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WHAT TO DO WHEN YOU RECEIVE A HARASSMENT OR DISCRIMINATION COMPLAINT

“If mistakes happen, effective leaders don’t place blame on others. They take ownership of the mistakes, determine what went wrong, develop solutions to correct those mistakes and prevent them from happening again as they move forward.”

Jocko Willink, The Dichotomy of Leadership: Balancing the Challenges of Extreme Ownership to Lead and Win

Observing others’ successes and failures is a good way to learn.  However, the primary way we learn is through our daily “self-experiments.”   Example:  you come home tired after work and ignore your spouse.  It does not go well.     If you are smart you adapt: exhausted or not, you pay attention. 

Our work lives are no different.  Eyes focused on serving clients and positive balance sheets, it is easy to develop bad habits elsewhere.  Ignoring employee problems is one such mistake.  You can take a small, easily solvable problem and turn it into a lawsuit.

At some point in life most women encounter the man who cannot take no for an answer.  In the workplace, this causes various problems.   If management does not step in and solve the problem, the company may end up owning it. This article provides guidance for employers looking to solve, not own, sexual harassment problems.

Last week a federal court provided guidance for employers eager to know what to do when faced with complaints of harassment or discrimination.  Many of you, particularly women, will quickly recognize the fact pattern in Holland v. NTP Marble

HOW MANY TIMES CAN SOMEONE ASK A WOMAN OUT ON A DATE BEFORE IT BECOMES HARASSMENT?      

Robin Holland alleged that that Chris Bekas pursued her by repeatedly asking her out and contacting her via text messages. Bekas admitted that he exchanged personal text messages with Holland three to four times a week wherein they generally discussed if they could meet up, but Holland usually said that she was busy. Bekas asked Holland to go to dinner with him three or four times before she accepted his invitation.

Bekas testified that he thought Holland was interested in him because she walked by his office and smiled, and because they had gone on a date. Bekas further stated that he was interested in a sexual relationship with Holland.

Holland claimed that Bekas’ harassment culminated when he touched her inappropriately while in the back construction area at work. Holland told another employee about the incident. Holland  alleged that the employee responded “this isn’t the first time that this, quote, creep has done this.” The employee told Holland, who was reluctant to come forward and make a complaint, that she would report the allegation to management if Holland did not. Holland then went ahead and reported the incident management by sending an email to company’s Chief Operating Officer. 

Does this sound familiar so far?  I thought so.  What came next determined whether the company was held liable for Bekas’ alleged conduct.  Here is what happened:

  • Bekas was immediately suspended and required to leave the building. 
  • Bekas had no further communication or contact with Holland, and no further incidents occurred.
  • The CFO talked to Holland on the phone about the “details, exactly what happened … exactly where she was … harassed and touched in an inappropriate manner” and asked for a formal statement.
  • Bekas spoke at length about the allegations to an outside attorney hired by the company to help investigate the allegations.
  • The CFO also interviewed the employee Holland had initially spoken to.
  • However, the company had never given sexual harassment training to Bekas and its CFO admitted that “If we had stronger policies — had we had been — there be, you know, no contact, you know, they’re lackadaisy [sic.] as far as making specific policies and really lackadaisy [sic.] at enforcing them. So, you know, nobody was even supposed to be in the service department. Nobody’s even supposed to be using these doors. Had we, as a company, said that nobody should be back in the construction area alone, because nobody should be back there alone. So, you know, nobody would be in this position today.  I don’t think anybody should have been allowed in that back area alone.

HERE IS THE LEGAL TEST YOUR COMPANY MUST PASS

Do you think the company was held liable?  Here is the legal test for employer liability — apply it to the facts and test your knowledge:

An employer’s liability for a hostile work environment claim depends on whether the harasser is the victim’s supervisor or merely a co-worker. When a harasser is a co-worker or other non-supervisor, employer liability attaches only if (a) the employer failed to provide a reasonable avenue for complaint or (b) the employer knew or should have known of the harassment and failed to take prompt and appropriate remedial action.  An employer’s remedial action is adequate if it is reasonably calculated to prevent further harassment.

The mere fact that the harassment fortuitously stops does not demonstrate that the employer acted reasonably.  An investigation must be undertaken, and an employer can be held liable if a faulty investigation renders its subsequent remedial action inadequate, i.e., not reasonably calculated to prevent further harassment.  However, if the remedy chosen by the employer is adequate, an aggrieved employee cannot object to that selected action. An employee cannot dictate that the employer select a certain remedial action.

Applying this test, the court ruled in favor of the company.  While it could have done things better, the company had an anti-harassment policy and complaint procedure in place and took proper remedial action upon learning of the alleged harassment. 

Note:  the company won the case despite evidence that Bekas had several incidents with other females.  One testified that he asked her out on dates multiple times, “constantly approached her during breaks, and she found him to be “creepy and weird.” A male employee stated that he had witnessed Bekas offer himself to several female co-workers and make inappropriate comments to female employees. And, Bekas was reprimanded on one occasion for calling a customer to ask her out on a date.  However, management had never learned of these incidents until after Holland had complained; so the company was not liable for Bekas’ conduct.

