Sexual Harassment’s Legal Morass

November 7, 2011

Once again, America finds itself gripped by a sexual harassment scandal. And once again the term “sexual harassment” is being thrown around in a way that conveys a misleadingly broad definition. The reported allegations against Herman Cain—that he made sexually suggestive remarks and unwanted sexual advances while he headed the National Restaurant Association in the 1990s—are endlessly spoken and written about as constituting sexual harassment. That’s far from clear according to the law.

Sexual harassment claims in the workplace are governed by the federal antidiscrimination statute Title VII and similar state laws. Title VII protects only employees, holds the employer, not the harasser, liable, and recognizes two types of harassment claims: “quid pro quo” and “hostile environment.”

The former occurs when job benefits, such as employment, promotion, and salary are made contingent on the provision of sexual favors—or withdrawn because a sexual advance is rejected. While suggestively asking your employee up to your hotel room is a bad idea, without more it’s not sexual harassment.

The definition of hostile-environment harassment is more complicated and more open to interpretation. For a hostile-environment claim to succeed, the conduct—sexual advances or hostile behavior—must be unwelcome, based on gender, and severe or pervasive enough to create an abusive work environment as judged by an objective, reasonable person. Each of these several elements must be satisfied. And even then, the plaintiff will prevail only if the employer failed to respond appropriately.

Conduct must be unwelcome in the sense that it wasn’t invited, and was regarded as offensive. If the plaintiff engaged in the same sort of inappropriate behavior as the alleged harasser—”sexual hijinx” in one case—courts will usually conclude that the conduct is not unwelcome.

To be considered “severe or pervasive” the Supreme Court has instructed courts to look at the totality of circumstances, including “the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance.” The court distinguishes between “the ordinary tribulations of the workplace, such as the sporadic use of abusive language, gender-related jokes, and occasional teasing” and flirting, and a workplace “permeated with discriminatory intimidation, ridicule, and insult.”

A single offensive incident or isolated incidents generally do not constitute a hostile environment, but one unusually severe incident might. What Paula Jones claimed that then-Gov. Bill Clinton did when she was brought to his hotel room—that he removed his trousers, exposed himself and asked for sexual favors—is a memorable example.

The boundaries are slippery. One federal appeals court concluded that a supervisor asking an employee for dates, calling her a “dumb blonde,” and attempting to kiss her three times did not a hostile environment make. Another appeals court found that exposing an employee to pornography on computers, on the office television, and in the mail she opened was sufficient.

Under Title VII, the harassing conduct must also be motivated by the plaintiff’s gender. One federal appeals court concluded that conduct that looked like sexual harassment did not meet the legal definition because it was motivated by a bitterly contested union election rather than by the complainant’s gender. Similarly, in another case, repeatedly calling a female employee a “sick bitch” was deemed not to be sexual harassment because the slur was used as a synonym for “nut case” and thus wasn’t based on gender. However, courts sometimes fail to strictly enforce this gender element.

Even when all the elements are satisfied, plaintiffs often lose sexual harassment cases because their employer took appropriate remedial action or because the employee failed to take advantage of the employer’s harassment safeguards and procedures. An employee claiming harassment by co-workers must show that the employer knew or should have known of the harassment and failed to properly respond.

If the alleged harasser was the plaintiff’s supervisor, the employer must affirmatively show that it exercised reasonable efforts to prevent and eliminate the harassment (the efforts don’t have to be 100% successful). But if a supervisor’s harassment culminates in a discharge, demotion or the like of the complainant, the employer has no affirmative defense.

One aspect of sexual harassment law that did not get much attention until the Cain story is that employers often make financial settlements even when evidence of actual sexual harassment is lacking, or ambiguous.

Why settle? One reason is the negative publicity sexual harassment cases often draw when they go to court. It’s particularly tempting for employers to settle before litigation has been filed, which results in a public record. Mr. Cain’s National Restaurant Association did just that.

Then too, settling sexual harassment complaints makes good financial sense for employers in light of the lottery-like awarding of punitive and emotional distress damages and unpredictable “severe and pervasive” standard they face in court. In a 1990s California case, a jury awarded an employee of law firm Baker & McKenzie $7 million in punitive damages for sexual harassment despite finding only $50,000 in actual damages.

Defendants who lose sexual harassment cases in court have to pay the plaintiff’s attorney fees—$1.9 million in the Baker McKenzie case—but are rarely awarded attorney fees when they win. Even in the best-case scenario where an employer avoids trial and prevails on summary judgment, the employer will ring up a legal bill of $100,000 or so.

The National Restaurant Association got off inexpensively if, as reported, it settled with two complainants against Mr. Cain for $35,000 and $45,000. The cost is considerably higher when there is convincing evidence of harassment. Bill Clinton’s settlement with Paula Jones cost him $850,000.