Source: https://laborandemploymentlawupdate.com/category/employer-liability/
Timestamp: 2019-04-25 12:07:24+00:00

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On August 2, 2017, the United States Court of Appeals for the Seventh Circuit issued a decision in Nischan v. Stratosphere Quality, LLC providing clarity on what constitutes an employer’s “constructive notice” of harassment.
Michele Nischan worked as a project supervisor at Stratosphere Quality, LLC, a company that provides third-party inspection and quality-control services to car manufacturers. Nischan alleged that an employee of one of the client manufacturers “relentlessly” sexually harassed her by routinely rubbing himself against her and making offensive comments, amid other inappropriate actions.
Because the alleged harasser did not have supervisory authority over Nischan, Stratosphere could only be held liable for the alleged sexual harassment if it was negligent in discovering or remedying it. Normally, to prevail on this type of claim, the employee presents evidence that she made a concerted effort to report the harassment. Here however, it was undisputed that Nischan did not report the harassment during the relevant time period.
Nevertheless, an employer may be held liable even when an employee fails to report sexual harassment if the employer knew or should have known of the harassing conduct but failed to act. The Federal Appellate Court explained that constructive notice will generally attach when someone who has a duty to pass the information up the chain of command learns of the harassment.
Nischan claimed a fellow project supervisor (her peer) and an operations manager were both present when one of the incidents of harassment occurred. However she testified she was unsure whether the operations manager witnessed the harassment and he denied witnessing any conduct that constituted sexual harassment. The lower court concluded there was no basis to impute liability to the employer because only her peer, not the higher level employee, knew of the harassment.
Bottom Line: This case serves as a reminder that each company’s unique employee policy may guide the court in determining an employer’s legal obligations. Employers should review their harassment and reporting policies and ensure that all employees that fall under its scope receive proper training on identifying harassing behavior—even if it is directed at another—and promptly reporting it.
This entry was posted in employer liability, employers, Harrassment, Uncategorized and tagged employee handbook, employer liability, employers legal obligations, reporting policies, Sexual harassment, supervisory responsibility on August 22, 2017 by smithamundsen.
Failure to document performance or conduct problems is a common mistake employers make. Typically, employee handbooks contain provisions requiring periodic performance reviews. Similarly, handbooks contain discipline provisions that include procedures dealing with the issuance of warnings related to the violation of work rules. How employers use and apply these provisions can make the difference in successfully defending claims.
A recent decision out of the United States Court of Appeals for the District of Columbia illustrates how critical it is to properly document an employee’s behavior and performance issues. This decision also underscores the importance of making sure that the reasons for termination are clearly and consistently stated throughout the life of a claim. In Giles v. Transit Employees Federal Credit Union, 2015 WL 4217787 (July 14, 2015), an employee suffering from multiple sclerosis (MS) sued her former employer alleging wrongful termination in violation of the American with Disabilities Act (ADA) and the Employee Retirement Income Security Act (ERISA).
Prior to her termination, the employee was involved in a couple of altercations with customers. In one instance, the employee was engaged in an argument with a customer over a pen. The employee was given a verbal warning. On another occasion, the employee improperly confronted a customer for entering the building through the wrong door. In response, the employee was issued a written warning with a two day suspension. The employee was then assigned to a different position. As for performance, the employee was given a combination of satisfactory and poor ratings in the two positions she held. When a leadership change occurred, the new CEO terminated the employee.
Because premiums for the health insurance plan increased 57% over a period of two years during her tenure, the employee sued claiming that the cost of treating her MS caused premiums to increase and that she was dismissed to reduce the employer’s health care costs. As the employee’s case moved from administrative proceedings before the EEOC to the action in district court, the employee also attacked the employer’s “shifting and inconsistent justifications for her termination.” Initially, the employer stated that the employee was terminated based on the employee’s performance ratings and her altercations with customers. Later, her termination was the result of a “general organizational review” made for “business reasons.” Finally, the employer reverted to poor performance and added that substandard employees were being eliminated as part of a business strategy to cut costs and restore profitability. Fortunately for the employer, the appellate court affirmed the trial court’s finding of summary judgment in favor of the employer because there was no evidence supporting a claim that the cost of insuring plaintiff was a motivating factor in the termination decision. However, inconsistencies or shifting justifications for employment action often give employees a successful argument that the reasons given for termination were pretextual in nature.
Behavior issues should always be documented, even if they only involve a verbal warning.
Periodic reviews should clearly identify any deficiencies in employee performance.
The basis of a termination decision should be clearly stated to the employee.
Employee files should be clear and concise so even a change in management will not affect employment decisions.
The basis of the termination decision should be consistent – shifting reasons may impact the outcome of litigation.
This entry was posted in employer liability, Terminating Employees and tagged EEOC, Giles v. Transit Employees Federal Credit Union, termination on August 27, 2015 by smithamundsen.
Although not prevalent, and seemingly counterintuitive, some federal courts have recently addressed the issue of subordinate sexual harassment of their supervisors. This conundrum is especially interesting as employer liability is usually determined by the status of the harasser, including a subordinate, co-worker, or supervisor of the victim. Under Illinois law there is strict liability for employers when the harasser is a supervisor of the victim – i.e., there are no defenses available to an employer if sexual harassment is shown.
Under both state and federal law, Illinois employers are liable for sexual harassment by a victim’s co-worker when they (1) knew or should have known of the offensive behavior; and (2) failed to take immediate and appropriate corrective action. Under federal and most state laws, except Illinois which is strict liability, an employer is automatically liable for sexual harassment by a supervisor against a subordinate unless it can show that (1) it reasonably acted to prevent and to correct harassing behavior; and (2) the harassed employee unreasonably failed to take advantage of the employer’s preventive and corrective actions or otherwise failed to avoid harm. Presently it is unclear what standard applies when the victim is the supervisor.
This issue was addressed on July 20, 2015 in Simmons v. DNC Hospital Management of Oklahoma, LLC, 2015 WL 4430967, wherein the court denied summary judgment for the employer on the employee’s claimed sexual harassment at the hands of her subordinate. The court explained the employer essentially forced the employee to quit through its failure to remedy the complained of harassment. The Simmons case serves as a stark reminder that even when a supervisor is complaining of harassment by a subordinate, the employer still has a duty to stop the harassment regardless of what action the victim could have taken herself.
An employer may be held liable for the harassment of a supervisor by a subordinate if the employer knew or should have known of the harassment and failed to implement prompt and appropriate action; but an employer will not be liable for the sexual harassment of a supervisor by a subordinate where the supervisor-plaintiff had the ability to stop the harassment and failed to do so.
Although this is a “unique fact twist” on the sexual harassment theory, it is one that has gained traction with federal courts recently. What is important to note is that NO court has held that an employer is not liable for subordinate harassment of a supervisor. As such, although the area is still in development, employers should start incorporating this situation into their training and ensuring that all supervisors are aware that the employer’s harassment policies apply to these situations as well. Only proactive prevention, training, and correction will protect against costly litigation.
This entry was posted in employer liability, Harrassment and tagged Knudsen v. Bd. of Sup'rs of Univ. of Louisiana Sys., LLC, Sexual harassment, Simmons v. DNC Hospital Management of Oklahoma on August 3, 2015 by smithamundsen.

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