Avoiding Costly Discrimination And Harrassment Lawsuits

Is your business safe from lawsuits for sex harassment or discrimination?

That question has become top of mind for many employers, and for good reason: The Supreme Court has taken on the Wal-Mart class action employment bias lawsuit — the largest such suit in history. The plaintiffs, more than one million women, claim the nation's largest private employer systematically underpaid and under-promoted female employees.

Costly Consequences

Whatever the final decision in the Wal-Mart case, the litigation highlights the importance of due diligence in assuring gender-free employment practices. Failure to take sex bias seriously can have costly consequences in any size business.

"The typical harassment case that goes to trial can cost from $300,000 to $500,000, just in attorneys' fees and litigation costs," says James J. McDonald, Jr., managing partner at the Irvine, Calif., office of Fisher & Phillips. "Normally in these cases the accused harasser is also sued. And in many states the employer is obligated to provide a defense attorney for that individual, so you end up paying two lawyers."

In most sex discrimination cases there is a good bit of discovery and depositions, and trials often take two to three weeks to complete. Because the cases are fact-specific it's difficult for employers to obtain summary judgments.

Litigation can strike employers of any size, warns McDonald. Federal anti-discrimination law covers businesses with as few as 15 employees. Moreover, most states have laws that apply to smaller organizations. California, for example, covers businesses with only one employee for harassment claims and employees with five employees for discrimination claims.

"Even the smallest of employers needs to have some prophylactic programs in place," suggests Jay W. Waks, chair of the labor and employment law department at New York's Kaye Scholer LLP and head of the firm's national employment practice. "Employers of all sizes should have clear and unambiguous policies against discrimination and harassment."

Creating a workplace free of sex discrimination means getting everyone on board, says Waks, who has 38 years of experience representing a broad range of employers in employment litigation. "Everyone, employers and employees alike, must understand that profitability is a function of productivity and not of discriminatory attitudes."

Harassment Is Discriminatory

Sexual harassment is a form of sex discrimination. That's because individuals who engage in sexist remarks, or more serious activities, are picking on an individual because of gender alone.

"Federal, state and local laws all prohibit sex discrimination in every aspect of employment," says Nancy Williams, a partner in the Seattle office of Perkins Coie LLP. "One such aspect is the set of terms and conditions of the job. If sexist remarks rise to the level of being terms and conditions of employment — in other words, something employees have to accept if they want to remain at work, then those remarks violate their rights and they constitute discrimination."

Severity depends to some extent on frequency. "Most courts have said a very minor or infrequent comment might be offensive but probably not severe and pervasive enough to alter the terms and conditions of employment," notes Williams. "So an occasional off-color remark will probably not form the basis of a legal claim. But if those kinds of remarks occur regularly or frequently, if dirty jokes are part of the everyday working environment, then a court might very well conclude the harassment has become pervasive enough to constitute a term and condition of employment."

It's smart, then, to nip such comments in the bud and continue to monitor workplace behavior. And be wary of sexual joking that seems to be voluntary — it's easy to get lulled into a false sense of security.

"Often dirty joking and off-color comments may appear to be happening voluntarily and in jest," says Williams. "Truly voluntary conduct that is welcome doesn't violate the law, but it is very difficult to know whether someone is voluntarily going along or feels pressure to do so. Even if an employee did voluntarily go along, problems can arise if something should go wrong with the employment. Perhaps the individual gets fired or receives a bad appraisal. In such situations it is very easy for the person to rewrite history and say, 'I went along because I felt like I had to. It was unwelcome and now I have a claim against you.' So employers need to first of all not put on blinders and earplugs to what is happening in the workplace."

So what can you do when you employees say they are just joking around and there's no harm being done? Williams suggests a response such as this: "Do it when you hang out together on your own time. Here at the workplace we are going to have a different kind of work environment."

