Last week, Minnesota legislators introduced a bill to amend the definition of sexual harassment under state law.  Indeed, this legislation has already received significant attention in the media throughout Minnesota.  And although the bill adds only a single sentence to existing law, it has the potential to significantly reshape the legal landscape for employees who bring sexual harassment claims against their employers.  The substantive text of the amendment reads as follows:

An intimidating, hostile, or offensive environment … does not require the harassing conduct or communication to be severe or pervasive.

To unpack what this means, it’s necessary to first review some general principles of the law concerning sexual harassment.  Sexual harassment is a prohibited form of sex discrimination under state and federal employment non-discrimination law.  For a time, courts struggled to precisely define prohibited harassment.  In 1986, the Supreme Court, interpreting federal law, held that “[f]or sexual harassment to be actionable, it must be sufficiently severe or pervasive ‘to alter the conditions of [the victim’s] employment and create an abusive working environment.'”  Generally, state law in Minnesota has followed this interpretation.

The severe or pervasive standard is an attempt by courts to reconcile issues of degree (i.e., severity) and frequency (i.e., pervasiveness) into what constitutes unlawful sexual harassment in the workplace.  The standard recognizes that some acts of alleged harassment are so severe that the conduct may be actionable even if it occurred only once.  For example, a single instance of unwanted, inappropriate physical contact from a coworker might be sufficiently severe to be actionable, depending on the facts.

Simultaneously, the standard acknowledges that severity is not the only way by which illegal sexual harassment can occur.  Hence, the standard recognizes that some acts of alleged harassment, which may not seem as severe, can occur with such frequency as to create a hostile working environment.  For example, workplace remarks that might be considered only mildly inappropriate may, if made regularly or with a high frequency, constitute sexual harassment.  Note: the complained of conduct must only be severe or pervasive to be actionable; it is not necessary to be both severe and pervasive, although some complaints of sexual harassment may meet both standards.

Critics of the severe or pervasive standard, who presumably include the bill’s sponsors, have argued it discourages employees from making legitimate reports and/or claims of sexual harassment by setting the bar too high.  In removing the severe or pervasive standard, the Minnesota bill therefore redefines illegal sexual harassment in employment as “conduct or communication has the purpose or effect of substantially interfering with an individual’s employment . . . or creating an intimidating, hostile, or offensive employment . . .  environment.”  What, exactly, meets this standard would be determined by Minnesota courts.

Critics of the bill have argued that removing the severe or pervasive standard removes important guideposts for courts evaluating sexual harassment claims.  In their view, this bill risks creating a flood of new lawsuits, broad exposure for employers without large, sophisticated Human Resources departments, and potential inconsistencies in how the law of sexual harassment is applied.

Employers should keep an eye on this legislation as it proceeds through the legislative process.  If passed in its current form, the bill would apply to causes of action arising on or after August 1, 2018.  Employers can track the status of this legislation at the Minnesota Legislature’s website.

Maryland’s Disclosing Sexual Harassment in the Workplace Act of 2018, which awaits Gov. Larry Hogan’s signature, imposes stricter waiver and disclosure requirements regarding sexual harassment on Maryland employers beginning on October 1, 2018.  The bill was passed by both houses of the Maryland General Assembly and a Governor’s veto is not anticipated.

The bill impacts Maryland employers in two ways.  First, the bill prevents employers from asking employees to waive their future rights to come forward with sexual harassment complaints and provides that such waivers are void as a matter of public policy.  Second, the bill requires employers with 50 employees or more to disclose: 1) how many settlements the employer has made after a sexual harassment allegation; 2) how many times an employer has settled allegations of sexual harassment made against the same employee; and 3) the number of settlements of sexual harassment complaints that included non-disclosure provisions.  The Maryland Commission on Civil Rights will collect and compile the data and make it publicly available, including the employers’ identities (although not the identities of the alleged harassers or victims).

Maryland employers should  pay close attention to whether any of their contracts, policies, or agreements require employees to waive a future right to assert a sexual harassment claim or complaint.  Any waiver requirements should be eliminated by October 1, 2018, in accordance with the new law.  Additionally, employers subject to the reporting requirement should develop a reliable method of accurately tracking the data required to be disclosed.  This is a good opportunity for employers operating in Maryland to perform a comprehensive review of their sexual harassment policies, make any necessary revisions, and provide training to their managers in an effort to educate their employees as well as reduce the risk of sexual harassment claims being asserted in the future.

 

Monday, New York’s budget bill for FY 2019 was presented to the Governor for signature.  Buried among the usual budget line items are several provisions that will drastically affect employers.

In what seems to be a direct response to the #metoo movement, the bill sets training requirements, prohibits mandatory arbitration of discrimination claims, and outlaws confidentiality provisions in settlement agreements unless specifically requested by the complainant.

