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September 9, 2002

New Jersey Lawyer: The Weekly Newspaper

Volume 11; Issue 36

Maurice W. McLaughlin

Harassment Policies: A Safe Haven?

The U.S. Supreme Court held in 1998 that an employer may be vicariously liable under Title VII of the Civil Rights Acts of 1964 to an employee for a hostile work environment created by its supervisor, even though the harassment does not culminate in a tangible adverse employment action, such as termination.

The court also held, however, the defending employer could raise an affirmative defense: "(a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise."

Thus, the Supreme Court held where the employer had promulgated an anti-harassment policy with complaint procedures and the employee unreasonably failed to utilize those procedures, the employer had a valid affirmative defense - a “safe haven” -- from liability for its supervisor's harassment. Burlington Industries, Inc. v. Ellerth, 524 U.S. 742; Faragher v. Boca Raton Industries, 524 U.S. 775. In these cases, decided the same day, the Supreme Court adopted a broad principle, and rejected a case-by-case approach.

New Jersey also recognizes a cause of action for a hostile work environment. A corporation is a legal fiction; it cannot act on its own. It functions only through its agents and employees. In New Jersey, therefore, the doctrine of respondeat superior is fully applicable to Law Against Discrimination (LAD) violations through a hostile work environment, and an employer may therefore be vicariously liable for a hostile work environment created by its supervisor. Lehmann v. Toys 'R' Us, 132 N.J. 587.

New Jersey, however, has taken a more nuanced approach. Courts here apply a case-by-case analysis to determine liability.

Under LAD, "employers... have a duty to take effective measures to stop... harassment when the employer knows or has reason to know that such harassment is part of a pattern of harassment that is taking place in the workplace and in settings that are related to the workplace." Blakey v. Continental Airlines Inc., 164 N.J. 38.

It therefore follows logically that "when an employer knows or should know" of harassment" and fails to take effective measures to stop it, the employer has joined with the harasser to make the working environment hostile." Payton v. N.J. Turnpike Auth., 148 N.J. 524.

According to the Lehmann court, "Effective remedial measures are those reasonably calculated to end the harassment. The reasonableness of an employer's remedy will depend on its ability to stop harassment by the person who engaged in the harassment."

The flip side, of course, is that a large employer cannot control the act of every employee. New Jersey's Supreme Court therefore has held, "The best defense may be a good offense against sexual harassment." Thus, New Jersey courts "have afforded a form of safe haven for employers who promulgate and support an active, anti-harassment policy" Blakey.

However, unlike under Title VII, New Jersey has not afforded a blanket defense based on the mere promulgation of a policy. Rather, while an anti-harassment policy might bolster an employer's defense against a harassment claim, it is only a factor. Thus, even though the Supreme Court has cited Faragher and Ellerth for the proposition that agency principals apply in harassment claims, it has not adopted their affirmative defense standard. See, e.g., Cavouti v. N.J. Transit Corp., 161 N.J. 107; Mancuso v. Atlantic City, 193 F.Supp. 2d 789.

Indeed, the 3rd Circuit in Hurley v. Atlantic City Police Dept., 174 F3d 95, rejected the proposition that Faragher and Ellerth control analysis under LAD. The Appellate Division, even since Faragher and Ellerth, continues to apply the case-by-case approach articulated by Lehmann and its progeny.

In accordance with the court's construction of LAD, such policies are given any weight only if they are effective, but employers still will be liable if they failed to stop the harassment, even negligently.

Effectiveness of the employer's remedial steps such as an anti-harassment policy, of course, is relevant to the employee's claim for liability. It is also relevant to the employer's defense that remediation should absolve it from liability. It is, however, merely one of the relevant circumstances to be considered.

The Cavouti court said an effective, good-faith policy will involve, at a minimum "periodic publication to workers of the employer's anti-harassment policy; an effective grievance process; and training sessions for workers, supervisors, and managers about how to recognize and eradicate unlawful harassment."

The policy must contain "effective formal and informal complaint structures, training and/or monitoring mechanisms."

Indeed, the result is more important than the employer's policy. Even a well-publicized policy will not shield the employer from liability if it failed to enforce the policy. For instance, if management rebuffs an employee's charges of harassment "instead of investigating and instituting appropriate corrective measures," not even a well-publicized policy will shield the employer. Shepherd v. Hunterdon County Development Center, 336 N.J. Super. 395.

Thus, under New Jersey law, only an effective policy provides "a form of safe haven" for the employer. When a factual analysis demonstrates an effective policy, this safe haven only bolsters the employer's defense. While relevant, it will not absolve liability unless it actually stops the harassment.

In short, while the employer's policy is relevant to its defense, the best policy cannot shield an employer from liability if it fails to protect its employee from harassment of which it "knows or should know."

An effective policy therefore is relevant, but not dispositive.

Where does this leave the parties?

The employer - whether it's the right thing to do or because of enlightened self-interest - should adopt a policy prohibiting harassment and discrimination, and distribute it to all employees and publicize it. There should be procedures for employees to report incidents and for aggressive investigation and remediation. Employees should be trained in both procedures. Any report of harassment should be thoroughly investigated and steps taken to ensure the behavior ceases. Further, management should proactively examine the facts on the ground and preemptively do all it can to prevent harassment.

The employee, on the other hand, should find out about the policy. If in fact subject to harassment, the employee should utilize the policy’s procedures and assist the employer in its investigation. The employee should also advise the offending persons their actions are unwelcome and should cease immediately.

All parties, as a matter of self-interest, should document every incident and all steps taken.

However, LAD's purpose is not to create successful litigants, whether employees or employers. Its "overarching goal... is nothing less than the eradication of the cancer of discrimination." Bergen Commercial Bank v. Sisler, 157 N.J. 188.

Although an effective anti-harassment policy is a valuable tool achieving this goal and thus relevant in any ensuing litigation, it is not a complete safe haven.

a. Maurice W. McLaughlin, an associate at Cohn Lifland Pearlman Herrmann & Knopf in Saddle Brook, focuses on claims of wrongful termination, LAD violations and workplace harassment on behalf of employees.


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