Reports of sexual harassment and discrimination in the workplace appear to be at an all-time high. The media reports daily on allegations across every industry—entertainment, technology, media, law, venture capital, finance, government, and more.
The actions taken after an employee alleges harassment or discrimination can be key in limiting the employer’s potential liability and resulting adverse publicity. This article examines the important steps a company can take in responding to sexual harassment or discrimination claims, both with respect to addressing workplace allegations as well as dealing with any resulting litigation. While legal and policy considerations are key, effective communications are equally essential, and a team of HR, legal, and (where appropriate) communications professionals should coordinate carefully with senior management on the company’s response.
1. Lawyer up
Sexual harassment or discrimination complaints can lead to serious liability, including punitive damages designed to punish the company for inappropriately handling the complaints. The company may face significant liability even if a low level supervisor fails to comply with company rules and policies. Not all of the proper responses to these claims are intuitive and many require knowledge of complex applicable laws and regulations.
The company should involve outside legal counsel experienced in handling such claims as soon as possible to navigate the thicket of related legal issues. Counsel can provide guidance on compliance with legal requirements for the response as well as assist the company in determining whether early resolution is advisable or possible.
With the assistance of legal counsel, the company can also take the appropriate steps to ensure that communications with executives, Board members, and employees are protected by attorney-client privilege. To protect that privilege, communications with the company’s legal counsel should be restricted to those individuals with a legitimate need to know and include a subject line that reads “Confidential and Subject to Attorney-Client and Work Product Privileges.”
2. Notify the Board of Directors promptly of significant allegations
Board members may be able to provide helpful advice regarding difficult allegations based on their experience advising other companies. Additionally, Board members hate to be surprised with bad news, especially if that news shows up in the media before they have heard about the claim.
Accordingly, once an employee makes a significant allegation of sexual harassment or discrimination, especially one likely to bring media attention, the CEO, ideally with the General Counsel or outside counsel (to ensure the communication is privileged), should promptly inform the Board of Directors.
3. Treat the complaining party with respect
Employees usually find it very difficult to make allegations about sexual harassment or discrimination. They worry about the consequences and the effect the complaint will have on others in the workplace. They may feel vulnerable and concerned about losing their jobs.
The employer should show respect, understanding, and concern, including in initial responses to the complaining party. Employees and managers may have misbehaved and violated company standards, and the complainant may be legitimately upset and concerned about that behavior. Swift and appropriate action, including thanking the employee for raising the concern and quick initiation of an investigation, sends a message not only to the complaining employee but to others watching for the company’s reaction.
Employees who observe the company taking concerns seriously are also more likely to seek internal resolution and less likely to resort to litigation.
4. Promptly and thoroughly investigate the complaint
The company should promptly investigate complaints (including those which may initially appear to be meritless). Failure to treat a complaint seriously can significantly exacerbate the problem and the liability.
Investigations of these concerns should be conducted by persons with training and experience who have the ability to be neutral and impartial (i.e., who don’t report to or have relationships with those individuals involved in the complaint). Legal counsel should provide advice as needed, including on any thorny evidentiary or credibility issues which could arise during the investigation.
The investigator should create an initial plan for thoroughly analyzing the actions at issue, ideally in consultation with counsel. Here are some basic steps which may be appropriate for that plan, depending on the facts:
- Determination of the appropriate scope of the investigation
- Interviews with the complaining party
- Interviews with the accused employee
- Interviews with other employees and third parties (contractors, outside witnesses, etc.) who may have relevant information
- Review of emails, memos, and other relevant communications
- Review of the personnel files of the parties (including any prior disciplinary write-ups)
- If needed, consideration of how to resolve credibility in assessing conflicting reports
- Assessment of whether the initial scope of the investigation needs to be broadened
- Action taken to address the concerns raised, potentially including training and discipline, which should be clearly documented
- Determination of the form any report should follow
Here are some tips for an appropriate investigation:
- Determine the appropriate scope of the investigation; the scope will vary depending upon the allegations and should be reassessed if facts change.
- Choose an investigator who has good people skills and judgment. Both will be important in almost every investigation. If you don’t have a qualified neutral candidate inside, hire an experienced one from outside. One good resource is the Association of Workplace Investigators.
- If the initiation of the investigation is delayed (for example, because the appropriate internal investigator is traveling or the company is searching for an appropriate outside investigator), document the reasons for the delay. The company may need to explain in litigation, possibly years down the road, why it did not begin to investigate immediately.
- The investigator should coordinate activities with legal counsel from the outset, so that the company can determine whether the investigation will be privileged. This is especially important for the drafting of memos or notes associated with the investigation.
- The investigator should review company policies or procedures in place for dealing with harassment or discrimination. Employee handbooks often include such procedures (for example, they may identify who is responsible for investigating or pertinent timelines), and you don’t want to make the situation worse by not following your own articulated policies.
- Assure the complaining party at the outset that the complaint will be treated seriously, that there will not be any retaliation for raising it, and that any concerns about retaliation should be brought to the investigator’s attention immediately so that they can be addressed.
