Risk Managers Offered Loss Control Advice On Sexual Harassment Claims

The manager respected her wishes and did not report the incident to anyone, did not investigate, and created no "memo to the file" to document these issues.

Several months later the female employee indicated that the same male employee harassed her again. She has demanded that ABC Company fire the alleged harasser. The owner called the EPL hotline and asked what he should do now.

EPL Hotline Counseling:

An internal complaint of sexual harassment is a very serious matter. Sexual harassment is prohibited by federal and state law. Courts interpreting these laws often impose civil liability on companies unless complaints of sexual harassment are investigated promptly.

However, an investigation of a sexual harassment complaint in and of itself is not enough. An employer may be subject to damages in a subsequent lawsuit unless it takes remedial measures where warranted.

In certain circumstances, appropriate remedial measures could include an obligation that the company terminate a worker found to have engaged in conduct constituting sexual harassment.

Every employer should have an existing anti-sexual harassment policy with a prohibition on conduct by employees that constitutes sexual harassment. Fortunately, ABC Company has a sound personnel policy on this subject. As with most policies, it has an internal company complaint procedure, which allows an employer to mount an effective defense against sexual harassment lawsuits.

An employees failure to complain to an employer constitutes a defense where a grievance procedure is established to encourage such notice. An employers investigation of the allegations and adoption of prompt and effective remedial measures also serves to diffuse the situation.

Potential lawsuits often can be avoided if an employer makes the investigation a priority, carries out the investigation in a sensitive and professional manner, and handles potential disciplinary situations in a consistent fashion.

From a legal standpoint, an employer must take immediate steps when it receives a complaint of sexual harassment from an employee. Once an employer is put on notice of sexual harassment directed to one of its employees, an employer may avoid liability for sexual harassment if it:

Investigates the alleged situation promptly.

Takes prompt and appropriate remedial action, where necessary, which is calculated to prevent further sexual harassment.

In this situation, ABC Company has exposure because substantial case law precedent holds that an employer is on notice once it learns of a sexual harassment problem, even if the "notice" is in the form of a request by the employee to "do nothing" about the problem. Once an employer receives notice of a problem in the workplace, it has a legal duty to investigate and take remedial measures if warranted.

In this instance, the owner should discipline the manager who agreed to the employees request to do nothing about the first complaint of sexual harassment. ABC Company also should remediate the situation by reminding all supervisory personnel that they have no discretion to agree to "do nothing" if requested to do so by a complainant. Rather, such complainants must be advised that the supervisors have no choice but to report the problem to human resources and executive officials pursuant to the employers anti-sexual harassment policy.

ABC Company also needs to investigate the "second" complaint. Again, the goal is to:

Immediately investigate the complaint of sexual harassment.

Where necessary, effectuate prompt, effective and appropriate remedial action.

If a companys response to a sexual harassment complaint fulfills these twin goals, an employer can substantially limit or potentially eliminate its liability in a subsequent sexual harassment lawsuit.

ABC Company should gather all the facts necessary to make an informed decision to resolve the complaint and take corrective action if necessary.

Since quick action is important, the employers investigation should begin within 24 hours after receiving the complaint. If it does not act promptly, the company will compromise its potential defense in a future lawsuit.

At the same time, the investigation itself should not be rushed, or else it might not be defensible if challenged in a later lawsuit. The investigation must be conducted in a thorough and effective fashion.

Assuming ABC Company is large enough to have personnel specialists on staff with training in investigating sexual harassment complaints, its HR department should conduct the investigation. If it does not have an HR department, members of management should conduct the investigation.

Given the current legal climate, a company can investigate a complaint of sexual harassment most effectively by using two internal investigators where the employer decides to conduct the investigation with its own personnel. If at all possible, one investigator should be male, and the other female. The collective efforts of two investigators will be more reliable than decisions by one investigator.

The investigators goals are to find out the relevant facts in an unbiased manner. They must be credible and responsible, and possess good judgment. Most important, the investigators must be sensitive to the issue of sexual harassment in the workplace, and its effect upon victims.

To prevent a later challenge to ABC Companys decision, the investigators should thoroughly document their work. A file should be created that contains the notes of the investigators, any statements they take, copies of their report, and the documentation of any subsequent disciplinary action.

