No Sex Harassment Policy Can Be a Very Costly Mistake

By Julie A Moore, Esquire
Reprinted with permission of the New Hampshire Business Review, Vol. 21, No. 2, Jan. 15-28, 1999

A New Hampshire jury recently returned that largest verdict ever to a New Hampshire plaintiff in a sexual harassment lawsuit – $637,500. That is staggering, and should prompt employers to wake up and examine how this startling verdict happened. The facts in this case make it reasonably clear that the employer was ignorant of its supervisor’s sexually harassing misconduct. Ignorant -- because it deliberately kept its "head in the sand" about what was going on at the workplace, and it had no policies or procedures in place addressing the issue of sexual harassment or how to respond to it if it occurred. That is a recipe for exposure to legal liability – and a large verdict on damages by a jury.

Background Facts

Jessica Means was employed by Shyam Corporation to work in a small hotel in Campton. The hotel had twenty-something employees, large enough to subject it to both federal and state discrimination and civil rights laws.

Means was initially hired in July 1995 to work in the hotel restaurant. She was later promoted to the position of night desk clerk. She remained with the hotel for seven months.

Charles Estes was the food manager at the hotel and supervisor of the restaurant staff. He was Means’ immediate supervisor. Estes’ wife was the general manager.

Allegations of Sexual Harassment

Means charged that Estes engaged in a pattern of behavior, culminating in an egregious physical assault, that constituted sexual harassment. Specifically, she charged that he engaged her and other female employees in conversations containing sexual overtones and frequently made inappropriate inquiries into their sex lives. Beginning in August 1995, she claims that Estes began physically touching her by rubbing her shoulders while she worked. In November, she says that he told her that he was physically attracted to her. The touching then became more frequent, with increased sexual overtones.

According to Means, Estes’ misconduct toward her continued to escalate. In December, he pulled back the neckline of her shirt and asked her the color of her bra. He grabbed her waist and gestured toward her chest. He directed her to a vacant storeroom where he embraced her and tried to kiss her. He unzipped his pants and attempted to force Means’ hand on him. Means physically struggled to free herself. In January 1996, while Means was working at the front desk, Estes made graphic sexual gestures toward her.

One final incident occurred which prompted Means’ immediate resignation. On February 16, 1996, Estes approached Means in the dining room late at night, exposed himself and forcibly placed her hand on his genitals, according to Means.

Means claimed that all of Estes’ actions were offensive to her and that she indicated to him repeatedly that she did not invite or appreciate his words, gestures, and physical overtures.

Following the February incident, Means contacted the Campton Police Department to lodge a criminal complaint. The police then conducted a criminal investigation into Estes’ conduct, resulting in Estes being charged with criminal sexual assault. He later pled guilty to the charges. Incidentally, he had a criminal past, was on probation, and was then incarcerated at the state prison as a result of these charges.

Lack of Sexual Harassment Policy

During Means’ employment, the hotel had no written sexual harassment policy. Over one year after the complaint was lodged the company still had not implemented a policy against harassment. Rather, the hotel’s policy and practice was to have all new employees meet with the general manager, review the company’s organizational structure, and provide the contact persons for any concerns or complaints. Employees were merely told in a general way how to contact corporate officers. They were not specifically educated about how they could resolve any issues of sexual harassment in the workplace.

Lack of Meaningful Investigation

After Means resigned, the hotel failed to conduct a thorough investigation into her allegations. The hotel owners "spoke to" Estes and his wife, at which time they learned of the pending criminal charges. They had a conversation with the police and knew the police were conducting an investigation. That was it -- the owners took no further action. For example, they failed to interview Means following her resignation. They neglected to contact any co-workers or other witnesses to any inappropriate behavior. They failed to suspend or otherwise take disciplinary action against Estes following the incident or the criminal charges. They failed to welcome Means back to work by offering her a shift when Estes was not working. Ultimately, they failed to take any steps that a prudent employer should take when confronted with this situation.

Judgment Time

This employer was held accountable under Title VII of the Civil Rights Act for the sexual harassment by one of its supervisors even where the top management and owners had no idea that it was going on. A jury of six men and women put the price tag at $637,500. Significantly, the Court also issued a decision on the merits of the case and concluded that Means’ "allegations do paint a picture of a corporation largely ignorant of Title VII concerns."

