Workplace Investigations

On June 25, 2018, the U.S. Court of Appeals for the 11th Circuit issued its opinion in Wilcox v. Corrections Corporation of America in favor of the employer in a Title VII sexual harassment claim. The 11th Circuit affirmed the district court’s granting of the employer’s Rule 50 Motion for Judgment as a Matter of Law (“Rule 50 Motion”) after a jury returned a verdict for the employee, Felicia A. Wilcox, of $4,000 in actual damages and $100,000 in punitive damages. The 11th Circuit Court of Appeals agreed with the employer, Corrections Corporation of America, that the employer could not be held liable because it took prompt remedial action after Ms. Wilcox complained about the harassment.

Helen H. Albee, one of Ms. Wilcox’s attorneys, was surprised that the 11th Circuit followed what the district court did and were “unconcerned with the amount of factual analysis the district court did on the Rule 50 motion.” Ms. Albee noted that after the jury’s verdict, the district court did “a lot of re-weighing the evidence the jury did already.” Let’s take a look at the facts and what happened in this case.

What Happened and When?

Ms. Wilcox alleged that a coworker, Larry Jackson, slapped her buttocks twice, squeezed her thigh, and made sexually explicit remarks on different occasions. When Ms. Wilcox filed a complaint with her employer, the employer took the following steps:

  • The employer ordered Jackson not to be around Ms. Wilcox immediately, but nonetheless he rolled his eyes at her repeatedly and punched a metal machine in front of her to intimidate her;
  • After Ms. Wilcox made a second complaint to the employer about prior sexual harassment incidents and her fear that he would touch her again, the employer’s investigator interviewed Ms. Wilcox 6 weeks after her first complaint;
  • The employer’s investigation included interviews with 16 other employees that resulted in sexual harassment complaints against Jackson by other employees;
  • 8 weeks after Ms. Wilcox’s complaint, the employer’s investigator found that Jackson sexually harassed Ms. Wilcox and other employees; and
  • The employer terminated Jackson five days after the investigation report.

Knowledge + No Prompt Remedial Action = Employer’s Direct Liability

An employer can be held liable for a hostile work environment claim through either vicarious or direct liability. If the harasser is not the victim’s supervisor, an “employer will be held directly liable only if it knew or should have known of the harassing conduct but failed to take prompt remedial action.” Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1278 (11th Cir. 2002). Wilcox argued that her employer should have known about Jackson’s additional harassment after she complained about him because he would inappropriately hug female employees and make intimidating looks and gestures toward Ms. Wilcox after her first complaint. The 11th Circuit didn’t think the harassment was sufficiently pervasive to impute knowledge to the employer because (1) Ms. Wilcox didn’t report the hugging or intimidating conduct; (2) there wasn’t any evidence that the hugging was widespread or considered offensive; and (3) the employer’s anti-discrimination policy was well-known and vigorously enforced.

As for the employer’s “prompt remedial action,” the 11th Circuit held the employer’s action was effective “and a reasonable jury would not have a legally sufficient evidentiary basis to find otherwise.” Wilcox v. Corr. Corp. of Am., No. 17-11919, 2018 WL 3099892 (11th Cir. June 25, 2018). The only prompt action that seemed to occur here was ordering Jackson to stay away from Ms. Wilcox. Nine weeks is a long time to be working alongside a harasser who is being physically intimidating without saying a word. During oral argument, the employer’s attorney argued that Jackson’s termination within 5 days of the report concluding sexual harassment occurred and investigation into numerous other allegations showed that the ends justified the means because “the investigation was reasonable under the circumstances.” The 11th Circuit reasoned that a jury could not find that the employer failed to act promptly because “there were a lot of moving parts in the company’s investigation, and each of those workings took time” and “culminated in Jackson’s termination.” Wilcox, No. 17-11919, 2018 WL 3099892 (11th Cir. June 25, 2018).

