Innocent horseplay or minor employee misconduct are common
occurrences even in the most well run organizations. But how an organization
deals with employee misconduct can mean the difference between a “tight ship”
and a very expensive lawsuit.

Every manager has experienced some kind of employee
misconduct in the office. Sometimes the conduct is unintended or misconstrued;
sometimes it is harmless bantering; and sometimes the conduct can be more
serious. The best way to protect your company is to make sure management
addresses problematic situations in a timely and fair manner.

Investigating employee misconduct, however, is fraught with
its own set of problems. How do you
identify what misconduct should be investigated? How do you insure that a
negative work environment is not created because “big brother” is watching?
What if doing an investigation infringes on another employee’s rights?

The Duty To Investigate

Employers have a legal responsibility to investigate any
complaint of wrongdoing, regardless of whether the employer believes the
complaint is meritorious. An employer’s failure to investigate complaints of
harassment can subject an employer to significant legal exposure and damages.

In cases where harassed employees suffer no job-related
consequences, employers may defend themselves against liability by showing that
they acted quickly to prevent and correct any harassing behavior and that the
harassed employee unreasonably failed to utilize the employer’s protection. See Burlington Industries, Inc. v. Ellerth, 524
U.S.742, 765 (1998).

In the Burlington
Industries, Inc. v. Ellerth case, the Supreme Court upheld the Seventh
Circuit’s reversal of summary judgment to the employer where an employee who
alleged sexual harassment by her supervisor in her complaint never complained
of harassment to anyone at the company.

The supervisor repeatedly harassed and made inappropriate
sexual comments to the plaintiff, a sales employee, including comments
concerning her breasts and the fact that she was not “loose enough” to be
considered for promotion. The supervisor also propositioned the plaintiff on
several occasions and even indicated in substance that he “could make
plaintiff’s life at work easy or hard.”

The court found that the company could be held liable for
the supervisor’s conduct, even though the plaintiff never suffered an adverse
employment action (in fact, the plaintiff was actually promoted during her
tenure with the company). Noting that an employer could always be held
vicariously liable for harassment by a supervisor that is accompanied by a
tangible job action, the court clarified that an employer could also be found
vicariously liable, even if no tangible job action occurred, if the employer
did not try to correct or prevent the problem.

The court remanded the case to determine whether the company
exercised reasonable care to prevent and correct any harassing behavior, and
whether the plaintiff unreasonably failed to avail herself of the company’s complaint
procedures.

An employer’s failure to adequately train supervisory
personnel in handling employee complaints and rectify unacceptable behavior can
provide strong evidence for plaintiffs in a suit against the employer.

For example, in Manno
v. B.J.’s Wholesale Club, 150 F. Supp.
2d 325 (D. Mass. 2001), the plaintiff complained to her supervisor
that her co-worker subjected her to constant verbal harassment, propositioned
her, sent her vulgar notes and in one instance, sent plaintiff a condom, which
the plaintiff promptly showed her supervisor.

The supervisor responded by pulling out her own condom from
her purse but she never disciplined the co-worker or reported the behavior to
more senior levels of management. Once the employer learned of the co-worker’s
behavior, it conducted an investigation and immediately terminated the
co-worker’s employment.

The plaintiff then brought suit. The court denied the
employer’s motion for summary judgment, finding that because the employee
timely filed her complaint and her allegations of egregious and harassing
conduct, she adequately stated a claim that could survive summary judgment. The
employer’s only recourse was to assert its affirmative defenses at trial,
including its argument that that plaintiff unreasonably failed to avail herself
of her employer’s complaint reporting process because she notified the wrong
person about her harassment claim.

Similarly, in Brunson
v. Bayer Corp, 237 F. Supp. 2d 192, (D. Conn. 2002), the employer was
denied summary judgment where several female employees complained to their
supervisors about a male co-worker’s inappropriate sexual comments and
inappropriate touching, including one instance where the co-worker rubbed a
female employee’s posterior.

The supervisors failed to report the incidents to higher
level of management. Although the ultimate issue of whether the employer would
be held liable at trial for harassment was not decided, the employer was left
to defend itself against a lawsuit that alleged that the employer did not completely
follow up on complaints of harassment.

Tips From The Trenches

The first steps in protecting your company from liability
are to carefully review and distribute employee policies concerning conduct in
the workplace and complaint procedures.

The Ellerth and Faragher cases clearly reinforce an employer’s obligation to
prepare and publicize a strongly worded and legally sufficient anti-harassment
policy. Employers must train employees on harassment issues, including telling
supervisors and managers of their responsibilities to follow up on potentially
offending behavior and complaints.

Companies must provide employees with multiple ways to
complain about harassing behavior. They must thoroughly investigate all
complaints, take prompt corrective action if necessary, and notify the
complainant, as appropriate, about the results of the investigation. These
cases also instruct employers to notify employees of their right to follow an
employer’s complaint procedure.

Employers should also carefully document all complaints
(however minor they seem at the time) and provide good detail when describing
the investigation process. Documentation should include when the complaint was
received, who was interviewed in connection with the investigation, the date
and time the investigation was conducted, and any remedial steps taken.

Care should be taken to conduct all investigations as
confidentially as possible. An employer, however, should never promise absolute
confidentiality since an investigation could require interviewing other
employees, and even the alleged harasser, about the allegations.

Take-Home Message: Prompt Investigations

The important lesson to learn from this article is that
prompt action in handling complaints of employee misconduct can go a long way
to avoiding larger issues in the future. No matter how insignificant a
complaint may seem, the employer should investigate immediately until it is
satisfied that it has sufficiently addressed the situation. Employers should
also conduct a careful review of its employment policies to ensure that
employees understand complaint procedures and appropriate conduct at work.

Bret A. Cohen and Yvette Politis are
labor and employment attorneys at Pepe & Hazard LLP. The firm’s labor and
employment law practice group is dedicated to outstanding client service
through a preventative approach to employment disputes and cost-effective
litigation management. Bret and Yvette have extensive experience in executive
compensation disputes; non-compete litigation; defense of employment
discrimination claims, wage and hour issues; and general employment counseling.
Bret can be reached at [email protected]
and Yvette can be reached at [email protected].