In finding for the company, the Holland court contrasted a prior case where an employer had not acted promptly or properly:  it forced a woman to speak to five different supervisors to elicit any response from management; management took five months between her complaint and a response; and management’s only instruction to the alleged harasser was a one-page memo two months after the last incident of harassment.  Do not be “that” employer.

Harassment and discrimination complaints are a gift.  They afford businesses the opportunity to address and resolve festering problems. Some companies. however, squander this gift.  These companies get punished twice — first because the problem continues and next when they find themselves on the receiving end of an EEOC investigation or lawsuit.

By failing to prepare, you prepare to fail.  Have procedures to handle harassment and discrimination complaints.  Then, when you receive a complaint you will know what to do and you will do it. 

REVERSAL:  It is not always proper to immediately suspend or discipline an alleged harasser before learning all the facts; doing so could expose your company to liability to the alleged harasser.  Seek legal counsel when in doubt.

Art Bourque is an AV rated commercial and employment lawyer who has been practicing law in Phoenix, Arizona for 28 years.  Art provides employment law training to help businesses operate efficiently and avoid mistakes; conducts sexual harassment and other investigations; and is an experienced litigator.  Art can be found at www.bourquelaw.com, art@bourquelaw.com, 602.559.9550, linkedin, or trail running with his dog, Eli.

THE ART OF THE DEMAND LETTER — HOW TO GET WHAT YOU WANT AND STAY OUT OF JAIL

“There are many different kinds of people in the world, and you can never assume that everyone will react to your strategies in the same way. Deceive or outmaneuver some people and they will spend the rest of their lives seeking revenge. They are wolves in lambs’ clothing. Choose your victims and opponents carefully — then never offend or deceive the wrong person.”

Robert Greene, The 48 Laws of Power

Some people do not honor their promises or pay their debts. We first learned this as children, when we had to make a stand in the schoolyard or in the street.  We demanded the return of our ball, prized baseball card, or the cool action figure we loaned our brother or sister.  Sometimes it did not go well.

As adults, the stakes have changed but the dynamic remains the same:  someone owes you money or has your property and you need to get it back; you have tried the “nice” way, but you are being ignored or rebuffed.  You have a choice — give up or fight for what is yours.  

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If you are going to reclaim what is yours, do it well.  Plan your strategy.  Do not rush into battle (litigation) unless it is your only option.  Instead, start with a demand letter — a request stating what you want. 

A good demand letter must:

  • Be clear and concise
  • Be strong, but professional
  • Identify exactly what must be done/stopped
  • Contain a deadline for compliance
  • State the consequences for non-compliance
  • Not contain any threat of public disclosure or criminal prosecution

Your demand letter should not incite antagonism.  Gratuitously angering someone is rarely effective and often counterproductive.  You may create a lifelong enemy.  Strike the balance between demanding what you want and being professional.

Another reason to be professional:  courts or juries may see your demand letter if the matter proceeds to a lawsuit.  Do not risk being perceived as unreasonable or as a bully.

Depending upon the nature of your demand, you may need to include language to comply with certain laws, such as the Fair Debt Collection Practices Act governing certain debts.  Consider consulting legal counsel before making your demand.  

The biggest mistake you can make in your demand letter is handing your opponent the keys to your jail cell:  sending a demand letter that constitutes extortion or blackmail.  Here are the Arizona and federal laws that criminalize such conduct:

Arizona Revised Statutes Annotated Section 13–1804(A)(6) states:

A. A person commits theft by extortion by knowingly obtaining or seeking to obtain property or services by means of a threat to do in the future any of the following:

….

6. Expose a secret or an asserted fact, whether true or false, tending to subject anyone to hatred, contempt or ridicule or to impair his credit or business.

Federal law, 18 U.S.C 875, states:

Whoever, with intent to extort from any person, firm, association, or corporation, any money or other thing of value, transmits in interstate or foreign commerce any communication containing any threat to injure the property or reputation of the addressee or of another or the reputation of a deceased person or any threat to accuse the addressee or any other person of a crime, shall be fined under this title or imprisoned not more than two years, or both.

Understand the difference between writing a good demand letter and a committing a crime.  For example, federal prosecutors recently indicted attorney Michael Avenatti, claiming he told Nike he had evidence that Nike employees channeled money to recruits in violation of NCAA rules.  Avennati threatened to release the evidence unless the company paid him and his client $22.5 million dollars.  If true, this is a crime.

Do not be like Mike [Avennati].  When composing a demand letter, think back to when you were a child.  Remember the unpleasant — even violent — occasions where you took a stand and your opponent struck back.  Understand, little has changed.  Human nature remains what it is, only now we are adults and the stakes are higher.  Do not hand your opponent a weapon he can turn on you.  Instead, provide a demand he cannot resist.

Art Bourque is an AV rated commercial and employment lawyer who has been practicing law in Phoenix, Arizona for 28 years.  Art provides employment law, business operations, and other training to help companies and individuals operate efficiently and avoid mistakes; he is also an experienced litigator.  Art can be found at www.bourquelaw.com, art@bourquelaw.com, 602.559.9550, linkedin, or trail running with his dog, Eli.

