    The investigation summary was completed on January 13, and on January 19, Madison Square Garden’s general counsel prepared a memorandum recommending that Thomas receive sensitivity training since he had occasionally used profanity and raised his voice in the workplace and, on one occasion, greeted Browne Sanders with a hug and kiss. The in-house investigators also found that most of Browne Sanders’ allegations were not confirmed, but that she had exhibited a "poor relationship and difficulty interacting with members of Madison Square Garden management." Browne Sanders was fired that same day.

    By the time of trial, there was little doubt there was sexual harassment by Knicks and Madison Square Garden employees and management.

    Obviously, comments by Thomas to Browne Sanders about her physical appearance (she was "beautiful" and "easy on the eyes") and putting his arm around her arm and attempting to kiss her on the cheek were offensive and were perceived by Browne Sanders as harassment. Thomas was also accused of "screaming" at Browne Sanders on several occasions and referred to her in sexist and demeaning terms.

    Those of us who have handled dozens of sex harassment cases over the years with allegations that would make Brittney Spears blush know that the Madison Square Garden case is pretty much a garden-variety claim of sexual harassment (no offense to Ms. Browne Sanders). Juries generally decide these types of claims with a generous award of compensatory damages for lost wages, emotional pain and suffering, lost benefits and attorney fees.

    It has been my experience that juries seem somewhat reluctant to award a huge amount of punitive damages if the defendant’s conduct is not egregious, does not take place over a long period of time and has stopped. But in this case, the jury came back with a prodigious punitive damage award, and the potential for more compensation to Ms. Browne Sanders. What is different about this case?

    Well, on the social monitor of appropriate behavior, Dolan’s behavior tipped the needle all the way to "stupid." If stupidity could be converted to energy, Madison Square Garden would not have to pay its electric bill for a long, long time. But while stupidity does not create fuel, it does create fools. Consider the following:

    I’ve looked at portions of Dolan’s videotape deposition posted on the Web. (The videotape deposition was also projected on a larger-than-life screen for the jury at the trial.) It is hard to imagine Dolan as corporate leader of one of the world’s most-recognized entertainment conglomerates after seeing him slumped in his chair, wearing a collarless black shirt, and testifying in what seems to be an extremely offhanded way.

    Dolan looked more like the high school sophomore sitting in the principal’s office than a CEO testifying in an important lawsuit. His trial testimony also seemed indifferent; he testified he had not read Browne Sanders’ performance evaluations nor did he require Thomas to attend sensitivity training. Dolan testified: "When the lawsuit came, that was about as much sensitivity training as he’d ever want."

    None of these events can be counted as a high point in Madison Square Garden’s 128-year history, but Dolan’s conduct, appearance and testimony at trial certainly may become notorious for a new low. As chairman of that august landmark, Dolan is in a leadership role at Madison Square Garden, responsible for the company’s overall growth strategy, and oversees its day-to-day operations. At his deposition, Dolan testified:

Q. Who made the decision to have Ms. Browne Sanders’ employment be terminated by the Garden?
A. I did.

Q. Did you make it on your own or was it with others, consultation or something else?
A. Well, all decisions at the Garden I make on my own.

    Dolan testified he did not consult with corporate counsel, talk to Browne Sanders’ supervisor or read the report of the in-house investigation.

    Anyone who has ever been a defendant in an employment discrimination case, every HR professional and every employment lawyer could have told Dolan his solitary decision was really, really dumb.

    Consider Title VII and its prohibition against retaliation. Title VII of the 1964 Civil Rights Act prohibits intentional discrimination based on gender and other protected categories. Similarly, employees may not be retaliated against if they complain of harassment or discrimination. And if it is just one person who makes the decision to terminate a complainer, the plaintiff’s burden of proving intentional discrimination becomes pretty easy, especially if the decision-maker behaves like Mr. Dolan.

    When more than one person makes the decision to fire an employee, the occurrence of (and proof of) intentional/unlawful conduct is not quite so easy. We teach employers to make important decisions, such as job action against an employee who has complained about discrimination, in a collective, shared-responsibility forum.

    It doesn’t take a legal expert to know that when it comes to decision-making, two heads are better than one. A small group consisting of corporate counsel, a supervisor with a long-standing knowledge of the complainant, a human resources professional and key management is a committee formula that works when important personnel decisions become necessary in the context of complaints of discrimination and possible litigation.

    A small group like that has the advantage of a rational, dispassionate review of the events and documents with an unemotional, logical result, compared with a reactive "fire away" of the single "Type A" decision-maker. One of the biggest changes I have noticed in my 33 years of experience in employment law is that employees seek legal advice long before their employers come to the realization they are about to be sued. Most employers today give their business the same advantage that employees have by advance planning and prudent strategic consultation. But not Madison Square Garden.

    In the Browne Sanders case, it appears that she knew more about the laws of discrimination and retaliation than Dolan at the time of his decision to fire her. Maybe I have it all wrong: Dolan may have been advised well, but simply ignored the guidance. Take my advice, Mr. Dolan: Listen to others from time to time. Get some value from your lawyers, who probably—rightly, as it turns out—told you that you could be personally sued if you fired Browne Sanders.

    Sexual harassment cases are most generally he said/she said cases, and juries often decide on the basis of the witnesses’ credibility. When faced with the plaintiff’s and defendant’s opposing views of reality, juries are often swayed by a witness’s demeanor, dress and respect for the legal system.

    Trial is not the time to head-butt the plaintiff and it is the lawyers’ responsibility to make sure the client is prepared and aware of the jury’s sense of justice and fairness. The best time to win a sexual harassment and retaliation case is at the beginning, not the end. A non-hostile environment and collective carefree and dispassionate decision-making wins sex harassment and retaliation cases before they ever get started.