VANNOY:
Protect your business from sexual harassment lawsuits, best practices. Hi, I’m Mike Vannoy with Asure. I’ll tell you what, this is a topic that maybe if you’re watching today, it doesn’t matter because you’re here. I think this topic might scare some folks thinking, well, I’m not a sexual harasser. That topic doesn’t apply to me. I don’t really need to understand this. And if you are someone who has sexually harassed your employees, you need this one hour and a two by four upside the head for sure. But I just want to be clear, this conversation is for those people who think that they don’t have an issue because that’s where really all the risk comes. There are not, in my opinion, as an entrepreneur, there’s not a bunch of small business owners running around thinking, oh boy, I’m doing this and I’m getting away with it.
The places people get in trouble is it’s the joke. It’s the innuendo that they think is totally fine, or it’s something that’s happening under their watch that they’re unaware of, but they should be aware of. So that’s really where we want to go with this conversation today because I think most business owners have way more exposure here than they realize they do. So have a great guest if you watch the show regularly. Brian, my guest is Brian Schenker, New York based attorney with Jackson Lewis. Brian’s practice focuses on representing employers in a wide range of workplace matters, as well as preventative advice and counseling. Brian has extensive experience defending class and collective action lawsuits under federal and state wage and hour laws. He has successfully defended wage in our audits conducted by the US and New York State Departments of Labor. Brian regularly handles cases before courts and administrative agencies involving claims of discrimination, sexual harassment and retaliation. Brian, welcome back to the show.
SHENKER:
Happy to be here, Mike.
VANNOY:
Alright, so this might sound stupid, simple and obvious, but I think where we start the show a lot of times, let’s start with just a legal definition. Give me the good lawyerly version of what is a legal definition of sexual harassment.
SHENKER:
Right. So yeah, perfect place to start and look. Where this is going to come from is we have a number of federal anti-discrimination laws that all deal with types of harassment. Certainly Title VII is the one that deals with sexual harassment. And so when we talk about what sexual harassment is, the definition, it’s got a lot to unpack, but it’s basically unwelcome sexual advances or requests for sexual favors or other verbal or physical conduct of a sexual nature. And when submission to that is either made explicitly or implicitly a term or condition of employment or the conduct has the general effect of unreasonably interfering with work performance or creating a intimidating or offensive work environment. And so these sexual harassment claims are generally broken down into two types. There’s quid pro quo and there’s hostile work environment. And so it’s important to understand the differences.
One is a little more simple than the other. So quid pro quo involves typically it’s going to be someone in management harassing someone who’s not in management, and they’re basically going to condition an aspect of employment on the employee’s submission to sexual advances. So a manager saying, Hey, I’ll put you up for a promotion if you have sex with me. That would be quid pro quo unlawful sexual harassment. The other type of sexual harassment is also quite common and we see probably more allegations of this type, which is hostile work environment, which again, we’ll talk about unwelcome sexual conduct that’s sexual in nature. Again, it’s going to be severe or pervasive typically means it’s not happening just one time. It’s typically not an isolated incident. And this unreasonably interferes with the person’s work. And so as I said before, there’s lots of things to break down there.
We will do that throughout this show today. But a couple key things to discuss in that definition. So you heard me say unwelcome a couple times, and so I think this kind of flows, Mike, from what you’ve discussed at the beginning, which is many people in management might not even have the idea that they’re sexually harassing someone, right? In their mind, it’s just regular office banter and they don’t have any intent to harass a person. Well, the thing is that for sexual harassment intent is not really relevant. The question isn’t about whether the alleged harasser intended to harass someone else. It’s how the individual received it. It’s about the impact of that behavior. So again, when we talk about unwelcome behavior, it’s unwelcome when the complaining party says it’s unwelcome, right? So there’s a lot to unpack here, but that is kind of the general setup of these two types hostile of these harassment claims that we see.
VANNOY:
So I just want to summarize. So two buckets of sexual harassment. One is the most egregious offense. The thing that we all probably want to smack somebody upside the head for this is the quid pro quo. This is you do this for me, I’ll do that for you and fill in the blank with whatever comes to mind. I think that’s pretty obviously wrong. The second bucket is the hostile work environment. Let me ask this. Are there areas where you’ve seen where it makes sense why it would’ve to be an owner or a supervisor or manager, something to be in a position to offer a quid pro quo, a peer coworker, couldn’t advance offer advancement? Are there areas where it’s not so obvious that it’s a, Hey, you do explicit, you do this for me, I’ll do that for you, but it’s implied only the people who dress this kind of a way advance in this company and maybe it falls under quid pro quo. Maybe that falls under hostile work environment. Where might that line be drawn? Or does it matter because it’s still unwelcomed,
SHENKER:
Right? So I think in either case it’s certainly unwelcome. But yeah, I think what you’re getting at would be more of an implied type of quid pro quo instead of that explicit one, which we can all identify as someone conditioning a position or advancement on sexual acts. That’s obviously quite wrong, but when it’s implied, so some examples of that are where everything’s not black and white at companies. Maybe it’s a situation where, like you said, people who wear provocative clothing are getting raises or promotions while others who don’t do that. And it might not be explicitly stated, but there can be a course of conduct that would surely show these things. So even if that quid pro quo and conditioning of certain things isn’t stated or written anywhere, it’s just kind of a practice, those are actionable too. And just to be clear, so quid quo, the conditioning on this for that, that always needs to involve management quite clearly because it’s a management employee who would have the authority to offer those things. But our hostile work environment category where someone is making it a sexually charged environment that’s inappropriate, that can come from a coworker, that doesn’t have to be created by a manager in order for a hostile work environment to be actionable.
