Employers in California know they need to publish anti-harassment policies and provide harassment-prevention training to their employees. A recent federal court decision emphasizes that merely going through the motions of posting policies and providing training is not enough if the policies and training are inadequate or never fully implemented.

In EEOC v. Management Hospitality of Racine, 2012 WL37112 (7th Cir. 2012), the court upheld a jury’s verdict against an employer in a case involving teenage employees who were sexually harassed by a manager who was a decade older than the teenagers.

Teenage Employees Harassed by Night Manager

Two teenage employees at a pancake shop in Racine, Wisc., alleged that the older night manager sexually harassed them on multiple occasions. The girls alleged that the night manager made numerous sexually charged comments; propositioned them for sex; stared at their bodies; pressed up against them; and touched and groped them. Both girls told the night manager to stop his behavior.

One of the teenagers went with two other servers to the assistant manager to report the behavior. The assistant manager “blew [them] off” and told them they were “silly girls.” Reports were also made to the general manager, who responded that “[she] didn’t need to hear it.”

The federal Equal Employment Opportunity Commission (EEOC) filed a lawsuit on behalf of the teenagers, and the teenagers won.

Preventative Measures Can Limit Liability

The company tried to avoid liability by relying on its anti-harassment policy. Under federal law, preventative actions by employers can actually provide a complete defense to liability for sexual harassment. If the employer has effective policies to prevent and correct harassment and the employee fails to use these policies, the employer cannot be held liable for the harassment. This is known as the "Ellerth/Faragher" defense. The lawsuit in this case was brought under federal law.

California does not allow an employer to use its preventative measures as a complete defense to liability, but does allow the use of such measures to minimize liability. Under California law, an employer can limit liability for sexual harassment under the following circumstances:

• The employer took reasonable steps to prevent and correct workplace sexual harassment, including creating a clear policy that forbids sexual harassment, communicating a process that is available to employees to remedy improper conduct and providing appropriate training for employees and supervisors.
• The employee unreasonably failed to use the preventive and corrective measures that the employer provided.
• Reasonable use of the employer’s procedures would have prevented at least some of the harm that the employee suffered.

Insufficient Preventative Steps

The employer argued that it could not be liable under federal law because it had an effective anti-harassment procedure in place that was not used by the two teenagers. The court disagreed and held that “a rational jury could have found that the policy and complaint mechanism were not reasonably effective in practice.”

First, managerial employees did not take any actions under company policies that could be considered corrective or effective in preventing harassment. None of the managers carried out their duties under the policies:

• The night manager engaged in harassment.
• The assistant manager and the general manager failed to report harassment after receiving complaints from the two teens and basically ignored the complaints.
• The district manager failed to investigate a prior complaint.
• The district manager engaged in conduct that could be considered inappropriate under the policy.

Second, anti-harassment training was provided but was inadequate and ineffective:

• The assistant manager did not receive training herself even though she was responsible for training new employees.
• The assistant manager did not report harassment because she did not think the teens were “afraid” of the night manager.
• The general manager knew she had to report allegations to upper management but failed to do so.

Third, the policy itself was not reasonably effective as drafted.

• An anti-harassment policy must provide a clear path for reporting harassment. It is even more important to be clear when minors are working in an establishment.
• The company’s policy did not provide a “point person” to bring the complaint to.
• The company’s policy did not provide any names or contact numbers to call in the event of sexual harassment, either internal names and contact information or outside agency names and contact information, such as the EEOC.
• The company’s anti-harassment poster did not discuss harassment or employee rights under Title VII. The company’s poster also did not provide any company or agency contact information for filing a complaint.

Finally, the company’s ultimate investigation of the teenager’s complaints was not prompt:

• The teenagers’ complaints started in March, and the investigation did not begin until the end of May.
• The company’s investigation seemed to be prompted only because one of the teens hired a private investigator.

Because of these deficiencies, the federal court upheld the jury award against the employer. The court also found that punitive damages were appropriate because the employer did not engage in good faith efforts to protect employees' rights.

In fact, the court noted that the employer apparently inserted certain language into its sexual harassment policy with the intent to discourage complaints. Shortly after receiving one complaint against the franchise owner, the employer inserted language in the policy warning employees of the “severity of knowingly making a false accusation of discrimination or harassment.”

Best Practices

• California law requires employers to post a Department of Fair Employment and Housing (DFEH) poster, which includes information on the illegality of sexual harassment. In addition, you must distribute a pamphlet on sexual harassment to all employees. This requirement is in addition to any policy in an employee handbook and/or to any posted policy. HR Allen's Required Notices Kit can help you comply.
• Employers must provide a clear complaint mechanism. Specify an alternative mechanism if the person who receives complaints is the alleged harasser. Depending on your organization’s size, you may want to consider a hotline for all discrimination and harassment complaints. Make sure your anti-harassment policy also informs employees that they can go to the DFEH or EEOC with their complaint. HR Allen can customize an Employee Handbook thats based on your company size.
• Make sure that all supervisors understand what sexual harassment is and know how to respond if a complaint is made. If a complaint is made to a line supervisor, that is enough to place the employer on notice of the situation. These line supervisors need to understand how to handle the complaint. In California, employers with 50 or more employees must train their supervisors every two years. HR Allen offers a online harassment-prevention training course meets the requirements of state law, and simplifies the training process for employers.