Tag Archives: sexual harassment

Sexual Harassment in Restaurant Industry

Sexual harassment lawsuits against another employee are not uncommon, but oftentimes employers overlook harassment of their own employees by customers. A 2014 Restaurant Opportunities Center United report about sexual harassment found that 78% of restaurant workers had been harassed at one time by a customer. Title VII of the Civil Rights Act requires employers to provide a workplace free of harassment. If the employer “knew, or should have known about the harassment and failed to take prompt and appropriate corrective action,” they can be held liable. Many guests don’t expect that their behavior will be questioned; many restaurants don’t want to make customers uncomfortable by correcting their behavior. So what is a restaurant to do when a customer harasses the staff?

The first step for restaurants to fix this problem is to have a strong HR department that is serious about preventing and dealing with sexual harassment. It’s clear when employers are using training as a pre-emptive legal defense and when they actually take it seriously. Employees will respond with equal seriousness. If workers don’t feel like policies against harassment will be enforced, they won’t report.

Another step that restaurants can take to prevent lawsuits is proper sexual harassment training. All restaurants need sexual harassment training, not just big ones with HR departments. There needs to be something written down somewhere that’s clearly visible — if this happens, this is how we will respond. In other words, employers can’t just say that all their employees deserve respect; they have to go out of their way to show that they won’t tolerate sexual harassment if there is to be any meaningful change.

See also: Sexual Harassment: Just the Start  

The final way to mitigate sexual harassment lawsuits is through employment practices liability Insurance. Some restaurants consider going without EPLI coverage. Others mistakenly assume they are covered under their general liability policies, which most often have a standard exclusion for employment practices liability exposures. Going without EPLI can be a costly decision. Even if a restaurant only has a few employees, it needs EPLI coverage.

You can find the full report here.

Sexual Harassment: Just the Start

The dam has likely broken on sexual harassment claims. While the allegations currently focus on celebrities, politicians and other public figures, we can expect it to broaden to encompass virtually anyone in an organization. Victims now have a plethora of ways to address wrongdoings: social media with the #MeToo hashtag, traditional media and, of course, the legal system.

The risks to organizations are reputation, loss of focus and reduced productivity levels in the face of the negative publicity, legal costs, and legal awards or settlements. The current climate may very well have set the stage for some very large jury awards as juries decide to punish those who they feel failed to take the steps that should have been taken. Make sure your company and clients don’t fall into this category.

If your clients or company have not already implemented solid risk management practices in the employment practices arena, do so immediately! Make certain you have strong anti-harassment policies in place that are fully supported from the top down through the organization, train everyone in the company on the dos and don’ts of all forms of harassment, establish a clear line of communication for employees to report harassment and make certain that all complaints are promptly and competently investigated. Lastly, if you haven’t historically purchased employment practices liability insurance, revisit that decision, as well.

What do you think? Will the current deluge of harassment claims become a flood? Has corporate America done what it should to mitigate and manage the risks? Are companies large and small buying adequate insurance to fund the claims they cannot avoid? Share your insights and recommendations with other readers in the IRMI Group on LinkedIn.

You can find more at IRMI.com.

Getting Culture Right: It Starts at the Top

Leading a large organization of people is not unlike raising teenagers. At its core, the goal is to provide enough independence to allow growth and innovation and to fuel excitement about what people are doing, but at the same time to provide the necessary guard rails to help keep focus on the mission and prevent the stray person from getting too far from the flock and encountering danger. Parents are like the C-suite, and their approach to life, their leadership stamina and their commitment are key drivers in the family’s success.

When a teenager makes a huge mistake, or perhaps even worse, does harm to himself or others, people often look to the parents. Are they good parents? Strict enough? Involved enough to know what’s going on? Participating enough to influence behavior? Modeling good values and social norms? The same is true when a business finds itself embroiled in scandal or accusations of wrongdoing.

See also: How to Lead Change in an Organization  

Incidents of sexual harassment in the workplace have dominated recent headlines. These examples are not in the gray area of whether there’s hidden bias impeding the path to promotion for women, or whether there’s a systemic gender pay gap, for example. These headlines include overt sexual behavior that most people readily agree is totally inappropriate at work, and that many judges and juries will likely find are illegal, as well.

The managers at Microsoft’s Xbox division reportedly sponsored a party with scantily clad waitresses and too much alcohol. Uber has been accused of rampant sexism, sexual harassment and an untenable environment for women employees. Members of the U.S. Marine Corps reportedly have a Facebook site with 30,000 followers on which naked photos of female Marines are posted for all to see, comment on and share. Some of the naked photos were apparently taken without the subject female’s knowledge or permission, and some identify the women by name, rank and duty station. Sadly, these are just a few of the highlights. Examples are plentiful and span all industries.

