Being a business owner, supervisor, or boss doesn’t make you immune to bad behavior. Business owners, CEOs, and upper-level managers have been known to be bullies, behave badly, harass employees, and have affairs. There are certainly plenty of recent examples in the media. You can rarely open a popular magazine without seeing some type of allegation against a public figure, whether it is a reality TV star, a director, or an actor or actress. Apparently, in some instances, just because a person knows how to run a business doesn’t mean he knows how to behave. 
Recent examples
Bikram Choudhury, the founder of Bikram Yoga, has been involved in a lawsuit in California in which a former employee alleges sexual harassment and wrongful termination. The contentious allegations include inappropriate touching, jokes about rape, and pregnancy discrimination.
In a recent high-profile case involving the Napoli Bern law firm, there were allegations that a senior partner had an affair with a young lawyer at the firm. Additionally, there were claims that the partner’s wife stalked and harassed the young lawyer on social media and other forums.
These types of situations can be incredibly difficult for an employee to report because of the nature of the employee-manager relationship and the perception that reporting the conduct may negatively affect the employee’s job. These situations can be HR’s worst nightmare. There is no easy way to deal with a boss who misbehaves because the power to hire, fire, and discipline may ultimately rest with the person named in the complaint.
Situations like these can be particularly difficult in small, closely held companies, where HR may not be able to move the employee away from the person who has allegedly engaged in inappropriate behavior. In Iowa, the lawsuit known as the “dentist case” is frequently cited in this situation. The case, Nelson v. James H. Knight, DDS PC, 834 N.W. 2d 64 (Iowa 2013), was decided in July 2013 and deals with the issue of a business owner’s conduct toward an employee.
Melissa Nelson worked as a dental assistant for James Knight. They developed a very friendly relationship that included “texting each other on both work and personal matters outside the workplace on everything from how their day went to what their children were up to.” Knight allegedly made comments regarding Nelson’s clothing and other remarks that were clearly sexual.
Knight’s wife, Jeanne, who also worked at the dental office, became concerned about the relationship and demanded that Nelson’s employment be terminated in order to save the Knights’ marriage. The Knights consulted with the senior pastor at their church, who agreed that Nelson should be terminated.
The Iowa Supreme Court, citing Tenge v. Phillips Modern Ag Company, 446 F.3d 903, 905-06 (8th Cir., 2006), stated that the determining factor in this case was the personal relationship between the parties, not necessarily Nelson’s gender. Thus, the court ruled that Knight did not engage in gender discrimination by terminating Nelson.
The Nelson case received a lot of national attention because it seemed to embody an issue that was both inevitable and unfair. Justice Edward Mansfield asked, “Can a male employer terminate a long-time female employee because the employer’s wife, due to no fault of the employee, is concerned about the nature of the relationship between the employer and the employee?” In this specific case, the answer was yes.
Note that the Nelson case is extremely fact-specific and is unlikely to provide a defense for terminating an employee who complains about a harassing boss. The dental office was very small, Knight was the owner, and the company would not have existed without him. There were clear indications that Knight had developed a relationship with Nelson that did not influence his conduct toward other employees. Generally, when an employee complains of harassment or a hostile work environment and there is not an individualized relationship between the parties, it is unlikely that the termination of the complaining employee could be defended with the same arguments used in Nelson.
What to do when there is a complaint
Take a deep breath. First and foremost, don’t panic. Be brave. This won’t be an easy process, but it has to be done. When you receive a complaint about the boss, remember that it is simply a complaint. Handle it carefully, just as you would with all complaints. Keep in mind that while it may not be true, it may not be false, either. Having an open mind is particularly important when you are dealing with the boss.
Document, and then document some more. Make sure you document conversations and issues that arise. It is important to have contemporaneous documentation that coincides with your investigation and the complaint. If you simply rely on your memory, you will have no way to show that you took action in a prompt and timely manner. HR is like medical care: If you didn’t document it, it didn’t happen.
Get help. Find a champion or someone who can assist you in managing the issues and concerns regarding the complaint and the boss. Someone above you on the food chain—or someone who has equal responsibility in your area—may help create a strategy, serve as a sounding board, or help convince the boss that he needs to stop calling female employees “sweetheart” and quit patting pregnant women’s bellies. In many instances, assistance from an attorney may be helpful.
Be specific. Provide concrete examples when possible. It is difficult for people to understand what they have done wrong or why they need to change their behavior if you don’t give them examples of the behavior at issue. However, the need for a concrete example is somewhat at odds with the competing need to protect employees who are concerned about retaliation. So a champion—or at least a sounding board—can help you craft ways to present the example in a way that provides specific information and foster dialogue and improvement.
Don’t overlook training. Training can be valuable not only for frontline managers, supervisors, and employees but also for the boss. Training can help bring issues to the boss’s attention, help him understand why the issues are present in the workplace, assist in developing solutions, and potentially form a foundation to address the problems.
What not to do
Don’t ignore the problem. It may be tempting to ignore inappropriate behavior by an upper-level manager or someone at the highest level of the company, but ignoring a problem rarely makes it better. Further, under some state laws, individual employees could be named in a complaint asserting discriminatory treatment, retaliation, and other claims.
It is common for HR representatives to be named as witnesses and even defendants when they fail to act when problems are brought to HR’s attention. Documenting issues, conducting training, and formulating a plan to address concerns (even if the plan is not fully implemented) can be critically important.
Jo Ellen Whitney is an attorney with Davis Brown Law Firm in Des Moines, Iowa. She may be contacted at joellenwhitney@davisbrownlaw.com.