Defense Digest 12/08: Liability For Harassment Is Not Just For Bosses Anymore
By JoAnn Veltrup Diaz, Esq.*
Federal - Employment Law
The typical sexual harassment scenario in the workplace which most people believe results in a lawsuit is the situation of a male boss harassing his female subordinate, either by creation of a hostile work environment full of innuendos, comments, epithets, and sometimes touching, or when certain behavior or conduct is expected in exchange for special employment benefits (promotions, raises) and/or continued employment. Clearly, it is well established that if an employer is aware of such a situation and turns a blind eye, liability on the part of the employer is a foregone conclusion.
Recent case law in New Jersey and other circuits suggests an expansion of the types of harassers who may impute liability on an employer. A boss is not the only harasser out there. In a recent decision in Cerdeira v. Martindale-Hubbell, No. A05855-06T1, Superior Court, New Jersey (App. Div. 9/18/2008), the Appellate Division reversed a grant of summary judgment for an employer and held that a negligence-based theory of liability exists based upon an employer's failure to have effective preventative mechanisms in place to deal with claims of non-supervisory harassment.
In Cerdeira, a female employee became the subject of harassing conduct directed towards her by a co-worker, who worked in a separate department from the plaintiff. The co-worker did not supervise the plaintiff and, in fact, did not have any supervisory duties.
The long-term harassing conducted included sending the female employee sexually explicit pictures of "[n]aked women, people having sex, catalogs of Frederick's of Hollywood, Victoria's Secret, [and] people having oral sex." In addition, the male co-worker placed telephone calls to the female co-worker, while apparently self-gratifying, and left undergarments for her at her work station.
When the employee in Cedeira finally reported the co-worker's conduct, the co-worker was immediately suspended and terminated days later. As such, by all accounts, it appears once the employer learned of the harassing conduct, it took prompt, remedial action. Notwithstanding, it may not have been enough. One can only wonder why the employee did not report the conduct of her co-worker for such a long period of time.
In Cedeira, the employer moved for summary judgment on the premise that, because it was co-worker harassment about which it had no knowledge, the employer could not be liable under the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. Summary judgment was granted, and the trial court relied upon the fact that the harassment did not involve supervisory/employee harassment; thus, the employer could not be held vicariously liable. Given the rationale for the decision, the court did not examine the effectiveness of the employer's policy or practices prohibiting harassment and whether those policies were clearly communicated to employees. The alleged harassment in Cedeira went unnoticed for years before the employee was urged to report it.
The Appellate Court reversed summary judgment on the same basis: that a negligence-based theory of liability arising from an employer's failure to have effective preventive mechanisms in place is not limited to claims of supervisory harassment. It concluded that if such liability was only limited to harassing supervisors or bosses, such a dictate could clearly discourage employers from adopting proactive sexual harassment policies that are well-publicized and directed to all employees.
Simply because the harassment is by one employee toward another employee, and does not involve a supervisory or managerial employee, does not automatically extinguish any liability that may be imputed to the employer. Clearly written and publicized anti-harassment and anti-discrimination policies to all employees are essential for an employer in these situations.
Federal courts have likewise looked toward the effectiveness of communications of an employer's policies and procedures prohibiting harassment in the workplace while acknowledging the existence of liability on an employer for co-worker harassment. In Ocheltree v. Scollon Productions, 335 F.3d 325 (4th Cir. 2003), the Fourth Circuit, the Federal Appeals Court examined the issue of employer liability under Title VII of the Civil Rights Act, as amended ("Title VII"), in a co-worker harassment situation. In Ocheltree, the female employee worked for a costumes production company and was the only female employee in the production shop at the time. She was subjected to repeated harassment on the basis of sex by her male co-workers including, without limitation, coarse sexual talk and sexual antics by male co-workers involving mannequins, as well as a daily stream of discussion and conduct that was sex based and/or sexist. Affirming the South Carolina District Court's denial of the employer's motion for judgment as a matter of law, the appellate court reiterated that an employer cannot avoid Title VII liability for co-worker harassment by "adopting a see no evil, hear no evil" strategy.Knowledge of harassment can be imputed to an employer if a reasonable person, intent on complying with Title VII, would have known about the harassment. As noted in Ocheltree, an employer may be charged with constructive knowledge of co-worker's harassment when it fails to provide reasonable procedures for victims to register complaints.
A significant issue faced by the employer in Ocheltree was the apparent failure to place any duty on its supervisors to report incidents of sexual harassment to their superiors, as well as its failure to have adequate procedures in place for employees to report sexual harassment complaints. In Ocheltree, the employer had what it termed an "open door policy" in which employees were encouraged to go to his or her supervisor and/or then directly to two upper managers and report any concerns. In practice, it appears that on the occasions when the plaintiff attempted to utilize the "open door policy," she was dissuaded and/or dismissed due to the managers not having any time or being too busy. This contributed to the court's statement in its decision that the "open door policy" was an illusion.
While the factual allegations and situations in the Cedeira and Ocheltree cases may appear extreme, they are instructive in that each reiterates the fact that, simply because the harassment toward an employee is instigated by another employee, and not by the boss or manager or someone in "power," does not mean that the employer will escape liability for the actions of that harassing employee. Moreover, these cases emphasize the importance and significance that clearly written and communicated policies and procedures can have on the extent of any employer's liability, whether the harasser is a person in a "power" position or a line employee.
With sufficient and clear communication to all employees regarding the behavior that is prohibited in the workplace and by ensuring that each employee is fully apprised of their complaint options, an employer may better insulate itself from exposure to liability for the wrongdoing of an employee who acts inappropriately toward another employee and outside the scope of his or her employment at the workplace.
* JoAnn is an associate in our Cherry Hill, New Jersey, office. She can be reached at (856) 414-6016 or jvdiaz@mdwcg.com.