VANNOY:
So I kind of wanted to go to, and I think this is perhaps an undefinable to define all the things that don’t qualify as sexual harassment, but just examples come to mind. Maybe I own a bar and a restaurant in near a resort area near a beach where I believe right or wrong that part of my business is to exude this brand of hot, sexy, beach vacation, and therefore I want my staff to mirror that. So no, hey, I don’t expect any sexual relationship with an employee, but you do need to dress in this provocative manner as part of the uniform. Where do those lines start and stop?
SHENKER:
So those things in that regard that are business related and a business purpose, those can be past muster. But in that situation, I think the hostile work environment might come in if you have a supervisor who or other employees start commenting on the attractiveness or the bodies of other employees, or you have a manager telling some employees to dress differently or then others when there’s something that’s being done there that involves sex or sexual discussion or the body, things like that. And it doesn’t serve a business purpose. So oftentimes we might think that, hey, a common thing I hear from a client is, look, the guys will be guys. And that’s no defense to a hostile work environment claim. But look, I do recognize that in certain workplaces, there are cultures that have developed over time that are not consistent with what we’re saying today, are not consistent or compliant with the law, but that employers say, well, everyone’s doing it type of thing. But the problem for employers is all it takes is one of those employees to not be comfortable with what’s being said, one employee to be offended by that quote guy talk or what have you. So you might think, Hey, everyone’s okay with it, but there could be that one person who’s not. And then you’ve got a hostile work environment situation on your hands.
VANNOY:
Brian, is there anything important we should be thinking about hostile work environment like harassment in of itself is a broader term than the descriptor sexual harassment. Are there different categories of law here that we should be thinking about? Because maybe answer that first I guess maybe I’ll have a follow up.
SHENKER:
That’s a great question, and it’s almost taking a step back because yes, harassment can take various forms. So today we’re talking about sexual harassment, and that’s sex having to do with harassment, rather having to deal with sex or the sexual characteristic. But discriminations can be directed at other protected characteristics. So harassment can be based on race or disability. It can include whenever there’s an expression of, say, contempt for a group or the conduct is making someone feel humiliated or discomfort because of a protected characteristic, whatever it might be.
VANNOY:
So to be clear, we’re talking about harassment that is truly sexual in nature, not gender. So today we’re not talking about, oh, he only promotes men to the C-suite, or they’ll only hire women for this role. We’re not talking about gender, we’re talking about truly harassment of the sexual nature, right?
SHENKER:
Right. And so it is generally going to involve, look, I mean, it is hard to say, right? There’s so many different things that harassment can include. It can be range from comments to physical touching, staring. People can be inappropriate in certain circumstances. And so a lot about a hostile work environment situation is the context and the history. You can imagine someone, an employee who makes an off-color joke for the first time, and there’s never been a history of that type of discussion that might be inappropriate, might require some discipline, but it probably isn’t creating a hostile work environment because it’s so limited. These things, these hostile work environment, again, unless it’s particularly egregious, generally, it’s stuff that’s ongoing. And that’s really the point that this employee has to show up to work every day to endure, not this conduct that’s unrelated to their work, but now makes their work environment quite bad to deal with.
So that’s what we’re dealing with. But one thing that employers should really note though, and this is a common misconception, is that the only thing that the only place harassment can occur is at the office right at work. And that’s all we’re going to be concerned about what happens within the four walls of the office. Unfortunately, harassment can occur and does occur in many other places and employers will have to deal with it. So harassment can take place at an offsite event like a holiday party. It can take place outside of work hours, through calls or texts or social media. But any behavior, whether it’s during work hours or after work hours that impacts the work environment for employees is rightly going to be the concern of management.
VANNOY:
Can we go down a couple of those paths? Curious? Let’s go first maybe to the happens outside of work. So maybe you think you’re doing a good job and you’re holding a high standard to your culture and you don’t tolerate sexually oriented jokes, teasing, poking, fun, touching, et cetera. You do the basic things, but you believe people’s private time is their private time. Where are areas that employers get in trouble in the blurring perhaps, especially maybe in a social media world with sexual harassment that happens outside the workplace?