NEW CASE HIGHLIGHTS RISKS ASSOCIATED WITH EMPLOYEE TERMINATION DECISIONS


War is deceptive: you may think you are strong and that you are making advances against an enemy, but time may show that you were actually marching into great danger. You can never really know, since our immersion in the present deprives us of true perspective. The best thing you can do is to rid yourself of lazy, conventional patterns of thinking. Advancing is not always good; retreating is not always weak.

To waste your time in battles not of your own choosing is more than a mistake, it is stupidity of the highest order. Time lost can never be regained.

Robert Greene, The 33 Strategies of War

As an employer you seemingly hold all the cards. You can terminate an employee for failing to perform or for no reason at all. Employees work for you “at will” — as long as you want them to.

Life is not so simple. Terminating an employee can be an act of war. You have just deprived someone of their livelihood. You may have wounded their pride. And you may have embarrassed them. Never be surprised when such a person strikes back at you.

As an owner, manager, or human resource professional, you are a risk manager. You must know the law and, equally so, the laws of human nature. Ignore either and you may find yourself in court — wasting time and treasure.

This article provides you with a risk management tools to make employee termination decisions. Understand when it is better to bide your time rather than to act in the moment. Follow these guidelines and keep your time, money, and sanity. Leave bad decisions to your competition.

“It’s who you know and who you blow.” This tasteless comment from one employee to another got the employee fired. Was it a lawful termination? The question was answered last week in Scheidler v. Indiana. However, after six years of court battles I am not sure it really mattered. With the enormous waste of time and money, both sides had lost by then. Only one group had profited — the lawyers.   

There are interesting legal questions which arose in the case: what are limits of what employees can say to each other?  Was Brenda Lear Scheidler’s crude comment really a complaint about favoritism in the workplace — a “protected activity” for which she should not have been fired?

However, “interesting” legal questions are best left to lawyers. You have a business to run. You cannot do so while litigating against ex-employees. Therefore, let’s examine how Brenda Lear Scheidler’s employer could have avoided the fiasco from the start — and how you can be a good risk manager when faced with difficult employees.

SCHEIDLER V. INDIANA

Brenda Lear Scheidler worked for the Indiana Department of Insurance (IDOI). She sought accommodations for disabilities related to her mental health, including that her coworkers not startle her. She received these accommodations for several years. But on May 28, 2013, a frustrated supervisor reached toward Scheidler and said, “I could just strangle you.” An investigation into this workplace incident discovered that several months earlier Scheidler commented in an elevator about a coworker’s apparent promotion prospects: “It’s who you know and who you blow.”

Weeks before she made the comment Scheidler she had applied for a new position.  Another employee, Mary Ann Williams, also wanted the job. As Scheidler and others left work one day, they noticed Williams was not at her station. Scheidler then said, “Oh, it looks like Mary Ann is still upstairs in her interview for her government job.” 

Her co-worker responded, “Brenda, don’t we all have government jobs? We’re all State employees.”

Sheidler then replied, “Well, I mean for her federal job upstairs … I’m sure she’ll get it because … it’s who you know and who you blow.”

IDOI terminated Scheidler for this comment and one other incident. Sheideler then sued alleging disability discrimination, retaliation, and other claims. 

The case went on for six years.  The employer prevailed, but only after costly and time-consuming discovery, a trial, and an appeal.   With better decision making by company management, Scheidler v. Indiana would never have come to be.

DO NOT FIND YOURSELF IN COURT DEBATING THE MEANING OF “BLOW”

“Another such victory over the Romans, and we are undone.”

King Pyrrhus

A Pyrrhic victory is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Someone who wins a Pyrrhic victory has also taken a heavy toll that negates any true sense of achievement.

Pyrrhic victories can hit close to home.  Have you ever “won” an argument with your spouse, only to suffer tenfold from the ensuing fallout?  Yeah, me too.

Some (mostly lawyers) who read Scheidler v. Indiana will come away believing it was a victory for IDOI.  But those of us who know history — and have learned from our experiences —  know otherwise.  We think:  how could we have avoided six years of painful litigation, while at the same time having managed this group of challenging employees?

HOW TO BE A GOOD RISK MANAGER

Risk management requires managers to first identify the risk.  Untrained, inexperienced, or impetuous managers lack this skill.

