Employers Are Responsible for Stopping Sexual Harassment by Non-Employees

imagesIn the wake of the #MeToo movement, many employers remain unaware that they must investigate sexual harassment allegations and take appropriate measures if sexual harassment is perpetrated by non-employees, such as customers  or vendors.

A recent opinion from the Fifth Circuit Court of Appeals addressed just this issue when the court considered whether a nurse at a nursing home facility who repeatedly complained of sexual harassment by a patient with dementia presented a strong enough claim to go to trial.  The Fifth Circuit found that she did. And although Gardner v. CLC of Pascagoula, L.L.C. involved a rather common and pervasive problem of patient-nurse sexual harassment, the Court’s analysis is usefull for all companies where employees have interaction with customers or third parties on a regular basis.

The Court of Appeals reminded that pursuant to the Regulation issued by the Equal Employment Opportunity Commission (EEOC): 

An employer may [] be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases the Commission will consider the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of such non-employees. 29 C.F.R. 1604.11(e)

In Gardner, the patient who suffered from a host of mental disorders, had a documented history of grabbing the female nurses’ “breasts, butts, thighs, and trying to grab their private areas,” and asking them to engage in sexual activity with him as well as making lewd sexual comments.  Several nurses routinely recorded this behavior on the patient’s chart and made complaints to their supervisors. Additionally, at least one of the supervisors observed the patient behaving in a sexually inappropriate manner.  

When the plaintiff-nurse attempted to discuss her concerns about the patient’s behavior, her supervisor and the nursing facility administrators allegedly laughed and told her to “put [her] big girl patients on and go back to work.”  Eventually, after the patient punched her in the breast while she was trying to assist him, she asked to be reassigned.  Her request was denied.  The patient was soon transferred to an all-male facility but only after he had punched a male resident. 

The district court granted the employer’s summary judgment finding that a hostile work environment did not exist because it was “not clear to the court that the harassing comments and attempts to grope and hit [were] beyond what a person in the [nurse’s] position should [have] expect[ed] of patients in a nursing home.”  

The Court of Appeals disagreed, however, ruling that while inappropriate comments from patients with reduced cognitive abilities may not rise to the level of legally-actionable sexual harassment, where a patient crosses the line into physical contact, which progresses from occasional inappropriate touching or minor slapping to persistent sexual harassment or violence with the risk of significant physical harm, the employer must take steps to try to protect an employee. 

BOTTOM LINE: If a company becomes aware that its employees are being harassed by a third party, such a customer or vendor, the company has an obligation to take steps immediately to get the harassment to stop. This may include reassignment of the employee, adding security, conversations with a customer or a vendor, and a host of other measures.  Ignoring the situation once the employer becomes aware of it may result in a liability under Title VII. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.

 

 

 

 

 

 

 

Trump’s Tax Reform Affects Settlements of Sexual Harassment Claims, But Training Remains the Best Answer

sexual harassmentJust days before we rang in 2018, in the wake of the #MeToo movement, the Tax Cuts and Jobs Act became the law, including the special clause titled “Denial of Deduction for Settlements Subject to Nondisclosure Agreements Paid in Connection with Sexual Harassment or Sexual Abuse.”

Prior to this statute, the law allowed companies to claim tax deductions for settlements of sexual harassment and abuse claims and for attorney’s fees incurred in defense of such claims, even if the settlement agreements were confidential, which they usually were. 

Now, if a settlement agreement prevents a harassment or abuse victim from publicly sharing details about the claim, then the company paying the settlement cannot deduct from taxable income the amount of the settlement or the attorney’s fees incurred in reaching the settlement agreement. 

However, while the title of the section declares a lofty goal, its implementation and the practical effect remain less than clear.  In particularly, the following questions remain:

  1. Where the settlement agreement settles more than just a sexual harassment or sexual abuse claim, can the company still claim the deduction?
  2. Will this law encourage the companies to segregate attorney’s fees between sexual harassment allegations and other types of discrimination or claims alleged by the settling employee?
  3. Will this law incentivize employees to add a sexual harassment/sexual abuse claim to other claims simply to put additional pressure on the company?
  4. Will this law drive the companies to misclassify the types of claims that are being settled or seek a general release of all employment claims (without specific mention of sexual harassment/abuse claim) in order to get the deduction?
  5. Will a general release of all claims against the employer result in its inability to get a deduction because sexual harassment and abuse claims are included in such a release?
  6. Will this law result in more companies attempting to litigate the sexual harassment / sexual abuse claims rather than reach settlement agreements, especially on those claims that are weak and/or not supported by evidence – the so-called “nuisance claims”?

This law goes into effect on January 1, 2018 and will not affect the 2017 taxes.  Until the implications of this statute come into focus, companies should consult with their attorneys regarding whether to include a non-disclosure provision in a settlement agreement if any claim of sexual harassment or sexual abuse was made by the claimant.

While the uncertainty of the answers to the above questions remains, the best course of action for companies is to keep investing into quality anti-discrimination and anti-harassment training so as to avoid the sexual harassment claims in the first place. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice Her practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.