SHENKER:
So I’ve seen this many times, Mike, and certainly some employers really believe that if it didn’t happen at work, it’s not their concern. So that’s number one. That’s the first misconception that employers should get over because again, you could have an employee sending sexually explicit photographs or text messages to another employee, and it doesn’t matter if that happened at 10:00 AM when they were in the office or 10:00 PM when they weren’t, because that is going to impact that employee in the workplace. So
VANNOY:
It is. Do you have real life examples that you can share of this?
SHENKER:
Yeah, absolutely. So this often can come up with respect to relationships that may or may not be consensual. So I’ve seen various versions of this scenario play out where it doesn’t have to be a manager. We’re not talking about quid pro quo, but we have two employees. They share contact information and then one of them immediately starts texting them, asking them out repeatedly, trying to go on a date and then look, maybe they go out outside of work and it’s awkward. Maybe the person says, I don’t want to do this again. And so again, you can see how those outside activities might have an impact on how someone is then being experiencing the workplace where another employee is constantly asking them out, right? That’s not necessarily appropriate. Asking another employee out on a date by itself isn’t necessarily bad, but repeatedly doing it, that becomes an issue. Other things I’ve seen,
VANNOY:
Can we stick on that one for a second? I’m assuming it’s not illegal for coworkers to go on a date. It’s not even illegal for someone to ask someone out who doesn’t want to go out? Where does it turn into harassment in the eyes of the law? And since it’s not maybe happening at work, what is the employer’s responsibility? No way they can know everything that’s going on in the personal lives of all their employees. So it’s reasonable for them to think, okay, it didn’t happen at work. What do you want me to do about it? Where does that line cross where the employer should know about it and therefore is now responsible?
SHENKER:
Right. No, excellent question because I absolutely agree employers are not here to legislate the private lives or private relationships of employees, but I think there are two keys. One is once the employer has notice of an issue, now, if the employer learns that, hey, last night there was someone made, one of the employees inappropriately touched another employee at a happy hour, and that employee is now coming and complained about it because she now doesn’t want to face this other employee who touched her. So you can see how something outside becomes a workplace issue, but typically it’s going to be a complaint. We’re not out there listening and looking to see what happens in the private lives of our employers, but it’s more to understand if an employee comes in with a complaint about harassment and part of it stems from conduct or off hours, that should not be a line of demarcation where HR or the employer says, Hey, don’t want to hear anymore. We’re not dealing with it. It can still potentially be something. And look, Mike, like you said, sometimes it could be an outside issue between the employees that the company can’t deal with or shouldn’t deal with. But again, receiving the complaint, conducting the appropriate investigation into it, that’s what matters, right? We don’t want to just say, Nope, not looking into this, right? That’s the type of ignoring of employee complaints that often oftentimes is what results in litigation over these
VANNOY:
Types so that we’re giving clear guidance to people watching today if it happens outside of work, obviously they’re adults, you can’t control their lives, you shouldn’t have purview to everything that happens in their lives once you have been notified. However, if you have two coworkers, one complains about the other, even if it didn’t happen at work, it’s not work related, but they work together and one reports. Now you are on notice, dare I say, you must take action, but regardless of what you do or don’t do as a result, just know in the eyes of the law, judge is going to look at you and say, well, she told you. I mean you knew, right? And so am I hearing you? You’re right. That’s the line in the sand.
SHENKER:
And that should tell right? When the company gets that information that should be telling them, alright, this is something we need to look into and gather more information.
VANNOY:
Absolutely. Let’s kind of take the inverse now. So now we’re at work. And so I think it’s safe to say when you are notified when the employee notifies you that, Hey, she’s always slapping me on the butt and I don’t like it. Or Hey, he’s always saying these jokes and I don’t like it, or they made these advances, whether it’s at work or outside of work, once the employer is notified you’re on the hook period. I think that one’s clear enough now, so we can talk about what to do about it in a second here. What about the at work stuff that you don’t know about that no one did report to you? Where’s the liability? Where’s the accountability for an owner in those scenarios?
SHENKER:
Absolutely. So it’s a complicated question, and in fact, one that can vary depending on the law of the state. So under the federal law, if an employee might’ve been harassed, but they don’t report it to the company or they don’t take advantage of the company’s complaint procedure and its policies that can provide somewhat of a defense to employers, I want employers to be careful about that because that’s not a blanket statement, and I really do see the trend as going the other way in that employers will be liable for things, this type of conduct, regardless of whether they have policies in place and regardless of whether the employee took advantage of them. For instance, in New York, that’s not a defense really anymore. But yeah, I mean, look in the workplace, this just speaks to the policies, training and culture that a company should be setting up because what you’re hoping is that someone will identify what’s going on as something that’s wrong and be reported. So the victim, of course, is the first person who could do that. So that’s why we want to make sure everyone receives a handbook and it has very clear complaint procedures so that that person is aware of who they can go to, but even if they’re not the one, right? This is where manager training is so key because there’s this duty to report for managers where maybe no one complains to them, but they observe something, right? Yeah. Again, we’re talking about things that aren’t limited to happening on one day, right?