Since the file of the investigators is discoverable in a subsequent lawsuit (if one ensues), care should be taken in creating documentation that will stand up in court. Thus, any document in the file as well as the report of the investigation should be thorough and even-handed, and devoid of any derogatory comments.

The individuals selected to conduct the investigation should work alone and without any interference. Since allegations of sexual harassment create the potential for defamation, support staff should not be employed to type, copy or deliver any documents relating to the investigation. Thus, the investigatory file should be stored in a safe and secure place where no one other than the investigators has access to the documents.

The investigators should gather all the relevant facts and interview all witnesses as soon as possible. The investigators must keep an open mind about the issues. Also:

The more thorough the investigation, the more informed the decision an employer will make.

The more expeditious the investigation of facts, the less time the interested parties will have to fabricate their stories.

The faster the investigation is completed, the sooner remedial measures can be effectuated, if such measures are warranted.

The investigators should review the personnel files of the female employee and the male employee. This may reveal earlier complaints of sexual harassment or a pattern of harassing conduct. It also will reveal whether the alleged victim has had prior dealings with the alleged harasser (or where there is a supervisor/subordinate relationship between the alleged victim and the alleged harasser, whether there is motive for fabricated allegations of sexual harassment given recent performance evaluations, etc.).

The alleged victim of sexual harassment should be the first person interviewed by the investigators. The alleged victim should be informed by the investigators that the company takes any complaint of sexual harassment very seriously, and that the complaint will be thoroughly investigated.

Although, generally, only those individuals who "need to know" will be informed of the investigation or of its results, the alleged victim should not be promised that the information provided will be kept confidential. This is something the company cannot promise for legal reasons.

The interview should consist of answers to who, what, when, and where type questions. The investigators should thoroughly document what the alleged victim claims to have happened, the presence of any substantiating factors or witnesses, and the effect of the alleged sexual harassment on the victim (medical treatment, psychological care, etc.).

The investigators should inquire as to what action, if any, the female employee believes would prevent a further recurrence of the alleged sexual harassment.

In the circumstances where a statement is necessary, the investigators should take a statement and type up the notes of the statement. The investigators should also assess the credibility of the alleged victim.

After the alleged victim is interviewed, the investigators should interview the alleged perpetrator/harasser. The investigators should advise the alleged harasser that the company is investigating a complaint, and that no decision has been made with respect to the veracity of the allegations.

After being briefly informed of the specifics regarding the charges of the alleged victim, the alleged perpetrator should be asked to respond to the charges in detail. Broad-based who, what, when, and where type questions should be posed by the investigators. Substantiating factors or witnesses identified by the alleged perpetrator should be identified.

The investigators should, as in the case of the alleged victim, assess the credibility of the alleged harasser. Where warranted, the investigators should take a statement from the alleged perpetrator.

The investigators should then question any corroborating witness identified by the alleged victim or perpetrator. Broad-based who, what, when, and where type questions also should be posed in the questioning of witnesses. Where necessary, the investigators should take statements of any witnesses and assess their credibility.

After all the facts have been gathered, the investigators should review the data and come to a conclusion as to whether a violation of ABC Companys anti-sexual harassment policy actually occurred.

When evaluating whether or not comments or conduct constitute sexual harassment, the viewpoint of a "reasonable person" should be chosen as the benchmark. As a general principle, the fact that the male employee did not intend any comments or conduct to constitute offense is not relevant.

If a reasonable person would take offense or view conduct as constituting sexual harassment, there may be a violation of Title VII of the Civil Rights Act of 1964 and ABC Company should conclude that a violation of its personnel policy prohibiting sexual harassment has taken place.

Title VII does not prohibit all sexual remarks or conduct in the workplace. It is only when comments or acts are unwelcome from the viewpoint of a "reasonable person" that Title VII is violated.

The courts view the concept of "unwelcome conduct" as statements or conduct which are unwelcome in the sense that the employee did not solicit or encourage it, or regarded it as undesirable or offensive. Therefore, when evaluating the facts gathered in the investigation, the relevant inquiry is whether or not the conduct was unwelcome.

After coming to a conclusion as to the validity of the complaint, the investigators should draft a thorough and even-handed report. The facts gathered should be reported chronologically, and details should be set forth in the report as to the facts learned during the investigation.