- Instruct the accused not to contact the complainant regarding the complaint, and not to engage in conduct that is—or even might be viewed as—retaliatory. And if the accused violates the instructions (which happens regularly), take action immediately. It is not unusual for an employee or executive to be terminated for violating these instructions in the course of an investigation.
- The U.S. Equal Employment Opportunity Commission (EEOC) provides examples of questions that may be helpful in questioning the complainant and other witnesses, as well as other information helpful for the investigation. See Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors.
- The investigator needs to keep an open mind when gathering and reviewing information, and to refrain from coming to a conclusion until all relevant data has been reviewed and assessed.
- Encourage all involved to maintain the confidentiality needed for a thoughtful investigation while avoiding heavy-handed mandates (which might lead to National Labor Relations Board complaints about the employee’s abilities to share workplace concerns).
- Consider asking the complainant at the conclusion of the interview what he or she hopes will happen as a result of the investigation (one option: “how would you like to see the situation resolved?”). The company is not required to comply with unreasonable demands, but some requests (for example, a transfer, additional training, time off) may be helpful in resolving the concerns constructively.
- Fairness is important. The investigation must be evenhanded, and both be fair—and appear to be fair—to all involved.
The Guiding Principles for Conducting Workplace Investigations prepared by the Association of Workplace Investigators contains additional helpful advice.
5. Take appropriate action during and after the investigation
A full investigation into sexual harassment or discrimination often takes time, and it may be appropriate for the employer to take immediate steps with respect to the employee who raised the concerns. Protective measures may include, depending on the circumstances, the following;
- Placing the alleged wrongdoer on paid or unpaid leave, pending the outcome of the investigation;
- Allowing the complainant paid time off during the investigation;
- Altering work assignments so that an alleged harasser does not work directly with or supervise the complainant; and
- Ensuring that all supervisors understand that retaliation will not be allowed.
Once the investigator reviews all information, and resolves any credibility conflicts to the extent possible, the investigator should attempt to reach a conclusion about the complaint. The investigator’s conclusions should generally be tied to determination of whether the company’s anti-harassment (and any related) policies were violated by the conduct at issue. Harassment policies typically prohibit inappropriate conduct which does not necessarily fall within legal definitions of harassment or discrimination, but which the company nonetheless prohibits. For example, the telling of an inappropriate joke will not typically meet the legal test for harassment, but it may be prohibited by the policy nonetheless.
A finding by the investigator that is tied to legal concepts, such as a conclusion that an employee “engaged in discrimination,” or that his or her “conduct constituted sexual harassment,” may not only be inaccurate under applicable legal standards, but may be argued to be an admission of liability in future litigation (even if incorrect). Accordingly, in most cases the appropriate conclusions will be “the company’s policy was violated”; “the company’s policies were not violated”; or “based on the evidence, I cannot determine whether the company’s policies were violated.”
If the company determines that a policy was violated and inappropriate conduct occurred, it should take appropriate disciplinary action. The correct discipline, depending on the severity of the situation, can include warning, counseling, impact on bonus, impact on future compensation increases, suspension, or immediate firing of the wrongdoer. It is important to document the discipline carefully, although specifics about the investigation should not go into personnel files.
The complainant needs to understand that the investigation has been completed, what the results were (for example, that a policy violation occurred, the investigation could not determine whether a policy violation took place, or that the investigation showed that no violation occurred), and that, if applicable, action has been taken to resolve the issue. The company should remedy any inappropriate action taken against the complainant (for example, a performance rating lower than it should have been, unfair compensation treatment, etc.) and consider whether there should also be an apology with the explanation of the changes.
Even in situations in which the investigator concludes no policy violation occurred, the facts may suggest that the workplace would benefit from anti-harassment or discrimination training as well as written reminders of the company policy. And, in many cases, those who behave with bad judgment may need one-on-one training designed to encourage appropriate behavior and spell out clearly the consequences of further questionable actions.
6. If the company doesn’t have a well-drafted anti-harassment and anti-discrimination policy, adopt one
Ideally the company already has a carefully drafted anti-harassment and anti-discrimination policy (which is required by some state laws and expected by many jurors). If it doesn’t have such a policy, or if the policy doesn’t address the issues below in language appropriate to the company culture, the company should adopt one or edit the existing policy.
Helpful policies typically run 2-3 pages in length and samples can be obtained from experienced employment lawyers or HR consultants. A good policy will typically address the following concepts:
- The company’s zero tolerance for any forms of harassment, discrimination, bullying, or violence in the workplace
- The definition of sexual and other types of harassment or discrimination (i.e., that which is based on race, color, religion, national origin, age, disability, etc.)
