Sexual Harassment, Ancient Info, Quirky Question # 82
Quirky Question # 82:
I am the HR director for a mid-sized company. A number of years ago, one of our employees complained about sexual harassment from a senior executive in the Company. We investigated and found corroboration for a number of her allegations. The investigation also revealed that other employees had been mistreated by the executive.
We addressed the situation at that time, though we did not terminate the executive. Nevertheless, I thought the issues were behind us. Now, the same employee has filed a new complaint against the same executive. She’s dragging in all of the issues that arose more than five years ago. Can she do that? I’m not a lawyer but I thought referencing these kinds of ancient problems was barred by the statute of limitations? The complaining employee also has stated somewhat vaguely that she also may assert “common law claims.’ (Sounds to me like she has lawyered up.) What might these claims be? Your guidance is appreciated.
Roy’s Analysis:
Your question implicates a number of different issues. You are correct that the statutes of limitation for statutory discrimination claims are relatively short. The federal statute of limitation under Title VII, for example, is 300 days (approximately 10 months). In the few states without a parallel state agency, the statute of limitations is even shorter (180 days, or approximately 6 months). In Minnesota, where my practice is based, the statute of limitations under the Minnesota Human Rights Act is one year. So, your initial instinct that employees should not be able to bring lawsuits based on conduct that occurred long ago has some legitimacy.
In the legal arena, however, as you undoubtedly know, you have to dig a bit deeper to test your first impressions. Although you would have a strong statute of limitations defense if the conduct complained of had occurred five years ago and there had been no problems since, when wrongful conduct (assuming there was some) has occurred within the statutorily protected time period, the statute of limitations defense may not be available to you. In this context, the question of whether the complaining employee may introduce evidence of the prior problems (even those that occurred five years ago) implicates both statute of limitations issues and evidentiary issues. Each are addressed below.
Statute of Limitations
In an interesting, and some respects unusual, case from the Washington Court of Appeals, Jane Doe III v. State of Washington, et al., No. 35130-7-II, (Wash. Ct. App., April 8, 2008) (unpublished), the court examined some of the issues you have raised. The plaintiff in that lawsuit, Jackie Delgado, brought a 7-count complaint based on statutory and common law claims, including hostile work environment sexual harassment and sex discrimination. The trial court dismissed the plaintiff’s lawsuit on statute of limitations grounds, noting that plaintiff’s lawsuit, filed in 2005, was based on conduct occurring 8 years earlier. The court reached this conclusion despite the fact that some of the interaction between Delgado and Green (the alleged harasser) had occurred in 2003. The Washington Court of Appeals reversed the grant of summary judgment on several of Delgado’s claims, including her statutory claims for sexual harassment and sex discrimination.
The appellate court began its analysis by noting that the Washington Law Against Discrimination (WLAD) did not have a statute of limitations. Therefore, under Washington’s general statute of limitations for personal injury claims, a plaintiff must assert discrimination claims within three years. (This highlights a practice pointer I have emphasized in prior Blog analyses – since so much of employment law is state-dependent, it is critical for you to evaluate the laws of the states where the dispute arises. Washington’s 3-year statute of limitations for discrimination claims is atypical.)
The intermediate appellate court then noted that for discrete acts of discrimination (termination, failure to promote, denial of transfer, refusal to hire, etc.), the statute of limitations begins to run “from the date of the alleged wrongful act.” The court noted that “if the statute of limitations period has run, a lawsuit for that discrete act is barred, even if that act relates to others timely alleged in the charges filed.”
Critically, however, the court stressed that hostile work environment claims are “different in kind from discrete acts.” The court observed that a hostile environment claim is composed of a series of separate acts that collectively constitute one unlawful employment practice. Therefore, the court found it did not matter that some of the alleged acts fell outside the statute of limitations period, because hostile environment claims are based on “the cumulative effect of individual acts.”
