Discrimination in the Workplace: New Guidelines

As a result of two United States Supreme Court cases decided in 1998, the Equal Employment Opportunity Commission on June 18, 1999 issued new 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 (or his) rights are preserved.

Because of language in the two decisions, 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 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⁽¹⁾.

The new guidelines make it clear that 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. 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. Thus, the EEOC, interpreting the Supreme Court's opinions, has made clear the importance for every business of having clear guidelines dictating what should happen when an employee feels he or she has been the victim of discrimination.

Introduction

The two landmark Supreme Court cases involved the question of the degree of liability of an employer for sexual harassment which occurs on the job but which is not known to nor approved by the highest levels of management. Sexual 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 has increased dramatically during the 1990's, from 6,883 in 1991 to 15,618 in 1998, according to statistics compiled by the Equal Employment Opportunity Commission, the federal agency which has the responsibility of oversight in the enforcement of federal laws dealing with sexual discrimination in the workplace.

For years, the courts have grappled with the issue of the liability a business may have for sexual harassment perpetrated by supervisors that are not in the top level of command. As a matter of reality, sexual harassment usually occurs without the express approval of the directors or operators of companies or institutions. 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 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.

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

A. Harassment Resulting in Tangible Employment Action

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 an exhaustive list. Altering an employee's duties in a way that diminishes his or her opportunity for promotion or increased compensation would 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 sexually discriminatory acts of a supervisor, the employer does 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, where the initial burden is carried if the employee can prove a tangible employment action was taken against him because of his/her protected category and the burden then shifts to the employer to prove that there was a legitimate reason for the change. If the employee then proves that this stated reason was 'pretextual,' the employee wins.⁽²⁾

The EEOC guidance makes clear that if a supervisor who has been sexually harassing an employee has 'significant input' in the employment decision, then there will be a strong inference that the employment action was discriminatory.

B. Hostile Environment Discrimination

By definition, sexual harassment which does not result in a tangible employment action is hostile environment discrimination. The employer will not be liable for such 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.

Before explaining what is meant by these two requirements for an affirmative defense by the employer, it should be noted that, in order to avoid liability, the employer must have exercised reasonable care to correct the situation and the employee unreasonably failed to take advantage of the corrective opportunities provided. In other words, if the employee follows up and makes an appropriate complaint, cooperating in the subsequent investigation, yet nevertheless has sustained harm caused by the harassment, the employer may still be liable.

What is clear, however, is that it is 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 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 EEOC Guidance then gives the following "examples" of general questions that should be asked:

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 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.

Conclusion

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.

1. 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)

2. McDonnell Douglas v. Green, 411 U.S. 792 (1973)

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