Many employees want to know what is going on with the company’s investigation after lodging a sexual harassment complaint. Working alongside a harasser while an investigation is ongoing can be excruciating, but many employers don’t keep the victim apprised of the investigation. While taking six weeks to interview a victim scarcely seems “prompt,” a court may conclude otherwise if the investigation is complicated and results in the harasser’s termination. If you are experiencing sexual harassment at work, an attorney can help you understand your rights and guide you through the pre-litigation phase.

Nicole Reyes moved to the United States from the Philippines with her five-year-old daughter and husband just over a year ago, speaking minimal English. Through a family friend who knew the owner, Maria Santos, also from the Philippines, Mrs. Reyes got a job in Hotel Pagalit cleaning rooms. When she began her employment with the hotel, Mrs. Reyes received a fifty page handbook in English with the hotel’s policies and procedures, which included a section on how to address any sexual harassment she might encounter. The handbook defined sexual harassment, contained examples of verbal, physical and non-verbal harassment, stated that any form of sexual harassment was strictly prohibited and should not be tolerated by any employee, provided information about the hotel’s human resources department, how to record and report an incident of sexual harassment, the individuals to whom sexual harassment should be reported, the investigative procedures the hotel would carry out in response to reports of sexual misconduct, and instructions on how to minimize the risk of being harassed in the first place. The hotel required that cleaners work in teams of two or more, and never enter rooms alone, in an effort to reduce the risk of sexual harassment. The handbook also stated that the hotel would take prompt, vigorous action in the form of discipline, reporting to the police, and/or dismissal against anyone who, after a full investigation, was determined to have sexually harassed or engaged in sexual misconduct against another.

The owner’s husband, Angelo Santos, did not have a formal management position or ownership interest in the hotel. Nonetheless, he was a constant presence at the hotel, and would informally participate in the hiring and firing of employees such as Mrs. Reyes. Maria and Angelo Santos would jointly discuss employees’ rates of pay, the number of hours employees worked, and job assignments, and who should be hired and let go, although the ultimate decision-making authority rested with Mrs. Santos. According to the hotel handbook, any reports of sexual harassment alleging improper physical contact would have to be reported to Mrs. Santos by senior human resources personnel.

Coerced Sexual Activity By the Hotel Owner’s Husband

Mr. Santos falsely told Ms. Reyes that he was the owner of the hotel and was her boss, and that if she did not do as she was told, he could fire her. He asked repeatedly to meet with her privately in one of the vacant rooms. Once in the room, Mr. Santos would then tell Ms. Reyes that if she did not have sex with him, she would lose her job, lose her husband, and be sent back to the Philippines. Mrs. Reyes was terrified of Mr. Santos, and as a result, had frequent coerced sex with him throughout her employment. After the sexual activity, Mr. Santos would threaten that if Mrs. Reyes reported him she would be fired, he would tell her husband that she was unfaithful, and that he would prevent her from finding another job in the United States.

Ms. Reyes Quits Without Following The Employer’s Procedures

After about six months of giving into Mr. Santos’ sexual demands, Mrs. Reyes had finally had enough. She told her husband about all of the abuse that she had endured from Mr. Santos, and quit working for the Hotel Pagalit. Mrs. Reyes did not report any of the abuse to the hotel or its human resources department, nor did she follow any of the procedures outlined in the hotel’s handbook, partly because she could not read much English, and partly because she believed that Mr. Santos was the owner of the hotel, and that any recourse through the hotel’s channels would be futile. Mr. and Mrs. Reyes then hired an attorney to sue the hotel on his wife’s behalf.

The Employer’s Faragher Defense

In 1998, the U.S. Supreme Court in Faragher v. City of Boca Raton held that an employer may raise a defense to an action seeking to hold it vicariously liable to a victimized employee for a hostile work environment created by a supervisor with immediate or successively higher authority over the employee, where no tangible employment action is taken against the victimized employee, by showing that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer to avoid harm or otherwise. If the harasser himself holds such a high position in the company that he could be considered the employer’s alter ego, the defense is inapplicable. In a recent Florida case, a hotel attempted to assert the Faragher defense where it was the owner and general manager of the hotel who was sexually abusing and victimizing the plaintiff hotel worker, and the hotel fired the worker when she began to refuse the owner/general manager’s advances. Charest v. Sunny-Aakash, LLC, 2017 WL 416901 (M.D. Fla. 2017). The Court rejected the hotel’s Faragher defense, both because the hotel took retaliatory action against the worker and because the harasser was the hotel’s alter ego.