Defendants, however, argued that the 8-year gap between 1994 (when some of the most outrageous conduct ended) and 2002 (when other conduct occurred), demonstrated that the sexual harassment was not part of the same hostile work environment. The appellate court rejected this argument. The court noted that Delgado had been harassed by Green from 1989 through 1994, that Green had threatened to kill her on two occasions between 1989 and 2002, and that she had been harassed in 2002. Interestingly, the court also focused on the impact the sexual harassment had had on Delgado – she had cut her hair, intentionally gained a great deal of weight, dressed poorly, all with intention of making herself unattractive to Green, and avoided large portions of the hospital grounds where she might encounter Green. During the period where she made herself physically unattractive, she was not subjected to sexual harassment.
Finding that Delgado’s claims were not time time-barred, the court noted that the harassment involved the same victim, the same relationship, and the same type of harassment. Moreover, even though the harassment ceased for a lengthy period, the court found that Green continued to “control” Delgado, affecting her physical appearance and her movement at her place of employment. The court observed, “In other words, there is a genuine issue of material fact as to whether Delgado continued to bear the burden of Green’s harassment between 1994 and 1999. There is a genuine issue of material fact as to whether Green’s acts from 1989 to 2002 are part of the same actionable hostile work environment practice.”
What makes this case unusual in my opinion is that the court looked at the impact or effect on the victim in evaluating whether her claims were time-barred. Because she clearly was affected in the period following the cessation of the harassment (cessation attributable to the actions she took to make herself less attractive), the court considered the interim period in determining the ongoing nature of the hostile environment claim. As noted, the court observed, whether Delgado continued to bear the burden affected the limitations calculus. The principle articulated by the court in the Washington case has the potential for significantly altering the way in which limitations periods are determined in hostile environment cases, at least in Washington. If limitations periods are extended to encompass the period in which an employee continues to “bear the burden” of prior harassment, the limitations period could be open-ended. The unanswered question from the case is whether the same decision would have been reached if there had been no subsequent similar acts in 2002. Conceivably, an employee could continue to “bear the burden” of prior harassment look after the harassment ended, regardless of whether the harassment resumed at some point in the future.
A cynical view of the appellate court’s decision is simply the old axiom – bad facts make bad law. There certainly were some terrible facts in the case and it could be that the court was unwilling to leave this particular plaintiff without a remedy. Whether the same analysis will be applied to less egregious contexts remains to be seen.
Evidentiary Issues:
Even if a court did not reach the conclusion that the statute of limitations should reach back eight years, the harasser’s earlier conduct still could become part of any subsequent litigation your employee may institute, based simply on evidentiary considerations.
There are two related questions you should consider when evaluating the evidentiary issue. First, will the evidence be “discoverable” – in other words, will the plaintiff’s lawyer be permitted to explore these past events in interrogatories (written questions the company will have to respond to under oath), document requests, or depositions (under oath question and answer inquiries). The standard for the “discovery” of information in these mechanisms is very broad: is the information directly relevant or “reasonably calculated to lead to the discovery of admissible evidence.” Courts generally are unreceptive to objections to inquiries during the discovery phase of litigation based on an argument of relevancy. Thus, unless you could establish that the plaintiff was seeking the information simply to harass or embarrass your executive (a tough legal hurdle to clear), most of the information pertaining to the past events will be fair game during discovery.
Second, courts have to assess whether information legitimately explored and elicited during the discovery phase of a lawsuit is “admissible” during the judicial proceeding. Here, courts examine whether the information elicited is relevant and whether, even if so, the information’s relevancy is outweighed by the risk of unfair prejudice. This balance is set forth in Rule 403 of the Federal Rules of Evidence, which states: “Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”
Applying this construct to your situation would lead to the following types of inquiries. What conduct occurred five years ago and is it the same as, similar to, or different from the conduct that recently occurred? What were the executive’s motivations then, and what were his motivations now? Did the executive deny engaging in the conduct which the complaining employee brought to the company’s attention? Did the executive deny engaging in the conduct revealed by your investigation that implicated his interaction with other employees? Has he denied the conduct the employee complained of recently? Did the executive’s response (then and now) implicate issues regarding his veracity?