The employment related provisions are set forth in S7507-C.  Here are the highlights (or low lights depending on your point of view):

  • Mandatory Harassment Policies:  All employers must have a policy against harassment that complies with or exceeds the model harassment policy that will be developed by the Division on Human Rights.  At a minimum, the policy must:
    • prohibit sexual harassment consistent with guidance issued by the department in consultation with the division of human rights and provide examples of prohibited conduct that would constitute unlawful sexual harassment;
    • include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment and a statement that there may be applicable local laws;
    • include a standard complaint form;
    • include a procedure for the timely and confidential investigation of complaints and ensure due process for all parties;
    • inform employees of their rights of redress and all available forums for adjudicating sexual harassment complaints administratively and judicially;
    • clearly state that sexual harassment is considered a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisory and managerial personnel who knowingly allow such behavior to continue; and
    • clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any proceeding under the law is unlawful.
  •  Mandatory Training:  All employers must also provide “interactive” training to their employees.  The Division will also be developing a model training program that must include:
    • an explanation of sexual harassment consistent with guidance issued by the department in consultation with the division of human rights;
    • examples of conduct that would constitute unlawful sexual harassment;
    • information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment;
    • information concerning employees’ rights of redress and all available forums for adjudicating complaints; and
    • address conduct by supervisors and any additional responsibilities for such supervisors.
  • Statements by Public Contractors:  Public contractors submitting a bid for work with the State must include a statement that they have a policy against sexual harassment and that they provide training to employees on that policy.  Public Contractors must generally comply with the policy and mandatory employment training that applies to all employers under new Labor Law §201-g which sets for the policy and training requirements.
  • Prohibition on Mandatory Arbitration Agreements:  No employer may require that a claim of unlawful discrimination or sexual harassment be submitted to mandatory arbitration.  Voluntary arbitration provisions are still okay.  Collective bargaining agreements trump this provision, so if the CBA requires arbitration of discrimination or sexual harassment, then that would not run afoul of the law.  The law only bans this on a prospective basis and the law will not apply to any agreements entered into prior to the effective date of the law.
  • Bar on Most Confidentiality Agreements:  Settlement agreements may not contain confidentiality provisions requiring the complainant to keep the facts of the harassment or discrimination confidential unless the complainant voluntarily agrees to it.  Employers may still put a draft provision in agreements requiring confidentiality for the complainant to review.  The complainant must be given 21 days to review the provision. If the complainant accepts the provision, there must be a separate writing stating that.  Complainants must also have 7 days to revoke their acceptance of the agreement.
  • Provides Protection (and a Cause of Action) for Non-Employees:  the bill makes clear that an employer may be held liable if one of its employees sexually harasses a contractor, subcontractor, vendor, consultant or other non-employee providing services to the employer.

These provisions will go into effect 180 days after the law is enacted.  We assume that the forthcoming regulations may clarify certain aspects of the law such as how frequently harassment training must occur.  We will keep you updated when the regulations are issued.

In the meantime, employers should begin assessing their harassment policies and training programs.  Employers should also review settlement agreements and employment agreements for compliance with the law.

I’ve been meaning to blog about all of the harassment charges that have appeared in the news.  Every morning I would get up with a plan to talk about the latest person accused.  And almost every morning it seemed as if there was a new person to talk about.   I quite simply could not get ahead of the avalanche of claims.

There were, after all, so many lessons to be learned from each allegation.

Rather than try to address them all at once, let me start by saying that employers should be looking at cultural shifts, not isolated responses to a particular claim.

After all, if the corporate culture is such that all people, regardless of gender, are treated fairly, employers will be looking at far fewer claims of harassment or discrimination.  If employers need more proof of this, all they have to do is look at the companies where the corporate culture is the opposite of fair.

Before there was a #metoo campaign trending on Facebook and Twitter, there were allegations against companies, like Uber, that the male executives not only ignored complaints of harassment but set a culture that “high performers” were untouchable as far as bad behavior was concerned.  These allegations were detailed in claims first made by Susan Fowler, but the scandal has become far more encompassing than just her claim.

I have noticed a weird reaction by some people I talk to who know I do harassment training for clients.  Most have assumed that this means that more clients are looking to do training, and those people would be correct.

The perplexing response I have gotten from others assumes that employers are too scared to open a can of worms and are probably not looking to schedule training.  Hopefully, none of you fall in the latter camp.

Now is precisely the time to have training.  This is true even if you think that your company does not have a harassment or discrimination problem.  If you are right, then the training merely reinforces the positive corporate culture.  If you are wrong, then you can begin the process of correcting behavior and getting issues brought to light before your company becomes the latest headline.