VANNOY:
Because Brian, it’s fair to say, so I keep coming back to this, you were notified or you were not notified it was at work or was it not at work? Imagine these four quadrants, if you will. Again, if you’re notified, you’re on the hook period, you have to deal with it and you have to act on it, whether it was at work or outside of work. If it’s at work and they don’t notify you,
You’re still responsible for creating an environment that is sexual harassment free is perhaps the right way to say that. I don’t want to say it’s necessarily even a warm welcoming. You could intentionally want a super competitive, almost aggressive culture. You can try to create whatever culture you want, but you are legally responsible for creating a sexual harassment free culture period. And so where do you see cases where maybe someone’s unintentionally or maybe willfully turning a blind eye in allowing a sexual harassment culture to exist and they find themselves in trouble because they weren’t. It’s not just that because they never heard a complaint, but it was their lack of proactivity in seeking out these kinds of behaviors. Coach us through this.
SHENKER:
So there are lots of examples I could think of. I mean, look, oftentimes there’s something that the company knows with respect to their harassment and that they don’t do. So there’s a recent case at a hospitality venue where it wasn’t a coworker or a manager, it was a customer put his hands down the shirt of one of the female servers that was observed by a supervisor, and immediately the company responded to it. The customer was banned that manager and the company banned them. But then several weeks later, they let the customer back in and not to mention that the customer’s, friends and family came in and ridiculed and mocked this server. And so again, it’s not necessary that the company needed to know all that, though they did. They were aware of it and they were eventually complaints. But that’s the type of stuff where once there’s some level of notice, what is the company going to do and what are the steps it’s already done?
Are you going to ensure that that person’s taken out of this situation? But yeah, look, in terms of the situation where there’s nothing observed by any other employees and the employee who’s the victim doesn’t report it, unfortunately in that situation, it’s not going to come to light until it does, right? Until someone observes it or there’s a complaint. So as the employer, that’s why it’s just so important. The things we’ll talk about, the preventative type stuff, the trainings, how to spot sexual harassment, what to do about it when you see it, those are so important to have those mechanisms in place. I mean, there’s some states now that require annual sexual harassment training, and that in and of itself can be helpful to employees so that it’s on their mind that this exists and we need to be cognizant of it.
VANNOY:
Brian, am I thinking about it? Right? And this is classic hr. There’s laws on the books, title VII specifically we’re talking about here. We’re not talking about just general harassment, we’re talking sexual harassment. So it would largely fall under Title vii. This isn’t going to come from a DOL audit. This isn’t an EEOC claim. This is probably going to originate as a lawsuit if you didn’t act. Disgruntled employee is going to go talk to somebody and either seek out an attorney or somebody could refer them to an attorney, and all of a sudden, boom, you got a lawsuit on your hands. That’s usually how these things manifest. Is that safe to say? So because it is a lawsuit, you’re going to sit in front of a judge and the judge is going to make a decision, certainly based on law, but we’re talking human beings involved here, and the severity of the judgment, either you’re innocent or you’re guilty, but if you’re guilty, the severity of the penalty is probably going to have a lot to do with how you responded or didn’t respond. Is that fair to say?
SHENKER:
Yeah, it often is. So companies that ignore complaints are typically going to be on the hook for much higher damage awards than those who may have handled the situation once they were aware, right? There could still be exposure there, but right, it’s going to be the two cases where either one, after the company’s aware of it, it doesn’t do anything. Or two, after the company’s aware of things it retaliates, which as surprising it might be. It happens all the time. And in fact, I believe the EOC statistics tell us that a huge number, I think almost 45% about of sexual harassment claims have a retaliation claim as well. Wow. So that’s telling us that a lot of these employers are at least alleged to have done something improper even after they were aware of what occurred.
VANNOY:
And to be clear for everybody, and I’m making an assumption, you correct me if I’m wrong, retaliation doesn’t mean one of your employees came to you and said, Hey, they’re telling these inappropriate jokes. I don’t like it. And the employer says, well, you got to toughen up. This is just the real world. I’m docking your pay. It’s not that blatant, but it might look like, oh, you don’t get scheduled quite as much as you used to, right? The person telling the dirty jokes gets there 40 hours a week. Maybe you only get 28 hours next week. And it’s the retaliation, whether it’s, it could in fact actually be a complete coincidence, will give benefit of the doubt. But if the person who raises the issue and complains perceives that some course of action, whether it’s available schedules or which crew I’m working on, which clients I get, they get the good clients, I get the bad clients, they work the good hours, I work the bad hours, whatever that may be, if they connect those dots, boy, you’re in a lot more trouble here. Right?
SHENKER:
And a lot of times the only thing that connects the dots is the timing of things. And that is sufficient to prove one of these claims a retaliation claim. There’s a recent case with a woman in her forties who is a executive, and she was subject to a pretty bad hostile work environment. People openly watching pornography in the office, explicit comments and jokes. She reported that the conduct and company executives did nothing. But then after that, she starts being removed from relevant work emails. She was ignored at meetings. These are more subtle ways of retaliating. She was told by her boss that her salary was too high. Later, there was more blatant retaliation when she was offered a promotion and it was withdrawn right after she filed a complaint. Those are much more rare, the blatant forms, but even these smaller things that are designed to make someone’s life a little more difficult in the workplace, they can be constitute retaliation.
