Tag Archives: harassment

The Right Way to Handle Employee Complaints

California employers have a legal duty to respond to certain employee complaints.  Failure to respond or failure to respond appropriately can result in significant liability.  This is particularly true with complaints of harassment, discrimination and other unlawful conduct.  Accordingly, employers should never take employee complaints lightly.  Even if no legal duty to investigate exists, a well-managed response can minimize or even eliminate problems and improve employee morale.

Achieving the well-managed response is not easy.  It takes careful planning and execution.  Fortunately, most employers do a very good job of managing their employees, and complaints are infrequent.  Unfortunately, this means most employers have little experience at managing the complaint process.  Being aware of and strategically planning at each step of the process can help make up for the lack of experience.

Here’s how you do it:

Receipt of the Complaint

How an employee complaint is received can be critically important.  If the employer has not created a culture of trust and respect, employees will not be comfortable coming to management with complaints.  That may mean fewer complaints but will also mean bigger problems — employees are not required to complain to the employer before filing a lawsuit.  Consistent with the culture of trust and respect, the manager receiving a complaint should express an interest in and concern for the employee making the complaint.  Remember, the employee is not happy about something.  A closed-minded, uncaring demeanor during the first contact will only make the unhappiness grow.

It is also very important to be aware of and address the complaining employee’s expectations.  If the employee requests that the complaint be kept confidential, the manager must be able to explain why it cannot be kept completely confidential and must be able to do so in a way that does not alienate the employee.  The manager should also address the employee’s expectations for the process and the result.  Obviously, it is too early for the manager to make promises about the result, but he can help build confidence in the fairness of the process.

Act Immediately

Once a complaint is received, the employer should act immediately.  Any delay in taking action on an employee complaint will be magnified tenfold in litigation, and the employer will have a very difficult time overcoming the perception that the complaint was dismissed as unimportant.

Conduct an Investigation

Every employee complaint warrants an investigation.  That does not mean that every complaint requires a lengthy, formal process conducted by professional investigators.  The investigation might be as simple as asking the employee a few questions.  Regardless of its scale, the investigation’s purpose remains the same: to get an accurate understanding of the facts.  Only with a solid understanding of the facts can the employer make an informed decision on the complaint.

As an initial matter, the employer must determine who will conduct the investigation.  Will it be conducted by a single individual or several people working in coordination?  Will it be conducted by the employer’s own staff or by an outside investigator?  In either case, the employer should consider the following factors:

  • The nature and seriousness of the complaint.  Complaints about the speed of the copy equipment do not warrant the same level of investigation as complaints about sexual harassment.
  • The skill and experience of the investigator.  Whether an employee or outside professional, the investigator should understand how to conduct a good investigation and have the skill to do it.  In some cases, an internal investigation is preferred.  If the employer does not have a skilled investigator on staff, the employer should hire an expert to guide and coach the employee conducting the investigation.
  • The investigator’s neutrality regarding the facts and witnesses.  Any bias, real or perceived, can render the investigation useless.
  • The investigator’s quality as a witness.  The investigator may well be a key witness in future litigation.  The ability to speak well and inspire confidence is essential in that arena.  It is equally important in giving the complaining employee and witnesses confidence in the investigative process.
  • The outside professional’s qualification.  California law requires outside investigators to be either a licensed private investigator or an attorney.
  • Whether creating a legal privilege around the investigation is important.  If it is, the investigation must be conducted by an attorney and conducted in a manner that maintains the privilege.
  • The scope of the investigation.  The investigator should find the facts and assess the credibility of the witnesses and information obtained.  The investigator should not make legal conclusions or suggestions on what actions to take, even if he is an attorney.

It is important to understand that the investigator or investigators cannot follow a set formula or pattern in every investigation and expect success.  A specific and strategic plan is always advised.  The plan will include consideration of who will investigate, who will investigate which parts, what order witnesses will be interviewed in, where they will be interviewed, what kind of record will be created and who will be responsible for communications.   As important as it is to have a strategic plan, it is even more important to not follow it blindly.  As facts are uncovered and circumstances change, the plan may need to be adjusted.  By definition, a good investigation will be flexible enough to ensure that all of the relevant facts are uncovered with a minimum of collateral damage.

Review the Investigation and Respond

The employer bears the ultimate responsibility for responding to the complaint.  Doing so appropriately requires a clear and complete understanding of the facts.  If the employer is uncertain about any facts contained in the investigator’s report, they should be clarified.  If the employer is not confident that the investigation was thorough, further investigation should be ordered.  With all the facts and confidence in them, the employer will decide what actions to take on the complaint.  This is the point where an employer should be interested in legal conclusions, particularly if the complaint is serious.  The deliberations about what actions to take and why should be protected against disclosure.  Often, it is advisable to have such deliberations protected by the attorney-client privilege.