Here are ways to improve your risk management game when disciplining or terminating employees:      

  • If an employee is a minority or in another protected class (e.g. over 40, pregnant, disability), then there is increased risk of a discrimination claim.  For example, Brenda Lear Scheidler had a mental disability that she claimed was the real basis for her termination.
  • If there is no record of you having disciplined the employee and/or a history of positive employee reviews, terminating the employee for performance or other “cause” based reasons will be problematic.
  • If the employee has recently reported misconduct or harassment, then the risk of a retaliation claim — and liability for your company — is high.
  • You will increase the risk of a claim by fudging the real reason for the termination —  for example, telling an employee that the company is “restructuring” or “eliminating the position” when in truth the basis for the termination is something else. In court this sort of statement can and will be used against you.
  • Patience pays:  if you want to terminate an employee, but the immediate risk is too great, it is often best to wait and establish a better record of discipline for a future termination (assuming the employee continues to perform poorly or engage in inappropriate behavior).  In 27 years of counseling employers, I have never once seen this strategy fail to succeed.
  • Ask yourself:  have I been consistent in meting out discipline?  Treating two employees with similar offenses differently can be evidence of discrimination.
  • Conduct an adequate investigation into the facts before you make a final decision.
  • Document discipline; if you do not write it down, it might as well never have happened.
  • Understand, employees are permitted by law to criticize management and work conditions.   Think twice before firing an employee on the basis of a critical, possibly offensive, comment about the workplace or your business.
  • Contact legal counsel if there is any question regarding your strategy or pending decision.  A half hour call is much less expensive than a trip to the courtroom.  

TAKE CONTROL

Court can be a Roman circus.  The Scheidler parties actually debated the meaning of “blow.” The judge, in making his decision, went further: “Blow” has various potential meanings. Another Lear famously hurls it without obvious sexual innuendo: “Blow winds …! Rage, blow!” William Shakespeare, King Lear, Act III, sc. ii.

You have control over your workplace.  You do not have control in the courtroom. Use the tools provided in this article to make good, informed decisions and your risk of ending up in court will fall to near zero.  Operate in the dark, however, and you may find yourself among lawyers and judges debating the meaning of “blow” or some such other random word. 

Art Bourque is an AV rated commercial and employment lawyer who has been practicing law in Phoenix, Arizona for 27 years.  Art provides employment law training to help businesses operate efficiently and avoid mistakes; he is also an experienced litigator.  Art can be found at www.bourquelaw.com, art@bourquelaw.com, 602.559.9550, linkedin, or trail running with his dog, Eli.

WHAT TO DO WHEN YOU ARE A VICTIM OF SEXUAL HARASSMENT

“Proclaim the truth and do not be silent through fear.”

 St. Catherine of Siena

If you are a victim of sexual harassment, it’s easy, right?  Just read your company’s sexual harassment policy and make a complaint.  Everything will be fixed, just like it says in the company handbook.  If life were so simple.

Those of us who live in the real world understand that bullies do not like being called out.  We learned this long ago — on the playground, or the bus to school, or on the street.  Either deal with the abuse or risk something worse by speaking up. 

We like to believe that this dynamic changed when we became adults; but it didn’t.  To the contrary, children are typically more open to expressing themselves than adults, who often accept their toxic environments without complaint.   

Women in the workplace face a dilemma:   either report sexual harassment and risk retaliation, or “deal with it,” try to avoid the harasser, and hope it goes away.  Neither choice is easy.

THE LAW PUNISHES WOMEN WHO STAY SILENT

The law requires women to “take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.” This means that if your company has a sexual harassment reporting policy, and you fail to report harassment as stated in the policy, you could end up being victimized twice:  first, at the hands of your harasser; and later when you are left without a remedy by the courts. 

In deciding whether to allow a claim to go forward, courts look at the reasonableness of a woman’s efforts (or lack thereof) to report misconduct and avoid further harm. The United States Supreme Court has held that “proof that an employee failed to exercise reasonable care to avoid harm … will normally suffice to satisfy the employer’s burden…”

Under this standard, victims of sexual harassment too afraid to come forward will find themselves trapped in a hell-like place where they have no way of redressing the harm they have suffered.

Modern courts understand the hard choice women face when deciding whether to report sexual harassment.  They allow certain cases to go forward despite a woman not following her company’s sexual harassment reporting procedure.  In a recent case, a court noted that the plaintiff’s belief that complaining would result in retaliation was reasonable: she reasonably feared her supervisor’s hostility and retaliation by having her fired, and her belief that reporting would be futile was reasonable because others knew of his conduct, yet it continued. These factors were aggravated by her pressing financial situation.

DO NOT STAY SILENT — SEEK HELP      

Do not leave your future to chance.  If you do not speak up or seek help against your harasser, you will leave your fate to the whims of the court system.  “Hoping” that your judge will be the one who finds that your failure to report under your company handbook was reasonable is not a good strategy.

Here is what you should do when faced with sexual harassment in your workplace:

  • Read your employee handbook or manual; highlight every section that may apply to sexual harassment, discrimination, reporting, and the like.
  • Gather and maintain evidence to support your position; examples include emails, audio and video recordings, notes, witness statements.
  • Determine if there are other victims that will support or corroborate your experience.
  • Consult legal counsel: many lawyers will discuss your situation via a free consultation or a limited charge; depending on your case, many lawyers will pursue the matter for you on a contingency fee basis.
  • Keep a diary or chronology of what is happening so that events remain fresh in your mind over time.
  • Report the harassment under the procedure in the handbook unless there is a situation where that would be futile or otherwise untenable.
  • Consider filing a charge of discrimination with the EEOC; this, like reporting harassment to your employer, is “protected activity” which will insulate you from illegal retaliation by your employer.