So I think retaliation is one of those things, Mike, that we often think it is so basic, it almost needs no discussion, just don’t do anything bad to someone once they complain. But it is worth repeating that when you have an employee who makes a complaint that’s considered protected activity, then number, that doesn’t mean you treat them with kid gloves and you can’t do anything with that employee if there are issues. But you need to understand that any employment action you take, whether it’s discipline, termination, or even those more subtle types of terms and conditions, those are going to be scrutinized based on the timing. And so if you are going to discipline or take really any action against an employee once they’ve made a protected sexual harassment or other complaint, the idea is you really have to back that up with documentation to show whatever was done was based on legitimate business reasons.
VANNOY:
And maybe the last thing I’ll comment on before we move to best practices and prevention here is to really, really think long and hard about timing of changes you make of any kind with an employee who has raised a concern to you. And I think there are bad actors on both sides here. There are employers who allow things to happen that they just shouldn’t, and they’re acting badly. There are also employees who see the boogeyman behind every shadowed corner and perceive things that aren’t there. And so as an employer, you just have to think through every decision. I know an entrepreneur, she had an employee that complained to her. It was a sales rep. The sales rep was making some demands around territory office, vacation, all kinds of stuff. F this employer in her heart, she actually wanted to retain this person. She was a little bit of a troubled soul perhaps, but saw potential in this person and as a reaction to the complaints, change this person’s comp plan in a way that they thought that was actually going to help that rep succeed and make more money. And all of a sudden it was days later, they found themselves at the end of a discrimination suit based on gender. That also included the retaliation claim you’re talking about. Because the reason they changed my comp plan was because I complained and it was like 180 degrees from the owner’s intent, but the owner was not seeing around corners the way they should have. Is there anything you’d want to, additional coaching you’d provide along those lines before we talk about some best practices?
SHENKER:
Yeah, I think that, again, in that situation, the company could have been much better off if they could have done the same thing, but documented why they were taking, making that change, which then when it resulted, maybe in an unintended consequence they could, they’d have documentation to show why it was done. But yeah, I mean, look, we want to be careful in dealing with employees once they’ve engaged in protected activity. But we also have to balance that with you’re running a business and the reality that on occasion employees will do. We make complaints to protect themselves from discipline when they expect discipline is coming. I
VANNOY:
Will say that I know in that case, this business owner had excellent documentation and notes and the thing was settled out of court by insurance because I think prosecuting attorney saw that and they’re like, oh, well you really don’t have a case here. Exactly. And so it costly deductible, but if you didn’t have good documentation, that could easily have been a hundred grand as straight out of your pocket if this thing would’ve gone to court.
SHENKER:
Absolutely. Absolutely. And look, as we’ll talk in a moment, sexual harassment claims are highly emotionally charged and they don’t look good. It’s obviously a very bad look for companies, but this day and age for companies not to take these issues seriously, again, if you go to court or have to settle or see a jury award, that will convey the seriousness in which the law looks at these types of complaints.
VANNOY:
Let’s pivot to some best practices in our remaining time here. So what are some of the best things could do? And I’ll jump the shark here, so to speak, age myself with that reference. When we did our HR benchmark survey for small, medium sized businesses, looking at the best practices of the fastest growing companies versus shrinking companies, we found that nearly 40% of companies who didn’t grow last year do not have an employee handbook updated within the last 12 months compared to eight in 10. So 80% of fast-growing companies do have an employee handbook updated. So 40% of shrinking companies have an updated handbook. 80% of growing companies have an updated handbook. Clearly growing companies, and this is a big survey. This is over 2000 businesses. The data doesn’t lie fast. Growing companies understand the importance of having talented employees, good employee relationships, and then setting expectations around these things. So what is it about an employee handbook that is probably always going to be our number one recommendation here as a best practice.
SHENKER:
And I think it’s simple, right? Handbooks serve really two big purposes for employers. One, it’s legal compliance. It’s going to contain your equal employment opportunity policies, your harassment policies, other legal disclaimers. So we’re getting all that legal stuff in there. But the second part is legal protection. So this comes into different, a few different forms. Oftentimes when we talk about discrimination and harassment, it’s treating people in similar situations the same way the employer should be treating women differently than men. And so a handbook that has policies, it promotes consistency by the employer in outcomes and in different situations that it’s treating people with different characteristics the same way as the law requires it. Also the proof of receipt. So when we see handbook, we should probably say everyone should have a handbook and handbook acknowledgements, because I’ve had employers who had a handbook, had no acknowledgements, right?
