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HomeMy WebLinkAbout06242019 City Council Laydown - 3rd Party Sexual Harassment ( gob zy Received:19 January 2018 I Accepted:16 March 2018 Check for DOI:10.1002/ert.21645 1 updates WI LE \'PLOO)MI.N1 srta.AnONc QUESTIONS-AND ANSWERS (La-44-e- 3 a6 3 Employer liability for third-party sexual harassment Kevin J. Smith I Lindsay C. Stone Sheppard,Mullin,Richter&Hampton,New York,New York While most employers understand the scope of their responsibility to prevent sexual harass- Correspondence ment between employees,the scope of an employer's responsibility to prevent sexual harass- Kevin J.Smith,Sheppard,Mullin,Richter& ment by third parties is often less clear.Such third parties may include customers,clients,sales Hampton,New York,NY. representatives,vendors, investors, or anyone in the workplace who is not a member of the Email:kjsmith@sheppardmullin.com employer's workforce. Although an employer may be unable to easily control non-employee Lindsay C.Stone,Sheppard,Mullin,Richter& actions,it is legally obligated to respond to any third-party sexual harassment of its employees Hampton,New York,NY. that is brought to the employer's attention.With proper safeguards and remedial action,how- Email:Istone@sheppardmullin.com ever,an employer can keep its employees safe from third-party sexual harassment and protect itself from liability in the process. This Q&A explains employer liability for third-party sexual harassment,describes the ramifications of an employer's failure to properly address or prevent it,and recommends strategies to reduce an employer's legal exposure. KEYWORDS employment,employment law,sexual harassment 1 I WHICH LAWS PROHIBIT THIRD-PARTY however, that agencies which enforce this regulation should "con- SEXUAL HARASSMENT? sider the extent of the employer's control and any other legal respon- sibility which the employer may have with respect to the conduct of Title VII of the Civil Rights Act of 1964,as amended("Title VII"),pro- such non-employees."4 As such,an employer is more likely to be lia- hibits all employment discrimination on the basis of sex at the federal ble for sexual harassment by a non-employee where the employer level, including sexual harassment by third parties.' In addition to has some degree of control over the harassing individual's conduct.5 Title VII,a panoply of state and local laws also prohibit sexual harass- ment in the workplace. While each state and local statute is unique, several provide more significant protection for employees than their 3 WHAT MUST AN EMPLOYEE SHOW TO federalcounterpart.Z ESTABLISH THIRD-PARTY SEXUAL HARASSMENT? 2 I ARE EMPLOYERS RESPONSIBLE FOR As an initial matter,an employee must articulate a viable sexual harass- SEXUAL HARASSMENT BY THIRD PARTIES? ment claim.Title VII,along with its state analogues,prohibits two types of sexual harassment(a)quid pro quo;and(b)hostile work environment 6 Yes. Federal regulations explicitly state that"an employer may. . .be 429 C.F.R.§1604.11. held responsible for the acts of non employees [under Title VIII -See,e.g.,Crist v.Focus Homes,122 F.3d 1107,1111-12(8th Cir.1997)(resi- where the employer(or its agents or supervisory employees) knows dential care home employer could be liable for sexual harassment by a resident or should have known of the conduct and fails to take immediate and where it could exercise control over the resident);Magnuson v.Peak Tech.5erv., 808 F. Supp. 500.511-14(E.D.Va. 1992)(employer liable for sexual harass- appropriate corrective action."3 Federal regulations also instruct, ment of non-employee where it"clearly ha(d)authority over,and responsibility for,[harasser's)actions."). 142 U.S.C.§2000e et seq. 629 C.F.R. § 1604.11; U.S. Equal Employment Opportunity Comm'n,Enforce- 25ee,e.g.,New York City Human Rights Law,N.Y.C.Admin.Code§8-107;Cal- ment Guidance No.N-915-050(Mar.19,1990),available at https://www.eeoc. ifomia Fair Housing and Employment Act,Cal.Gov't Code§12900 et seq. gov/eeoc/publications/upload/currentissues.pdf. Federal regulations define 329 C.F.R.§ 1604.11; see also U.S. Equal Employment Opportunity Comm'n, "sexual harassment" as "(u)nwelcome sexual advances, requests for sexual Harassment(last visited Jan.6,2018),available at https://www.eeoc.gov/laws/ favors,and other verbal or physical conduct of a sexual nature."29 C.F.R. § types/harassment.cfm. 1604.11. Employment Relations Today.2018;1-3. wileyonlinelibrary.com/journal/ert 0 2018 Wiley Periodicals,Inc. I 1 -W I LEY mu. kit 'I i()",1 SMITH AND STONE "Quid pro quo"sexual harassment occurs where"(1)submission to seriously.16 The plaintiff escalated her complaint to Dal-Tile's Human [sexual harassment] is made either explicitly or implicitly a term or Resources Department, which banned the sales representative from condition of an individual's employment, [or] (2) submission to or communicating with the plaintiff,but continued to permit