You think you’ve done everything by the book. Someone complains that she has been sexually harassed, you immediately conduct aprompt and thorough investigation, and you decide to terminate the accused harasser, a low-level supervisor. But you’re sued for sexual harassment nevertheless, and the court rules against you. Why? Because you can be liable for harassment committed by a supervisor-even if you never knew a problem was brewing and responded promptly as soon as a complaint was made. And now, in a new ruling, a California court has defined the term “supervisor” very broadly to include a lot more employees than you might expect.
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Office Manager Accused Of Harassment
The case was brought by two female insurance agents who workedfor a Prudential Insurance office in Alhambra. The women, Justine Lai and Elvira Viernes, claimed that the sales manager for their office forced one of them to have sex with him and had inappropriate physical contact with the other. The women complained to Prudential,and the company conducted an investigation. The manager, Chiman Dialani, denied the charges, but Prudential concluded that he had improper sexual contact with the women and terminated him.
Who Is A Supervisor?
The two women sued Prudential for sexual harassment anyway. They claimed that because Dialani was their supervisor, the company should be held “strictly,” or automatically, liable for his conduct, whether they knew about it or not. The general rule in California is that you are responsible for harassment committed by your managers and supervisors, even if you had no notice of the problem and you did nothing wrong. The reason is that employers have an absolute duty to keep the workplace safe, and holding you liable for a supervisor’s actions is intended to provide an added incentive to monitor misconduct. And unlike federal law, which currently imposes automatic liability only when a manager conditions job benefits on sexual favors (so-called quid pro quo harassment), in California you’re on the hook for a supervisor’s conduct regardless of the type of harassment alleged. As for harassment among co-workers, however, you are liable only if you were aware of the harassment and failed to investigate the situation and take action to stop it.
High-Level Authority Not Required
Prudential contended that Dialani was too far down on the corporate totem pole to be treated as a supervisor for purposes of imposing automatic company liability. The insurer argued that Dialani did not have the authority to hire, promote, terminate or discipline the employees who reported to him. Plus, he could not set their compensation, and he had no role in establishing corporate policy.
The California Court of Appeal rejected Prudential’s argument. As the only office manager at the Alhambra office, Dialani supervised and trained the 17 sales agents who worked there. The court noted that while he did not have final authority, he could make recommendations regarding hiring, promotion, termination and transfers. Prudential’s agents were required to report to Dialani on a daily basis, and he had the power to reprimand them.
The court concluded that Dialani had sufficient authority and control over other employees to be considered a supervisor-and Prudential was therefore responsible for the sexual harassmenthe was accused of committing.
Five Important Factors
The court outlined five factors to look at in determining whether an employee is a supervisor for the purpose of assigning liability to the employer for sexual harassment:
- Does the person have a title such as “supervisor” or “manager,”plus the authority to direct the work of others?
- Does the person supervise employee work, evaluate job performance, or train other employees?
- Can the person impose or recommend employee discipline?
- Can the person significantly influence employees’ working conditions, such as by changing their job duties?
- Is the person responsible for the day-to-day supervision of the work environment?
More Rulings Likely
The court’s open-ended approach is not likely to be the final word on the subject of automatic employer responsibility for asupervisor’s harassment. That’s because a similar case under federal law is currently pending before the U.S. Supreme Court. But for now, this new decision clearly expands the universe of employees who might be considered supervisors.
Immediate Steps To Take
The court’s ruling is a reminder that you’re at risk even if you’vedone everything right. But there are steps you can take to minimize the danger:
- Get the word out to employees. Make sure you have a written sexual harassment policy and clear procedures for employees to report harassment problems. Let employees know that they shouldcontact a designated person immediately if they experience sexual harassment of any kind. Also act quickly when you learn of a problem because even if you’re found liable, responding promptly and effectively to the complaint can limit the damages you might have to pay.
- Remind and warn supervisors. Periodic training of supervisors and managers about the serious consequences of harassment should be a top priority. Remind them never to retaliate against an employee who complains of harassment, even if the charge turns out to be unfounded. And be sure to inform managers that they can be personally sued for wrongful conduct.