Depending on how these and other questions are resolved, the information pertaining to his conduct many years ago may or may not be admissible. If the behavior was the same, if his motivations appeared to be the same, if he lied about his conduct then and/or now, a court may find that this evidence should be admitted. If, in contrast, the conduct complained of five years ago was radically different and the executive fully acknowledged the conduct (thereby removing issues regarding his truthfulness from the equation), a court might reach the opposite result.
Another way in which these issues could play out in your lawsuit relates to the adequacy of your company’s response. In your question, you note that “other employees had been mistreated by the executive” but that your company did not fire him. You do not identify the ramifications (if any) for the executive. Did the company discipline him? Suspend him? Demote him? Freeze or reduce his compensation? Your company’s response to the prior problem also could influence the court’s decision on the admissibility of the evidence of these earlier problems, depending in part on the non-statutory claims asserted by the complaining employee. For example, if she alleged that the company was negligent in retaining this executive, or negligent in supervising his conduct since these earlier problems arose (common law claims recognized in many states), the relevancy of the prior conduct becomes more direct.
Common Law Claims:
You also asked about the types of common law claims your employee may assert. As you may know, many common law claims have longer statutes of limitations than do the statutory claims. Depending on the state and the nature of the claim involved, the statutes of limitations may range from two years (for intentional torts) to six years for negligence theories. In a harassment case, the common law claims could include assault, battery, negligent hiring, retention or supervision, and intentional or negligent infliction of emotional distress. Depending on the nature of the conduct in which your executive employee may have engaged, some or all of these claims, and possibly others, may be asserted. Plaintiffs assert these kinds of claims for different reasons, including, among others, the differences in the damages schemes. That is the subject for another day.
Scope of Relief in Sexual Harassment Cases, Quirky Question # 67
Let me start with the basics. As you undoubtedly know, sexual harassment is prohibited by Title VII. But, a Title VII claim is not the only cause of action that will be asserted and is not the only claim about which you need be concerned when trying to evaluate the risks your company is confronting.
As these examples demonstrate, the scope of liability you confront will depend on the nature of the underlying conduct and the resultant claims that are asserted. Without knowing a bit more about your factual pattern, it is difficult for me to provide you too much specific information about the nature of the damages and/or other relief you confront. But, with that caveat, here are a few thoughts for you to consider.
First, under the statutory schemes (whether federal or state), defendants typically confront the possibility of back pay. In contexts where an employee alleging harassment has been terminated (either actually or “constructively”) back pay simply represents the salary and other benefits that the discharged employee would have received from the date of the discharge through the date of trial. Of course, plaintiffs typically will seek the monetary equivalent of all the benefits an employee would have received but for her discharge (e.g., health, dental, and life insurance; 401k contribution or other equivalent retirement plan contribution; automobile and/or auto allowance; vacation and/or PTO days; payments for educational programs for which the employee was eligible; and various other perquisites unique to the company involved). The amount of back pay is offset by the sums earned by the employee in other employment following her discharge.
Third, depending on the nature of her injuries (including psychological or emotional injuries), a sexual harassment plaintiff may be entitled to pain and suffering or emotional distress damages. These damages, which are capped under the federal statutory scheme, may be largely unlimited under state statutes or under common law legal theories.
Fourth, a plaintiff-employee may be entitled to recover exemplary (or punitive) damages. Again, these damages are capped under the federal statutory scheme (depending on company size, they can be as much as $300,000), but they may be unlimited under parallel state statutes or the common law claims asserted by the harassment victim. Some states, however, also limit the punitive damages under their anti-discrimination statutes, so this issue needs to be examined on a state-by-state basis. Keep in mind too that the statutory caps are per plaintiff. Therefore, if you had five plaintiffs who were affected by the conduct you alluded to, and your company had 500 or more employees, you would be exposed to potential punitive damages of $1.5 Million. (If you would like to see additional analysis of punitive damages in sexual harassment cases, see Quirky Question # 56.)
Fifth, although the federal statutory scheme of Title VII does not allow for doubling or trebling of compensatory damages, some state statutes do provide for this type of recovery. Again, it is critical to examine the statutory scheme under which the claim is asserted to fully appreciate the potential exposure associated with a particular claim.
