Reducing Employer Liability Newsletter
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This is a monthly newsletter. Each issue covers one specific area of employer liabilities with suggestions to control that liability. You are not to rely on this publication as legal advice and must seek competent legal assistance.

In This issue: Sexual Harassment Laws

How a Six Million Dollar Man Became a Six Million Dollar Liability.

He blocked her way. He scanned her body from head to toe and asked, “Do you have a boyfriend?” When she said no, he asked, “How long has it been since you’ve had one?” When she passed by, he brushed up against her. He sent her a vulgar note and tickled her feet under a table. He also threw a pencil at her chest, snapped her bra strap, and asked if she liked “three-ways.” Is this flirting? Is this playful, adult fun? She didn’t think so and the courts agreed, especially since it happened on company time.

The examples above were taken from testimony in one of the most notorious and high-ticket sexual harassment cases in history (Weeks v. Baker & McKenzie, 63 Cal App 4^th 1128, 1998). The Weeks case involved a successful partner in a law firm and his secretary. Although plaintiff Rena Weeks was the first to file suit, testimony from other female employees revealed the defendant’s long history of roving hands and inappropriate behavior toward his colleagues and staff. Both his conduct and the passive stance adopted by Baker & McKenzie resulted in one of the largest damage awards in history for this type of action – $3.5 million in punitive damages against the firm, $225,000 in punitive damages against the partner, and $1.9 million in attorney fees.

Who is Responsible for Setting Workplace Boundaries?

Context is everything. Gender and power differences in work relationships turn offices into breeding grounds for sexual misconduct. Behaviors that may not be legally actionable in a social setting take on new meaning at the office. Let’s face it, support staffers and high-level managers are human and some are incapable of drawing the line between office and social life.

The responsibility falls upon the employer to set and maintain these boundaries. The law requires companies to take reasonable steps to ensure harassment-free environments for workers. This is an ongoing process and involves educating and training employees as well as implementing up-front policies for reporting and handling complaints.

What Do I Need to Know About the Sexual Harassment Laws?

Sexual harassment is a form of gender discrimination that violates federal laws under Title VII of the Civil Rights Act of 1964 and state laws such as the Fair Employment and Housing Act (FEHA), which was applied in the Weeks case. FEHA makes sexual harassment of an employee by any person within the work place unlawful and holds an employer strictly liable for sexual harassment committed by an agent or supervisor employed by his or her company.

Are you wondering why the plaintiff’s award in Weeks was so high? It’s because the California FEHA statutes regarding punitive damage awards require the court to take a close look at how a company communicates its intolerance for sexual harassment, how much effort they put into preventative measures, and how well they handle actual complaints. In Weeks, more than four million dollars of the total award accounted for punitive damages as a direct result of the law firm’s failure to meet the legal requirements for these FEHA statutes. Become familiar with the laws in your own state. It’s the only way to know the scope of your potential liability on this issue. In addition to Federal and State laws, there are also local and county codes and ordinances covering such prohibited conduct and rights. You may have to consult professionals to learn these details for your specific area and to seek guidance.

What Exactly is Sexual Harassment?

The Weeks case was replete with examples of the more known types of sexual harassment such as unwelcome physical advances and quid quo pro requests for sexual favors. But less obvious inappropriate conduct will catch the unprepared employer by surprise. Blocking someone’s movement to talk to them, allowing employees to send unwanted or bizarre messages to colleagues, allowing staff to keep a favorite Sports Illustrated swimsuit picture, and derogatory cartoons or posters in a workspace may also land an employer in hot water.

Prevention: The Six Million Dollar Message to Employers

The message is to be proactive. Focus on education and prevention, but have solid policies and action plans in place to manage incoming complaints. Communicate policy in writing to new employees. Ask them to sign an agreement regarding company protocol for submitting a complaint. However, a simple form will never constitute sufficient preventative measures. Many companies engage consultants to conduct sensitivity training. Others develop in-house workshops using commercially produced videos and require all of their employees to attend.

What Should I Do Next?

Don’t operate under the misconception that employees who bring suit do so only for revenge and money. According to expert psychologist Joni Johnston, individuals suffer great emotional harm from these types of offenses, and current legislation and case law fully evidence this theory.

If you don’t have an in-house expert or the manpower to develop policies and integrate a program at your company, you are not alone. However, this is no reason to continue to expose your company to such high-risk, heavy ticket liability. A qualified PEO can help you reduce your exposure and let you get back to the business of running your business. To learn about the many benefits of employee leasing and how a PEO can reduce your employers liabilities, please visit www.peo7.com.

Weeks v. Baker & McKenzie 63 Cal. App. 4^th 1128 (1998)

Ellison v. Brady 924 F. 2d 872 (1991)

CA Govt § 12900 (2001)

CA Govt § 12940 (2001)

CA Civ. Code 3294 (2001)