Don’t Ignore the Kissing Supervisor—Court Rules that Employer’s Knowledge of Past Behavior Negates Faragher-Ellerth DefenseEmployment lawyers and most HR professionals are familiar with the Faragher-Ellerth defense to a claim of sexual harassment. In short, if an employer can show that (1) it exercised reasonable care to prevent and correct promptly any sexually harassing behavior, AND (2) the employee unreasonably failed to take advantage of available preventive or corrective opportunities, then the employer is not liable. Usually, the defendant-employer points to its sexual harassment policy in the employee handbook and shows that despite a complaint procedure, the plaintiff-employee never reported the harassment. But is that enough? In Minarsky v. Susquehanna County, the Third Circuit recently stated that it may not be, and the facts may provide a good lesson on the importance of diligently enforcing sexual harassment policies.

Continued Pattern of Sexual Harassment—But No Report

Sheri Minarsky was a part-time secretary at the Susquehanna County Department of Veterans Affairs. On Fridays, she worked for Thomas Yadlosky in an area separate from the other county employees. From the very beginning, Mr. Yadlosky began to sexually harass Ms. Minarsky—attempting to kiss her on the lips, pulling her against him from behind, massaging her shoulders and sending her sexually explicit emails.

When she started work, Ms. Minarsky signed the county’s General Harassment Policy which stated that an employee could report any harassment to a supervisor, and if the harasser was the supervisor, then she could report that activity to the chief county clerk or a county commissioner. Ms. Minarsky did not report the harassment to Sylvia Beamer, the chief county clerk, or to any of the county commissioners.

Why did she not report the behavior? Ms. Minarsky said not only did she fear retaliation, she also knew that the chief county clerk—one of the people to receive reports—was aware of Mr. Yadlosky’s inappropriate behavior to other women. Mr. Yadlosky had been reprimanded, but it didn’t stop the behavior. It also came out in discovery that Mr. Yadlosky had even tried to embrace Ms. Beamer herself!

After four years of mistreatment by Yadlosky, the harassment had reached a level where her own doctor told her to report it. Ms. Minarsky finally sent Mr. Yadlosky an email stating that she thought his behavior was inappropriate. She also told a coworker who subsequently reported it to Ms. Beamer. Mr. Yadlosky was interviewed, and when he admitted to the allegations, he was suspended and ultimately terminated.

Suit and Judgment against Ms. Minarsky

Ms. Minarsky filed suit under Title VII for gender discrimination, hostile work environment, quid pro quo sexual harassment, and several state law claims. After discovery, the county moved for summary judgment based on the Faragher-Ellerth defense—once Ms. Minarsky complained, the county terminated Yadlosky. The lower court held that the county acted reasonably by maintaining an anti-harassment policy and by reprimanding Mr. Yadlosky for the past incidents and promptly terminating him when the Minarsky incident came to light. The judge also found that Ms. Minarsky’s failure to report the harassment was unreasonable. The court dismissed her lawsuit, and Ms. Minarsky appealed.

Third Circuit Reverses

The Third Circuit recognized that the county maintained an anti-harassment policy, but was not willing to find as a matter of law that its responses to the past complaints about Mr. Yadlosky were reasonable. The court noted that Mr. Yadlosky’s record showed a pattern of unwanted advances against multiple women other than Ms. Minarsky—including two women in authority, Ms. Beamer and a female county commissioner. The commissioner testified that Mr. Yadlosky attempted to kiss her on the cheek approximately 10 times but he had not been reprimanded. The court noted that the county had indicators of a pattern of conduct, as opposed to mere stray incidents, “yet they seemingly turned a blind eye toward Yadlosky’s harassment.” The court stated that Mr. Yadlosky’s termination may not be a reflection of an effective anti-harassment policy, but instead simply showed that Ms. Minarsky’s complaint was “the straw that broke the camel’s back.” That was enough of a dispute of material fact that the court felt it should be decided by a jury.