Seventh, the statutory schemes are “fee shifting” statutes. A prevailing plaintiff typically is entitled to recover her attorneys’ fees. (Alas, the same is not true for the prevailing defendant.) At times, the attorneys’ fees incurred in the pursuit of a plaintiff’s claim may exceed the compensatory damages to which the plaintiff is entitled.
As you can see, the seven categories discussed above relate to the potential financial risk your company may confront when faced with a sexual harassment case involving egregious conduct. Courts, however, also may impose other types of non-monetary penalties on companies that disregard their obligations under Title VII. These kinds of penalties may be quite diverse, depending on the imagination of the federal judge. They include, by way of example, ensuring that the federally mandated posters are displayed prominently in a company’s lunchroom, conducting periodic training sessions on sexual harassment, monitoring future claims with corresponding reporting requirements to a special master or other court-appointed official, etc. In some circumstances, a court may order “reinstatement” of a discharged employee.
As you can see from the discussion above, when egregious sexual conduct occurs, a company confronts serious financial damages and potentially onerous injunctive relief. You have a sobering message to deliver to your management.
Punitive Damages for Sexual Harassment, Quirky Question # 56
Our company is committed to eliminating sexual harassment. We have a well-defined sexual harassment policy that is included in our employee handbook. We also have conducted training sessions on a bi-annual basis to ensure our employees understand our company’s position on sexual harassment.
Some time ago, one of our employees complained of sexual harassment. For various reasons (including the timing of her complaint, our company’s hectic schedule at the time, and her lack of persistence), her complaint fell through the cracks. She now has sued our company and included a claim for punitive damages. Given our commitment to eliminating sexual harassment (as reflected by our well-established policy), we do not have any risk of a punitive damages award, do we?
Courts are not particular sympathetic to a company’s failure to investigate employees’ sexual harassment complaints and typically do not find that a company’s “hectic schedule” justifies delaying the initiation of an investigation. Further, in my experience, courts would be completely unimpressed by a company’s attempt to shift responsibility to the harassment victim by suggesting that she was not sufficiently persistent in pursuing her claim. Once an employee reports the harassment to you, it is incumbent upon your company to act. I doubt that there is anything in the handbook you referenced or in the training you conduct suggesting that if your company is unresponsive to the employee’s first complaint, she needs to follow up by complaining again.
The bottom line is that sexual harassment complaints must be investigated promptly. I am periodically asked just what “promptly” means. Like much of sexual harassment litigation, this issue depends on the “totality of the circumstances.” Moreover, there s a direct linkage between the seriousness of the allegations and the speed with which the company begins its investigation. If, for example, the allegation involves a sexual assault, it is imperative that the company start its investigation immediately. If, however, the harassment allegations were only a few off-color jokes, especially if they were not directed at the person complaining, a court might be a bit more tolerant of a slight delay in commencing the investigation. But for any type of harassment allegation, the commencement of the investigation should be measured in days, not weeks, and certainly not months. Even for allegations that involve less egregious conduct, failing to begin your investigation within days of receiving the complaint is a mistake.
Here, you state that your employee has filed a complaint and has included a claim for punitive damages. This suggests to me that the actions about which your employee complained could be serious. You inquire whether the mere fact that you have a sexual harassment policy, coupled with your bi-annual training, will suffice to defeat any claim for punitive damages. Sorry to disappoint, but if there is disconnect between your policies and your enforcement of those policies, your company may be at risk for punitive damages. In short, if your company ignores its well-established policies prohibiting sexual harassment, you may have exposure for punitive damages.
In a similar, more recent case, Bjornson v. Dave Smith Motors, No. 04-285 (D. Idaho July 31, 2008), the District Court denied the defendant’s post-trial motions and affirmed the jury verdict of $100,000 in punitive damages. The court rejected the auto dealer’s argument that its well-established harassment policy insulated it from a punitive damages award. The court found that the company had disregarded its policy by ignoring the plaintiff’s complaints, failing to investigate fully, and only providing the harasser a “meager warning” for his conduct. The court observed further, “The employer must show that it implemented its policy in good faith. As with the affirmative defense to the hostile work environment claim, there is substantial evidence from which a jury could conclude that the policy, although it existed, was not implemented in good faith. It must be shown that defendant made efforts to implement its policy, through education of its employees and active enforcement of its mandate.” (Emphasis added.)