Nothing signed by employees to say they received it. And so if it wasn’t emailed, obviously if we email it, we can see if they got it, but these were not emailed. And so we had an employee who denied ever receiving it, and it was impossible to establish they had gotten the handbook with these policies. So acknowledgements, especially year after year, these handbooks should be updated. Every time a new version is distributed, every employee should acknowledge it. It’s very important. So yeah, the handbook for those reasons far away, the biggest thing that a company should have, and they follow the handbook. It’s not a document that just sits on the shelf and collects dust. This is what the company refers to when, hey, it gets a harassment complaint. We haven’t had one before. Let’s look in our handbook. Let’s see what our procedure says. Alright, we have a investigation procedure. That’s what we’re going to follow. So it makes it easy for the employer as well. You have one place now you can look to determine what you’re going to do in various situations.
VANNOY:
Hey Brian. So a couple of things I want to go there. So the handbook protects. It helps to protect, I can’t say it protects, there’s no such thing as blanket protection, but I kept on at the top of the conversation of in the workplace, out of the workplace, we’re notified, wasn’t notified. Kind of putting these into those four categories, it’s when you aren’t notified or maybe you kind of observe something, maybe you had a gut feeling. It’s these areas where you weren’t clearly notified by someone that you got a problem. There’s a complaint, there’s a whatever. There’s an event. This is maybe the single biggest thing you can do. If you can demonstrate that you not only have the handbook, you explain the handbook, we deliver this presentation and everybody signed off, here’s their signature. Whether they paid attention, maybe that employee didn’t pay attention, maybe they just signed it and never read it, but now they attested to it and you are miles better off than you were otherwise. I’m curious. I want you to speak more on having this handbook, but then you don’t follow it. I’m just imagining if I’m a judge, I’m sitting here thinking, okay, well yeah, your handbook says this and the employee signed it. Good on you. But your handbook also says that when you get a complaint, this is your process. Did you follow that process? And if you didn’t, your handbook means crap,
SHENKER:
Right? No, absolutely. And look, those situations where a company does not follow its handbook, those end up in exposure to the company, right? Because it looks just as bad to just not have a handbook and fly by the seat of your pants as it does to actually have these policies and not follow ’em. Perhaps
VANNOY:
It looks worse because now you’re willfully not doing what you said you were going to do.
SHENKER:
Yes. And that’s where we often see the biggest damage awards in cases like those where the company knew about it, even had policies, and then they just went the other way. I’m thinking of one right now where there was a case where a company was going to hire a new manager for a department, and one of the employees in that department reported to HR that, Hey, I worked with this manager at a different facility and they sexually harassed me. And by the way, I filed a complaint about that and the company had all the handbook, everything in place, but their response to this aid was employee was, go find another job. If you don’t want to deal this person, they’re now your manager. So the new manager comes in, fires this employee within a week, and this was a seven. There’s a figure result here based on the prior conduct and the continued conduct and the employer’s blatant ignoring of the complaint and not following its handbook. So yeah,
VANNOY:
Seven figures scares the hell out of anybody. What is the, what’s going through my mind is many of these things to a small business who’s trying to, everybody wants to grow. Everybody wants to build an asset that could be their retirement. But the reality is most small business owners are actually trying to survive. And a six figure hell, maybe a five figure, but certainly a six figure, and for sure a seven figure settlement is existential threat. It literally puts them out of business, ends their dreams without unduly scaring folks. Where do you see the spectrum of these things? And obviously there’s different levels of the size of the company and how egregious the offense, and there’s a million factors here, but kind of bucket this if you will. What should employers be thinking about as if this goes badly? How much could this actually cost? Yeah,
SHENKER:
So I guess stepping back, what are the things that an employee can recover if they are sexually harassed so they can get money for emotional distress? That’s the humiliation, embarrassment, anxiety, which that alone can range from a couple thousand in a very minor case to six figure in a more serious situation. There’s also punitive damages, which is basically just the jury or judge saying this was egregious conduct and you need to pay for that egregious and malicious conduct. And that’s typically going to be the situations where complaints were ignored. Punitive damages can be seven figures in those cases. That’s where a jury will really hit a company where it’s not just that they did one thing wrong, but once they realized something was wrong, they doubled down on it and did it went even worse. Those are the situations where you’re going to have sizable punitive damages.
But another thing that often occurs in these cases is injunctive relief, right? So the EEOC sometimes files these claims on behalf of employees and they will, or if you settle with the EOC too, they’ll impose terms where they’re going to be reporting requirements to the EEOC for the next three, five years during the term of this judgment or settlement. And that there have even been EOC settlements where the company’s required to get a third party to draft policies and implement the anti-discrimination policies because the employer cannot be trusted to do it based on their past conduct. So courts will style relief. It’s not just going to be money. They will style relief that kind of meets the conduct and addresses. Is it an organizational failure that, hey, we don’t have policies or they’re just ignored? In those situations, there might be even broader relief provided.
VANNOY:
Maybe it’s a good explanation. I understand why you can’t, it’s hard to give dollar amounts. Maybe just generally speaking, I’m thinking in the very low end, unless your insurance covers this and their attorneys, you’re picking doing this work on your behalf, what would a likely low end cost just to defend, even if you’re completely right and you’ve done everything a cost to defend up to kind of the max area that you’ve seen, and let’s call it a 25 employee business to stick in the smaller end of the small business range.