Regardless of the type of employer you are, you depend, on some level, on customers who are willing to pay for the goods or services being offered.  And the old adage, “The Customer is Always Right,” a mantra of the American business community since this country’s founding, is as true today as it was then.  But from time to time, valued customers will step over the line and act inappropriately towards company employees.  If and when that occurs, employers need to understand the legal ramifications of dealing with the fallout.

Recently, a receptionist at a New Jersey automobile dealership brought an action against her employer for violation of the New Jersey Law Against Discrimination.  In the Complaint, she alleged, inter alia, that her employer retaliated after she pressed charges against a high-profile customer who had tugged at her shirt and exposed her bra.   Thereafter, she alleged that her work environment became hostile until she was terminated.

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This case has been up to the Appellate Division in New Jersey, who ruled that the employer is not responsible for the conduct of a non-employee, and will not be held responsible for customer conduct under most circumstances.  However, the Appellate Division did find that an employee filing charges against a customer is a protected activity that protects and individual against employer retaliation.

The upshot of the case is that in the rare case that customer behavior crosses over the line of good taste, take immediate measures to correct the situation.  In the even rarer case that the conduct becomes criminal, let your employees know that if they choose to press charges, they will not the subject of retaliation in any way, shape, or form.

Last week, the EEOC reached a $1.02 million settlement with Vail Run Community Resort Association, Inc. and its management company, Global Hospitality Resorts, Inc.  The settlement came after the EEOC sued based on its allegations that a housekeeping manager, Omar Quezada, repeatedly sexually harassed female subordinates.  The settlement will resolve the claims of 8 female employees.

This case certainly caught my eye because of the size of the settlement, but also because of the other obligations set forth in the consent settlement decree.  Pursuant to the settlement, there are some relatively minor “extras,” for example, giving favorable references and apology letters to the former employees.

The settlement also requires regular training on harassment and discrimination and, more unusually, the appointment of a monitor to assess compliance with the decree.  This is not a simple one-off check-in to see if the the companies are complying with the settlement.  Instead, the companies will have to pay an outside monitor for five years.

22207527_sUnder the settlement, the Spanish speaking monitor will insure that semi-annual training is conducted and will regularly be interviewing employees to determine if harassment or discrimination is occurring.  The monitor will also have to review any and all charges of discrimination during this time period.

If this were a Roadrunner cartoon, that outside monitor would be represented by a 1 ton weight hanging over Wile E. Coyote’s head.  Granted, there are rather serious allegations in the complaint and the supervisor in question has already been criminally convicted of unlawful sexual contact and felony extortion, so this is not your usual discrimination claim.

I think most employers would not relish having a monitor coming into the workplace and speaking with employees.  It may seem counter-intuitive but this is why you want to encourage employees to come to you with complaints, no matter how minor.  If you have an open door policy and then actually investigate the complaints that arise, you, hopefully, are dealing with much less severe situations and resolving them without the employee ever needing to get the EEOC involved.

 

At the end of an employment relationship it is common for employers to elicit a Release from an employee that, in addition to waiving the right to sue, includes a nondisclosure agreement that essentially forbids the departing employee from speaking about the employer.  This is especially valuable when the employer is a high-profile company with brand goodwill to protect.  Obviously, the consideration for such a promise is normally some sort of severance.

For many employers, this practice becomes a fallback when harassment and discrimination policies fail to address an issue with the departing employee.  But banking on an 11th-hour cure-all is especially dangerous, since some employees would rather retain the ability to talk about their experiences instead of receiving a one-time payment.  Take the example of Maureen Sherry, a former trader at defunct Wall Street investment bank Bear Stearns.

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After turning down a severance offer that included such a clause, Sherry now makes her living spilling Wall Street workplace secrets in a series of high-profile interviews and a forthcoming book.  While her employer was a casualty of the financial collapse of 2008, rest assured that senior executives are still very much in the game.  While this blog is not in the business of verifying her many sordid allegations, the lesson to be gleaned is that implementing effective anti-harassment policies is a far better course of action then relying on a last-second nondisclosure agreement.

18691875_sBikram Choudhury, founder of Bikram Yoga or hot yoga as it is colloquially referred, has been the center of several well-publicized sexual harassment lawsuit.  As the trial of one former legal adviser’s claim of sexual harassment is now progressing, it gains even more publicity, whether because of the juicy allegations of rape or schadenfreude or a little of both.

The allegations have been very salacious and, if true, paint a picture of a predatory and abusive man.  Law 360 reported that his wife testified on Wednesday.  The reports of her testimony are fairly shocking as she confirmed that she heard her husband swear at students and called female students prostitutes and bitches.  Certainly not what his defense attorneys wanted to hear.

The Choudhurys are also going through a divorce so it is tempting to attribute her testimony to a spouse seeking revenge.  However, her testimony was not a full-scale attack on her husband. Instead, although she had to admit that she had heard him use those words during teacher training sessions, she claimed that what he was doing was merely theater and all part of his act.  In other words, she tried to rationalize what he said by saying that he did not mean it.

