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Article: February 2018: Defining Sexual Harassment: The State of the Law

February 01, 2018
Business Litigation Reports

Litigation involving sexual harassment, in a variety of forms, emerged as a recurring  headline in 2017 and shows no sign of slowing in 2018. The increase in sexual-harassment  claims coincides with the widespread and still-burgeoning social movement that has  encouraged victims of sexual harassment to come forward and declare that they, “too,” have been victimized.

There are many steps that companies can take to limit the exposure they may face from incidents of sexual harassment in the workplace. Among them, employers should stay abreast of the changing landscape of the legal exposure they may face from sexual harassment claims; implement policies and promote business cultures that minimize the prospect that such claims will ever be raised in their companies; and prepare themselves to address such claims when they are raised, including by conducting prompt and fair investigations into the allegations and managing any public-relations fall-out.

Quinn Emanuel has significant experience advising and assisting employers with all manner of legal concerns regarding sexual-harassment litigation— including by helping employers avoid facing such claims and mitigate their exposure when they arise. Based on our experience, we present below some instructive background and practice pointers that we hope will be useful in managing litigation risks from sexual harassment claims.

Claims Commonly Raised by Alleged Victims of Sexual Harassment
Alleged victims of workplace harassment have a litany of legal theories at their disposal to seek damages and other remedies against employers of alleged harassers. The most well-known among these is Title VII, 42 U.S.C. § 2000e, et seq.—the chief federal employment discrimination statute. Although Title VII’s language does not explicitly address “sexual harassment,” it includes protections against sex discrimination, and it has been long settled that sexual harassment is an actionable form of sex discrimination.

Broadly speaking, a Title VII plaintiff may pursue damages against an employer under different theories of liability, depending on whether or not the alleged harasser was a supervisor. If the alleged harasser was not the alleged victim’s supervisor, then the employer can be liable for the harassment only under principles of common law negligence—when the employer knew or should have known of the harassment but failed to take
corrective action.

By contrast, if the alleged harasser was the alleged victim’s supervisor, then the employer can face respondeat superior, or vicarious liability, for the harassment, regardless of whether the employer knew or should have known about it. The harshness of this rule has come to be somewhat mitigated by what is known as the “Faragher/Ellerth affirmative defense,” which affords a safe harbor to employers who prove that they exercised reasonable care to prevent and correct any sexually harassing behavior, and that the complaining employee unreasonably failed to take advantage of the preventative or corrective opportunities offered by the employer. Helm v. Kansas, 656 F.3d 1277, 1285 (10th Cir. 2011).

Traditional remedies under Title VII include injunctive relief, reinstatement of employment if the plaintiff was terminated, back pay, and front pay in some cases. Both compensatory and punitive damages are also available in intentional discrimination claims brought under Title VII—sexual harassment claims included. Accordingly, sexual harassment plaintiffs typically seek compensatory damages for the emotional distress and humiliation that they suffered due to the harassment. The amount of compensatory damages that may be awarded in Title VII cases is subject to a cap depending on the size of the employer: $50,000 for employers with between 14 and 100 employees; $100,000 for employers with between 101 and 200 employees; $200,000 for employers with between 201 and 500 employees; and $300,000 for employers with more than 500 employees. 42 U.S.C. § 1981a(b) (3). To be awarded punitive damages, a plaintiff must show that the employer exhibited malice or a reckless indifference to the federally protected rights of the plaintiff. Punitive damages are subject to the same value caps as compensatory damages.

In addition to federal causes of action, it is common for plaintiffs in sexual harassment cases to assert state- law claims in the same suit, or to forgo Title VII claims altogether in favor of more generous state-law remedies. States have their own laws against sex discrimination, which are
nearly uniformly interpreted to forbid sexual harassment, similar to Title VII. However, it is important to note that many state statutory claims of sexual harassment allow for significantly higher compensatory and punitive damages than Title VII (which has caps on those damages, as well as a higher standard—malice or reckless indifference—for punitive awards). For example, in 2012, the West Virginia Supreme Court of Appeals upheld a punitive damages award of $500,000 against an employer because of the “reprehensibility” of the employer’s conduct in failing to adequately address complaints of sexual harassment—which amount is well above the Title VII cap on punitive damages for even the largest employer. CSX Transp., Inc. v. Smith, 729 S.E.2d 151 (W. Va. 2012). As discussed more fully below, some states expand the coverage of anti-discrimination laws by including more protected classes than included in Title VII. Moreover, many states, such as California, do not offer defenses like the Faragher/Ellerth affirmative defense, and thereby essentially impose strict liability for harassment by a supervisor. See State Dept. of
Health Servs. v. Superior Court, 79 P.3d 556, 562 (Cal. 2003).