Protect Your Business

So what can you do to protect your own business? Here are some suggestions:

  • Policies. "First, make sure every employee, on the first day of work, receives and signs for a copy of your company's policy against harassment," says McDonald. "Provide a copy in the employee's native language."
  • Hotline. Maintain a hotline at the corporate office or with an outside HR consulting firm that an employee should call to report harassment, discrimination, retaliation or other illegal activity. "This third-party channel is important because employees will otherwise claim they were too afraid to complain to their direct supervisors," says McDonald.
  • Communication. Post information in the employee break area about your company's policy against harassment, and display the hotline number mentioned above.
  • Training. All individuals in a management position should receive training on harassment immediately upon hire or promotion into management, and they should receive refresher training every year or so. This should include an explanation of not just the law against harassment but also the kinds of scenarios that arise that lead to harassment complaints, such as dating relationships with subordinates, drinking or socializing with subordinates after hours, and careless use of e-mail, text messaging and social media.

Consider utilizing web-based programs that give online sensitivity training and tests to employees. Such programs often facilitate the maintenance of computerized records that demonstrate an employer has taken all reasonable steps to prevent sex-based discrimination and harassment.

How often should you have training? The answer depends partly on whether you have had problems in the past, says Waks. "Hold training at least on an annual basis. Some employers should run them twice a year to make sure everyone is getting the message."

Training can go a long way toward obviating issues, says Waks. "Once supervisors and managers understand that to some extent they may be responsible for gender-based discrimination or sexual harassment, you are 95 percent of the way home."

Establish Multiple Channels

A hotline is a great idea for the reporting of any discriminatory practices. But it's wise to go further: Establish multiple channels of communication.

"Give employees a number of outlets to use for complaints and reports if they are the subjects of discrimination or harassment or they observe that kind of activity," suggests Waks. "Multiple outlets for workplace complaints can be useful if an employee feels uncomfortable going to one office or manager as opposed to another."

At the same time, make sure you are adequately informed when more than one employee, perhaps in different departments, files complaints about the same individual. "Establish a mechanism to aggregate claims from different parts of your business," suggests Waks. "Complaints that individually may seem insubstantial may, when considered together, represent a serious problem. It's far better to discover that problem before a court case results."

Take Complaints Seriously

Once you receive complaints, take them seriously. "The most common error by employers is overlooking a complaint of harassment or pay-based discrimination," says Waks. "A failure to investigate complaints is often not done out of avarice. Rather, if an employee has established a reputation as a whiner, a complaint about harassment may not be taken as seriously as it should be."

That's not all: Often an employer will chalk up a complaint to bad management rather than discrimination. "Sometimes employers view complaints as instances of workplace unfairness due to a bad boss rather than harassment based on sex." That can lead to a false sense of security: "The law in most of the United States is that bad bosses are not banned. Maybe being a bullying boss is bad for business and productivity, but it is still not a violation of law."

What bad bossing can do, though, is spark a discrimination complaint. "From my perspective I would say about 98 percent of all discrimination claims arise from feelings of unfairness," says Waks. "So it's important to get to the bottom of any sex discrimination claim to see if it in fact involves a question of unfairness. If a manager has acted unfairly to an employee, even if it does not violate the law, a good employer really should take steps to resolve the workplace problem. That should help improve productivity."

Your goal is to assess the legitimacy of the complaint with an investigation. "Perform as thorough an investigation as possible, sometimes to the point of irritation of your people, to demonstrate to yourself and to your organization that you do or do not have a problem," advises Walks. "In sensitive employment situations, consider getting the advice of outside counsel."

If that's time consuming, it's time well spent, says Waks. "A busy executive will often say, 'I don't have time for this.' But in light of the consequences, it is in everyone's best interest to be sure the employer gets all the facts."

Establish a system for regular review of your workplace anti-bias policies and continue periodic communications to your supervisors, says Waks. "You need to make it clear to your organization that you have zero tolerance for any type of sex-based discrimination and harassment, that it is against company policy and that it is unproductive."

Comments or thoughts on this article? Please e-mail [email protected].

Content Library
Dig through our best stories from the magazine, all sorted by category for easy surfing.
Read More
Content Library
Buyer's Guide
Find manufacturers and suppliers in the most extensive searchable database in the industry.
Learn More
Buyer's Guide