him to visit rejection of[sexual harassment]by an individual is used as the basis Dal-Tile's facility.17 The plaintiff resigned and sued Dal-Tile for hostile for employment decisions affecting such individual[.]"7 work environment sexual harassment based on the sales representa- Alternatively,hostile work environment sexual harassment,which tive's actions.18 The Fourth Circuit permitted the plaintiff's claims to is more likely to be seen in the third-party context,occurs where sex- proceed, holding that Dal-Tile's knowledge of the third-party sales ual harassment"has the purpose or effect of unreasonably interfering representative's harassment,coupled with its failure to promptly pro- with an individual's work performance or creating an intimidating, tect the plaintiff by controlling the sales representative's access to its hostile or offensive working environment."8 To succeed on a hostile facilities, subjected it to liability under Title VII and applicable state work environment claim, a plaintiff must demonstrate the following: anti-discrimination laws.l9 "(1)that the workplace was permeated with discriminatory intimida- Likewise,in EEOC v.GNLV Corp.,the United States District Court tion that was sufficiently severe or pervasive to alter the conditions for the District of Nevada determined that an employee of Las Vegas' of the [employee's] work environment; and (2) that a specific basis Golden Nugget Casino had a viable Title VII sexual harassment claim exists for imputing the conduct that created the hostile environment against her employer based on the behavior of the casino's cus- to the employer."9 The first element of a hostile work environment tomers.2°The plaintiff,a blackjack dealer,alleged that various casino claim has both a subjective and objective component, meaning that customers,among other things,stared at her, made lewd comments "'the misconduct must be severe or pervasive enough to create an to her,and tried to kiss her throughout the course of her employment objectively hostile or abusive work environment,and the victim must while her managers watched and did nothing to avoid turning the also subjectively perceive that environment to be abusive.ii10 customers away.21 Despite the fact that the plaintiff had no personal The United States Equal Employment Opportunity Commission knowledge that any of her supervisors actually heard or saw the (the"EEOC")has determined that Title VII claims for third-party sexual harassment that she described, and although she had never com- harassment, such as harassment by a customer or vendor, should be plained of any harassment,the court permitted her claims to go for- evaluated in the same way as claims for harassment by non- ward by determining that the casino should have known about the supervisory fellow employees.11 Applying this analysis,employers may plaintiff's complained-of experience at the hands of its customers.22 be liable for third-party sexual harassment to the extent of their own Both Freeman and GNLV Corp. serve as a reminder that courts will negligence in failing to prevent or remedy the harassment 12 According not hesitate to hold employers responsible for sexual harassment of to the EEOC and reviewing courts, in order to prevail on a claim for their employees by third parties, even where remedial action has third-party sexual harassment, an employee "must demonstrate that been taken or the employer's liability is not obvious. the employer'failed to provide a reasonable avenue for complaint or that it knew,or in the exercise of reasonable care should have known about the harassment yet failed to take appropriate remedial action."'13 4 I WHAT DAMAGES MAY AN EMPLOYER Recent cases evaluating employee claims of third-party sexual FACE IF FOUND LIABLE FOR THIRD-PARTY harassment highlight the type of conduct that may give rise to such SEXUAL HARASSMENT? causes of action.For instance,in Freeman v.Dal-Tile Corp.,the United States Court of Appeals for the Fourth Circuit(the"Fourth Circuit") The range of damages that an employer who had been found liable evaluated a customer service representative's sexual harassment for third-party sexual harassment varies based on the employer's claim against her employer, Dal-Tile, based on the actions of a sales size and the statute in question.Title VII allows plaintiffs to recover representative for one of Dal-Tile's customers.14 The sales represen both compensatory and punitive damages in an amount that is tative allegedly made several lewd comments to the plaintiff, dis capped based on the size of the employer.23 Specifically, Title VII cussed his sexual prowess with her, and showed her nude sets four statutory limits on the amount of recoverable damages: photographs of women on his cell phone.15 The plaintiff complained (a) $50,000 for employers of 15 to 100 employees; (b) $100,000 of the sales representative's behavior to her supervisors on multiple for employers of 101 to 200 employees; (c) $200,000 for occasions, but her supervisors allegedly ignored the plaintiff or employers of 201 to 500 employees; and (d) $300,000 instructed her not to take the sales representative's behavior for employers with 501 or more employees.24 A prevailing plaintiff in a Title VII action may also recover reasonable attorneys' 729 C.F.R.