The first questions that came to my mind when I read these headlines are directed at the leadership of the organizations. Have those leaders done something to create or facilitate this behavior at work? Are their policies strict enough? Are those policies enforced? Do the leaders even know what’s going on in their organization? Are they modeling good values themselves? Sound familiar?

Teenagers, even though the vast majority of them are wonderful, caring people of good character, don’t always exhibit those characteristics in their behavior. They are notorious risk takers and exercise poor judgment. Parenting them is hard. I’ve discovered recently that the biggest parenting challenge, however, originates not with my own teenagers, but with their friends’ parents.

Let’s consider underage drinking. Studies show that the vast majority of students drink alcohol while still in high school. Locking up your alcohol, staying up late to chaperone gatherings in your own home or to greet your teenagers when they arrive home, imposing consequences when you discover your teenager has been drinking and even enlisting professional help if it’s a consistent problem requires stamina and commitment. It disrupts your own social life and your own freedom as a parent.

Even more difficult, it draws judgment and scorn from other parents and from your teenager’s friends. If you inform other parents that their own kids are participating in drinking, you could end up being an outcast, and there will almost certainly be negative social consequences for your teenager. It’s hard. And if you don’t, the risks are too scary to imagine. Studies show that teenagers who drink are three times more likely to become addicted than people who start drinking later, and alcohol-related deaths among teenagers (already too frequent) are on the rise. Nonetheless, studies also show that most parents will throw in the towel and ignore the drinking, decide not to inform other parents, fail to follow through with consequences and accept that it’s “normal” for teenagers to drink. My teenager, after all, is a “good” kid.

Creating a workplace environment that is hostile to sexual harassment is also hard. Even though the vast majority of men are wonderful, caring people of good character, when together in groups there can easily be a high incidence of inappropriate sexual behavior that is deeply disturbing (and illegal) in the workplace. Corporate leaders may either be unaware of it or may condone it. Either is problematic.

Reporting incidents of sexual harassment, or punishing employees who engage in it can draw judgment and scorn from fellow leaders and very often results in negative social consequences for both the victim and the leader. When the consequences of speaking out affect career advancement and rewards, the impulse to stay out of it or ignore it altogether can be overwhelming. And yet the consequences of failing to speak out and stand up to sexual harassment in the workplace can kill your business. Sound familiar?

There is a simple solution that will at least eliminate the headlines we’ve seen lately, even if it doesn’t address the whole problem: no safe sex in the workplace. Period. Sex is a personal and private activity that has no place at work.

We as humans easily understand that there are certain environments where sexual behavior by adults is always inappropriate. For example, you would be hard pressed to find a person who thinks it acceptable to expose preschoolers to strippers, pornography, aggressive propositioning or naked pictures of parents. Consequently, we don’t do that in preschools, and not because adults suddenly don’t enjoy that type of behavior on their own time, and not because the people who do enjoy that behavior are not “good” people. Instead, adults recognize that preschool is a safe zone in which adult sexual behavior is not appropriate or welcome.

A similar mindset at work would be extremely effective in eradicating offensive and illegal behavior. No strippers at work gatherings. No passing around naked pictures of colleagues. No standing by quietly and watching your colleague or boss harass a woman in his organization. Work needs to be a safe zone in which sexual behavior is not appropriate or welcome.

See also: Is Your Organization Open to New Ideas?  

A plethora of books about how to be a good parent and how to succeed as a corporate leader are readily available. You can read thousands of pages about which seven habits are most important and effective. I offer a simple tip that applies equally to parenting and leadership. It is hard. The consequences of getting it wrong are significant. But when it comes to the big stuff, there are no shortcuts. Stand up to the potential negative social impact and stop your teenager from drinking. Stop your colleagues from bringing sex into the workplace. You will be very glad you did.

D&O Coverage: A Low-Cost Alternative for Nonprofits

Who needs nonprofit directors and officers (D&O) coverage when you have volunteer immunity and homeowners insurance? Not so fast. It is possible to find some coverage, or form of immunity, under your homeowner’s policy, and there are attorneys that find ways to wedge things into coverage when there are no other remedies available.  However, that doesn’t mean you should ignore the availability of the proper insurance. Rather than hope to fit a round peg into a square hole, buyers should look to purchase coverage for any exposure that keeps them up at night.

There are people who wrongly believe that if they are performing charity work they can’t be sued, won’t be sued, or have some form of mythical immunity or free insurance somewhere to protect them. Let’s explore those theories in more detail.