This brings up an interesting point.  Under anti-discrimination laws, the alleged harasser’s intent is largely irrelevant.  A person does not have to mean to harass someone to be guilty of harassment.  This is a point that I make at every training session I do with employees and managers and one that seems to be the most surprising to people.

The way hostile work environments are defined under most anti-discrimination laws is that the conduct is based on membership in a protected class, that the conduct was severe or pervasive, and that the victim perceived and a reasonable person would perceive that a hostile work environment had been created.  In short, even where someone was joking or putting on an act, if they engage in conduct that could be considered harassment, it does not matter what they meant.

So, although I think Rajashree Choudhury might have been trying to excuse her husband’s behavior, saying he was joking is not likely to cut it.

 

1991649_sGenerally, if an employee is going to complain of harassment by a supervisor, in my experience, the complaint is raised to another person, such as another manager or Human Resources.  A lot of employees simply do not feel comfortable having that conversation with their bosses.

Of course, if an employee does have that conversation with his or her boss, the boss needs to be aware that the complaint cannot simply be pushed under the rug.  As a recent 6th Circuit case makes clear, this is where it is crucial that employers provide training and other guidance to supervisors in how to handle such complaints.  In EEOC v. New Breed Logistics, the 6th Circuit recently held as a matter of first impression that an oral complaint about harassing supervisor to that harassing supervisor is “protected activity” under Title VII for which an employee cannot be retaliated against.  In so finding, the Court upheld a $1.5 million award for the EEOC where the EEOC raised claims of retaliation on behalf of two female workers and a male worker who complained of a supervisor’s harassing behavior.

Although the case is headline news in the legal community since it is the first time the 6th Circuit has confronted the issue, the decision itself is not surprising.  This is because courts have routinely applied broad definitions of “protected activity” to insure that employees are not being intimidated from filing complaints of harassment.

Managers who hide complaints of harassment may think that they are protecting themselves, but they could be exposing themselves to greater liability.  In the New Breed case, the defense was that the plaintiffs had performance issues. However, where a complaint of discrimination is not investigated and then an employee is terminated very close in time to that complaint, the failure to investigate the claims muddies the issue of whether there was a legitimate reason to terminate the employee.

It is certainly possible that, had the complaint been investigated, it would have been found to be unsubstantiated and the manager would not have been in any trouble.  On the other hand, hiding the complaint clearly did not help the manager. It’s an expensive lesson to learn and is why companies should make clear that all complaints of harassment must be reported to human resources or whoever is else responsible for investigating complaints.

27485319_sLawyers, and I suspect a good deal of employers, watched the Marchuk v. Faruqi & Faruqi case with a great deal of interest.  The allegations after all were quite scandalous — namely that Juan Monteverde, one of Faruqi’s high profile partners, had sexually harassed Marchuk and raped her.  Some of the interest may have been little more than schadenfreude as Faruqi & Faruqi have certainly made their share of enemies trolling for class actions against corporate giants.

Now that the verdict has come in and it was rather non-spectacular given the allegations, defense lawyers may be celebrating that a jury rejected most of the claims and only awarded a total of $140,000. Above the Law has tracked down a juror to explain the verdict, especially given the rape allegations. There is probably a lot of interest in reading the juror’s tale, most notably the rare glimpse inside jury deliberations.

What should be of note to employers is that the mere fact that the jurors did not 100% believe Marchuk did not preclude them from finding liability against the Firm.  Instead, the jurors really delved into the evidence to see if that supported a verdict under the employee-friendly New York City Human Rights Law.  The jurors understood that the law is much more lenient than state or federal law.

However, this case is not only a cautionary tale for New York City employers, but it is a reminder to employers and all of us defense attorneys not to fall in love with only a certain aspect of  their case.  The juror interviewed noted that there were several inconsistencies in Marchuk’s story regarding the rape and that was what led them to come to the conclusion that the sex had been consensual.  However, the defense attorneys also tried to paint a picture of a woman who was only looking for a payday by introducing evidence that she joked she was going to Hawaii with the settlement money.  This evidence was roundly rejected by the jury.

I have been involved in many investigations and lawsuits where clients have discovered that perhaps an employee was not truthful on one minor issue.  Clients begin to convince themselves that this one misstep means that no one will ever believe the rest of the story.  This may be true, but it may not be when you look at the totality of the circumstances.  After all, jurors are human beings, most of whom have told partial truths about minor incidents, whether intentionally or not, but still expect people to believe them when they raise serious complaints.  To borrow from the title of a much-ballyhooed movie currently in theaters, there are 50 shades of gray.

When evaluating risk of exposure in a lawsuit, employers need to look at the big picture.