§1604.11. BId. 16Id. 9Petrosino v. Bell Atl., 385 F.3d 210, 220 (2d Cir. 2004) (internal quotation 17Id.at 418. marks and citations omitted). 181d.at 419. 1°Id.(quoting Terry v.Ashcroft,336 F.3d 128,148(2d Cir.2003)). 19Id.at 426. 11See,e.g.,Summa v. Hofstra Univ., 708 F.3d 115, 124 (2d Cir.2013)(citing 20No. 2:06-cv-01225-RCJ-PAL, 2014 WL 7365871, at •18-20 (D. Nev. Dec. Duch v.Jakubek,588 F.3d 757,762(2d Cir.2009)). 18,2014). 12Summa,708 F.3d at 124. 211d.at*3-4. 13Id.(quoting Ouch,588 F.3d 221d.at*19/ 14750 F.3d 413,416(4th Cir.2014). 2342 U.S.C.§1981a(b)(3) "Id.at 417. 241d. SMITH AND STONE WI LEY ,`\1I''O'1[ENT RELATIONS J 3 fees.25 Title VII does not limit the amount of damages that a plain- inappropriate behavior of any kind, regardless of whether the tiff may recover under state anti-discrimination statutes, some of individual is a co-worker. To reinforce the importance of which permit recovery of uncapped compensatory and punitive employee reporting, the employer should include a policy to this damages.26 effect in employee handbooks or other applicable policy docu- ments. Additionally, the employer should conduct regular train- ings to advise employees that sexual harassment by third parties 5 I WHAT SHOULD AN EMPLOYER DO IF IT is unacceptable, and provide clear information regarding all avail- SUSPECTS OR LEARNS OF THIRD-PARTY able reporting and remedial mechanisms. Finally, as described SEXUAL HARASSMENT? above, the employer should promptly and thoroughly investigate all reports of sexual harassment, and take remedial measures if Once an employer is made aware of potential third-party sexual necessary. harassment, either through employee reports, personal observation Though it may not always be able to control the behavior of third or other means, prompt and thorough investigatory action is critical parties,an employer must understand that it may still be responsible to prevent additional harassment and avoid future liability. First,the for sexual harassment committed by a third party. The significant employer should identify and implement any immediate interim pro- ramifications of failing to address third-party harassment brought to tective measures to ensure employee safety, such as prohibiting a an employer's attention can be severe, and may also cause reputa- third party from entering the workplace entirely or adjusting the tional damage to the employer in the future. An employer which employee's job duties to avoid interaction with the alleged harasser. thoroughly implements the best practices described above takes a Next, the employer should investigate the allegations by, among significant step toward preventing third-party sexual harassment other things,gathering and preserving all relevant documentation that entirely,and reducing or eliminating liability in the unfortunate event might shed light on the potential harassment, such as recordings by that it does occur. premises video cameras,service logs,work schedules,text messages or emails. The employer should then proceed to interview any wit- AUTHOR'S BIOGRAPHIES nesses to the alleged harassment,taking care to document the date, - time and content of each witness statement. During all steps of the Kevin J. Smith is special counsel and Lindsay C. Stone is an investigation process,the employer should take care to preserve the associate at Sheppard,Mullin,Richter&Hampton LLP.They have confidentiality of both employees and third parties to the extent pos- extensive experience in employment litigation,including trials and sible for a thorough investigation.Once the investigation is complete, appeals in federal and state courts and conducting arbitrations the employer should consider and implement any remedial measures and administrative hearings. Their employment practice also that may be necessary to prevent future harassment,such as perma- includes counseling Fortune 500 companies in all types of nently banning the individual from the employer's premises. employment and labor law matters. 6 I HOW CAN AN EMPLOYER PREVENT THIRD-PARTY SEXUAL HARASSMENT? How to cite this article: Smith KJ,Stone LC. Employer liabil- Today's employer can take a variety of measures to prevent ity for third-party sexual harassment. Employment Relations sexual harassment by third parties in the workplace. As an initial Today.2018;1-3.https://doi.org/10.1002/ert.21645 matter, an employer should encourage employees to report 2542 U.S.C. § 2000e-5(k); see also CRST Van Expedited, Inc. v. E.E.O.C., 136 S.Ct.1642,1651-52(2016). 26See,e.g..New York City Human Rights Law,N.Y.C.Admin.Code§8-107.