The highlighted admonition of the Idaho District Court appears to apply to your fact situation. You will need to demonstrate the “active enforcement” of your policy’s mandate if you hope to rely on the existence of your policy to avoid potential exposure for punitive damages. Based on the facts you describe, I’m not convinced that you will be able to do so.
Finally, keep in mind that Title VII has capped exemplary damages at $300,000 (or less, depending on the employer’s size). Typically, however, sexual harassment claims are brought under both federal and state statutes, with a few common law claims thrown in as well. The state statutes may (or may not) cap available punitive damages. Be sure to check the state statute that may be implicated. The common law claims (assault, battery, intentional or negligent infliction of emotional distress) usually will not have any limits on the potential punitive damages. Given these facts, it is critical for you to treat sexual harassment seriously and effectively if you hope to avoid potential exposure for punitive damages.
Sexual Harassment — Activities Outside the Workplace, Quirky Question # 32
I am an attorney in the Law Department of an advertising agency. I recently learned in a roundabout way that one of our female employees is a motorcycle enthusiast. For the last few years, she has taken time off from work to attend the motorcycle rally in Sturgis, South Dakota. This year, someone at work was surfing the Web and looked at various Sturgis websites. (I’ve since learned that there are more than 1000 Sturgis websites, many of which contain photos.) Our employee was pictured in photos on a number of the Sturgis websites and in many of them she is not wearing much (if any) clothing. Some of the photos are quite suggestive.
One of our employees downloaded several of the photos and circulated them via email to other employees in our office. One employee is using one of the pics as the “wallpaper” on his computer. A number of our employees have been asking our Sturgis enthusiast about her experience and what “really goes on at Sturgis,” Not all of the questions are in good taste. Other employees (mostly, but not exclusively, male) have been teasing our employee quite a bit (sometimes crudely) about her Sturgis trip. She recently reported to me that she finds their comments both offensive and irritating. My initial reaction was “What did you expect?”, but I did not express that sentiment to her. I’ve informally asked some of the guys to tone it down, but I’m not sure I’m getting through to them. What recommendations would you make regarding how this should be handled?
Exacerbating the situation from a potential liability standpoint is that your employee already has complained to you. Given your position as an attorney in Law Department, your knowledge will be imputed to the corporation. Moreover, you have described the fact that you have attempted to take action to address some of the concerns expressed by the offended employee (“I’ve informally asked some of the guys to tone it down . . ..”), but that you are not getting the hoped-for response.
In sum, you have a harassment complaint, the company is on notice, and the problem has not been rectified. In my view, you need to respond more aggressively to the problems that have been brought to your attention. This includes the four distinct issues of which you have been made aware: a) teasing; b) crude comments; c) circulation of pornographic materials via your company’s computer system; and d) display of a photo of a (partially ?) naked woman on a computer screen. If an investigation is necessary (you already may have all the facts you need), you should conduct one promptly. To the extent that you confirm the allegations that have been brought to your attention, you should discipline the employees who have engaged in the problematic conduct. I recommend that you ignore the fact that some of the offending conduct arguably was precipitated, in part, by the non-work-related behaviors of the complaining employee.
In sexual harassment cases, you must distinguish between the work-related behaviors of your employees and the non-work-related behaviors. The non-work-related behaviors are largely irrelevant to the sexual harassment analysis. The fact that one of your employees is a motorcycle enthusiast, who enjoys the Sturgis rally, and who engages in behavior while in Sturgis that is radically different from her workplace conduct, does not mean that she is fair game for inappropriate, harassing workplace conduct.
The most directly analogous case of which I am aware is a decision out of the Eighth Circuit Court of Appeals, Burns v. McGregor Electronic Industries, Inc., 995 F.2d 559 (1992). The plaintiff, Lisa Burns, was a victim of substantial (often outrageous) sexual harassment by a number of employees, including the company’s owner/President who was more than 40 years her senior. Compounding the problem of her treatment in the workplace, she had posed nude for a couple of motorcycle magazines. This resulted in significant additional abusive conduct directed toward her. Despite these facts, the District Court granted the employer summary judgment. In an opinion deferential to the District Court, the Eighth Circuit reversed and remanded, but noted, “Our disposition of this case should not be read as constituting a de facto entry of judgment for Burns.”
