ALA Newsletter Article – HR failure to investigate harassment

10/4/2018 | Articles

HR IN THE CROSSHAIRS: EMPLOYER HIT WITH HUGE JURY VERDICT DUE TO HR’S ALLEGED FAILURE TO INVESTIGATE HARASSMENT CLAIMS

        It is often said, but not always followed: Human Resources takes all claims of harassment seriously and will investigate all such claims. Human Resources’ failure to do so in one recent case cost an employer $499,000.00. The Equal Employment Opportunity Commission (“EEOC”) recently prosecuted a case against a physician services outsourcing company in which three employees alleged that they were terminated for reporting harassment by the CEO of one of the company’s corporate divisions. One of the employees sued for sexual harassment by the Division CEO and was awarded $250,000.00 in punitive damages. Two of those employees sued for retaliatory discharge, alleging that they were fired for reporting and opposing a sexually hostile work environment. Those two employees collectively were awarded $249,000.00 for lost wages and benefits after their termination, for a total jury verdict of $499,000.00 against the employer.

      The employees presented evidence that the Division CEO and other management level employees continuously made lewd sexual comments and engaged in sexually inappropriate conduct. All three employees testified that they had reported the comments and conduct to Human Resources and Human Resources failed to investigate the reports. Two of the employees testified that they jointly reported to Human Resources an inappropriate comment that the Division CEO made to one of the employees’ then 15 year old daughter at a company-sponsored “Bring Your Child to Work” event. Human Resources took no action to investigate the employees’ complaint, nor had any investigation been made of prior reports of harassment, including the reported lewd sexual comments and conduct. The two employees who jointly reported the Division CEO’s inappropriate comment to the 15 year old both were fired, within an hour of each other, only six weeks after reporting the comment and on the basis of alleged performance issues. Although the employer presented evidence of the employees’ alleged performance issues, the jury of two women and four men found that the timing of the termination and Human Resources’ failure to investigate in any meaningful way the employees’ allegations made the alleged performance issues appear to be nothing more than a pretext for the employer’s true motive in the termination – to retaliate against employees who made a report of sexual harassment against an officer of the company.

       Most if not all Human Resources professionals know that they must investigate claims of harassment made by employees. However, the above case serves as a staunch reminder of several principles that may present practical problems for Human Resources professionals who are faced with pressure when a complaint implicates a high level manager within a company. First, all complaints must be investigated, regardless of who is accused. Second, disciplinary action cannot be taken in a vacuum against a “poor performer” where Human Resources is aware of a prior employee complaint, regardless of pressure from a manager to terminate that employee. Third, Human Resources investigations protect the company as well as employees. It may well have been true that the underlying complaint against the Division CEO in the case above was unfounded. It may well have been true that the two employees who were fired six weeks after reporting the Division CEO’s comment to a 15 year old actually were poor performers who had been “underperforming” for some time. However, Human Resources’ failure to investigate the complaint lent credence to the “pretext” theory that the poor performance allegations were an excuse to retaliate against good employees who did nothing more than exercise their right to report harassment. If and to the extent that the Division CEO had engaged in the reported conduct, Human Resources’ failure to investigate meaningfully the complaint allowed the harassment to continue, risked further injury to other employees, and increased the company’s exposure to liability.

      One of Human Resources’ essential functions is to investigate all claims of harassment – and that means ALL claims of harassment. If Human Resources fails to investigate a claim for whatever reason, whether because the claim seems improbable or involves “the boss,” Human Resources not only is failing to do its job, but is failing to protect the employer and exposing the employer to possible destruction under the weight of an insurmountable jury verdict.