National and Global Impact
It is frequently said that as California goes, so goes the rest of the country, especially in terms of progressive employment laws and regulations. The trend towards “globalization” of businesses significantly increases the magnitude of the impact of changing employment law. In the authors’ opinions, foreign business organizations doing business in the United States will also be required to adhere to these new standards and requirements. Protecting employers from potential significant liabilities created by this new law[1] will require that immediate and comprehensive training priorities be established. Clearly, this new law will have profound implications throughout the country and throughout the global business arena regarding the work environment and workplace relationships.
From a purely pragmatic perspective, employers throughout California are beginning to realize that preventive “anti-harassment” training for all supervisors and managers makes it easier to defend against harassment lawsuits because this type of training demonstrates concern for preventing harassment in the first place.[2]
Compliance
Compliance with AB 1825 will require the following procedures: a) establishing a comprehensive and strong “sexual harassment” policy within the company; b) communicating the policy to employees on a regular basis; c) training all employees and considering all related matters according to the requirements of AB 1825; and d) setting up effective investigation procedures and appropriate action steps in compliance with this important new law. After January 1, 2006, this new law will penalize employers who fail to comply with the mandated training requirement by triggering the issuance of an order from the California Department of Fair Employment and Housing (DFEH) to conduct the required training.[3] Perceived infractions of AB 1825 may also serve as a basis for punitive damages. With this in mind, plaintiffs’ lawyers will be including in any legal compliance case that not adhering to this new law demonstrates “reckless disregard” for the laws and regulations set forth by the Fair Employment and Housing Act, thereby establishing a basis for punitive damages liability.
Allocating Resources
When engaged in mitigation planning relative to potential legal liability risks, employers often begin by acknowledging their limited training budget and resources. As a result, some employers allocate their limited training resources on a prioritized basis. Often the potential legal liability risks posed by sexual harassment claims are perceived to be fewer than those of other potential claims, such as product liability. As a result, some employers allocate few if any resources to sexual harassment training.
Such a strategy is ill advised. Sexual harassment claims (even only “alleged” claims) can be costly. The largest award to date was for $34 million. The employer, Mitsubishi Motor Manufacturing of America, Inc., settled claims relative to the actions of its employees, including some with no supervisory responsibilities.[4] The scope of the issue is evidenced by the fact that approximately 13,000 to 15,000 sexual harassment suits are brought annually to the U.S. Equal Employment Opportunity Commission.[5]
The Hidden Liability
In a January 2005 survey on office romance, 58 percent of employees stated that they had been involved in an office romance. Of those surveyed, 28 percent of the employees stated they were able to hide their romances from their company; 15 percent admitted to dating a boss or supervisor; and 20 percent admitted to dating a subordinate employee.[6] Other surveys have reported that anywhere from 59 percent to 82 percent of all employees either are involved in or know someone who is involved in a workplace romantic relationship.[7] When such a relationship inevitably fades, it can then become a major (and costly) headache for employers. Moreover, even though workforce consciousness of the issues has clearly been raised in the “past tense,” large numbers of sexual harassment claims are still being filed with the DFEH.[8]
Therefore, companies are well advised to understand these developments and legal issues and to proactively implement preventive training programs. It is important to realize that the California State Supreme Court has significantly expanded the laws pertaining to sexual harassment, including a broader definition of claims for “hostile environment.”[9] The courts have strongly advised that employers (even those outside California) should consider the impact of this new law pertaining to the requirement for sexual harassment training.[10]
Specific requirements for legal compliance include: Two hours of either “classroom” or “workshop” interactive training, which must include information and practical guidance about all related federal and state laws.[11]
The new California law requires that this two-hour training program must be provided (and completed) by January 1, 2006, and be conducted every two years thereafter. In addition, the training must be provided to all new supervisors within six months of their appointment to a supervisory position. The AB 1825 Mandated Training must be “effective and interactive.” Furthermore, it must be presented by trainers who possess knowledge and professional expertise with regard to the prevention of harassment, discrimination, and retaliation. Another implication for employers to keep in mind is that sexual harassment can negatively impact employee productivity, employee morale, individual careers, and ultimately, the employer’s “bottom line.” Despite the fact that an employer may have a limited training budget, the prudent employer will now become conscientious about the importance of this new law and about carefully selecting appropriate professional people with appropriate credentials to provide the requisite training.
Protecting Your Company
The new supervisory training requirement, which must be provided to all employees who have any supervisory authority, must include the following topics in the two-hour training session:
- Clear statement that any form of sexual harassment is illegal;
- Definition of sexual harassment as specified in state and federal laws;
- Descriptions of any type of conduct that might be considered a form of sexual harassment;
- Clear review of the employer’s internal complaint procedure;
- Information provided to employees regarding the legal remedies and complaint processes available under the DFEH;
- Information provided to employers and employees that any form of retaliation is unlawful; and
- Adoption of an “Anti-Harassment” Policy.
Because of California’s influence on national law, the implications of this new imperative for employers and businesses will rapidly expand and impact similar laws throughout the country, as well as impact global employers doing business in California.
[1] California Assembly Bill 1825 – California Government Code 129501.1, (Full text available at leginfo.cal.gov).
[2] To further underscore the importance of this topic, the “law of training” for this particular topic, as endorsed by the U.S. Supreme Court in the landmark 1998 cases (Burlington Industries, Inc. v. Ellerth and Faragher v. City of Boca Raton) declared it essential that all employers must conduct supervisory training if they are to avoid or minimize the risk of a “negative” or “harassment” type of work environment.
[3]California Department of Fair Employment and Housing (DFEH) report (2005), http://www.dfeh.ca.gov/about.asp. (no longer accessible)
[4] Equal Employment Opportunity Commission v. Mitsubishi Motor Manufacturing of America, Inc. f/k/a/ Diamond-Star Motors Corporation Case No. 96-1192; Miller vs. Department of Corrections, 2005 CAL.
[5] “Sexual Harassment Charges: EEOC & FEPAs Combined: FY 1998 – FY 2008,” The U.S. Equal Employment Opportunity Commission, http://archive.eeoc.gov/stats/harass.html.
[6] Hogler, R., Fram, J.H., and Thornton, G. “Workplace Sexual Harassment Law: An Empirical Analysis of Organizational Justice and Legal Policy,” Journal of Managerial Issues, Vol. 14, No. 2, 2002.
[7] Ibid.
[8] Barbee v. Household Auto Finance Co., 113 Cal. Appeals 4th, 525 (2003) California Court of Appeals Decision re: dating in the workplace.
[9] California Department of Fair Employment and Housing (DFEH) report (2005), http://www.dfeh.ca.gov/about.asp. (no longer accessible)
[10] In 2002, the New Jersey State Supreme Court ruled that an employer could avoid (or at least reduce) liability if that employer implemented preventive measures, including training programs. (Gaines v. Bellino, 173 New Jersey Code 301) The implication from this New Jersey case is that the EEOC has been increasingly consistent in requiring that proactive measures and preventive measures be taken by employers; businesses; and owners of companies. The states of Connecticut and Maine have even more stringent statutory requirements for all supervisors in the area of “sexual harassment” training, source: (www.jacksonlewis.com/legalupdates/article.cfm?aid). (no longer accessible)
[11] Assembly Bill 1825 (AB 1825).
