With a near-daily barrage of media reports about high-profile workplace harassment allegations, it is important to remember what “harassment” is, what it isn’t, and what employers must do when faced with employee harassment complaints.

Texas Bar Top 10Unlawful “harassment” is unwelcome workplace conduct based on certain characteristics that are protected by federal laws (race, color, religion, sex, national origin, age, disability, and genetic information). The two categories of workplace harassment are:

  1. Quid pro quo harassment, where the harasser demands that the victim do a certain act as a condition of employment (e.g. the stereotypical manager saying, “You have to sleep with me to get the promotion”), and
  2. Hostile work environment, where the harasser subjects the victim to harassment that is so severe or pervasive that it creates an abusive, hostile, or intimidating work environment (e.g. name calling, offensive jokes, or suggestive remarks).

The Equal Employment Opportunity Commission (EEOC) notes that the legal standard used by courts when assessing whether an employer is liable for claims of workplace harassment by non-supervisory employees is whether the employer “knew or should have known” of the harassing conduct and failed to take “prompt and appropriate” corrective action.

What is ‘Knowledge’?

Knowledge of workplace harassment can be actual or constructive. An example of actual knowledge is information reported in a complaint. Complaints about workplace harassment can take many forms, ranging anywhere from informal verbal comments made by employees to formal written complaints. Some employers may even receive anonymous complaints via a hotline or letter.

Actual knowledge of workplace harassment can also be based upon visual observations or overheard discussions among employees. Thus, if a manager or supervisor has actual knowledge, either from their own observations or from receiving an employee complaint, then the company is deemed to have knowledge.

Constructive knowledge exists when the harassment is so pervasive that knowledge is imputed to the company because under the circumstances it “should have known” that such misconduct was occurring. Therefore, even if a complaint is not made, a company may still be deemed to be on notice of the harassment, triggering a duty to act and respond.

Employers often make the crucial mistake of brushing off comments, complaints, or observations of misconduct, especially if they are anonymous, informal, or perceived as only a minor, isolated incident.

Employers know that workplace investigations are expensive, time-consuming, and disruptive, so they opt to avoid them at all costs unless a formal written complaint is received or the complained of conduct is extreme.

Some employers may not understand the true magnitude of legal exposure that comes along with such a decision to feign ignorance, while others may simply be willing to roll the dice due to skepticism of the allegations or the belief that the situation will “work itself out.”

Failure to look into complaints of workplace harassment, regardless of the type, or dig deeper when observations or rumors may suggest potential misconduct carries risky consequences for a company. Any non-action or delay in reviewing allegations may later be used as evidence that the misconduct was tolerated or even condoned.

Below are some reasons why managers should think twice before turning a blind eye to misconduct:

1. Legal Risk

A company’s risk of liability skyrockets when it fails to investigate and address potential workplace harassment (or delaying an investigation). And although not all complaints or observations warrant a full-blown investigation, employers still need to take steps to assess the alleged misconduct and gather enough information to make an informed decision about whether a larger-scale investigation is warranted.

The standard for hostile work environment claims requires the harassment to be so severe or pervasive that it creates a work environment that would be considered intimidating, hostile, or offensive to reasonable people. Generally, isolated incidents of harassment will not rise to the level of unlawful harassment unless extremely severe.

In addition, occasional petty slights may not be deemed unlawful, while routine offensive jokes, name calling, or ridicule by an employee will be analyzed with more scrutiny. Each factual scenario is examined on a case-by-case basis in court. However, just because certain complained-of behavior may not cross the line into unlawful conduct does not mean that such behavior should be ignored. Even if not illegal, such conduct may still violate company workplace policies.

Continuing to allow and tolerate improper conduct can quickly snowball and cross the line from inappropriate to unlawful. Thus, looking into all complaints of workplace harassment and stopping any unprofessional behavior is in the best interest of the company.

Anonymous Complaints

Anonymous reports of workplace harassment should not also not be ignored. Anonymity creates a temptation for employers to simply claim ignorance of any alleged workplace harassment. Vague, anonymous complaints, or those that contain very little detail or information, are much harder to address (especially in larger companies), so instead of wasting time trying to uncover more details, companies take the easy way out and let such complaints fall through the cracks.

However, at a minimum, anonymous complaints should be brought to the attention of Human Resources or management during a meeting to discuss whether there is a way to find out more information. If an anonymous complaint does indeed contain specific details, such as who the allegation involves or where the conduct is occurring, then employers should spend time digging into those details to see if such allegations can be substantiated.