With regard to Ms. Minarsky’s failure to report the harassment, the court felt that a jury could find that she did not act unreasonably under the circumstances. The court discussed the current atmosphere about sexual harassment and noted that “there may be a certain fallacy that underlies the notion that reporting sexual misconduct will end it.” The court cited studies showing that a majority of women who experience sexual harassment fail to report it and noted that “a mere failure to report one’s harassment is not per se unreasonable.” The fact that the county was aware of a past pattern of harassment by Mr. Yadlosky and yet the behavior continued could support a feeling by Ms. Minarsky that reporting it would be futile, if not detrimental to her job. Ultimately, the court held that the reasonableness of her inaction was also an issue that needed to be decided by a jury.

Is Faragher-Ellerth Dead?

While the Third Circuit certainly did not abolish the Faragher-Ellerth defense, it did chip away at some of its edges. Certainly, the extreme and prolonged behavior by Mr. Yadlosky here, coupled with the county’s apparent failure to address it effectively, didn’t help the county’s case. The fact that the appellate court found that a jury should decide the reasonableness of the county’s response should give all employers pause. This case may indicate that the simple act of putting an anti-harassment policy in a handbook is no longer a get-out-of-jail-free card, even if an employee delays reporting sexual harassment.

The most important lesson in this case is that employers have to take all reports of sexual harassment seriously, and respond to those reports with appropriate and effective discipline. If a company has an employee who is known as a continual harasser—even if the employee has been written up a few times in the past—it has a ticking time bomb on its hands. If you get a complaint, address it and make sure the behavior stops. Follow up to make sure the behavior has truly stopped and there is no backsliding. The last thing you want is to have an employee argue that he or she didn’t report an incident because similar activity had been reported in the past and the company failed to handle it.

As we reported earlier, after a hiatus during the Obama Administration, opinion letters are back and the United States Department of Labor (DOL) recently issued six new ones.

Quick Refresher

Opinion letters are official, written opinions from the Wage and Hour Division (WHD) on “how a particular law applies in specific circumstances presented by the person or entity requesting the letter.” The DOL encourages the public to submit requests for opinion letters; however, the request must state that the opinion is not sought by a party in a WHD investigation or for use in any litigation that was initiated prior to the submission of the request.

The Facts about Paying for Wellness

Be Well without Running Afoul of the FLSAOne of the newly issued opinion letters addresses whether the FLSA requires an employer to compensate an employee for time spent voluntarily participating in certain wellness activities, biometric screenings, and benefits fairs. The fact pattern presented to the DOL was as follows:

An employer makes available to its employees opportunities to participate in “biometric screenings,” which test, among other things, cholesterol levels, blood pressure, and nicotine usage. The employer does not require the screening, and it is entirely the employee’s choice to participate. The screenings are in no way related to the employee’s job duties; however, the employee may be screened both during and outside of regular work hours. An employee’s participation in the screening could decrease the employee’s health insurance deductibles.

An employee may also participate in other “wellness activities” to decrease his or her monthly insurance premiums, including (1) attending in-person health education classes; (2) using the employer-provided gym; (3) participating in telephonic and online health education classes facilitated by the employer; (4) participating in Weight Watchers; and (5) voluntarily engaging in a fitness activity. As with the biometric screening, the employer does not require anyone to engage in those wellness activities, and the activities are not related to the employee’s job.

Lastly, the employer allows employees to attend benefits fairs on such topics as financial planning, employer-provided benefits, or college attendance opportunities. Those fairs are not part of an employee’s orientation, are open to all employees, are not related to the employee’s job duties, and are entirely optional.

The DOL’s Opinion

The FLSA requires employers to compensate employees for their work, but does not explicitly define “compensable work.” That said, in reaching its ultimate conclusion, the DOL relies on the U.S. Supreme Court’s 1944 determination in Armour & Co. v. Wantock that the compensability of an employee’s time depends on “whether it is spent predominantly for the employer’s benefit or for the employee’s.” The DOL also relies upon separate regulations relieving employers of their obligation to compensate an employee for “off duty” time, i.e., “periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes.”

Considering all of those factors, the DOL opined that “an employee’s voluntary participation in biometric screenings, wellness activities, and benefits fairs predominantly benefits the employee.” It reached that conclusion, in part, because the activities (1) provide financial benefit to only the employee, (2) help the employee make decisions about matters unrelated to his or her job; (3) are wholly optional; and (4) are not required in conjunction with any job-related duty. As such, the DOL concluded that engaging in those activities does not constitute compensable worktime under the FLSA.