- Examples of conduct constituting prohibited harassment
- Rights of the employees to complain about harassment, discrimination, and retaliation, and to whom such complaints should be made (consider making HR the designated recipient of complaints to ensure they are properly handled)
- The company’s policy to investigate claims
- Assurance that the employer will protect the confidentiality of complaints to the extent possible
- Strong prohibitions on any retaliatory conduct
- The disciplinary actions that may be taken upon determination that the policy has been violated
- State and federal remedies available to the employee
The company should distribute the policy, ideally annually, to all employees with a cover email or other communication insisting on its importance and the need for compliance.
7. Cooperate with government agencies
The EEOC strongly advises employers to promptly investigate complaints of harassment or other unfair employment practices. But the EEOC or similar state agencies may conduct their own investigation related to employee claims, typically after the employee files an administrative “charge” accusing the employer of discrimination. Some background facts about the process can be reviewed at the EEOC’s Get The Facts Series: Small Business Information.
If the EEOC or other government agencies do become involved in reviewing a complaint, the company must cooperate. The governmental agency likely will require a response to the complaint and production of relevant documents (typically those related to the personnel actions at issue). The cooperation and document production should be coordinated with legal counsel, as the company’s response may lead to action by the agency or cause problems in future litigation.
The EEOC maintains a free, voluntary mediation service which is often available to the parties. If both sides agree to participate, the EEOC will typically delay the due date for the company’s written response to the charge. The mediation, a confidential settlement and negotiation process conducted by trained mediators, which usually takes place at the EEOC’s offices, can present an early opportunity to resolve the claim. If the agency doesn’t offer mediation, it will often agree to conduct one if both parties agree to attend. See the EEOC’s Questions and Answers About Mediation.
8. Consider whether the complaint can be resolved through arbitration
If litigation is threatened or filed in court, the company should determine whether any arbitration agreements might apply to the claim. Arbitration has downsides for employers, such as the possible requirement to pay an arbitrator’s fees (and good arbitrators can be expensive). But it also has powerful upsides, including less public airing of the dispute, typically a faster and less formal process to completion, and a decision maker who may—unlike a juror—be less likely to have bad employment experiences color his or her decision-making process.
Arbitration provisions may be present in hiring letters, employment agreements, benefit plans, bonus agreements, employee handbooks, and documents created by outside HR providers (Tri-Net, for example, may include arbitration provisions in the documents they provide their clients). Although courts have held that arbitration agreements cannot easily be waived, you don’t want to take a chance in waiving the agreement inadvertently.
9. Don’t retaliate
The company should ensure that it does not retaliate against a complaining employee (or a witness involved in the investigation), even if the initial complaint proves to be unfounded. Retaliation claims are often more difficult to defend against than harassment or discrimination allegations, in part because jurors tend to believe that those who are falsely accused have a natural motive to strike back. Retaliation can include many negative acts, including:
- Termination of employment
- Demotion
- Change in responsibilities
- Disciplinary action
- Transfer of the employee to a less desirable location
- Compensation or benefits reduction
- Change of shift hours or work area
- Isolating the employee by leaving them out of company activities
- Giving a performance evaluation that is more negative than it should be
- Making the employee’s work more difficult (such as purposefully changing work schedule to conflict with the employee’s family responsibilities)
- Threats to do any of the foregoing
Additionally, courts have held that retaliation protections extend beyond the employment relationship, and a falsely negative post-employment reference can violate anti-retaliation laws. The EEOC gives further guidance on retaliation issues at Questions and Answers: Enforcement Guidance on Retaliation and Related Issues and at Facts About Retaliation.
10. Be careful with texts and email
After an employee lodges a harassment or discrimination allegation, executives often exchange a flurry of emails or texts responding to and attempting to address the problem. This can be extremely problematic in future litigation, as the shock or concern may lead to emotional and negative reactions to the claim. A company may be required to turn over these emails and texts (and any other forms of communications, such as Slack messages and voicemails) in the course of the litigation. These communications can come back to haunt the company, as the plaintiff’s counsel will attempt to use these as evidence of the company’s bad faith, complicity, or retaliatory motive.
11. Preserve documents
Once a claim is made, it’s important for the company to put a “legal hold” in place. This means that any relevant emails, memos, and other documents must be preserved and not deleted or destroyed, in anticipation of potential litigation. Failure to protect these documents (even inadvertent and unintentional destruction through automatic email deletion processes) can lead to punishment from the court. This can include both monetary fines and evidentiary sanctions, which can adversely affect a company’s ability to fully defend itself against the claims.
12. Make a claim to your insurance carrier
Many companies have Employment Practices Liability Insurance (EPLI) or riders to insurance policies that may cover sexual harassment or discrimination claims. But it’s important that the insurer be properly and quickly notified of a claim or else the company runs the risk of denial of coverage.
Notification to the insurer of a claim is best done after the policy has been reviewed by legal counsel and the notification is made by counsel and the insurance broker. Insurers may also insist on approval of any litigation or arbitration counsel, and may put rate restrictions in place. The company will typically need to cooperate with any insurer providing coverage for the claims.
13. Develop a media strategy
With the development of online court dockets, reporters now have access to many litigation filings. A newly filed lawsuit will soon appear on an online cou
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