While the deliberations may be secret, the decisions resulting from them are not. They will need to be communicated to the complaining employee and other interested employees and communicated effectively.  Once again, a strategic plan is critical.  How something is communicated is often as powerful as the content of the communication.   The effort put into the investigation and the problem-solving potential of the complaint process can all be lost by careless final communications.

Employers cannot escape the duty to investigate employee complaints.  Nor should they want to.  Employee complaints can be healthy for an organization.  They can uncover problems before they cause significant damage.  They can also be a vehicle for increased employee morale and productivity.  But the positive aspects surrounding employee complaints can only be achieved with a properly handled complaint process.

The Two Must-Haves for Employment Practices Liability Insurance

If you own or manage an organization and have not experienced an employee claim, count yourself lucky—and know that the chances are very good that your luck will change.

Many employers purchase Employment Practices Liability Insurance (EPLI) because general business insurance policies exclude employment-related claims for issues such as discrimination, harassment and wrongful termination.  Many EPLI policies do not, however, cover commonly asserted claims such as wage and hour violations or statutory penalties. The issues are complicated enough that decisions on EPLI require the assistance of two experts: a knowledgeable and trusted insurance broker and an experienced employment defense attorney. The insurance broker will guide you through the various policy options available and provide a wealth of risk-management information.  The defense attorney will advise on the real-world impact a particular policy will have when an employment claim arises.

If you purchase EPLI, you should prepare for employment claims before they are even asserted, by following these steps:

  • Select Defense Counsel in Advance. If you already use trusted employment law counsel, your carrier may allow you to designate your chosen law firm at the time the policy is purchased or renewed.  Some policies allow the insured to select its own counsel without such pre-designation.  Asking the right questions of your broker and specifying at the outset the employment lawyer you want is the best way to ensure that you get the defense counsel of your choice.  
  • Train Staff on Claims Recognition. Train key personnel to recognize a “claim” as it is defined under the EPLI policy.  What constitutes a “claim” is generally defined broadly.  A “claim” may even include pre-lawsuit claims, such as a discrimination complaint filed at a governmental agency like the California Department of Fair Employment and Housing.  Even a “demand” letter from a threatening employee or lawyer may constitute a claim.  As policies change from year to year, the definition of a claim may also change.  Key personnel should know what to do when a potential claim is spotted, including the who, what and when of communicating with the insurance broker or carrier.
  • Develop Protocol for Receipt and Processing of Claims. It is a good idea to have a specific person designated to whom all “claims” are promptly forwarded. The protocol should also include things such as identifying the name of the employee who received the claim and the date, time and how the claim was received.  It is critical to ensure that a potentially covered claim is properly and quickly processed. Communication problems can arise inside organizations because finance and operations executives, who were involved in buying the EPLI policy, tend to be knowledgeable about the terms of the EPLI policy, while human resources personnel tend to be the first to know that a claim has been filed.
  • Be Thoughtful and Precise in “Tendering” Claims to the Carrier. Once a claim arises, carefully consider the requirements in the policy for tendering the claim.  This may involve discussions with legal counsel regarding the pros and cons of tendering a particular claim at all and will definitely include advice on how and what to communicate with the carrier. Careful consideration cannot result in much delay.  EPLI policies typically require very prompt communication of claims and potential claims.  Follow carefully the means and timing of “tendering,” i.e., providing written notice to the carrier, as stated in the policy.   A copy of the lawsuit, administrative charge or “demand” letter should accompany the tender.  Follow up to ensure that the carrier has received the claim and accepted it.

    As a general rule, attorneys' fees and costs incurred to defend a tendered claim may not “count” against the insured's retention (deductible) until the date of tender.   If you incur attorneys’ fees and costs before the claim is tendered to the carrier, your company will likely have to pay those fees plus the full amount of the retention.  Worse yet, if a claim is not tendered in the manner and time frame required by the policy, the claim may be denied.  

The great majority of employers in California should at least seriously consider the addition of an EPLI policy, but not just any policy will do.  Without the expert guidance of a knowledgeable broker and employment counsel, you might be shelling out premium dollars that do not effectively achieve your risk-management objectives.  Once you have a policy, the development of effective protocols for handling claims is essential.  Those protocols will ensure that claims are not denied and that they are positioned to be effectively defended.

Employers Have Affirmative Duty To Take Reasonable Steps To Prevent Harassment Or Discrimination

On July 26, 2012, a federal judge in Las Vegas ordered Prospect Airport Services, Inc., a provider of wheelchair assistance services to airline passengers, to implement extensive measures to prevent future sexual harassment.

