Sexual Harassment and Employer Liability

From Volume 11, Issue 1 of BCInsights

Author: Courtney Fischer, MA

Important legal developments in recent years have made it clear that failure to train employees to recognize and prevent sexual harassment can expose employers to liability and financial risk. This is especially relevant regarding training members of management. In 2010, the EEOC received 11,717 complaints of sexual harassment in the workplace.¹  Of those complaints, nearly 30% resulted in some type of monetary settlement, totaling approximately $51.5 million dollars. Employers who opt for litigation over settlements can be expected to pay monetary awards up to and including millions of dollars, in the event they are found to be liable.  

The two landmark cases that set the standard for employer liability in sexual harassment suits occurred in 1998: Burlington Industries v. Ellerth and Faragher v. City of Boca Raton. Liability for employers, as defined by these two cases, is based upon two factors. First, liability is established under the principle that an employer is responsible for the actions of its managers. Secondly, employers should promote the prevention of harassment, meaning employees should be encouraged to avoid or limit the harm resulting from the harassment. This can be established through providing reporting mechanisms for employees to utilize and providing regular harassment training. The Supreme Court has held that under the aforementioned principles, an employer is always vicariously liable for harassment perpetrated by a manager if a “tangible employment action” is taken against the harassed employee. These actions can include firing or demoting an employee, not providing similar training or promotional opportunities, or transferring the employee arbitrarily. If such action has not been taken, there are avenues an employer may create an affirmative defense in the event a sexual harassment claim is made. One such avenue is to demonstrate that the employer “exercised reasonable care to prevent” or remediate, a behavior deemed to be harassing in nature. The most effective way through which an employer can show they in fact, took measures to prevent sexual harassment, is by providing all employees, and to a greater degree managers, training regarding sexual harassment. Additionally, when a complaint arises, the organization must immediately investigate the concern and follow up to ensure the behavior does not continue.

In some states, including California, Maine, and Connecticut, sexual harassment training is mandatory. While the remaining states have no legal obligation for employers to conduct such training, it is a best-practice to provide training for all employees and managers. Employers may assume that providing employees and supervisors a company policy that prohibits sexual harassment is enough to prove “reasonable care;” however, a recent court case in Tennessee demonstrates that a policy is simply not enough. In Bishop v. Woodbury Clinical Laboratory, the employer disseminated the company’s anti-harassment policy to employees, but failed to provide training on the policy. A sexual harassment case ensued and the court denied the employer’s affirmative defense stating it had not met the “reasonable care” provision required by the Faragher and the Ellerth cases. Essentially the court held that simply providing a policy is not sufficient for an affirmative defense, rather an employer must demonstrate that supervisors and employers understand and were educated about the policy. While the case law resulting from the Bishop decision is not binding in courts outside of the Middle District of Tennessee, the conclusion demonstrates a growing trend of requiring employers to take more proactive measures to prevent sexual harassment. Additionally, when compared to a potential million dollar lawsuit, the cost of training is negligible. 

Overall, employers who provide training on sexual harassment are better able to defend themselves against any claims which may later arise. Moreover, proper training for all employees will diminish the occurrence of sexual harassment claims as employees who are aware of what constitutes sexual harassment are less likely to engage in harassing behavior. Being able to prove that training has been provided to your workforce may also diminish the amount of damages awarded to the plaintiff in the event liability is found to lie with the employer. Finally, more employers are training their supervisors and employees on how to recognize and prevent sexual harassment, further supporting an affirmative defense in the event a harassment claim is filed.

1. U.S. EEOC, Sexual Harassment Charges FY1997-FY2010

TIP: Keep employee training up to date with annual Sexual Harassment education.  Consistent, scheduled training not only ensures compliance with state laws, but it also allows for your policies and expectations to be clearly communicated to your workforce. The more knowledgeable your managers and employees are, the easier it is to recognize and address situations when they arise and will assist in decreasing the organization's liability.

BCI conducts Sexual Harassment training for organizations, in-house, to help reduce incidents in the workplace. For more information, contact us at 800.650.7005.

Click here to read the next article in Volume 11, Issue 1 of BCInsights, "Can Employees Raise Claims Under ADA If They Are Not Disabled? ".