Anti-Harassment Policy Is The Best Defense

Jennifer L. Parent
Director, Litigation Department & Chair Business Litigation Practice Group
Published: New Hampshire Business Review
January 2, 2009

Claire, President of the ABC company, in reviewing all departments for the new year, asks Tom, manager of the human resources department, what steps the company needs to take to help protect itself against sexual harassment lawsuits. Tom reports to Claire about a recent case where the court dismissed a sexual harassment claim because the employer took reasonable measures to prevent and correct the harassment. Are there lessons to be learned by ABC?

The First Circuit Court of Appeals held in Chaloult v. Interstate Brands Corporation (August 28, 2008) that a female employee who claimed she was sexually harassed by her supervisor cannot maintain her Title VII claim against the employer even though she alleged a co-worker had been aware of the alleged harassment.

Bonnie Chaloult worked at Interstate Brands Corporation (“IBC”) for five years before applying for and receiving an entry-level supervisor position. In February 2005, Kevin Francoeur, assistant production manager, became Chaloult’s immediate supervisor. Chaloult submitted a letter of resignation six months later on August 4, 2005. In her resignation letter, Chaloult alleged for the first time that her supervisor, Francoeur, had questioned her personal affairs with another entry-level supervisor, Jim Anderson, and that she no longer felt comfortable working for Francoeur.

Paul Santos, IBC’s department manager, notified the assistant human resources manager upon receiving Chaloult’s letter of recommendation. Santos then met with Chaloult to discuss the statements in her letter. In that meeting, Chaloult referred to only one incident that had taken place back on July 15, 2005. Chaloult did not report any other incidents to Santos at the meeting.

Following the meeting, Santos reported the incident relayed by Chaloult to human resources. Santos also conducted an investigation and spoke to both Francoeur and Anderson. IBC concluded after investigation that no sexual harassment occurred, although the supervisor was disciplined for using extreme and inappropriate language.

Chaloult filed a sexual harassment lawsuit against IBC a year later, alleging she was sexually harassed by Francoeur for a six month period in violation of federal and state law. For the first time, Chaloult alleged a number of incidents of inappropriate language and sexual propositions that she had not mentioned in her resignation letter or to Santos. Anderson, a peer of Chaloult, witnessed some of the incidents but did not report the incidents. As entry-level supervisors, Chaloult and Anderson both reported to the alleged harasser, Francoeur.

IBC had an anti-harassment policy in place which included procedures for reporting sexual harassment. The policy also required supervisors to report any incidents of sexual harassment to management. Chaloult had signed a form that she had read and understood the IBC policy.

Under Title VII of the Civil Rights Act of 1964, an employer is subject to vicarious liability for sexual harassment perpetrated by an employee’s supervisor where the sexual harassment does not result in a tangible employment action. Under the Faragher-Ellerth defense established by the United States Supreme Court in 1998, an employer may shield itself from such liability and prevail on an employee’s harassment claim if the employer demonstrates that (1) the employer had exercised reasonable care to avoid harassment and to eliminate it when it might occur, and (2) the employee failed to act with reasonable care to take advantage of the employer’s safeguards and otherwise prevent harm that could have been avoided.

The Court found that IBC could assert the two-pronged Faragher-Ellerth affirmative defense to the sexual harassment claim.

Chaloult did not contest that IBC met the second prong of the employer defense. She admitted that she did not report her supervisor’s conduct and had failed to take advantage of any preventive or corrective opportunities provided by the company through its harassment policies.

The issue was whether the company met the first prong of defense and took reasonable care to avoid the sexual harassment. The Court found IBC had satisfied its burden as to this prong. IBC had a sexual harassment policy in place, trained its employees regarding the policy, and conducted an investigation into the complaint she had made at the time of her resignation and took appropriate action.

Chaloult argued that the first prong of defense had not been met because IBC had a policy requiring all supervisors to report harassment and therefore Anderson’s knowledge of the conduct could be imputed to the employer. She claimed such knowledge of her peer put IBC on notice of the harassment and its failure to take corrective action was unreasonable.

The Court disagreed. The Court noted that to expand an employer’s liability and impute a peer’s knowledge to the employer just because the employer voluntarily adopts a policy requiring all supervisors to report sexual harassment would “discourage and penalize” employers from adopting anti-harassment policies. As the Court pointed out, the Supreme Court created this two pronged defense to “provide“ incentives for employers to develop sexual harassment reporting policies and to educate employees about and promote compliance with such procedures in order to avoid vicarious liability.”

Employers are cautioned that in some cases a supervisor’s knowledge of harassing behavior may be imputed to the company to require corrective action. Here, Anderson was not Chaloult’s supervisor. He held an entry-level position equal to her, was her peer, and both reported to the alleged harasser. There was no claim that anyone above Chaloult knew of such conduct. Under these facts, the Court held it would not impute Anderson’s knowledge to the employer.

As noted above, this case reinforces the importance of companies establishing anti-harassment policies and complaint procedures for reporting alleged harassment. Employers should train employees and managers so that they are familiar with the policies and procedures. This case also highlights the importance of employers conducting prompt investigations of complaints, whether formal or informal. These are all critical tools in asserting the Faragher-Ellerth defense and increasing an employer’s chance of prevailing against sexual harassment claims.