ON THE FLIP-SIDE: ADVICE FOR EMPLOYERS

Employers routinely make grandiose statements about their “progressive” and “inclusive” workplace policies.  Much of it is just PR.  But PR is no longer good enough in the #MeToo era.  Employers must provide a workplace free from harassment and discrimination or suffer the consequences.  Lately, those consequences have been multi-million dollar jury verdicts and settlements. 

Here is what employers should do to start 2019:

  • Review your company handbook cover to cover and determine if you need to make changes to either align with your current structure or comply with new laws.
  • Take a moment — or more — to conduct a self-audit of your workplace to understand if there is an existing harassment or discrimination issue(s) you need to get a hold of or ahead of.
  • Respond swiftly and appropriately if you determine there has been harassment, discrimination, or retaliation.
  • If you are overdue, have counsel conduct sexual harassment training for employees and management.

By taking these steps, employers will provide a workplace where women are not faced with harassment and the difficult decision of whether and how to come forward.

Art Bourque is an AV rated commercial and employment lawyer who has been practicing law in Phoenix, Arizona for 27 years.  Art provides employment law training to help businesses operate efficiently and avoid mistakes; he is also an experienced litigator on behalf of both plaintiffs and defendants.  Art can be found at www.bourquelaw.com, art@bourquelaw.com, 602.559.9550, linkedin, or trail running with his dog, Eli.

WAKE UP CALL: STATISTICS SHOW SIGNIFICANT INCREASE IN EEOC ENFORCEMENT


Your line of work is a layer of reality. Right now, things might seem calm on the surface, but there are changes rippling through that world; dangers are looming on the horizon. Soon your assumptions about how things are done will be outdated. These changes and problems are not immediately apparent. Being able to see through to them before they become too large would bring you great power.

Robert Greene, The 50th Law

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How many times you watched a TV news show where the crime victim’s neighbor exclaims “things like this just don’t happen in our neighborhood.”  Believing that we live in a safe environment allows us to enjoy life.  We have it so much better than our primitive ancestors who were constantly faced with danger — or so we think.  

Complacency is dangerous – even in 2018.  Businesses that fail to prevent sexual harassment and other forms of discrimination are being hit hard by the recent Me Too movement.  Recent EEOC press releases bear this out.

EEOC sexual harassment lawsuits against businesses increased over 50% in 2018 versus 2017. Overall charges of sexual harassment by alleged victims increased by 12% year over year. 

On November 15, 2018, the EEOC issued a report noting significant increases in its outreach efforts and enforcement actions to prevent and remedy unlawful employment discrimination.

The EEOC noted:

  • The launch of a nationwide online inquiry and appointment system as part of the EEOC’s Public Portal resulted in a 30 percent increase in inquiries and over 40,000 intake interviews.
  • The EEOC’s outreach programs reached 398,650 individuals, providing them with information about employment discrimination and their rights and responsibilities in the workplace. To address persistent workplace harassment, the EEOC conducted more than 300 Respectful Workplaces trainings that reached over 9,800 employees and supervisors in the private, public and federal sectors.
  • The EEOC secured approximately $505 million and other relief for over 67,860 victims of discrimination in the workplace.

The economy is thriving.  Complacency often follows prosperity.  Now is a good time to take stock of your business’ sexual harassment and discrimination policies, conduct a “self-audit” of your workplace, and schedule management and employee training heading in 2019, so that it too will be another good year.

Reality has its own power — you can turn your back on it, but it will find you in the end, and your inability to cope with it will be your ruin.

Robert Greene, The 50th Law

Art Bourque is an AV rated commercial and employment lawyer who has been practicing law in Phoenix, Arizona for 27 years.  Art provides employment law training to help businesses operate efficiently and avoid mistakes; he is also an experienced litigator.  Art can be found at www.bourquelaw.com, art@bourquelaw.com, 602.559.9550, linkedin, or trail running with his dog, Eli.

THREE COMMON EMPLOYER MISTAKES HIGHLIGHTED IN 11.9 MILLION DOLLAR SEXUAL HARASSMENT VERDICT

Last Wednesday a federal jury handed down a $11.9 million verdict in favor of a toy company employee.  The huge verdict is the result of three common mistakes I have seen many businesses make over the course of my career:  (1) having poorly written complaint procedures in their employee handbooks; (2) failing to train and oversee management; and (3) commingling the business and human resource operations of parent, subsidiary, and related entities — which can result in the “joint employer” liability of all entities for just one supervisor’s misconduct.

THE TOY COMPANY CASE IS A CAUTIONARY TALE

Danielle Rennenger  worked at a ToyQuest call center in Iowa.  According to the Des Moines Business Record, Renneger alleged in her lawsuit that her direct supervisor and a co-worker created a hostile work environment with vulgar and harassing remarks as well as gestures and physical advances toward Rennenger and other women. At one point, the supervisor grabbed Rennenger’s head and forced it into his crotch.

“Danielle tried to complain and get them to stop, but Downey basically told her that Hong Kong, referring to the owners, doesn’t care about women,” according to a release from the Newkirk Zwagerman law firm, which represents Rennenger and other plaintiffs.