How to Respond

In this case, the company neglected to implement the most rudimentary measures to prevent a sexual harassment claim from crippling its business. The first step is a clear, strong anti-harassment policy. As a practical matter, under the United States Supreme Court’s most recent sexual harassment rulings, companies, regardless of the number of employees, must have:

• A written policy outlawing all forms of sexual harassment;
• A strategy for responding to and investigating sexual harassment complaints; and
• A preventative program to include sexual harassment awareness training for supervisors and all employees.

Why was the jury verdict so high in this case? It is easy to point out the numerous errors and omissions that took place here. Here are just a few:

o No anti-harassment policy
• No posting of any sexual harassment policy
• No training or communication from the owners to supervisors and employees that sexual harassment is not tolerated
• No training or communication from the owners to the workforce about who to complain to if anyone feels victimized by sexual harassment
• No meaningful investigation undertaken following the harassment complaint
• No interview with the complaining party after learning of the sexual harassment complaint
• No indication whatsoever that the company took the allegations seriously
• No remedial or disciplinary measures taken to end the harassment
• No penalties imposed on the harasser to assure a workplace free from harassment
• No drafting or implementation of a sexual harassment policy for over a year following the incident
• No attempt to bring the victimized employee back to work by separating personnel or reassigning the harasser
• No attempt to obtain advice from human resources or legal counsel

In the hands of an experienced lawyer, the picture could easily be presented of a callous, disinterested and arrogant employer. The jury obviously became angry at the employer’s reckless disregard for the law, both under Title VII and the recent decisions from the United States Supreme Court (Burlington Industries v. Ellerth and Faragher v. Boca Raton).

Sexual harassment is a matter that employers might be tempted to ignore, particularly if they think it does not happen in their workplaces. Given the recent teachings of the Supreme Court and media attention given to record verdicts and settlements in New Hampshire and across the country, employers have no excuse not to take steps to minimize their legal liability. They can do so by having effective policies, internal complaint procedures, and education and training of all members of the workplace about their commitment to a harassment-free workplace. Not only will these actions bring an employer within the letter of the law, they will create a code of conduct in the workplace which will be much more difficult to challenge if a claim similar to the present case is brought. Only by affirmatively dealing with these potential issues can employers effectively manage and limit the potential for huge punishing verdicts.

As a follow-up to an earlier article, the New Hampshire Supreme Court issued a ruling last month further clarifying the law related to personnel files (see article by this author in the November 20, 1998 edition of this newspaper). The Court held that a police investigative file concerning an officer’s complained-of conduct was a non-personnel record, because the officer was not disciplined. The decision reaffirms that personnel records must pertain to or affect an employee’s work history. Employers should be careful to exclude documentation pertaining to unsubstantiated complaints about employees’ performance which do not result in discipline from employees’ personnel records. Such complaints should be kept, when appropriate, in a separate investigative file. Where employees are disciplined, however, all documentation relating to that discipline should be in an employee’s personnel file and, therefore, accessible to the employee. For a copy of the decision, please contact Employment Practices Group at 978-975-0080 or info@employmentpg.com.

TOP TEN COMPONENTS OF EVERY SEXUAL HARASSMENT POLICY

1. A clear statement of purpose that sexual harassment in the workplace is prohibited and will not be tolerated.
2. A definition of sexual harassment.
3. Examples of misconduct which may constitute sexual harassment.
4. Notification to employees that engaging in sexual harassment subjects them to discipline, with sanctions that may include termination.
5. A description of the company’s internal process for employees who believe they have been subject to sexual harassment, including the persons to whom complaints of sexual harassment should be made and the procedure for resolving complaints.
6. A statement encouraging complaining parties to come forward.
7. Statements advising complaining parties that all good-faith complaints will be investigated promptly and that appropriate action will be taken.
8. Assurance that confidentiality will be maintained as much as possible.
9. A guarantee that complaining parties will not be retaliated against for lodging complaints.
10. A statement that retaliation is a form of illegal sexual harassment that is against company policy and will be treated in the same manner as other forms of sexual harassment.

Julie A. Moore, Esquire of Employment Practices Group in North Andover, Massachusetts, specializes in risk-management, workplace training and internal investigations on sexual harassment and other employment issues. She is admitted to practice law in Massachusetts and New Hampshire. She can be reached at jmoore@employmentpg.com or 978-975-0080.