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States up the ante in harassment liability

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in Discrimination and Harassment,Human Resources,Leaders & Managers,Management Training

Two pivotal Supreme Court decisions in 1998 gave employers a powerful new weapon to defend themselves when sued because of harassment by a supervisor. But recent rulings in a handful of states are disarming that weapon, leaving employers open to liability under broad state harassment laws.

The latest bomb fell in California. In that case, Theresa McGinnis complained to a co-worker that she had been sexually harassed by her supervisor. But she didn't take her complaints to management for two years. Once she did, her employer investigated and took quick disciplinary action against the supervisor, who ultimately retired.

McGinnis filed suit alleging sex discrimination and harassment under the California Fair Employment and Housing Act.

Her employer, arguing that it shouldn't be liable for rogue supervisors, pointed to the Supreme Court rulings, Burlington Industries v. Ellerth and Faragher v. City of Boca Raton. Those cases said that if a supervisor is to blame for the illegal action, the employer can defend itself against liability by proving that:

  • It took reasonable care to prevent and correct sexually harassing behavior.
  • The employee unreasonably failed to take advantage of the corrective or preventative measure provided by the employer.

But in a blow to all California employers, the state court of appeals ruled that the so-called Ellerth/Faragher defense can be used in federal cases but not in cases brought under California's discrimination law. Under that state law, employers are now strictly liable for harassment by their supervisors. (Department of Health Services v. The Superior Court of Sacramento County, Cal. Ct. App., No. 98A502085, 2001)

Advice: This isn't just bad news for California employers. In a growing number of states, companies are losing their ability to use this federal defense against sexual harassment claims. California now joins the Michigan Supreme Court, the Illinois and Missouri appeals courts and the Massachusetts district court in finding that state laws impose strict liability on employers for supervisor sexual harassment.

The practical result? Your company may be liable on the state level for sexual harassment by supervisors even if it didn't know of the harassing behavior and even if it had comprehensive policies in place to prevent and combat harassment.

Best bet: It's more vital than ever to train supervisors and remind employees of how crucial it is for them to follow your harassment policies.

Another byproduct: In these "strict liability" states, count on workers to bypass Title VII and instead file supervisor harassment lawsuits under state discrimination laws, where they'll have a better chance of winning.

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