Employers Gain Harassment Suit Protection

In a ruling intended to protect conscientious employers, the California Supreme Court decided Monday that businesses with strong anti-harassment policies may be spared monetary damages when a victim unreasonably fails to promptly report the misconduct.

The unanimous ruling shields employers who would have stopped a supervisor’s harassment if the victim had complained. Before, employers had been automatically liable even if they weren’t aware of the wrongdoing.

Justice Joyce L. Kennard, writing for the court, said the decision was aimed at making “employers the first line of defense against sexual harassment in the workplace.” By encouraging victims to come forward with their complaints, Kennard wrote, the law “can stop workplace harassment before it becomes severe or pervasive.”

“Prompt employer intervention not only minimizes injury to the victim but also sends a clear message throughout the workplace that harassing conduct is not tolerated,” she said in the ruling.

Employment lawyers predicted the it would spur employers to establish and publicize strong internal policies against sexual harassment.

“I think it is going to reduce instances of sexual harassment,” said Deputy Atty. Gen. Tracy S. Hendrickson, who represented the employer in the case before the court. “I think employers are going to be much more diligent about making sure policies are followed and employees have a good, clean route to follow when they complain.”

Some lawyers for sexual harassment victims said few employers would be able to significantly reduce their exposure to damages.

The ruling generally allows a jury to determine whether a victim’s failure to file a complaint immediately was unreasonable. A jury may consider a victim’s fear of retaliation and feeling of humiliation, the court said. Studies of sexual harassment victims show they rarely complain promptly.

“Employees may be reluctant to report their supervisors to higher management, and an employee will often attempt informal negotiation with a supervisor, make efforts to avoid encounters with the supervisor or resort to other informal strategies,” Kennard wrote. “Delay that results from an employee’s initial resort to such nonconfrontational means of dealing with supervisor harassment will have to be carefully evaluated to determine whether it was reasonable in a particular employment setting.”

The court’s ruling came in a sexual harassment lawsuit filed by Theresa McGinnis, an employee of the state Department of Health Services, who said she endured two years of improper touching and verbal harassment from her boss before complaining.

An investigation determined the supervisor had harassed McGinnis, and he retired. McGinnis said she had not complained earlier because she didn’t think the department would do anything. She cited cases of other workers who had reported the same boss, with no action taken against him.

The Department of Health Services argued that it would have stopped the harassment if McGinnis had complained. Two lower courts decided against the state.

Federal law permits employers to defend themselves in sexual harassment lawsuits when the victim fails to complain. Monday’s ruling brings California closer to federal law.

Christopher H. Whelan, McGinnis’ lawyer, said he expected McGinnis would prevail in her lawsuit. He noted that the ruling allows victims to show that other employees complained about harassment but weren’t taken seriously.

Whelan also expressed doubt that a jury would reduce damages simply because a victim hadn’t complained promptly.

“So you groped her 15 times, and if she had reported it a month earlier, it would be seven times, and therefore your emotional distress damages” are less? Whelan said. “The jury is going to be as outraged as ever.”

The court’s decision was based on the state’s Fair Employment and Housing Act, which prohibits sexual harassment in the workplace. The court said defendants sued under the act may rely on a theory known as the doctrine of avoidable consequences, which holds that a victim should not be compensated for an injury that he or she could have avoided.

“The doctrine encourages preventive action by both the employers and the employee while affording compensation to the employee for harms that neither party could have avoided through reasonable care,” the court said.

According to the ruling, employers need to do more than just present a written policy against sexual harassment. The policy must be communicated to workers and the employer must have consistently enforced the policy. The employer also must show that the victim’s failure to complain promptly was unreasonable and that the harassment would have stopped if the victim had come forward.

William Quackenbush, who represents plaintiffs in sexual harassment cases, called it a “very clear change in the law” in California.

“The bad news is that there is a brand-new defense [for employers] that never existed in the state of California for discrimination,” he said. “The good news is that in most cases, where the employee had taken some sort of action to try to report the harm, the employee will be entitled to a jury trial to evaluate the reasonableness of the employee’s conduct.”

Jeffrey Winikow, an attorney for a statewide association of lawyers who represent plaintiffs in employment cases, expressed “slight disappointment” with the decision. He said victims could now put an employer’s anti-sexual harassment procedures “under a microscope.”

Greg Richardson, who represents employers, said the ruling “is the best striking of a balance of how we end sexual harassment in the workplace. We do expect employers will respond when they know about harassment, and often the best way to learn about this is from the employee himself or herself.”

The McGinnis lawsuit will now be sent back to the Court of Appeal and eventually to Superior Court for a trial.