SHENKER:
Yeah, right. One thing we’re not even discussing, so we’ve talked about the damages, but the cost to defense, that would mean hiring an attorney and paying your own attorney to fight this. That can cost. I mean, again, every case is different, but if you’re talking about going from the start of the case up to trial, yeah, we’re probably talking low six figures depending on the state you’re in and
VANNOY:
New lawyers, Brian,
SHENKER:
I’m telling you. And that’s the problem. And look, that is why you don’t want to get hit with this type of claim, and you want to prevent these and handle any complaints internally and resolve them, because these matters do get expensive when it’s not dealt with the company. So that is why we need these policies that say who you can complain to and we promote an open door culture.
VANNOY:
So let’s just leave it at this, then we’ll go back to best practices. I think I pulled you away from that. So clearly the average small business, getting a seven figure settlement against them is crushing, could put ’em out of business. The company who does everything from an administrative perspective, they take great notes, they got an employee handbook, they do all this and all of that. It could still cost them six figures just to defend themselves if they’ve done nothing wrong, if the other side is lawyered up in a big professional way, and that might be existential. So therefore the very, very best thing to do is not have a sexual harassment happen in the first place, which then takes us back to the best practices of prevention, right?
SHENKER:
Yes. So picking up where we left off with preventative measures. So we talked about the handbook, the one policy I’ll discuss that should be inside that harassment discrimination section is a robust complaint procedure. I cannot emphasize this enough. I know we’ve discussed this in past in the past, Mike, that you always want to have employees come to you as the employer before they consider going outside to an agency or attorney or a union. So we want to make sure that the policy says they can complain to all sorts of people. We don’t want one or two places to go because what if they’re experiencing harassment from those places? We want to ensure they can go somewhere in the company to be heard and effectively heard. So very important, have complaint procedures. But outside of that, outside of the handbook, employee training and manager training is imperative.
In some states it’s even required nowadays, but there are two types of trainings. There’s one for your rank and file employees, which again, very important. The goals here, explain what the policies are, give examples of what’s acceptable behavior and not acceptable. But then manager training, manager training, I’d say is even more important than the employee training because it’s going to go a step farther than the employee training and teaches these managers the skills they need to identify when they’re observing harassment to identify a harassment complaint. Because oftentimes someone’s not coming forward and explicitly saying, Hey, I’m subject to sexual harassment. I’d like to make a complaint. It’s usually something far less clear than that. So managers should be trained on how to identify a complaint and then of course, what to do with it next. Right? This duty to report for managers, absolutely an important training topic because they can’t keep complaints off the record. They can’t promise confidentiality. They can’t tell an employee, Hey, let me know when you want me to report this complaint. I’ll keep it quiet. Until then, there’s none of that. Managers need to understand they’re the company. When they know it, it goes up the chain.
VANNOY:
It. It’s one of the biggest myths that there is such a thing as off the record, no, you might think it, it’s like a part of our cultural nomenclature. Hey, this is an off the record. No, it’s not. Because the judge is going to say, well, they told you so you knew, and then you still did nothing. So remove that from your vocabulary. There’s no such thing as off the record,
SHENKER:
Right? Look, right. The other thing we don’t want managers doing is deciding whether this is serious enough to report up. The chain managers should report the complaint, even if they think the complaints about something trivial or even if they think it’s been resolved, these things should be reported. So that is really important because as the company, you are charged with the knowledge of managers. And so they really need to understand their role in protecting the company and again, protecting other employees from potential harassment. So manager training, employee training, both very important. And look, we’ve really discussed this already, but of course once those complaints come in, we need to investigate. I know we did a deep dive into investigations previously, so I know that’s out there for anyone to see. But when a gets a complaint, right, we will just leave it at this, that promptly, promptly investigate because as we’ve seen, that’s one part that can really provide a company, a defense or at least part of a defense or make the situation a lot less serious if they get into that.
VANNOY:
I highly encourage you, Brian, and you and I just did a show recently on this. It’s a whole topic in of itself, but how to properly conduct an investigation, don’t under think this. It’s kind of like the judge that says, okay, you got the handbook, but you didn’t follow your own rules. Therefore, your handbook is meaningless. There’s a right way and a wrong way to do an investigation. Maybe wrap it up for best practices. I think it’s involves retaliation and not doing it
SHENKER:
Right. So I think we’ve hit that, but right. The last thing is don’t retaliate. And again, this applies whether the complaint is we think it’s frivolous or a serious complaint that just because someone complains and the complaint goes uncorroborated, and so we don’t take any action, that doesn’t mean you’re going to then be free to retaliate against the person. They still engaged in protected activity, and so you can’t take action against them because of that complaint. So again, I think just to hammer home both in this situation and all situations, employment decisions should be backed up with business related reasoning that it’s hopefully in writing and that will help in a retaliation situation and many others.
