Sex Ed: Insulating Yourself from Sexual Harassment Litigation

By Warfel, William | Risk Management, February 2005 | Go to article overview

Sex Ed: Insulating Yourself from Sexual Harassment Litigation


Warfel, William, Risk Management


Each year since 2000, the Equal Employment Opportunity Commission (EEOC) has investigated and attempted to resolve more than 25,000 sexual discrimination claims. About two-thirds of these complaints--most of which are regarded as valid--concern the conduct of immediate supervisors and upper management employees who have the authority, or the apparent authority, to make adverse employment decisions that affect the victim. Unlike cases involving nonsupervisors, notice is not a requirement for the imposition of liability on an employer in cases of this sort. In fact, in job detriment cases where a tangible job benefit (e.g., a promotion, an increase in wages), or the avoidance of a tangible job detriment (e.g., termination, reassignment with significantly different responsibilities), was conditioned on acquiescence to requests for sexual favors or other conduct of a sexual nature, imposition of vicarious liability on an employer is automatic. With respect to job detriment claims, employers are not afforded a defense.

Most sexual harassment cases involving a supervisor or upper management employee, however, pertain to conduct that creates a hostile or offensive working environment. In these cases, the subordinate alleges that unwelcome sexual advances or other conduct of a sexual nature was pervasive and created an offensive or hostile working environment. Most importantly, while the conduct may include a threat concerning an adverse employment decision, the conduct is not directly linked to a job benefit (or a job detriment). With respect to work environment claims, the law has been evolving in terms of exactly what is required for the employer to escape liability in those cases where it was not put on notice and it is important for organizations to be on guard.

Historical Perspective

In Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57 (1986), 106 S. Ct. 2399, 91 L.Ed. 2d 49 (1986), the plaintiff's employer had a policy prohibiting general discrimination (although the policy did not address sexual harassment as such), but its grievance procedure specified that the complaint be filed with the employee's supervisor. In this particular case, the offender happened to be the plaintiffs supervisor. Thus, the plaintiff never filed a complaint and the employer was not put on notice. In addressing the issue concerning whether absence of notice insulates an employer from liability with respect to a work environment claim, the U.S. Supreme Court acknowledged that a supervisor is an agent of the employer and that lack of notice does not necessarily insulate an employer from liability. The Court ruled, however, that agency principles impose some limits on liability. Imposition of absolute liability on an employer for the acts of its supervisors, regardless of the circumstances in a particular case, is inappropriate. Assuming that (1) the plaintiff had a reasonably available avenue of complaint regarding the sexual harassment claim, and (2) utilization of the grievance procedure was reasonably likely to result in an equitable resolution of the sexual harassment complaint, a failure on the part of the plaintiff to utilize this procedure and the resulting absence of notice on, should preclude employer liability.

In other words, an employer's sexual harassment policy and procedure must be sufficiently calculated to encourage victims of sexual harassment to come forward in order to insulate itself from liability, in this particular case, the policy was defective because it did not pertain to sexual harassment as such, and the procedure was defective because it did not allow the employee to bypass the offending supervisor in filing a complaint. Unfortunately, the Court declined to issue a definitive rule on employer liability in work environment cases, reasoning that a court should look to agency principles for guidance in this area. Several recent U.S. Supreme Court rulings seem to clarify exactly what was required for the employer to escape liability in work environment cases where the employee failed to utilize the grievance procedure contained in the policy prohibiting sexual harassment. …

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