Isn't there a federal law that grants immunity?
In 1997, our government passed the federal Volunteer Protection Act (VPA) to promote volunteerism for nonprofit organizations. There is more to the act than can be summarized in this article, and any legal advice should come from an attorney, but it’s important to know that there is a federal law designed to provide protection to volunteers. Also, note that the immunity applies to volunteers, and not necessarily the nonprofit organization or compensated employees/executives. With that knowledge, it’s important to be aware of other limitations of the act.

Exceptions from the federal law include:

  • Acts of violence
  • Acts of international terrorism
  • Hate crimes
  • Sexual offenses
  • Civil rights violations
  • Claims involving use of alcohol or drugs

In the absence of a definition of “Civil Rights” in the act, all sorts of common problems could be exempt. Three instances that immediately come to mind are discrimination, sexual harassment and privacy rights. Those are common allegations in claims we see made against volunteers, nonprofit organizations and their leaders.

Volunteers may also lose their potential immunity in these situations if:

  • the volunteer is acting outside the scope of his or her responsibilities to the organization
  • the volunteer was unlicensed if required or appropriate
  • the harm was caused by gross negligence rather than ordinary or simple negligence
  • the harm was a result of operating a vehicle, vessel or aircraft that requires a license or insurance
  • the volunteer receives compensation or anything other than compensation that is worth over $500
  • the charity loses its nonprofit status

The VPA has provisions indicating that immunity provided by the act cannot be reduced by state laws, but can be broadened by state law. The federal law will apply to volunteers unless a state opts out of the law, which is permitted.  New Hampshire, for example, opted out in instances where everyone involved is a state resident and a New Hampshire state court is used.

Can we find immunity provided by state laws?
Many states do have immunity laws available to volunteers providing services to nonprofits. Every state has its own advantages and limitations. Again, seeking the advice of an attorney licensed in the relevant state is appropriate. When seeking the advice of counsel as to the immunity provided by state law, there are some questions to ask:

  • Does the state law only protect volunteers, D&O or both?
  • Will the state law prevail if the plaintiffs are from a different state?
  • What material limitations exist?
  • How is immunity impacted by willful or negligent activities?
  • Is the nonprofit organization immune from vicarious liability arising from the conduct of the volunteers?
  • Can an organization subrogate against a volunteer for costs associated with vicarious liability?

Will a personal homeowner's insurance or personal umbrella policy protect me?
The easy answer is that an insured might find some coverage, but not for all situations. Not all homeowners policies are the same and some may have special D&O enhancements. If you review what is generally covered, you will see coverage for bodily injury and property damage on those policies. It is also important to keep in mind that these are personal policies and any coverage provided would not be shared with the nonprofit organization or any other person affiliated with the organization. So if a homeowners policy or personal umbrella is designed to only cover bodily injury or property damage and is limited to protecting only one individual, is this the best solution for a nonprofit organization and all its leaders, employees and volunteers? That’s easy – no.

How about buying the proper insurance?
There is a policy specifically designed to protect the directors, officers, employees, trustees, volunteers, committee members, interns, domestic partners and the organizational entity.  Note that the coverage isn’t limited to just the directors and officers. Those other individuals are also protected by this insurance.  A typical D&O policy pays on behalf of the nonprofit organization when that organization is obligated to indemnify the individuals for their actions on behalf of the organization, as outlined in the organization’s bylaws.  The organization itself is also generally covered for alleged wrongful acts. D&O policies are broadly written to cover claims alleging any error, act or omission arising from activities on behalf of a nonprofit organization. The policy won’t cover bodily injury, property damage, pollution, workers’ compensation or issues arising from the administration of benefit plans. Those items should be covered on other policies specifically designed for those exposures.  You should also find coverage for the individuals and entity for things like discrimination, harassment, wrongful termination and other personal injury violations such as invasion of privacy, wrongful imprisonment and, in some cases, copyright violations.

Similar to personal lines policies, no two D&O policies are the same. Each one needs to be closely reviewed to identify limitations as well as unique coverage enhancements. Some limitations to avoid are antitrust exclusions, third party discrimination exclusions, or overly broad insured versus insured exclusions. There are enhancements to negotiate such as coverage for immigration claims, wage and hour claims, lifetime personal extended reporting provisions, publishers liability, public relations expense coverage, priority of payments, punitive damages coverage, where insurable, and more.

Considering the relatively low cost for a properly constructed D&O policy for a nonprofit organization, it makes a lot more sense to buy the coverage than try to hide behind limited immunity or wedge coverage into the wrong insurance policy.

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.