Sex discrimination is not the only legal theory relied upon by sexual harassment plaintiffs, though it is the most common. Other theories may include (i) assault and battery, depending on the severity of the harassment and whether it became physical; (ii) intentional or negligent infliction of emotional distress, depending on the availability of those claims in the forum state; (iii) invasion of privacy, which is a tort recognized under many states’ constitutions or statutory schemes; and (iv) retaliation, if an adverse employment action is taken against an employee who makes a complaint about harassment, on the grounds that there is no legitimate, non-retaliatory reason for the action.

Claims That May Be Raised by Alleged Perpetrators of Sexual Harassment
Recent litigation trends demonstrate that employers today often face a “Catch-22” situation that requires them to take prompt and vigorous actions to safeguard the rights of the alleged victims of harassment, while also being careful not to expose themselves to liability to the alleged perpetrators of the harassment. Such claims by employees who have been accused of harassment typically arise from the employer’s investigation of, or other response to, the allegations of harassment. Claims brought by alleged harassers may include defamation, invasion of privacy, intentional or negligent infliction of emotional distress, breach of contract, or denial of due process for public sector employees. It is not uncommon, for example, for the subjects of workplace investigations—whether founded or not—to sue the employer for defamation based on statements made during or about the investigation.

To prevent exposure to liability based on defamation, employers should be on the watch to prevent employees from making false or defamatory statements about the target of an investigation. Toward that end, employers should keep the allegations and statements made during the investigation as confidential as possible, disclosing information only as needed to conduct the investigation and take any required remedial or corrective action. To further protect themselves, companies should also avoid making premature judgments about the outcome of an investigation or characterizing or labeling an employee’s conduct (such as by referring to it as “sexual harassment”) without sufficient basis to do so.

Special employment arrangements create additional issues. For example, employees who benefit from a contractual guarantee that they will be fired only “for cause” may have a breach-of-contract claim against an employer whose investigation into alleged harassment is insufficient. Similarly, unionized employees enjoy several additional rights, including the right to have a union representative present during workplace investigations. Breach of that right can lead to liability entirely separate from the alleged incident of sexual harassment. And government employers should be cognizant that they are affording employees with adequate procedural due-process protections under the United States Constitution and any due process provisions of the applicable state constitution.

All of this is to say that, in seeking to proactively protect an alleged victim of harassment, an employer should take care not to expose itself to other forms of liability. “No good deed goes unpunished,” as they say, and the same holds true for overly aggressive, even if well-intentioned, responses to allegations of sexual harassment.

Preventing Harassment and Protecting the Company
The single best way to avoid liability for sexual harassment is to prevent it from occurring. The most well-protected employers are those that are not merely reactive in the face of sexual harassment allegations, but also proactive in preventing them from occurring, including by instituting strong preventive policies and discouraging a culture that tolerates harassment. Not only can the prevention of harassment reduce workplace discord and an employer’s exposure to liability, but having in place a meaningful prevention policy may allow employers access to powerful defenses against harassment lawsuits. Some states even impose an affirmative duty on employers to take all reasonable steps to prevent harassment, with the failure to do so giving rise to an independent claim.
See Cal. Gov’t Code § 12940(k).

The Equal Employment Opportunity Commission (EEOC), which is the federal agency charged with enforcing federal anti-discrimination law, 42 U.S.C. § 2000e-4, recommends that workplace anti-harassment policies contain at least the following: (i) a prohibition against harassment; (ii) protection from retaliation; (iii) an effective complaint process; (iv) confidentiality; (v) an effective investigative process; and (vi) assurance of immediate and appropriate corrective action. See EEOC Guidance, “Vicarious Employer Responsibility for Unlawful Harassment by
Supervisors” (June 18, 1999).

In addition to the foregoing, employers should provide regular training programs to their employees. An effective training program should include more than mere gender-sensitivity training. In particular, some workplace bullying, even when not overtly sexual or gender-discriminatory in nature, has been found to establish a hostile work environment sufficient to support a Title VII sexual harassment claim. EEOC v. Nat’l Educ. Ass’n, Alaska, 422 F.3d 840 (9th Cir. 2005). For example, if a workplace “bully” disproportionately targets members of a protected class, even if the bullying does not seem to be based on the protected characteristic, courts have found this to be sufficient for Title VII plaintiffs to show a link between their protected class and the harassing conduct. Id. Hence, in addition to training their employees not to use discriminatory language or slurs, companies may also include training on how to recognize and prevent bullying.