Even if the complaint is not ignored entirely, it should not be put on the backburner for weeks. In order to have any legal defense if future litigation ensues, companies must be able to prove they investigated or looked into a given complaint in a timely manner. The longer an investigation is postponed, the greater the chance of legal risk for the company, because a company that has knowledge, actual or constructive, is liable for all future harassment that occurs after the fact.

Therefore, upon being put on notice – in whatever manner, verbal, visual, via hotline, informal or formal – action must be taken promptly to determine whether an investigation is warranted, and if so, an investigation and proper corrective action must ensue in a timely manner.

Retaliation Claims

Another legal risk the company faces by delaying an investigation is being on the hook for a retaliation claim by the complaining employee. For example, an employee comes forward to complain to her boss about being sexually harassed by another co-worker. The company is very busy, so it postpones looking into her complaint. In the meantime, the boss gives the complaining employee a negative performance review. The complaining employee may now be able to bring a claim for retaliation against the company because she was treated negatively after complaining. Even if it turns out that her original complaint of sexual harassment does not rise to the level of unlawful harassment, the company may still be liable to her for unlawful retaliation.

Lastly, employers who turn a blind eye to a complaint of workplace harassment, believing the behavior to be minor and not unlawful, open the door to potential claims of negligent supervision and retention if future incidents occur.

2. Cost

Along with legal exposure, defending workplace harassment claims can be quite costly, especially if the company failed to investigate properly or ignored the alleged misconduct entirely. In addition to the legal fees incurred in defending the claim, a company found liable for unlawful harassment may have to pay for both compensatory and punitive damages.

Taking small preventive steps to minimize workplace harassment is cheaper in the long run and also has positive effects on the overall working environment by making employees feel both comfortable raising concerns and confident that their complaints will be taken seriously and addressed.

Ways to promote such an environment include distributing a zero-tolerance harassment policy and having a grievance procedure whereby employees are encouraged to come forward. Besides simply spreading the anti-harassment talk, companies need to also walk the walk and enforce its own policies, including taking proper disciplinary action, if needed.

Ignoring worker complaints may lead to distrust by employees who perceive the company as being dishonest for failing to follow its own policies and procedures. Using an anti-harassment policy as a façade to reduce liability in the event of future litigation will not provide legal protection when it is widely known that the policy is never enforced.

In addition to promoting a positive workplace culture, gaining employees’ trust also saves the company money. Employers who are unable to control or properly handle issues of workplace harassment and misconduct have higher turnover rates because employees become frustrated with the employer’s reluctance to investigate and lack of respect for their concerns.

Thus, creating and fostering a harassment-free workplace not only improves worker morale, but it also increases employee retention – saving employers money associated with recruitment and training.

3. Deterrence

Strict adherence to company policies and procedures can be a strong deterrent for workplace harassment and misconduct. A company whose management takes its responsibility of maintaining a professional work environment and ensuring compliance with workplace laws seriously demonstrates a commitment to those ideals and to the individual employees.

Knowing that there is a high likelihood of repercussion for offensive and intimidating workplace misconduct makes it more likely that such conduct will be avoided (assuming that most people want to keep their jobs). Companies that show continued dedication to a professional, harassment-free workplace can greatly deter and reduce future misconduct.

As demonstrated above, ignorance of workplace harassment will not protect an employer that knows or should know that misconduct is occurring. In addition, even when certain perceived or alleged harassment may not rise to the level of unlawful, employers who wish to reduce their legal risk, save money, and promote a culture of deterrence should look into and correct all unprofessional workplace conduct.

For assistance with drafting or revising workplace anti-harassment policies or employee handbooks contact Clouse Brown PLLC. Our attorneys counsel employers and business owners on how to conduct internal investigations and comply with state and federal employment laws. We also assist in senior-management and employee training regarding their rights and obligations in the workplace.

Keith Clouse

About Keith Clouse

Keith Clouse is an employment law specialist with over 25 years of experience representing senior-level and C-suite executives, business owners, physicians, and corporations in complex employment litigation, arbitration, and negotiations. High-level business executives, physicians, and other professionals consistently rely on Mr. Clouse for employment law expertise and advice on employment contracts, covenants not to compete, severance agreements, equity awards, trade secret disputes, and breach of fiduciary duty claims. He is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. He can be reached at keith@clousebrown.com.

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