By Phillip M. Perry
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: Last year, the nation’s largest private employer, Walmart, was involved in the largest-ever class-action lawsuit after female employees claimed it had systematically underpaid and under-promoted them; the case, involving as many as 1.5 million female workers, was eventually thrown out. But today, the lawyers representing the women are working to bring similar lawsuits against Walmart on a state-by-state basis. The ramifications for other private employers are clear.
Whatever the final decision in the Walmart 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.
“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 employers with five employees for discrimination claims.
“Even the smallest of employers needs to have some prophylactic programs in place,” says 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.”
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,” Williams notes.
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. Large companies can 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 email, 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.
Establishing multiple channels of communication is a great idea for reporting any discriminatory practices.
“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, file complaints about the same individual. “Establish a mechanism to aggregate claims from different parts of your business,” suggests Waks.
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.”
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.”
Your goal is to assess the legitimacy of the complaint with an investigation. In sensitive employment situations, consider getting the advice of outside counsel. If that’s time consuming, it’s time well spent—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 to review 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.”