That was the first Burns opinion. The following year, after the District Court again dismissed Burns’ lawsuit, the case was back in the appellate court (989 F.2d 959 (1993)). The second time around, the appellate court was not quite so deferential. The Eighth Circuit was understandably troubled by the fact that the District Court was unable to distinguish between Burns’ conduct outside of work and her treatment at the workplace. The trial judge seemingly could not get over the fact that Burns had posed nude for a magazine, concluding that, given her behavior, she could not have been offended by her treatment in the workplace. The appellate court stated:
“The plaintiff’s choice to pose for a nude magazine outside work hours is not material to the issue of whether plaintiff found her employer’s work-related conduct offensive. This is not a case where Burns posed in a provocative and suggestive way at work. Her private life, regardless of how reprehensible the trier of fact might find it to be, did not provide lawful acquiescence to unwanted sexual advances at her work place by her employer.”
In the second opinion, the Eighth Circuit gave up on the trial judge, and reversed and remanded with a directive that judgment be entered for the plaintiff, Lisa Burns.
As the Burns decision illustrates, for the most part, an employee’s activities outside the workplace are irrelevant to the issue of whether he/she is a sexual harassment victim in the workplace. The one part of the analysis where this conduct may be considered is when evaluating whether the employee found the behaviors “subjectively offensive.” As was addressed by the U.S. Supreme Court in a post-Burns decision, in a typical harassment case, an employee must establish that the behaviors were both “subjectively” AND “objectively” offensive. For example, with regard to the subjective standard, an employee who initiated a lot of sexual banter in the workplace may have difficulty establishing that she was personally offended by sexual banter. With respect to the objective standard, an employee needs to demonstrate that she is not having a hypersensitive, idiosyncratic reaction, but rather that the behavior would have offended a “reasonable” person.
In the fact pattern presented by your question, you can argue that a person who allowed herself to be photographed nude, in provocative positions, at the Sturgis rally, with the knowledge that her pictures were likely to be displayed on the world wide Web, is not likely to have been “subjectively” offended by the conduct of her co-workers. Absent a direct linkage, however, to her conduct in the workplace, that argument is likely to be unpersuasive. The fact that your employee elected to behave in one way at a motorcycle rally in another state hardly suggests that she was inviting offensive conduct in the workplace, where she has had a very different persona. Given that fact, I suggest that you take her complaints of offensive conduct seriously, take steps to ensure the offensive conduct stops, and discipline the employees who engaged in the conduct described in your question.
Non-Fraternization Policies, Quirky Question # 30
Quirky Question # 30:
We are a large, national, medical device company. Over the years, we’ve adopted personnel policies to provide appropriate guidance to our workforce and to comply with federal and state laws. We have a well defined and clear sexual harassment policy. Notwithstanding our sexual harassment policy, we find that we periodically confront workplace problems associated with relationships among co-workers that fall apart. (We’ve had this happen with married couples going through a divorce, as well as couples who were just dating.) These situations are exasperating. Consequently, our company is considering adopting a broad “Non-Fraternization” policy, prohibiting relationships between employees. Is this a good idea or will we be plagued with enforcement problems?
Roy’s Analysis:
As a preliminary observation, it is important to recognize that non-fraternization policies are legitimate and enforceable. Many companies use them because they advance significant corporate interests.
A) The policies minimize favoritism, especially in the context where one employee may have supervisory responsibilities over another person with whom he/she is involved.
B) Non-fraternization policies minimize the perception of favoritism. Even if a member of a relationship is attempting scrupulously to be fair and objective, other employees may perceive favoritism toward the individual with whom he/she is involved.
C) The policies reduce the likelihood that the company will confront sexual harassment litigation if the relationship between two emotionally involved employees ends, especially when both members of the couple are not equally enthused about the termination of the relationship.