A conclusion should be stated as to the issue of whether a violation of ABC Companys anti-sexual harassment policy prohibiting sexual harassment took place. The report should conclude with recommendations of action that can be taken to prevent further sexual harassment.

The report of the investigators should be reviewed by a manager, supervisor or corporate decision-maker. That review should consist of more than simply rubber-stamping the conclusion of the investigators.

If the report is deficient, the corporate decision-maker should point out the deficiencies and request further gathering of facts or interviews if necessary. Any additional investigation ordered by the corporate decision-maker should likewise be documented.

ABC Company can insulate itself from liability under Title VII by responding to a charge of sexual harassment with prompt and effective remedial action. In turn, this means that ABC Company must take disciplinary action against the perpetrator/harasser–where necessary and when warranted. This is an affirmative duty imposed by the law.

Under some circumstances, the discipline will involve the discharge of the harasser. There is a growing trend by sexual harassers to sue an employer, the victim, or the companys investigators. The threat of such a suit is no defense to an employer for not imposing disciplinary measures against the harasser.

To avoid such potential charges, the level of discipline should be fair, appropriate to the situation, and consistently applied. The level of discipline should be reviewed and approved by the corporate-decision maker too. To that end, various considerations should be reviewed prior to imposing discipline.

ABC Company should ensure that its imposition of discipline is consistent with any discipline imposed in the past in similar situations. For example, if two employees are accused of sexual harassment and, after a through investigation, both are determined to have committed sexual harassment of the same or similar degree and nature, then both employees should be disciplined in the same way, i.e. terminated, reprimanded, etc.

If one employee contends that he/she suffered harsher discipline than another employee who was similarly situated and contends that the basis for the employers disciplinary decision was the employees race, color, national origin, religion, gender, marital status, or age, then the employee could file a discrimination suit against the company.

To avoid a discrimination suit, ABC Company should impose discipline in an even-handed and consistent fashion.

Documentation should be placed in the personnel file of the perpetrator to verify the discipline imposed by the employer. The victim also should be notified of the corrective action that the company is taking.

The complainants request that the harasser be fired is irrelevant, as the remedial measures to be undertaken should be whatever the company deems is appropriate to prevent a further reoccurrence of the situation. The documentation should be prepared with a view toward potential litigation–the documents should be drafted in a manner that show the good faith of the employer and the reasonableness of its decision.

The imposition of the discipline must be timely. ABC Company has an affirmative duty to act in a deliberate manner, so as to prevent any reoccurrence of the harassing conduct.

In most instances, the level of discipline will need to be determined on a case-by-case basis. Considerations include issues such as:

Whether the male employee is a high-level manager.

Whether the male employee had been warned before and nonetheless continued engaging in this conduct.

Whether the sexual harassment was physical, verbal or both.

Whether the female employee was threatened with physical harm, etc.

Considerations that are irrelevant include the reputations of the victim and/or harasser and the victims social relationships with other workers.

In certain circumstances, an oral warning after an investigation is appropriate if it results in the end of any sexual harassment. However, where an oral warning is given, but the sexual harassment has continued, courts are apt to decide that the "discipline" was insufficient to satisfy an employers duty to eradicate the sexual harassment.

As in the case of an oral warning, a written warning may be sufficient so long as it is effective to prevent further sexual harassment. It might be coupled with a requirement that the harasser apologize to the victim.

Sexual harassment can be remedied in certain circumstances by transferring either the complaining party or the alleged harasser. At least in the case of the complaining party, the transfer cannot be used as a mechanism to demote or retaliate against the victim for bringing charges of sexual harassment.

In certain circumstances, prompt and remedial action can include the demotion of the harasser, a suspension with or without pay, or placing the alleged harasser on probation. In addition, consideration can be given to requiring the harasser to undergo counseling or sensitivity training.

In certain circumstances, the only way to end the sexual harassment is to terminate the harasser. This is usually the case where a supervisory official has engaged in sexually harassing conduct over a period of months or years despite repeated efforts to get him to stop and other attempts at discipline short of termination.

Lisa Bee is director of EPL risk management for Lexington Insurance Company in Boston, while Gerald L. Maatman Jr. is an employment lawyer with Baker & McKenzie in Chicago.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 12, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.