In Mrs. Reyes’ (fictional) case, the applicability of the defense is less clear. Mr. Santos had no ownership or formal management position with the hotel, but falsely represented to Mrs. Reyes that he did. And Mr. Santos had substantial influence over the actual owner of the hotel, who had the ultimate authority to hire and fire employees, determine their rates of pay, and assignments. Moreover, while the hotel’s procedures might have been reasonable, it is less clear whether Mrs. Reyes’ failure to follow them was unreasonable, particularly where she spoke and read little English, and arguably reasonably believed Mr. Santos had the power to fire her and that her complaints would therefore fall on deaf ears. Mrs. Reyes could also argue that Mr. Santos, who was married to the actual owner and manager of the hotel, was a de facto alter ego of the hotel, even if he did not hold a formal ownership or management position.  In any case, availing oneself of the employer’s procedures and remedies for addressing sexual harassment can help to avoid the employer from successfully asserting a Faragher defense.

Hotel workers are particularly vulnerable to sexual harassment. For more on this subject, see the recent NPR article, Advocates Push for Stronger Measures to Protect Workers from Sexual Harassment.

A new lawsuit involving non-lawyer employees at Dentons, the world’s largest law firm, reiterates that there is no area of society immune from sexual harassment issues, and that a company’s response to allegations against an employee deserves as much scrutiny as the underlying behavior. Above The Law and the ABA Journal Blog outline the allegations leveled by Kruanli Parekh, a Business Development Specialist, against Alton Delane, the Managing Director of Dentons’ Venture Technology Group.  Law.com and Bloomberg’s Big Law Business Blog also have reports.

Allegations of Inappropriate Touching and Vulgar Language

Parekh’s Complaint alleges that Delane treated her as a sex object, using vulgar language, trying to draw her in to sexual conversations during late night calls, and touching her legs and buttocks without her consent. The Complaint even offers a bullet-point list of explicit allegations against Delane, while noting that he generates significant business for Dentons and is treated as a partner. Not surprisingly, alcohol is alleged to have played a part in Delane’s alleged-behavior.

Dentons, which just a few months ago dealt with allegations made against a partner while at a firm that merged with Dentons, issued a statement explaining that it placed Delane on administrative leave upon first learning of the allegations, and that it will take appropriate action upon conclusion of an internal investigation.  Parekh’s Complaint, however, alleges that Dentons initial response was far from robust. She claims that when she complained to her supervisor, she was told not to discuss the matter with anyone, which she characterizes as the firm’s effort to silence her and discourage her from seeking outside counsel. Parekh attributes the response—and the environment which enabled Delane’s alleged behavior—to a lack of female representation among the firm’s leadership. There are just three women on Dentons’ 34-member global board, and two on its 20-member global management team. For its part, the firm noted in its statement that five women serve on its 16-member U.S. board.

Whether Dentons responded appropriately or not will be borne out as the case progresses. Above The Law notes that Parekh’s allegation that she was told,

do not discuss this with anyone else inside or outside the firm,”

could be part of a prudent direction if given in the context of a request to wait until the firm concluded its investigation. Parekh’s lawyer told Bloomberg that the firm knew about the allegations for months, and only took action once Parekh sought outside counsel.  What is clear, however, is that even though companies can’t control for every employee’s behavior, they can control their response.  And society is paying attention.

The #MeToo moment is making it harder for businesses to allow bad actors to quietly move on to other opportunities, as demonstrated by the resignation of Mayer Brown capital market’s partner James R. Tanenbaum. Above the Law and The American Lawyer report that Tanenbaum resigned in March when it surfaced that he was fired from Morrison & Foerster’s New York office after an internal investigation substantiated allegations of sexual harassment.