U.S. District Judge James Gritzner said in an August 3 ruling, “Fundamentally, we know that there’s really no dispute about what happened to Ms. Rennenger in terms of the call center and the behavior of people in the call center.”

After hearing the evidence, a federal jury  awarded Rennenger $10 million in punitive damages, $1.8 million for past and future emotional distress, and nearly $83,000 in lost wages.

Sexual harassment lawsuits brought by other ToyQuest employees are also pending.

MISTAKE NUMBER ONE:  TOYQUEST DID NOT HAVE AN ADEQUATE COMPLAINT POLICY 

The ToyQuest case judge noted that “[I]t seems rather clear in this record that it was very difficult for employees there to know how to proceed in the event that their supervisor was actually the harasser.”

Failing to have a clear policy as to how victims of sexual harassment and discrimination can complain — especially when management or ownership is alleged to be the harasser —  is a surefire way for businesses to get in trouble.  The typical mistakes I see are poorly drafted policies, policies that do not reflect the actual organizational structure of the subject company, policies that contradict themselves, and policies that are hard to understand or are ambiguous.

Avoid mistake number one:  have a bombproof complaint and sexual harassment/discrimination policy and review it annually with counsel.

MISTAKE NUMBER TWO:  TOYQUEST DID NOT TRAIN AND OVERSEE MANAGEMENT

ToyQuest management at the Iowa call center was out of control.  Management training and oversight is critical to create a management team and work environment that is free from harassment and discrimination.  Equally so, management training is essential so that management knows how to apply and comply with the complaint provisions in the employee handbook.

Avoid mistake number two:  conduct periodic management training with counsel and stay ahead of the myriad of problems that come with ignorant or undertrained management.

MISTAKE NUMBER THREE:  TOYQUEST APPEARS TO HAVE COMMINGLED ITS DIVISION’S BUSINESS OPERATIONS

After the lawsuits were filed ToyQuest’s parent company created multiple companies, apparently in an effort to avoid liability, according to Rennenger’s lawyers.  The federal judge agrees:  “And there is a very complex series of positions that the various companies have taken here absolutely contradictory of one another in terms of their relationship and how they were set up. Depending upon which executive you talk to, you get a completely different version of how the call center was set up and who employed those people. In the process of looking at the entire picture of this case, there is substantial evidence of active avoidance of liability,” he said in the Aug. 3 ruling.

If your company has a parent, subsidiary, or related company, it is very easy to expose all your businesses to liability for the “sins” of one.  For example, running HR operations from a central location can expose your businesses to the claim that they are a “joint employer” and thus all liable for harassment which occurred only at one business.

Avoid mistake number three:  if you are operating more than one business and are concerned regarding commonality of operations, ownership, or control  — factors which can expose all the businesses to joint employer liability — contact counsel to determine methods to keep the businesses separate.

Don’t be like ToyQuest.  Instead, understand “joint employer” liability before your businesses  — emphasis on plural — get sued and make any necessary changes.

CONCLUSION

Businesses should stay ahead of harassment, discrimination, and joint employer problems by staying proactive with their policies, training, and organizational structuring.  ToyQuest had the chance to do these things but failed — abysmally — to do so.

Speaking of failing to take advantage of a chance to do something the right way, enjoy “I Had My Chance” by Morphine, one of my top ten favorite blues songs:

WORKPLACE INVESTIGATIONS: SHIELD FOR BUSINESSES OR SWORD FOR PLAINTIFFS?

HR Law Insider’s last edition discussed — using the wacky world of the NFL as an example — workplace investigations.  Businesses should anticipate that their workplace investigations, or lack thereof, may be scrutinized by the EEOC, a judge, or a jury. A good investigation is an effective shield against employment claims; a bad one is a sword for plaintiffs’ lawyers.

EEOC GUIDELINES FOR WORKPLACE INVESTIGATIONS

The EEOC has published guidelines which include many of the elements of an effective investigation:

Effective Investigative Process

An employer should set up a mechanism for a prompt, thorough, and impartial investigation into alleged harassment. As soon as management learns about alleged harassment, it should determine whether a detailed fact-finding investigation is necessary. For example, if the alleged harasser does not deny the accusation, there would be no need to interview witnesses, and the employer could immediately determine appropriate corrective action.

If a fact-finding investigation is necessary, it should be launched immediately. The amount of time that it will take to complete the investigation will depend on the particular circumstances. If, for example, multiple individuals were allegedly harassed, then it will take longer to interview the parties and witnesses.

It may be necessary to undertake intermediate measures before completing the investigation to ensure that further harassment does not occur. Examples of such measures are making scheduling changes so as to avoid contact between the parties; transferring the alleged harasser; or placing the alleged harasser on non-disciplinary leave with pay pending the conclusion of the investigation. The complainant should not be involuntarily transferred or otherwise burdened, since such measures could constitute unlawful retaliation.

The employer should ensure that the individual who conducts the investigation will objectively gather and consider the relevant facts. The alleged harasser should not have supervisory authority over the individual who conducts the investigation and should not have any direct or indirect control over the investigation. Whoever conducts the investigation should be well-trained in the skills that are required for interviewing witnesses and evaluating credibility.