VANNOY:
Brian, I got maybe one last use case I want to throw out here. I think this is actually common if you watch the show regularly that I’m, I’m not naive to think that there are bad actors from employers, but the purpose of this show is to advocate for employers and how do you protect yourself? That’s not to say we want to give you techniques to get away with wrong stuff. We do not. That’s not the intent. But we generally give business owners, entrepreneurs, employers, the benefit of the doubt, real life conversations, straight talk, talking to an employer recently, and it’s about hr, and she runs a business in the beauty industry. She’s like, Mike, I know darn well that my business isn’t super HRE compliant. There’s a lot of slapping on the ass. There’s a lot of off-color jokes, she said. But that’s also one of the things that my employees love. And if I try to clamp down and be too legalistic here, my words not hers. She’s had genuine fear.
She would lose some of her employees. That’s what they love about this open, super fun group. And she knows that it’s a little bit maybe playing with fire, and she’s not intentionally trying to create anything that’s toxic or over the top. And I don’t think there’s anything that’s egregious that’s happening in her business. But I think a lot of business owners kind of do this calculus that’s like, yeah, maybe in a pure HR sense, I shouldn’t allow that, but hey, we’re real. We’re family. We tell jokes and give your business consultant not lawyer advice to business owners. This is real world, right?
SHENKER:
Look, it’s an issue that, look, I’ve heard this clients as well, and it’s a difficult one. It’s a difficult situation where sometimes these come up depending on what industry it is, or it’s just a company that’s been around and this is the culture that’s developed. And look, the owner will say, Hey, it’s acceptable. People just do this, everyone’s fine. And look, my response to that is it’s fine until it isn’t. You might think it’s fine, but do you know how each of your employees is subjectively feeling about that conduct? And one of the things with sexual harassment is the unwelcome nature of it. So what I’m hearing is, well, this isn’t really unwelcome. It may be we understand it’s inappropriate, but it’s not unwelcome because everyone’s partaking in it. But with that unwelcome aspect, you can change consent, right? So it might be welcome, right?
This is fine, but then someone crosses a line and now it’s no longer welcome conduct. When someone says, that wasn’t really a funny joke, I don’t like when you say that. Or, look, maybe we hire someone new who has some different protected characteristics or other characteristics than the other employees, and they might think about what’s being said a bit differently. So again, I think for the reason that an employer can never truly get inside their employee’s heads, it’s not good to tolerate those types of environments because I’ve also seen lawsuits filed by an employee who said the environment was so bad and I was compelled to go along with it because if I didn’t laugh at these jokes, if I didn’t say something along those lines, then I thought I would be fired or I would be ostracized. So I endured it, right?
VANNOY:
I think you’re hit the nail in the head. I think that’s, I mean, there’s obviously a bunch of legalistic HR compliance context, a bunch of things wrong with allowing any of those behaviors, the bad jokes, the ass padding, the whatever. But I think the thing that we miss as employers is, I remember when I first became a boss and had employees years ago, people laugh at your jokes a little more than they used to, and they’re not trying to suck up to you. But that’s just nature, human nature. And if you might not be the one telling the bad joke or the pat on the tush, but you laugh when the other person does, you’re sending a signal to everybody else that this is funny. And you might honestly think that everyone quote, everyone thinks this is funny. Maybe there’s laughing because they think the boss thinks this is funny, and maybe they just want to fit in. Maybe it’s purely social. They just want to fit in. Maybe it’s career. Hey, this is how it is, this is the game you have to play here. There’s a whole bunch of reasons why some of your employees might see this as, and I’ll use your word at the top of the conversation, unwelcomed and of sexual orientation that makes it sexual harassment, even though you think it’s not. I think that’s a really good use case. I’m going to give you the final word. What’s your guidance to employers, small business owners around sexual harassment?
SHENKER:
Yeah, I think just having a recognition that harassment can and does occur and that you need to take steps to ensure it’s not occurring in your workplace. And again, as with a lot of these things, taking steps to create a harassment free environment at work not only helps compliance wise, but it creates a better culture. And when you have a better culture, you have employees who want to be there, who are going to be better workers. And so all of this goes to creating a more positive workplace and a better company potentially, because employees will stay. They’re not getting pushed out and they want to be there. So I think companies who invest in these preventative measures and setting this compliant workplace, they’ll reap the benefits in multiple ways.
VANNOY:
Yeah, yeah. Very good. Brian, this is a super important topic that I think people too quickly dismiss as, oh, that’s not me. I don’t sexually harass people. I think we did a good job unpacking some of the ways that we, as employers and entrepreneurs, we probably have more exposure than we thought we did in start getting a good employee handbook. Living out your employee handbook, take serious every complaint, conduct investigations, and do not retaliate. I think that’s all really, really sound advice to help get ahead of these things and you never have to face the claim in the first place. Brian, thanks for your time today. Thank you. And to everybody else. Until next week, we’ll talk to you then.
Speaker 1:
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