Employers should also stay abreast of the myriad and often-changing laws in the specific states in which they operate. Employers doing business in California, for example, should be aware that, on January 1, 2018, a new law went into effect that requires employers to include in their mandatory sexual harassment prevention training program for supervisors the prevention of discrimination and harassment based on gender identity, gender expression, and sexual orientation. Cal. Gov’t Code § 12950.1. Although California has protected transgender individuals since 2003, when the state outlawed discrimination against transgendered people in housing and employment, it did not require employers to include transgender rights in sexual harassment training programs. As of this writing, California is one of 19 states with laws explicitly protecting transgendered people from discrimination and harassment, the others being Colorado, Connecticut, Delaware, Washington, D.C., Hawaii, Illinois, Iowa, Main, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, and Washington.

Under California’s new law, employers with 50 or more employees (such that they are subject to California’s mandatory sexual harassment training requirement) will need to ensure that their programs include prevention training designed to protect transgendered and other LGBT individuals. Moreover, covered employers must now display a poster created by the California Department of Fair Employment and Housing regarding transgender rights; the poster is available on the Department’s website.

Investigating Allegations of Harassment
As noted, employers can be liable for sexual harassment perpetrated even by non-supervisors if they knew or should have known about the harassment but failed to take adequate steps to address it. See 29 C.F.R. § 1604.11(d). Most, if not all, states permit negligent hiring, retention, or supervision claims against employers who have reason to believe one of their employees poses a threat but fail to take remedial action. When responding to an employee’s complaints, employers should carefully consider what steps, if any, are necessary to investigate and put a stop to any harassment.

Employers should consider using in-house or outside counsel to conduct the investigation. Doing so increases the likelihood that the results of the investigation will be protected by attorney-client privilege and work-product protection. One pitfall of relying entirely on in-house counsel, however, is the possibility that in a subsequent litigation arising from the investigation (or the actions taken pursuant thereto), they will be viewed as biased in favor of the company, thus potentially negating the desired protections afforded by an investigation.

While an investigation conducted by counsel may be subject to privilege, employers should be aware that, in some circumstances, employers may not be able to maintain the confidentiality of the investigation. In particular, the National Labor Relations Board recently held that, under Section 8(a)(1) of the National Labor Relations Act (“NLRA”), employers cannot have an across-the-board policy forbidding employees from discussing workplace disciplinary investigations because it is considered interference with the employees’ Section 7 rights to self-organize and engage in concerted activity. See In re Banner Health System, 362 NLRB No. 137 (Jun. 26, 2015). According to two of the three members of the Board panel, employees have a right under Section 7 of the NLRA to discuss pending workplace disciplinary investigations involving themselves or other employees. Employers may only restrict discussions among employees about workplace investigations if the employer can show that it has a substantial or legitimate business justification that outweighs its employee’s Section 7 rights. It is not yet clear how this new principle might apply to sexual harassment investigations, which have long been thought to require the strictest of confidentiality and discretion.

Quinn Emanuel will continue to monitor developments in this area to ensure that it offers the most up-to-date advice to its clients regarding carrying out workplace harassment investigations.

How We Can Help
Navigating the issue of sexual harassment has always been tricky and sensitive, and it is even more-so now in this turbulent period. But companies are not helpless; they are in a unique position to enforce a culture and policies that are intolerant of inappropriate behavior for the protection of all of their employees and themselves. In doing so, however, they should be cognizant of the complexities of federal versus state harassment law, and also careful to balance the competing interests of both the alleged victim and the alleged perpetrator of harassment.

With years of experience and dozens of success stories, Quinn Emanuel is well equipped to assist its corporate clients in formulating and implementing an effective strategy for avoiding and, if necessary, responding to accusations of harassment in the workplace. Our employment litigation team includes some of the leading employment lawyers in the nation who stay on the cutting-edge of developments in the law. Our world-class investigations team can oversee and conduct efficient, fair, and neutral workplace investigations to avoid any appearance of bias. And, because accusations of sexual harassment often result in negative publicity about the employers of accused harassers, our crisis-management team stands ready to help mitigate any harm to the company from adverse media exposure. When these attributes of our practice are combined with our trial expertise in the event that harassment claims must be litigated, few firms offer as comprehensive of a service package as we do.