Questions to Ask Parties and Witnesses

When detailed fact-finding is necessary, the investigator should interview the complainant, the alleged harasser, and third parties who could reasonably be expected to have relevant information. Information relating to the personal lives of the parties outside the workplace would be relevant only in unusual circumstances. When interviewing the parties and witnesses, the investigator should refrain from offering his or her opinion.

The following are examples of questions that may be appropriate to ask the parties and potential witnesses. Any actual investigation must be tailored to the particular facts.

Questions to Ask the Complainant:

  • Who, what, when, where, and how: Who committed the alleged harassment? What exactly occurred or was said? When did it occur and is it still ongoing? Where did it occur? How often did it occur? How did it affect you?
  • How did you react? What response did you make when the incident(s) occurred or afterwards?
  • How did the harassment affect you? Has your job been affected in any way?
  • Are there any persons who have relevant information? Was anyone present when the alleged harassment occurred? Did you tell anyone about it? Did anyone see you immediately after episodes of alleged harassment?
  • Did the person who harassed you harass anyone else? Do you know whether anyone complained about harassment by that person?
  • Are there any notes, physical evidence, or other documentation regarding the incident(s)?
  • How would you like to see the situation resolved?
  • Do you know of any other relevant information?

Questions to Ask the Alleged Harasser:

  • What is your response to the allegations?
  • If the harasser claims that the allegations are false, ask why the complainant might lie.
  • Are there any persons who have relevant information?
  • Are there any notes, physical evidence, or other documentation regarding the incident(s)?
  • Do you know of any other relevant information?

Questions to Ask Third Parties:

  • What did you see or hear? When did this occur? Describe the alleged harasser’s behavior toward the complainant and toward others in the workplace.
  • What did the complainant tell you? When did s/he tell you this?
  • Do you know of any other relevant information?
  • Are there other persons who have relevant information?

Credibility Determinations

If there are conflicting versions of relevant events, the employer will have to weigh each party’s credibility. Credibility assessments can be critical in determining whether the alleged harassment in fact occurred. Factors to consider include:

  • Inherent plausibility: Is the testimony believable on its face? Does it make sense?
  • Demeanor: Did the person seem to be telling the truth or lying?
  • Motive to falsify: Did the person have a reason to lie?
  • Corroboration: Is there witness testimony (such as testimony by eye-witnesses, people who saw the person soon after the alleged incidents, or people who discussed the incidents with him or her at around the time that they occurred) or physical evidence (such as written documentation) that corroborates the party’s testimony?
  • Past record: Did the alleged harasser have a history of similar behavior in the past?

None of the above factors are determinative as to credibility. For example, the fact that there are no eye-witnesses to the alleged harassment by no means necessarily defeats the complainant’s credibility, since harassment often occurs behind closed doors. Furthermore, the fact that the alleged harasser engaged in similar behavior in the past does not necessarily mean that he or she did so again.

Reaching a Determination

Once all of the evidence is in, interviews are finalized, and credibility issues are resolved, management should make a determination as to whether harassment occurred. That determination could be made by the investigator, or by a management official who reviews the investigator’s report. The parties should be informed of the determination.

In some circumstances, it may be difficult for management to reach a determination because of direct contradictions between the parties and a lack of documentary or eye-witness corroboration. In such cases, a credibility assessment may form the basis for a determination, based on factors such as those set forth above.

If no determination can be made because the evidence is inconclusive, the employer should still undertake further preventive measures, such as training and monitoring.

CONCLUSION

The EEOC guidelines provide employers with an excellent understanding of how the EEOC “thinks,” how it will scrutinize employers’ investigations, and how it will decide cases.

The EEOC’s guidelines, however, are just that: guidelines.  These particular guidelines involve a hypothetical complaint of sexual harassment.  No two situations — or complaints — are  alike.  Thus,  each investigation should be planned and conducted based on the unique facts that are presented.

Companies should consult counsel when launching an investigation, making difficult decisions during the investigation, and when a final conclusion is about to be reached.

For how NOT to conduct an investigation, enjoy Inspector Clouseau in action:

 

 

LONG ISLAND LIMO COMPANY LIABLE FOR FIRING FEMALE EMPLOYEE WHO REFUSED TO HAVE SEX WITH MANAGER

The New York Post reported today that a married Long Island ­limo-company manager told a female dispatcher he was firing her because she rejected his sexual ­advances — and even put it in writing: http://nypost.com/2015/04/10/boss-texts-gal-shes-fired-because-she-refused-his-sexual-advances/

According to the Post:

“The damning text — sent by former US Limousine manager Raymond Towns­end to pretty underling Geralyn Ganci — ended up costing him and his employer more than $700,000 in legal damages and fees, court papers show.

Ganci, 32, sued Townsend after she was fired for repeatedly refusing his barrage of sleazy requests, which eventually landed her in the hospital with extreme emotional distress, her suit said.

The sex-crazed Townsend said in one text that he “had to pull over to the side of the road and masturbate thinking about me,” Ganci said in her suit.

Ganci said she was shocked and sickened by his behavior — which occurred despite the fact that Townsend’s wife worked at the same New Hyde Park company and sat near her.