After agreeing to a monetary settlement of $75,000 in a lawsuit brought by the the Equal Employment Opportunity Commission, Prospect refused to agree to any prospective relief to prevent future harassment. The Equal Employment Opportunity Commission petitioned the court for an injunction and order directing compliance.

The judge issued an order prohibiting Prospect from further violating Title VII as it relates to sexual harassment for a period of five years. Prospect must develop a policy and procedures for handling reports of sexual harassment and an effective investigation process for all harassment complaints. It must also “appropriately discipline management and human resources staff for failure to comply with such procedures and provide annual sexual harassment training to all supervisory employees.”

The Equal Employment Opportunity Commission will monitor compliance and can haul Prospect into court again for any failure to comply with these orders or for damages based on new harassment incidents.

The Equal Employment Opportunity Commission had charged the company with failing to address complaints of unrelenting sexual advances toward a male passenger services assistant by a female co-worker. The employee, whose wife had passed away, received sexually suggestive notes and unwelcome advances. He rebuffed the advances and brought the notes to the attention of a general manager who made light of the situation and failed to stop the harassment. There was no effective company policy at the time to address the issue.

Over the course of a year, the harassment escalated to a near-daily basis, including offensive remarks by co-workers about his sexuality due to his rigorous rejection of the sexual advances. Despite his repeated complaints to management, the hostile work environment ended only when he resigned.

The Equal Employment Opportunity Commission’s press release states: “Today the court has spoken to affirm the importance for all employers to have effective policies and procedures in place to prevent discrimination in the workplace … A strong policy, meaningful training and a swift response to complaints help to contain an existing hostile work environment or to prevent one from arising.”

Under California’s Fair Employment & Housing Act (FEHA), failure to “take all reasonable steps to prevent discrimination or harassment from occurring” is a separate unlawful employment practice.

In a precedent-setting decision against a small law firm, the Fair Employment & Housing Commission (FEHC) determined that the Department of Fair Employment & Housing (DFEH) can prosecute an action for such failure, even when the underlying claims of harassment and retaliation aren’t proven.

In DFEH vs. Law Offices of Jeffrey Lyddan, the Fair Employment & Housing Commission determined that Lyddan’s statements, gestures and cartoons directed toward a paralegal, while often in bad taste, did not rise to the level of objectively severe and pervasive harassment that interfered with her ability to perform her job duties. Nevertheless, it supported a “stand alone” action by the California enforcement agency for failing to take all reasonable steps to prevent harassment from occurring. Without actionable harassment or retaliation, such a claim may not be actionable by a private litigant in a civil action.

The Commission found that Lyddan failed to maintain an anti-harassment policy, did not attend harassment training, and failed to order a fair and impartial investigation into the paralegal’s charges of harassment presented in her email when she resigned. Therefore, Lyddan was liable for failure to take all reasonable steps to prevent harassment from occurring.

California’s Fair Employment & Housing Act requires “effective remedies” that will both “prevent and deter” discrimination. This is why the Equal Employment Opportunity Commission and the Department of Fair Employment & Housing require employers to adopt significant future anti-discrimination practices and conduct widespread training as part of their settlement agreements.

The affirmative duty to prevent future harassment goes beyond sexual harassment to other hostile environment claims, including disability, as is seen in Espinoza v. Orange County, in which an employee was awarded more than $850,000 after harassment by his co-workers and indifference by the County to his complaints.

Failure to prevent future discrimination is also a separate unlawful employment practice in disability discrimination lawsuits. The Department of Fair Employment & Housing has obtained settlements and Commission decisions with affirmative requirements for expanding reasonable accommodation procedures, adopting preventative practices and training in several pregnancy and disability discrimination actions in the last 18 months.

In DFEH v. Acme Electric, the Fair Employment & Housing Commission handed down the largest award in its history to a sales manager with cancer when his employer violated California’s Fair Employment & Housing Act by ignoring the duty to engage in a good faith interactive process, refusing to reasonably accommodate his disability and “failing to take all reasonable steps necessary to prevent discrimination from occurring.”

Prevention Strategies

  • Update your discrimination prevention policies and periodically audit their enforcement — even before someone complains.
  • Make sure your complaint procedures have accessible avenues for employees to report harassing work environments.
  • Conduct an immediate neutral fact-finding investigation with every internal discrimination complaint, even when it is raised by a departing employee, because the alleged behavior may still occur with others.
  • Update your disability processes to comply with the broad interactive process and reasonable accommodation requirements imposed by California’s Fair Employment & Housing Act. California law mandates that leaders receive harassment prevention training every two years.
  • Provide training for front-line supervisors on the standards for preventing discrimination or retaliation against employees who seek reasonable accommodations or take leaves of absence for medical conditions and/or disabilities.