You need to know about many legal issues when hiring employees. For example, Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, color, religion, sex or national origin. It expressly prohibits employers from refusing to hire or discharging an employee based on a prohibited factor. Likewise, Title VII also expressly states it is unlawful for an employer to discriminate against any individual with respect to his or her compensation, terms, conditions or privileges of employment because of race, color, religion, sex or national origin.
Despite these prohibitions, Title VII does not explicitly mention racial harassment. Nevertheless, the U.S. Supreme Court has recognized that the phrase "terms, conditions or privileges of employment" allows congressional intent to strike at the entire spectrum of disparate employment treatment, which includes requiring people to work in discriminatory, hostile or abusive environments. Therefore, claims alleging racial harassment are brought under Title VII.
Who is the harasser?
When facing a claim alleging racial harassment, first determine whether the claimant is alleging the harassment was committed by a supervisor or co-worker. This is the threshold issue necessary to support a defense for harassment. The facts necessary to prove harassment committed by a supervisor differ from those necessary to prove harassment committed by a co-worker.
Determining this involves understanding how courts define "supervisor" and "co-worker." Title VII does not provide these definitions. Whether a particular employee is a supervisor, manager or co-worker involves looking at a number of facts, including, but not limited to, an individual's job title. However, a job title often is not the determining factor. Rather, courts look at the job responsibilities of the alleged harasser and extent of authority possessed. The key issue is whether an alleged harasser has the authority to alter the terms and conditions of a claimant's employment.
Who is a supervisor?
Because case law under Title VII provides that an employer's liability is presumed if a harasser is a supervisor, an employer's potential liability rests on whether a harasser has supervisory powers, such as the authority to hire, fire, demote, promote, transfer or discipline an employee. Without at least some of this authority, a person is not a supervisor for purposes of passing liability to an employer. Although an alleged supervisor does not have to be at a top-management level to act in a managerial capacity, he or she still must have some authority over low-level employees.
You can avoid having a low-level employee deemed a supervisor by ensuring proper documentation is kept indicating each employee's current job title and description. Job descriptions, including those for management and administrative personnel, should detail positions' responsibilities and authorities.
For example, if a particular job title gives an individual the authority to hire, fire or discipline an employee, be sure the job description identifies that authority. This way, if you are faced with a lawsuit where harassment is alleged to have been committed by a foreman, you can establish your foreman is not a supervisor under Title VII by referring to his job description. You then can compare that job description with a job title that has authority to alter employment conditions or terms, such as a project manager or general manager. Foremen who simply coordinate employee activities with management's goals generally will not be found to be supervisors within the context of Title VII.
Harassment by co-workers
If the facts in a particular case indicate a purported harasser is not a supervisor, the analysis proceeds that harassment was committed by a co-worker. With respect to conduct between co-workers, you are responsible for acts of racial harassment in the workplace where you know or should have known of harassment. Because notice or knowledge of harassment is a prerequisite for liability, you will not be held liable if you had no reason to know about the harassment. As a result, the reasonableness of your attempts to rectify harassment is measured against how much you knew or should have known.
The easiest way to avoid being found negligent in addressing co-worker harassment is to institute and publish a policy about discrimination and harassment. For a policy to be effective, you must be able to show your company's policy was distributed to employees. Have each employee acknowledge receipt of the policy by signing a written acknowledgment, which should indicate an employee received the policy and the policy was discussed with the employee at the time it was received. The acknowledgment forms should be kept in employees' personnel files.
An effective policy also must not impose a burden on an employee who wants to report a harassment or discrimination claim. The policy should require employees to report such matters to certain, specified individuals and list the telephone numbers of these individuals. If a telephone call would require a long-distance charge, a toll-free number should be provided. The policy also should provide the names of alternative individuals to call if the alleged harasser is an individual identified in the policy.
Of course, if an employee follows the policy and reports a claim, you will be deemed to have knowledge of the claim. Likewise, if the harassment is pervasive and open, you will be deemed to have constructive knowledge of the harassment.
Once you have actual or constructive knowledge of a claim or harassment, act appropriately to avoid liability by conducting an investigation. To create a documented defense to any potential racial-harassment claim, interviews should be documented and witness statements should be obtained. All documents associated with the investigation should be preserved in a special file. Depending on an investigation's results, appropriate action simply may involve separating the involved individuals or terminating the suspected harasser. If you fail to act appropriately, you will be liable for harassment committed by a co-worker.
What can happen
If a purported harasser has authority to alter an individual's employment terms and conditions, thereby making him a supervisor under Title VII, is a roofing company automatically liable? Not necessarily. In two recent cases decided by the U.S. Supreme Court, the court identified two categories of harassment by a supervisor: those involving a "tangible employment action" and those involving a "hostile work environment."
Tangible employment action typically involves some type of monetary loss for an employee or significant changes in workload or work assignment. You will be strictly liable for a supervisor's conduct that constitutes tangible employment action.
In claims alleging racial harassment, employees often allege the tangible employment action was in the form of "constructive discharge." A constructive discharge situation arises when an employer imposes intolerable working conditions that foreseeably would compel a reasonable employee to quit regardless of whether the employer specifically intended to force the employee's resignation.
