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When are you liable for supervisory harassment? EEOC offers guidance

From CBIA News, September 1999

By Lynn Atkinson, CBIA employment specialist

     In the wake of last year’s landmark Supreme Court rulings on sexual harassment, the Equal Employment Opportunity Commission (EEOC) has released policy guidance that explains when employers can be held liable for unlawful harassment by supervisors. The guidance analyzes the two sexual harassment cases — Burlington Industries Inc. vs. Ellerth and Faragher vs. City of Boca Raton — and says that the EEOC will apply the same standards used in those cases to harassment based on race, national origin, age, religion or disability.

     The guidance also discusses the steps employers can take to avoid or limit liability, as well as the nature of employees’ obligations to bring complaints to their employers’ attention.

     A summary of the guidance geared to small employers was released at the same time.

Two-Part Defense Available
     In the Ellerth and Faragher cases, the Supreme Court made it clear that employers may be "vicariously liable" for harassment by supervisors. If the harassment results in a tangible employment action, such as firing, failure to promote or undesirable reassignment, the employer is always liable; there is no defense available. However, if the harassment does not result in a tangible employment action, an employer may be able to avoid liability or limit damages by showing that:

    1. It exercised reasonable care to both prevent and correct the harassment, and
    2. The employee unreasonably failed to use the company’s complaint procedure.

      The guidance stresses that an employer must prove both elements of this defense. If an employee unreasonably fails to complain and the employer took steps to prevent harassment and steps to correct the problem when it heard about it, then the employer will avoid liability. However, if the employer took no steps to prevent harassment in the first place, the employer will be liable even if the employee failed to complain and the employer later took steps to correct the problem when it did gain notice. If both parties exercise reasonable care, says the guidance, the defense will fail.

     The defense is also not available if the harasser is a high-ranking company official, such as the president, an owner, a partner or a corporate officer. The EEOC considers these officials an employer’s "alter ego" or "proxy," and the harassment will be automatically imputed to the company, even if the harassment does not result in a tangible employment action.

     The guidance provides practical advice in a number of areas, such as how to question witnesses, determine credibility and reach a determination. It also suggests intermediate measures to take while an investigation is ongoing, as well as steps to take if the evidence is inconclusive.

Small-Employer Exception
     According to the guidance, the duty to prevent and correct harassment generally requires an employer to establish, disseminate and enforce an anti-harassment policy and complaint procedure. While larger employers may have to institute formal mechanisms, small employers may be able to effectively prevent and correct harassment through informal means. For example, says the guidance, an owner of a small business who has regular staff meetings with all supervisors and employees might tell them that harassment will not be tolerated and that anyone who experiences it should bring it "straight to the top." (It may not be advisable, however, to forego a written policy.) For both large and small employers, if a complaint is received, a prompt, thorough and impartial investigation should be conducted, followed by appropriate corrective action, if needed.

Using the Complaint Procedure
     Employees are expected to use the employer’s complaint procedure, unless it is unreasonable to do so. An employee who fails to complain is not required to prove the reasonableness of that decision. Rather, the burden lies with the employer to prove that the employee’s failure to complain was unreasonable.

     According to the guidance, there could be a number of acceptable explanations for not using a procedure — for example, fear of retaliation or the fact that the procedure included unnecessary obstacles, such as inaccessible points of contact for making a complaint or intimidating or burdensome requirements. An employee also might reasonably believe that the complaint process would be ineffective — for example, if the procedure required the employee to complain initially to a harassing supervisor or if other employees’ complaints had failed to stop harassment.

     The guidance also says that if an employee fails to use the company’s complaint procedure but takes other steps to avoid harm — for example, by filing a complaint with the EEOC while the harassment is ongoing or by bringing a union grievance — then an employer may still be liable.

What To Do
     It’s a good idea, based on the guidance, to add a general anti-harassment statement to your sexual harassment policy. If you don’t have a sexual harassment policy and procedure in place, now might be the time to consider developing them. CBIA offers a range of services to assist members with sexual harassment prevention and training. For more information, call Mark Soycher at 860-244-1900.

     For a copy of the EEOC guidance and the small-employer summary, visit the EEOC’s Web site. Copies are also available by writing to the EEOC’s Office of Communications and Legislative Affairs, 1801 L St., NW, Washington, DC 20507 or by calling the agency’s Publications Distribution Center at 1-800-669-3362.