Real Consequences After #MeToo

Tanenbaum was reportedly first accused of harassment over two years ago, and was reprimanded by the firm. When the allegations resurfaced last year, Morrison & Foerster brought in an outside firm to conduct an investigation into Tanenbaum’s behavior. Above the Law reports Tanenbaum was asked to leave the same day the outside report was finished, and left the firm in December 2017. In less than two months he had found work with Mayer Brown, reportedly as part of the firm’s luring of a large team from M&F.

It is not clear what led Tanenbaum to resign less than a month later. Mayer Brown issued a statement that it had accepted his resignation after “assertions that [he] may have engaged in inappropriate conduct at his former firm.” The firm did not respond to Above the Law’s request about whether they had any knowledge of the allegations surrounding Tanenbaum during the hiring process. M&F also declined comment.

While Tanenbaum’s story is nowhere near as public as those we have seen in the entertainment industry, it shows that even businesses as private as law firms are changing the way they handle allegations of workplace sexual harassment. Just two years ago he was slapped on the wrist, but this time around the firm investigated and acted. Above the Law spoke with a partner at M&F, who said the #MeToo movement inspired her to come forward, and that she was proud of the way the firm conducted a fair investigation into the claims. It is concerning that Tanenbaum was able to shuffle to another firm without—at least initially—any serious question, however in today’s environment he ultimately was not allowed to go away quietly.

It has been over a month since Sports Illustrated broke the story of the history of sexual harassment within the Dallas Mavericks’ organization. Since then, the team has hired outside counsel to investigate its culture, and brought in a new CEO who has committed to changing that culture going forward. Now, a new report from Deadspin, based on interviews with former and current employees, shows the important role that workplace culture plays in enabling sexual harassment.

A Real Life Animal House

The stories in the SI report are sadly predictable: the now-former President and CEO of the team once openly suggested that a female subordinate was going to be gang-banged over the weekend, and openly propositioned women for sex; at least one employee was warned, “don’t get trapped in an elevator with him.” A male employee in ticket sales was known for watching pornography at his desk. And in one instance, an employee allegedly dropped a used condom outside an office bathroom, which the head of human resources picked up with a paper towel. SI quotes one employee describing the office as a “real life Animal House.”

Deadspin’s interviews shed light on how this culture persisted for so long: employees were under constant pressure to perform, and there was a feeling that management was either unwilling or unable to do anything about the culture. One former employee described the job as

like being married to a Hollywood star, knowing he was abusive emotionally and physically to you, but you stayed with him because he’s a star.”

In the case of the porn-watching employee, Deadspin reports that employees felt they had no choice but to ignore it because the employee had a long tenure with the team, was known for bringing in a log of money, and, perhaps most importantly, was seen as close with the powerful people above him, who were known for caring only about how many tickets their employees sold. Reports of sexualized comments were dismissed as “talking shop.” And in perhaps the most widely-discussed revelation, the team allowed an accused-domestic abuser to remain with the team, even after he was arrested for alleged abuse of one woman, and was widely suspected of abusing a coworker whom he was dating.

When the Office Culture Protects the Harassers

Above all, the team’s handling of the abuse and harassment allegations sent a message to female employees that they were “just there to protect the men.” Sexual harassment persisted while male employees were given multiple chances. And the physical environment didn’t help. Many employees worked in a completely-open office space, meaning that everyone knew when someone was screamed at, belittled, or harassed. One employee stated that she was initially shocked by the abuse, but felt like she had to look the other way to keep her job.

As the #metoo and #timesup culture movement continues to evolve, it is stories like this that will help us understand how we got here, and how we can improve. In the case of the Mavs, the office culture played a critical role in enabling sexual harassment. Management looked the other way, or even participated in the harassment, intimidating victims and would-be whistleblowers alike into silence. It is in such a situation that an attorney can be a vital resource to a victim or whistleblower. We owe our clients a duty of confidentiality, and can also provide an objective analysis of the situation and possible remedies. If you have been a victim of or witness to sexual harassment in the workplace, don’t hesitate to reach out, especially when the office’s culture would encourage you to remain silent.