Discrimination in the Workplace

As a result of two United States Supreme Court cases decided in 1998, the Equal Employment Opportunity Commission on June 18, 1999 issued guidelines for businesses and employees. These guidelines, formally called "Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors," help to clarify what an employer should do to avoid being held liable for incidents of illegal harassment in the workplace, and what an employee should do to make sure that her/his rights are preserved.

The Guidance was intended to help answer the question what liability does an employer, usually a corporation, have for the discriminatory acts of supervisors and other employees who commit discriminatory acts. Because of language in the two decisions of the United States Supreme Court in the late handed down in 1998, Burlington Industries, Inc. v. Ellerth, 188 S.Ct. 2257 (1998) and Faragher v. City of Boca Raton, 118 S. Ct. 2275 (1998), implying that the new standards extend to all forms of illegal discrimination and not just sexual harassment (which formed the factual basis for these two decisions), the EEOC's new guidelines are intended to apply to all forms of harassment and discrimination, including harassment based on race, color, sex (whether or not the harassment is of a sexual nature), religion, national origin, protected activity (e.g. the right to freedom of speech and association), age and even disability.

An employer can avoid liability in many cases if the business has clear policies and procedures concerning illegal discrimination that are made known to each and every employee and takes appropriate action upon receiving a complaint. By the same token, an employee who is aware of the policies and procedures but fails to make a timely complaint may lose any right to recover for illegal discrimination, so it is important for employees to follow company policies and procedures before attempting to go forward with a charge of discrimination in court.

The two landmark Supreme Court cases involved the determination of liability of an employer for sexual harassment which occurred on the job but which was not known to nor approved by the highest levels of management. Discriminatory harassment in the workplace continues to be a significant concern for employers and employees throughout the United States. For a variety of reasons, the number of sexual harassment charges filed with federal and state agencies increased dramatically during the 1990's, according to statistics compiled by the Equal Employment Opportunity Commission.

For years, the courts have grappled with the issue of the liability a business may have for discriminatory harassment perpetrated by supervisors that are not in the top level of command. The reality is that discriminatory harassment usually occurs without the express approval of the directors or operators of companies or institutions, but Title VII is intended to prohibit such discrimination. Rarely will top officers of a corporation or institution be actually aware of discriminatory harassment well down the chain of command. To what degree, then, should a corporation or institution be liable for activities of an individual supervisor who has not been (and would - in most cases - never be) authorized to commit acts of sexual, or, for that matter, racial, ethnic or religious discrimination?

Unfortunately, for many years, the courts attempted to answer this question of 'vicarious liability' by resort to arcane principles of agency, which are difficult for courts and lawyers to comprehend and apply, let alone for business managers or human resources personnel attempting to run a business.

Now, the issue of vicarious liability has been clarified by dividing workplace discrimination into two broad categories: (1.) harassment that results in a tangible employment action and (2.) hostile environment harassment. The EEOC guidance, at least theoretically, enables an employer to know when it may be liable to an employee for sexual harassment, which it neither knew about nor condoned at the top level of management.

Although the newly issued EEOC guidance may over-simplify the analysis, it provides clearer guidelines than ever before for sorting out the issue of vicarious liability for discriminatory harassment in the workplace

The Tangible Employment Action category always applies to supervisors. What is a supervisor? According to the EEOC, an individual qualifies as a supervisor if:

• the individual has authority to undertake or recommend tangible employment decisions affecting the employee or
• the individual has authority to direct the employee's daily work activities.

Obviously, the EEOC defines supervisor more broadly than many businesses or corporations, and the authority to direct an employee's daily work activities or to recommend tangible employment decisions may apply to employees that are not 'supervisors' in the everyday use of the term.

The key issue, however, is what constitutes a 'tangible employment action.' The EEOC defines this as any significant change in employment 'status,' and gives as examples:

• hiring and firing;
• promotion and failure to promote;
• demotion;
• undesirable reassignment;
• significant change in benefits;
• change in compensation;
• change in work assignment.

Obviously, this is not intended to be an exhaustive list. Altering an employee's duties in a way that diminishes his or her opportunity for promotion or increased compensation may constitute a tangible employment action.

If the employment action results only in a change in an individual's job title, however, as opposed to changes in salary, benefits, duties or prestige, and the only impact is a bruised ego, there is no tangible employment action. If, on the other hand, the change in job assignment or title carries with it enough of a change in prestige that it is likely to hinder the employee's chances for advancement, then it would be considered a tangible employment action.

The issue of whether or not a tangible employment action has taken place is an important one because, if the action is caused by the discriminatory acts of a supervisor, the employer may not have the 'affirmative defense' of having made available to all employees a procedure for complaining about discrimination or having conducted a thorough investigation and taken appropriate actions. However, the employer will still have the defense that the employment action was taken for legitimate business reasons as opposed to discrimination.

If the employer can prove that the reason for the employment action was a legitimate, non-discriminatory reason, then there is no liability. The burden shifting analysis previously utilized in discrimination cases still applies: the initial burden is carried if the employee can prove a tangible employment action was taken against him because of his/her protected category, or that (s)he was replaced by a person not in the discriminatory class. The burden then shifts to the employer to prove that there was a legitimate reason for the change. If the employee can nevertheless prove that this stated reason was 'pretextual,' the employee wins.

If a supervisor who has been sexually harassing an employee has 'significant input' in the employment decision, courts usually find therein a strong inference that the employment action was discriminatory.

By definition, sexual harassment which does not result in a tangible employment action is hostile environment discrimination. However, not all harassment rises to the level that the courts will recognize as illegal. The harassment must be sufficiently severe or pervasive to "alter the conditions of employment and create an abusive working environment."