Finally, after allegedly forcing her into a restroom and putting his hand up her shirt, Townsend told the resistant Ganci she was fired in February 2009.

“The plaintiff even received another text message from Raymond Townsend which has been preserved stating that the reason plaintiff was fired was because she ‘refused to have sex with the general manager,’ ” according to the court papers.”

WHEN IS AN EMPLOYER LIABLE FOR ITS SUPERVISOR’S SEXUAL HARRASSMENT?

An employer may be subject to liability to a victimized employee for a hostile environment created by a supervisor with immediate (or successively higher) authority over the employee.  However, when no tangible employment action is taken, a defending employer can avoid liability IF (a) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

While proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing an unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer’s burden.

No affirmative defense is available, however, when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.

LESSONS FROM LONG ISLAND

Rogue supervisors — such as the Long Island limo manager — are unfortunately present in many companies.  To avoid liability for a supervisor’s misconduct, ensure that:

  • Your company has a solid complaint procedure in its employee handbook and/or other policies;
  • Any complaint procedure provides that the alleged victim can complain not only to the employee’s supervisor, but also to upper management and beyond in the event that the employee is uncomfortable complaining to the supervisor or unsatisfied with the company’s investigation;
  • The complaint procedure is known to all employees, documented as such, and reviewed with employees by management on at least an annual basis;
  • Company management is trained by legal counsel periodically on handling and investigating complaints;
  • The Complaint procedure is reviewed annually for any changes in the law or your organization;
  • Your company carefully follows its complaint procedure; and
  • If there has been supervisor harassment, it does not culminate in a tangible employment action, such as discharge, demotion, or undesirable reassignment.

 

 

INDEPENDENT CONTRACTOR VERSUS EMPLOYEE: MAKING THE RIGHT CHOICE

It is critical that business owners correctly determine whether individuals providing services to them are employees or independent contractors. In most cases the choice is easy: workers neatly fit within one category or the other. This edition of the HR Law Insider focuses on what to do when the choice is not so easy – when businesses need to carefully evaluate the pros and cons of their decision. As discussed below, making the wrong choice can be costly.

PROPER CLASSIFICATION: THE QUESTIONS EVERY BUSINESS MUST ASK

An employee is “a person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed.” In contrast, an independent contractor” is one who “in the exercise of an independent employment, contracts to do a piece of work according to his own methods and is subject to his employer’s control only as to the end product or final result of his work.”

Companies must evaluate the following before deciding whether a worker should be classified as an employee or as an independent contractor (or reclassified if classified incorrectly):

  • Does the company have the right to control when, where and how the worker performs the job.
  • Does the work require a high level of skill or expertise.
  • Does the employer furnish the tools, materials and equipment for the job.
  • Is the work performed on the employer’s premises.
  • Is there a continuing relationship between the worker and the employer.
  • Does the business have the right to assign additional projects to the worker.
  • Does the business set the hours of work and the duration of the job.
  • Is the worker paid by the hour, week, or month rather than the agreed cost of performing a particular job.
  • Does the worker hire and pay assistants.
  • Is the work performed by the worker part of the regular business of the company.
  • Is the worker engaged in his/her own distinct occupation or business.
  • Does the company provide the worker with benefits such as insurance, leave or workers’ compensation.
  • Is the worker considered an employee of the company for tax purposes (i.e., the company withholds federal, state and Social Security taxes).
  • Can the company discharge the worker.
  • Do the worker and the company believe that they are creating an employer-employee relationship.

Answering the foregoing questions typically yield a clear result: the worker is either an employee or an independent contractor. However, in many cases, the result is anything but clear. In such cases, companies should consult legal counsel to discuss the facts and the pros and cons regarding the important decision to be made.

IMPROPER CLASSIFICATION: PENALTIES AND PAIN

Improperly classifying an employee as an independent contractor can result in significant IRS tax penalties for failure to pay payroll, social security, and medicare taxes, among other things.

Misclassifying an employee as an independent contractor can open a can of worms with the other government agencies, particularly if an agency believes that the business misclassified the employee solely to avoid providing government mandated benefits.

For example, in most instances employees have significantly more rights than independent contractors: overtime must be paid to non-exempt employees; employees are protected by the EEOC enforcement of Title VII and the Americans with Disabilities Act; employees are protected by the Department of Labor and OSHA laws; and employees have a number of other rights in the workplace which do not apply to independent contractors (e.g. workers compensation insurance and unemployment insurance benefits).

 CONCLUSION

Classify workers correctly by evaluating — at the outset — their tasks and relationship to your company. Once you have performed a proper, careful, and supportable analysis, consult counsel if there is no bright line answer.

In future editions of the HR Law Insider, I will address easy ways to bolster any classification decision such that it will better withstand government or third party (e.g. plaintiff’s lawyer) scrutiny. This can be done via, among many other things, a good independent contractor agreement or by specifically delineating projects to be performed.

In the interim, sit back and enjoy a blast from the past about workin’ for a livin’. https://www.youtube.com/watch?v=9N2CANatVYQ