• Complaints of Workplace Harassment and The Critical Response
  • October 20, 2005
  • Law Firm: McLane, Graf, Raulerson & Middleton, Professional Association - Manchester Office
  • Employers may no longer avoid liability for workplace harassment by merely printing a policy in their employee handbooks. When employers fail to enforce them, or if they disregard the investigation procedures they provide, harassment policies simply become "weapons of mass destruction" for the victim's lawyer. As "Plaintiff's Exhibit A," the neglected provisions provide a compelling roadmap for what the employer could have done to ward off the hostile work environment or prevent the sexual assault that devastated the harassment victim.

    A case in point was decided two years ago by the New Hampshire Supreme Court. Managers at MPB Corporation, of Keene, fired Michelle Madeja only eight days after she complained about being sexually harassed by her trainer. According to the Court's opinion, the managers conducted their own, inadequate investigation of Madeja's harassment complaint without involving the human resources department, and they took no disciplinary action against the alleged harasser. The only time they involved HR was when they decided to fire Madeja because of her poor performance and attitude. Somehow, her eight-day-old harassment complaint didn't come up during that consultation.

    Madeja sued for sexual harassment and retaliation. A jury returned a verdict in her favor. They awarded her more than $83,000 for lost wages and emotional distress. The punitive damages award, however, topped $350,000, which the Court held was justified because there was evidence "that the defendant was not committed to enforcing its anti-discrimination policy."

    Million dollar verdicts in employment cases are no longer unheard of in New Hampshire. Last year, a jury in Rockingham County awarded $1.13 million to a woman who claimed she had been sexually harassed, and retaliated against for complaining about it. A business owner in Hudson, NH paid over $780,000 to settle the claims of five women who accused him of sexual harassment. Larger verdicts encourage plaintiff's lawyers to take more of these cases and work harder and smarter for their clients. Hopefully, as the costs of sloppy employment practices go up, though, so will the value of lessons learned.

    Here are some lessons we can take away from the decision in Madeja v. MPB Corp.

    Employer Liability for Co-Worker Harassment

    When an employee has been harassed by one of her co-workers, the employer may be held liable ¿ even if it was not aware of the co-worker's harassment ¿ if it should have known about it. Furthermore, the employer can be held liable unless its response to a harassment complaint is reasonable and adequate. An employer might fail to take corrective action, or take inadequate action, and find it only emboldened the harasser to continue his misconduct. Under those facts, a jury could properly find that the employer "adopted the offending conduct and its results," almost as if the policies authorized harassment instead of prohibiting it.

    The Supreme Court affirmed the verdict against MPB because there was evidence that the company did not take Madeja's complaint seriously, and failed to formally or fully investigate it.

    • Despite MPB's policy requiring the involvement of HR in all sexual harassment complaints, the managers never notified HR of Madeja's complaint.
    • The Court found the managers' investigation to be conveniently selective. They asked the harasser about his persistent invitations to share a six pack of beer, which he admitted, but failed to ask about Madeja's accusation concerning unwelcomed shoulder rubs.
    • MPB never disciplined the harasser, even for the conduct he admitted to. A note describing the interview was placed in his file, but he was never counseled about MPB's policy, or warned that similar conduct in the future would lead to discipline. Rather, his next performance review praised him for following all rules and policies and exceeding expectations in interpersonal relations. He also got a raise.

    Retaliatory Harassment -- It's Retaliation, Stupid

    An employer can be held liable for retaliation if it tolerates retaliatory harassment by co-workers. The harassment must be "sufficiently severe and pervasive" to alter the terms and conditions of employment. As with any other co-worker harassment, the employer will be liable if it knew or should have known it was going on, and if its response was not reasonable.

    After learning of Madeja's harassment complaint, her co-workers conspired to snub her and complain to management about her attitude. The Supreme Court held there was enough evidence that a retaliatory hostile environment existed and MPB unreasonably failed to address it.

    Retaliation -- If It Walks Like a Duck and Quacks Like a Duck . . .

    To prove that MPB fired Madeja in retaliation for complaining about sexual harassment, there had to be evidence of a causal connection between the complaint and the discharge decision. To the Court, the fact that only eight days separated Madeja's complaint from her discharge was "strongly suggestive of retaliation."

    The Court looked next for evidence that MPB management fabricated its criticisms of Madeja's performance and attitude to cover-up its true retaliatory motive. They found that:

    • The criticisms contradicted comments they had written in a performance appraisal less than three weeks earlier.
    • It was reasonable for the jury to question the motives of one of the decision-makers who happened to be sexually harassing another employee when he recommended Madeja's discharge.
    • Another manager was concerned that the termination looked retaliatory but did nothing to investigate.
    • When the managers contacted HR calling for Madeja's termination, they conveniently failed to mention the sexual harassment complaint she had made barely a week before.

    Indifference to the Policy Shows "Reckless Indifference" to Federally Protected Rights

    Title VII permits limited awards of punitive damages if the jury finds the employer discriminated "with reckless indifference" to the employee's federally protected rights. There was sufficient evidence that MPB acted with reckless disregard for Madeja's rights not to be harassed or retaliated against.

    • There was evidence that management decided to do nothing about Madeja's harassment complaint. It kept HR in the dark about it, and took no disciplinary action against her harasser.
    • Madeja's termination looked retaliatory to the factory manager, but he said nothing to HR and did no investigation of his own.

    An employer can avoid punitive damages if makes good faith efforts to comply with the law, and it can show that the decision-maker just "missed the memo," so to speak. However, "the mere existence of an anti-discrimination policy or presentation of seminars on anti-discrimination laws does not automatically satisfy the good-faith requirement. . . . A defendant must also show its sincere commitment to enforcing its policy." Despite MPB's policy and video presentation about sexual harassment, the Court was not impressed by management's response in this case, for many of the reasons already discussed, but also because no one from management told Madeja about the results of its investigation.

    Lessons to be learned for all NH employers

    1. Follow your workplace harassment policies.
    2. Your policy should prohibit all forms of discriminatory harassment, including retaliatory harassment.
    3. Train your managers to respond appropriately to complaints of harassing behavior. If the policy provides that human resources will investigate all complaints, make sure human resources is informed of all complaints.
    4. Be on the lookout for - and respond promptly and reasonably to - signs of co-worker retaliation.

    MPB learned the hard way that it's not enough to have a policy. All New Hampshire employers should learn from MPB's missteps to avoid such costly consequences.