An employer will generally not be liable for hostile environment discrimination if:

• The employer exercised reasonable care to prevent and correct promptly the situation giving rise to the harassment; and
• The employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm in some other way.

It should be noted that if the employee follows up and makes an appropriate complaint and cooperates in the subsequent investigation, yet nevertheless has sustained harm caused by the harassment, the employer may still be liable.

It is clearly incumbent upon the employer to formulate and distribute to all employees a policy and complaint procedure concerning illegal harassment.

According to the EEOC, the anti-harassment policy should at the very least contain the following elements:

• A clear explanation of prohibited conduct;
• Assurance that employees who make complaints of harassment or provide information relevant to harassment complaints will be protected against retaliation;
• A complaint process that clearly establishes what steps are necessary in pursuing the grievance;
• An assurance that the employer will protect the confidentiality of the harassment complaint to the extent possible;
• A complaint process that provides for a prompt, thorough, and impartial investigation;
• The assurance that the employer will take immediate and appropriate corrective action when it determines that harassment has occurred.

The importance of a clearly defined complaint procedure and immediate and thorough investigation that ensures that retaliative action will not be taken against the complaining employee or other witnesses can not be over-emphasized. It is vitally important that, in order to avoid liability the employer needs to take seriously its obligation to investigate any complaints and take appropriate corrective action in a timely manner. The EEOC Guidance gives examples of questions that should be asked. Obviously, the investigator needs first to establish the protected classification the employee claims to be a member of. There may be situations where an employee feels that more than one protected classification applies, and this should be clarified at the outset of the investigation.

The following are "examples" of general questions that the EEOC has suggested:

Questions to Ask the Complainant:

• Who, what, when, where, and how: Who committed the alleged harassment? What exactly occurred or was said? When did it occur and is it still ongoing? Where did it occur? How often did it occur? How did it affect you?
• How did you react? What response did you make when the incident(s) occurred or afterwards?
• How did the harassment affect you? Has your job been affected in any way?
• Are there any persons who have relevant information? Was anyone present when the alleged harassment occurred? Did you tell anyone about it? Did anyone see you immediately after episodes of alleged harassment?
• Did the person who harassed you harass anyone else? Do you know whether anyone complained about harassment by that person?
• Are there any notes, physical evidence, or other documentation regarding the incident(s)?
• How would you like to see the situation resolved?
• Do you know of any other relevant information?

Questions to Ask the Alleged Harasser:

• What is your response to the allegations?
• If the harasser claims that the allegations are false, ask why the complainant might lie.
• Are there any persons who have relevant information?
• Are there any notes, physical evidence, or other documentation regarding the incident(s)?
• Do you know of any other relevant information?

Questions to Ask Third Parties:

• What did you see or hear? When did this occur? Describe the alleged harasser's behavior toward the complainant and toward others in the workplace.
• What did the complainant tell you? When did s/he tell you this?
• Do you know of any other relevant information?
• Are there other persons who have relevant information?

If the determination is made that harassment has occurred, immediate and appropriate corrective action should be taken. The EEOC recommends the following as examples of measures that can be taken to stop harassment and to ensure that it does not recur:

• oral and/or written warning or reprimand;
• transfer or reassignment;
• demotion;
• reduction of wages;
• suspension;
• discharge;
• training or counseling of harasser to ensure that s/he understands why his or her conduct violated the employer's anti-harassment policy; and
• monitoring of harasser to ensure that harassment stops.

The EEOC also suggests the following measures to correct the effects of harassment: (a.) restoration of leave taken because of the harassment; (b.) expungement of negative evaluation(s) in employee's personnel file that arose from the harassment; (c.) reinstatement, if termination has occurred; (d.) apology by the harasser (although this remedy would seem sufficient in the rarest of cases); (e.) monitoring treatment of employee to ensure that s/he is not subjected to retaliation by the harasser or others in the work place because of the complaint (-this should always be done-); and (f.) correction of any other harm caused by the harassment (e.g., monetary compensation for losses). Obviously the corrective measure should be such that the remedy is appropriate to the harm.

The EEOC suggests that it may not be necessary for a small business to implement a formal complaint process. However, the small business employer is nevertheless held to the same standards for reasonable and prompt investigation of complaints and the taking of appropriate remedial action.

As stated earlier, it is necessary that the employee pursue the complaint in a timely manner. If the employee does not pursue the complaint despite a well-publicized and clear set of procedures, the employee must provide a 'reasonable' explanation for not having done so, such as a realistic expectation of retaliation or unduly burdensome or intimidating requirements for the making of a complaint. The EEO guidance emphasizes that the employee can never be required to waive rights in exchange for mediation. For example, the employee could never be required to arbitrate a Title VII complaint and waive his/her right to sue.

The purpose of the new guidelines, in accord with the intent of Congress in passing the Civil Rights Act(3), is to give employers the opportunity to rectify discrimination in the workplace before the resulting harm becomes significant. Well-defined policies and procedures against discrimination that are diligently followed may now provide a defense against liability. For more information, the EEOC guidance can be found at http://www.eeoc.gov/docs/harassment.html.

2. The Supreme Court made doubtful the applicability and effectiveness of EEOC guidances to disability cases in a recent landmark decision concerning the Americans with Disabilities Act, Sutton v. United Airlines,119 S. Ct. 2139 (1999)

3. McDonnell Douglas v. Green, 411 U.S. 792 (1973) The burden shifting analysis does not dictate the order of proof at trial: the plaintiff may present evidence of pretext in her case in chief.

4. Ford v. E.E.O.C., 458 U.S. 219, 102 S. Ct. 3057, 73 L.Ed.2d 721 (1982)