Harassment by supervisors that creates adverse working conditions but does not result in a tangible employment action may be referred to as "environmental harassment." Such racial harassment can involve jokes, graffiti, comments, stories, photographs, gestures, e-mail or written materials that interfere with an employee's work performance. Environmental harassment will be found where the conduct in question is unwelcome, related to a protected category, offensive to the recipient and a reasonable person, and severe or pervasive.
Generally, whether alleged racial harassment by a supervisor is actionable in court depends on whether the alleged harassment is severe or pervasive. In this regard, courts have found that isolated or sporadic comments are not severe or pervasive enough to be actionable. Likewise, one or two incidents of racial harassment generally will not be considered severe or pervasive enough to constitute actionable harassment under Title VII. Additionally, courts repeatedly have held that Title VII does not act as a general civility code and, therefore, the alleged harassment must consist of something more than rude comments.
To discourage frivolous claims alleging harassment, make sure documents kept in the ordinary course of business indicate the location of each employee on a particular day and hours employees were present at given locations. These documents often take the form of time sheets or time cards and are vital to establishing a claimant was not physically exposed to an alleged harasser.
If alleged harassment committed by a supervisor is actionable but does not involve a tangible employment action, you have an affirmative defense. To prove an affirmative defense, you must show you exercised reasonable care to prevent and correct any harassing behavior and the employee unreasonably failed to take advantage of preventive or corrective opportunities.
You can best show you exercised reasonable care by taking all necessary steps to prevent and address all types of discriminatory harassment. These steps include developing and adopting a written policy prohibiting all types of discriminatory harassment. In addition, train managers and employees so they fully understand the policy and how to raise and pursue their rights if harassed. You also should monitor supervisors' conduct; promptly investigate any complaints; and take appropriate action when needed, including disciplining an offender.
Of course, if a complaining employee does not follow the policy and the policy is reasonable, the second part of the affirmative defense is met and you avoid liability.
Just as in the situation involving co-workers, investigations conducted by an employer should be well-documented and kept in a file. Once an investigation is complete, document the results, as well as the corrective action offered to the claimant. If an employee fails or refuses to take advantage of the preventive or corrective opportunity, he or she will be unable to seek damages from the company.
Damages
If you are found liable for racial harassment, Title VII allows for the award of compensatory and punitive damages against your company. Compensatory damages compensate a plaintiff for his or her injury. Often, these types of damages take the form of "back pay" or "front pay." A roofing company charged with unlawful harassment or discrimination often can stop the accrual of back- and front-pay liability by unconditionally offering a claimant the job he or she sought or reinstatement. Of course, the offer must be reasonable. For example, a job offer requesting the claimant to return to work while informing the claimant the alleged harasser has been terminated generally will stop recovery of front pay.
Compensatory damages in racial-harassment claims filed against roofing companies by laborers generally are minimal given the hourly wages paid to these workers. The real potential for liability rests in punitive damages. Under Title VII, total compensatory and punitive damages, otherwise known as noneconomic damages, are capped depending on the size of a company. For companies with 200 employees to 501 employees, such damages are capped at $200,000. For companies with more than 14 employees but fewer than 101 employees, the cap on noneconomic damages is $50,000.
However, a recent Supreme Court decision has limited punitive damages to cases in which the employer has engaged in harassment or discrimination with "malice or with reckless indifference" to the rights protected by federal law. Because malice and reckless indifference focus on an individual's state of mind, whether an employer had knowledge that he might be acting in violation of federal law first should be examined.
However, the Supreme Court ruled a company can avoid liability for punitive damages if it can show it has undertaken good-faith efforts to comply with Title VII. This involves showing more than the existence of a company policy about discrimination and harassment. Rather, additional evidence will be required, such as proving a company educates its employees about harassment and discrimination issues. Attendance sheets should be kept that identify employees who attended the training. If a document shows a purported harasser attended this type of training, the claim for punitive damages faces a significant obstacle. This type of evidence will help you avoid liability for punitive damages by showing the discriminatory or harassing actions of supervisors are contrary to the roofing company's policies and training. The evidence shows a good-faith effort to comply with Title VII.
Conclusion
An effective, easily understood policy is basic to establishing a defense that you exercised reasonable care to prevent harassment. A policy should be distributed periodically, and you should provide training to all employees to ensure they understand their rights and responsibilities.
Also, ensure all employment decisions are subject to internal "checks and balances" to cut off any potential claims alleging tangible employment action resulting from harassment or discrimination. Moreover, when a complaint is filed, ensure a prompt, thorough, well-documented investigation is conducted. Once an investigation is complete, take prompt, effective, remedial action. The remedial action taken also should be well-documented.
Finally, to avoid the real incentive that drives attorneys to prosecute many of these lawsuits on a contingency fee basis, take affirmative steps to avoid liability for punitive damages by establishing training and seminars about your company's racial-discrimination and racial-harassment policies.
Philip J. Siegel is an attorney with the Atlanta-based law firm Hendrick, Phillips, Schemm, Salzman & Flatt.
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