Is Your Business Safe From Sexual Harassment Charges?

In two recent decisions, the United States Supreme Court has changed the law on sexual harassment involving a supervisor. The Court abolished the distinctions of quid pro quo and “hostile environment” in such cases, instead holding that an employer is strictly liable under Title VII for any harassment by a supervisor which results in a tangible job detriment.

If the harassment does not cause a tangible job detriment, the employer still will be strictly liable but can raise affirmative defenses by showing that (1) it used reasonable care to prevent and correct any harassment and (2) the employee unreasonably failed to complain about the harassment. The employer has the burden of proving both of the elements – reasonable care to prevent and correct, and unreasonable failure to take advantage of any preventive or corrective opportunities or to avoid harm – by a preponderance of the evidence. These two tests are so fact-specific that employers rarely will be able to obtain a summary judgment, and the cases will proceed to trial. We expect much litigation over what the new test means.

The Supreme Court said that strict liability was appropriate because employers “have a greater opportunity to guard against misconduct by supervisors than by common workers; employers have greater opportunity and incentive to screen them, train them and monitor their performance.” Strict liability only arises where the supervisor’s harassment results in a “significant, tangible employment action…such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or decisions causing a significant change in benefits.”

In addition to the examples listed above, the Court said that tangible employment actions include any action that inflicts direct economic harm. A transfer to a dead-end job with the same salary or a negative performance review could be perceived as tangible employment actions. There is a question as to whether strict liability applies only to supervisors in the chain of command or to any supervisor in the company. The safest course is to assume it applies to all supervisors.

These decisions dictate that every employer have and disseminate a sexual harassment policy and obtain a signed acknowledgment of receipt for each employee’s personnel file. At a minimum, the policy should include:

• a statement that a violation will result in discipline up to and including discharge;
• an assurance that an investigation and corrective action will be taken, if warranted;
• that there will be no retaliation for complaints;
• who should be contacted regarding a complaint, and
• that no individual is immune from the policy.