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Bar News - April 13, 2012


Labor & Employment Law: Sexual Harassment in the News: Legal Update

By:

Last June, an Illinois jury deliberated for three days before awarding a whopping $95 million to a 20-year-old worker at Aaron’s Inc., a nationwide chain of rent-to-own furniture stores. Although it sounds like a verdict straight from a John Grisham novel, the $80 million in punitive damages and $15 million in compensatory damages is non-fiction. It made the "Top Ten Jury Verdicts of 2011" in the Lawyers USA publication and is believed to be the largest individual sexual harassment verdict of all time.

While a $95 million verdict is certainly not the norm, it demonstrates that sexual harassment cases have not disappeared with the advent of training programs and workplace policies. The EEOC reported a record high $52.3 million in settlements recovered for victims of sexual harassment during its Fiscal Year 2011, demonstrating that, yes, sexual harassment does still occur in workplaces, including in New Hampshire.

A review of the Aaron’s case as well as other recent case law, including from our jurisdiction, highlights the pervasiveness (and potential costs) of the problem as well as the importance of preventative and corrective measures that can be taken to ensure a congenial working environment and to reduce employer liability. A NHBA•CLE on February 16, 2012 focused on recent cases, preventative measures, investigations, use of expert witnesses, and plaintiffs’ and defendants’ perspectives on handling sexual harassment cases. Highlights from the seminar are discussed in this article.

One recent New Hampshire case was Kaitlin Hudson v. Dr. Michael J. O’Connell’s Pain Care Center, 2011 US Dist LEXIS 79151 (D.N.H. July 19, 2011). Plaintiff Hudson was involved in a workplace romance and maintained a sexual relationship with her boss, Dr. O’Connell. She wanted to end the romance, but Dr. O’Connell allegedly threatened to terminate her if she didn’t continue having sex with him. The relationship did end, and Hudson’s employment conditions correspondingly changed, she claims. Dr. O’Connell allegedly continued to harass her, he changed her job description, assigned her to demeaning tasks, and otherwise treated her poorly.

The federal court denied the employer’s dispositive motion and allowed Hudson’s claims of constructive discharge, quid pro quo sexual harassment, and retaliation to proceed. The court noted that Hudson alleged that she was subjected to abusive, demeaning, and threatening actions over a period of time, and a retaliation claim was sufficiently pled. Her "compelled" sexual relationship with Dr. O’Connell appeared to be a supervisor extracting sexual favors from a subordinate employee and retaliating against the subordinate when she refused to perform the favors. The Court also found that a hostile work environment could have been created. The case has since been resolved.

In Tuli v. Brigham & Women’s Hospital, 656 F.3d 33 (1st Cir. 2011), a case with even more salacious facts, the Massachusetts jury returned $1.6 million verdict in neurosurgeon Dr. Tuli’s favor, finding that she sufficiently proved that she was subjected to sexual harassment and retaliation by a supervisor and colleague from Brigham & Women’s Hospital in Boston. In August 2011, the First Circuit affirmed the award plus $1.35 million in attorneys’ fees for plaintiff’s counsel. Dr. Tuli had alleged "ample" evidence of blatantly sexist, offensive, and demeaning conduct, including being asked, "Can you get up on the table to dance so you could show them how to behave;" seeing a blow up doll with her face on it at a co-worker’s bachelorette party; and receiving comments about an "oral exam," being "really hot," being naked, and her wearing a belly dancing outfit. She was also offended and complained about an alleged hospital-affiliated and funded party planned with "strippers and cages."

The hospital argued that Dr. Tuli failed to file a formal complaint and otherwise unreasonably failed to seek corrective action. The Court disagreed, finding that she did complain to the chief medical officer, who discouraged the filing of a formal complaint. The Court also found that she was subjected to adverse employment action and, thus, the issue of whether she properly complained or not was meaningless under the Faragher and Ellerth affirmative defenses.

The most recent New Hampshire verdict in a sexual harassment case in federal court came in 2008, when a federal court jury found in Nicole L’Etoile’s favor, awarding her $200,000 in compensatory damages and another $200,000 in punitive damages for hostile work environment based on her gender. New England Finish Systems was the defendant. Attorneys’ fees and costs were awarded as well. Judge LaPlante, who talked about the case at the CLE, instructed the jury that Ms. L’Etoile had to prove, by a preponderance of the evidence, that she was subjected to conduct which: (1) was severe or pervasive; (2) altered the conditions of her employment; (3) created an abusive working environment; and (4) was motivated, at least in part, by Ms. L’Etoile’s sex.

New Hampshire businesses don’t want to be the next headline or the next case discussed at seminars on employment law. Consistent with the law and EEOC guidance, employers must be proactive and engage in preventative strategies in an effort to avoid workplace sexual harassment and retaliation claims from ever emerging. At a minimum, preventative steps include sound and legally compliant written policies including a statement of policy, a definition and examples of sexual harassment, and a user-friendly complaint procedure which assures that complaints will be kept as confidential as possible and retaliation is strictly forbidden. Employers should establish clear consequences for violators of the policy and communicate those consequences if the policy is not adhered to.

Policies are meaningless unless they are distributed and properly communicated to the workforce. Training of all managers and non-supervisory employees is the most effective way to disseminate the policy to as many employees as possible. Our Supreme Court, in Madeja, held that merely having a policy and showing employees a videotape on harassment was insufficient to show the employer engaged in good faith efforts to comply with the law. Given that many employers do not take even these basic steps, the take-away message from Madeja is that the employer must show "its sincere commitment to enforcing its policy." That means following the letter and spirit of the policy, thoroughly investigating complaints, informing the complainant of the results of an investigation, and taking appropriate corrective action against the harasser.

Despite its best preventative efforts, even the most diligent and committed employer may receive a complaint. Complaints trigger an employer’s obligation to take action and commence an independent and appropriate investigation. Determining the right person to investigate is critical, as that shapes the process. In some circumstances, there may be a manager or human resources person who can properly conduct the investigation. In other circumstances (such as when the complaint involves senior management or any qualified internal investigators may not be neutral due to their relationships with the people involved), hiring an outside investigator may be advisable. In all cases, the chosen investigator must be well-trained and available to promptly start the inquiry. The investigation must be conducted in a manner that is consistent with current industry standards, which include, at a minimum, being thorough, questioning the accused, accuser and others as necessary, reviewing documents or other available evidence, determining credibility, and reaching a factual conclusion as to what occurred. Communicating back to all affected parties is essential as well.

When sexual harassment cases go to trial, both plaintiffs and defendants are more often utilizing expert witness testimony to outline the industry standards on appropriate preventative measures and the reasonableness of the investigation. Particularly where an employer asserts the Faragher and Ellerth affirmative defense, experts in employment practices can assist the jury by providing information that is helpful to them.

One final but important point is about retaliation. Retaliation claims are now the fastest-growing area of employment discrimination litigation. A plaintiff need not succeed on the underlying sexual harassment claim to prevail on the retaliation claim. Employers need to underscore to managers and non-supervisors alike that retaliation is contrary to company policy and will be taken as seriously as harassment claims.

The recent verdicts and prevalence of settlements show that sexual harassment cases were not a trend that fell by the wayside but are, instead, an evolving area of law that still present pitfalls to employers who may believe that they have adequately protected themselves by adopting an anti-harassment policy. Corporate counsel and employment law practitioners must stay abreast of the law and industry standards and advise their clients accordingly.



Julie A. Moore


Julie A. Moore is the president of Employment Practices Group, providing employment law and human resources consulting to employers. For more information, visit www.employmentpg.com.

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