The DOL specifically concluded that participation in those activities was not compensable even during normal work hours, because the activities constitute non-compensable “off duty” time, provided the employee may use the time engaging in those activities “effectively for his or her own purposes.”

Takeaway

Employer wellness programs are all the rage. The DOL’s recent opinion offers clear guidance to employers on how to structure a wellness program in a manner that does not require the employer to pay employees for using the program:

  • Make available financial benefits personal to the employee (not to the company);
  • Provide information that employees need to make decisions related to their lives—not their jobs; and
  • Make it voluntary.

Revamping Your Anti-Harassment ProgramsIn the wake of the #MeToo movement, I have clients wanting to know what they can do both to improve their workplace and protect themselves. They all have good policies and regularly train supervisors and employees on them. So what’s next? Although there is no silver bullet, I suggest you start with the following three things.

Review Your EEO Policy

Although most EEO policies are pretty straightforward, they can always use a little polishing. Does the policy mention all of the protected categories that apply to all of your locations? As a company grows, it can find itself with employees in states or municipalities that have classifications that are not covered in the federal laws. Many states have laws explicitly prohibiting discrimination based on sexual orientation and gender identity. Additionally, a number of federal circuit courts have ruled that Title VII’s prohibition against sex discrimination also covers discrimination based on sexual orientation or gender identity. Then there are municipalities that have covered even more categories. For example, Washington, D.C.’s Human Rights Law prohibits discrimination based on marital status, personal appearance, family responsibilities, matriculation and political affiliation.  Be sure your EEO policy is keeping up.

Review Your Harassment Policy

You need to update your harassment policy like you are updating your EEO policy. In addition to making sure the protected categories are broad enough, think about beefing up your reporting processes.

For years I have preached to clients that they need to have centralized reporting rather than having employees report to any supervisor. It is not that I want to make it hard to report—however, front line supervisors are in a tough spot. They may not have the skills to handle a complaint. Also, front line supervisors are more likely to know a lot about the complainant and the alleged perpetrator and handle it themselves. You don’t want someone discounting a report because “everyone knows the complainant is a liar” or “I know he didn’t mean anything by that.” Those are not good legal defenses.

I am coming to the conclusion that reporting hotlines, including the ability to report anonymously, may be the best options. Properly run hotlines get reports to the right people sooner. Also, if someone has the ability to report anonymously, it makes a later argument that he or she didn’t want to report because they would suffer retaliation a lot less convincing. Investigating an anonymous report presents challenges, but I think it is better to investigate what you can.

And another thing—really think about whether you want to say you have a zero tolerance policy. I find that is easily misinterpreted to mean that anyone found to have violated the harassment policy will be terminated. Is that really what you mean? I find that sexual harassment policy violations can come in a lot of different packages, ranging from unintended, thoughtless comments to boorish behavior to sexual assault. Although you can decide that you will treat all of those events the same, do you want to? In some ways, such a one-size-fits-all approach discourages complaints about behavior that we want to change, but that doesn’t deserve termination.

Revisit Your Training

Train people, and track it. New employees and new supervisors should complete training either before or shortly after they start. Everyone should go through training of some sort periodically. California requires everyone to be trained at least every two years. The State of New York has just enacted a law  that requires employers to provide annual sexual harassment prevention training.

What should your harassment training look like? New York’s new law comes with model training, including minimum standards, for employers to use. Saying that you met those standards, even if you didn’t have to, wouldn’t be a bad fact in defending a claim. So, even if you don’t have employees in New York, it may be worth looking at this material to see if there are parts you want to use.

Get company leadership on board. Having senior leadership (not just HR) involved in training gets employees’ attention and sends the message that this is important. It also gives you the opportunity to talk about workplace culture and respect for each other—more than just saying “don’t harass each other.”

Get feedback from the participants. Give them a chance to ask questions or take a test to be sure they got the message. Send a follow-up message to get feedback and see what stuck.