D) Non-fraternization policies enhance the company’s flexibility with respect to employment decisions that may result in the transfer of the employees; it is much harder to find suitable employment opportunities for two members of a couple, than just one person.
E) Non-fraternization policies reduce the likelihood that there will be undesired consequences for the company if adverse actions are taken toward an employee involved with a co-worker. Negative job actions are difficult enough without the added complication of evaluating how the other employee member of the couple will react to a layoff or demotion of a spouse or significant other.
For these and other reasons, many companies ban the hiring of spouses or significant others. Some companies do not adopt an absolute ban but do preclude individuals who are married or otherwise involved from working in the same department or exercising supervisory responsibility over each other.
Unfortunately, too often companies adopt non-fraternization policies without giving adequate consideration to how they are going to address a situation where two employees already are involved. Or, they fail to consider how they will address situations where two employees become involved after the policy is established. As I’ve expressed in other Blog analysis, I recommend that companies thoughtfully consider these (and other) issues before the situations arise and the assessments become influenced by the specific individuals involved.
As you referenced in your question, there are difficult “enforcement” issues that your company likely will confront. Some of them may be definitional. For example, although a policy may be easily applied to a married couple, what about two employees who are just dating? Is one date enough? Two? How many? At what point will the company insist on policy enforcement? Moreover, how will your company collect the relevant data and/or monitor the situation?
Not only are there difficult practical issues to consider, implementation of such a policy also raises difficult legal issues. Absent a carefully evaluated and consistently enforced approach, there is a risk of both disparate treatment and disparate impact claims. Disparate treatment claims could arise if your company concluded that to enforce its policy, the female employee must leave your organization. Disparate impact claims could arise even if your company had a facially neutral basis for selecting which member of the couple would be terminated, but your approach had an adverse impact on members of a protected class. For example, the policy may be that the employee with less seniority must leave the company. But, if your company’s past hiring practices have resulted in a workforce where your male employees generally have greater seniority, a women forced out by this policy arguably may have a disparate impact claim. Similar analysis may apply if the decision is made on the basis of management/non-management, salary, or other criteria that would favor men in light of your historical hiring practices. Even determinations based solely on performance evaluations may be problematic, since the two members of the couple may not be evaluated by the same person and there may be little consistency or fairness with the ratings.
Some companies request the employees to decide who will remain and who must leave the company. Although this approach eliminates any potential claim that the company’s selection criteria were unfair or biased, requiring the employees to choose may not yield the result the company most desires. For example, the most talented member of the couple (and the person the company would most like to retain) may have more opportunities elsewhere. Given that fact, the couple may elect to have that person leave. Although this eliminates risks associated with the selection process, it also may eliminate a talented employee from your workforce. Another option is the highly scientific coin flip. This approach certainly is a neutral process, but again, it may result in the loss of the employee the company would most like to retain.
Perhaps the best approach is to prepare, in advance of any necessary decision, a matrix reflecting the values the company would like to utilize in determining which employee should be retained. Commonly used in the context of reductions in force, the criteria on the matrix are more likely to ensure that the company will be left with the employee it most wishes to retain. The criteria would depend on the nature of the position and the skill sets deemed important by the company.
Finally, when making this determination, thought should be given to evaluating other potential legal risks to the company that may be associated with the discharge of one member of the couple. For example, are there contracts that limit in any way the company’s termination rights? Was one member of the couple recently recruited to the company to take the position, thereby increasing the possibility of a promissory estoppel claim? Does either member of the couple have a charge of discrimination or any other legal action pending against the company, increasing the risk that a discharge will result in a retaliation claim? If the company is desirous of managing carefully the risks associated with this difficult decision, these variables also should be factored into the company’s decision regarding which employee to retain and which employee to discharge.
The bottom line is that non-fraternization policies have a number of potential benefits.But, they raise practical and legal concerns that can be difficult to manage.They also can generate resentment among employees whose attitudes with respect to employer inquiries into this topic can be summarized by the observation, “None of your business.”Actually, it is your business, but you have to decide whether the benefits of adopting such a policy outweigh the detriments.
Follow
