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Managers can pay for their bullying behavior—And so can you

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in Discrimination and Harassment,Employment Law,Human Resources,Leaders & Managers,People Management

While companies have long borne the brunt of disgruntled employees’ wrath in federal court, supervisors and managers have traditionally avoided becoming directly entangled in such lawsuits. That’s because most federal and state employment statutes allow for lawsuits only against the companies themselves, not individual employees of those companies.

So while the actions of a single supervisor in a 5,000-employee company might get the entire organization sued for sexual harassment, the individual supervisor would be immune from liability under Title VII of the Civil Rights Act.

That’s now changed.

The Indiana Supreme Court has opened wide the lid on a Pandora’s box, condoning a whole new area of potential liability for both supervisors and the companies that employ them.

In a 4-1 decision, the court held in Raess v. Doescher (49S020710-CV-424, Indiana Supreme Court, 2008) that a plaintiff was entitled to keep a $325,000 jury verdict against his former supervisor, whom he accused of being a workplace bully. (See box below for the ugly details of this case.)

While much of the case was decided on procedural grounds, it had a significant practical effect: For the first time, the Indiana Supreme Court endorsed a claim brought by a former employee against a supervisor (rather than the company for whom he worked) on the grounds that the general harassment was so severe as to constitute illegal bullying.

A host of potential claims

On a practical level, the decision opens the door to a new host of potential claims brought by disgruntled former employees. While Indiana employees have always had the right to bring claims against individual supervisors under the theory of “intentional infliction of emotional distress” (IIED), such claims are extremely difficult to prove. Courts usually dismiss them before trial.
However, in light of the Raess decision, it’s likely that harassment cases will be filed hand-in-hand with claims of workplace bullying. And that has the potential to greatly expand employer liability. While federal claims are generally subject to damage caps ($300,000 under Title VII, for example), there is no cap on damages brought pursuant to a workplace bullying IIED or assault claim.

Worse, it’s conceivable that a court will find a bullying supervisor was acting within the course and scope of his employment, meaning the company will also be responsible under a vicarious-liability standard. Quite simply, companies that employ workplace bullies may now be on the hook for that bullying.

How to protect yourself

What can a company do to prepare itself to defend against such claims of workplace bullying?

Provide anti-bullying training. First and foremost, Indiana companies should conduct mandatory training classes for all supervisors and managers on issues such as workplace harassment, professionalism and professional interaction. Training should emphasize that managers’ and supervisors’ personal finances may now be at risk as a result of the Indiana Court’s Raess decision. (That should get the attention of the many bosses who pay little heed to mandatory training.) Require such training on an annual basis.

Act fast when trouble arises. Companies should quickly move to investigate any complaints of harassment, whether or not those complaints are based upon protected categories under traditional employment laws. Because workplace bullying is not tied to a particular type of victim characteristic (race or sex, for instance), the only defense an employer can generally use to counter such claims is that it moved swiftly to protect its workers once it learned of the bullying behavior.

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