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Employment Law Blog
James Tarquin, P.A
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An Employer’s Sexual Harassment Policy Must Be Effective In Preventing Sexual Harassment In The Workplace

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Employers customarily defend themselves against sexual harassment lawsuits by claiming that they should not be held liable for the sexually harassing behavior because they had sexual harassment policy in place.  This defense is derived, in relevant part, from the decisions by the U.S. Supreme Court in Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998).  In Faragher and Ellerth, the Supreme Court held that an employer is subjected to vicarious liability for the hostile work environment sexual harassment by a supervisor.  Unless the supervisor hostile work environment sexual harassment culminates in the taking of a tangible employment action against the victim, such as demotion or termination, the Supreme Court held that a defending employer may raise an affirmative defense to vicarious liability.  In order to avoid vicarious liability for supervisor hostile work environment sexual harassment in the absence of a tangible employment action, the employer must prove that:  (1) it exercised reasonable care to prevent and correct promptly any sexually harassing behavior; and (2) the employee unreasonably failed to take advantage of any prevented or corrective opportunities it provided.  This affirmative defense is commonly referred to as the Faragher/Ellerth affirmative defense. 

In applying the Faragher/Ellerth affirmative defense, courts have recognized that the Ellerth Court stated that Title VII of the Civil Rights Act of 1964 (Title VII) “is designed to encourage the creation of anti-harassment policies[.]”  However, courts have determined that the mere creation of a sexual harassment policy will not shield an employer from liability for supervisor hostile work environment sexual harassment.  Rather, in order for an employer to establish that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior, courts have consistently held that an employer’s sexual harassment policy must be effective in eradicating sexual harassment in the workplace.  A recent decision by the U.S. Seventh Circuit Court of Appeals in EEOC v. Management Hostility of Racine, Inc., 666 F.3d 422 (7th Cir. 2012) illustrates that an employer’s adoption and enforcement of an effective sexual harassment policy is an important factor in determining whether an employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior

Employer’s Sexual Harassment Policy Was Not Effective In Practice

In that case, the U.S. Equal Employment Opportunity Commission (EEOC) brought sexual harassment claims under Title VII on behalf of two employees, Katrina Shisler (Shisler) and Michelle Powell (Powell).  Shisler and Powell worked as servers at Management Hospitality of Racine, Inc., which was an International House of Pancakes franchise in Racine, Wisconsin (Racine IHOP).  Shisler and Powell claimed they were subjected to hostile work environment sexual harassment by a night manager.  The night manager’s alleged sexually harassing behavior towards Shisler and Powell included sexual propositions, explicit sexual remarks, remarks about their body, and touching intimate body parts.  Shisler and Powell alleged that they complained about the night manager’s unwanted sexual behavior to the general manager of the Racine IHOP.  However, the general manager did nothing to address their complaints and the night manager’s harassment continued unabated.  After a jury trial, the jury found in favor of Shisler and Powell on their sexual harassment claims. 

On appeal, the Racine IHOP argued that the trial court should not have submitted Shisler’s and Powell’s sexual harassment claims to the jury.  Instead, the Racine IHOP argued, the trial court should have entered a judgment as a matter of law in its favor because it had established the Faragher/Ellerth affirmative defense to vicarious liability for the night manager’s hostile work environment sexual harassment.  In other words, the Racine IHOP claimed that even if Shisler and Powell were subjected to hostile work environment harassment by the night manager, it was not liable for harassment because it exercised reasonable care to prevent and correct promptly the sexually harassing behavior.  In support of its position, the Racine IHOP contended that it “took sexual harassment seriously, and instituted an effective sexual harassment policy to prevent and promptly correct any instances of sexual harassment occurring in the workplace.”  The Racine IHOP claimed that it required all new employees, including Shisler and Powell, to watch a video educating them on sexual harassment in the workplace, and to read and sign its sexual harassment policy which manifested a “zero tolerance” policy towards sexual harassment.  The Racine IHOP further argued that it ultimately investigated Shisler and Powell’s sexual harassment complaints, took witness statements, and took corrective action by firing the general manager for her failure to initially investigate the complaints.  The appellate court rejected the Racine IHOP’s position and affirmed the jury verdict in favor of Shisler and Powell on their sexual harassment claims.    

The Seventh Circuit determined that a rational jury could have found that the Racine IHOP exercised reasonable care to prevent and promptly correct the sexually harassing behavior by maintaining a sexual harassment policy with a complaint procedure, and by taking remedial action by investigating Shisler’s and Powell’s sexual harassment complaints and terminating the general manager.  However, the Seventh Circuit also determined that there was sufficient evidence “for a jury to find otherwise.”  The Seventh Circuit explained that although a “sexual harassment policy is encouraged by Title VII, the mere creation of a sexual harassment policy will not shied a company from its responsibility to actively prevent sexual harassment in the workplace.”  The employer’s sexual harassment policy, the appellate court emphasized, “must not only be reasonably effective on paper, but also reasonably effective in practice.”

In applying these principles to the evidence at trial, the Seventh Circuit determined that a rational jury could have found that the Racine IHOP’s sexual harassment policy was not reasonably effective in practice.  The Seventh Circuit pointed to evidence showing that the night manager violated the policy by engaging in sexual harassment, the general manager and another assistant manager failed to report the night manager’s sexual harassment to upper management after Shisler and Powell complained to them, and the general manager failed to investigate Shisler’s and Powell’s complaints of sexual harassment.  “A rational jury faced with this evidence,” the appellate court explained, “could have found that none of the managers of the Racine IHOP took action under the policy that could be termed corrective or effective.  The Seventh Circuit further found that “although management was required to take sexual harassment training, the evidence at trial suggested that the training was inadequate.”  Indeed, the general manager ignored Shisler’s and Powell’s complaints, failed to investigate the complaints, and never reported the complaints to upper management.  Thus, the appellate court determined, a “rational jury could have concluded that, not only was the policy and the management training ineffective, but the protections afforded by them were illusory.”  Consequently, the Seventh Circuit concluded that the jury reasonably concluded that the Racine IHOP failed to “effectively prevent and correct promptly sexual harassment in the workplace.”

The decision in Management Hospitality establishes that the mere existence of a sexual harassment policy will not satisfy an employer’s burden of establishing that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior in the workplace.  Rather, the decision in Management Hospitality demonstrates that an employer’s sexual harassment policy must be implemented and effective in order for the employer to satisfy its burden of preventing and promptly correcting sexual harassment in the workplace.  The decision in Management Hospitality also reflects the types of evidence that can be used to  prove that an employer’s sexual harassment policy was not implemented or effective.  As observed by the Management Hospitality court, a “consistent stream of harassment” in the workplace reflects that the employer’s sexual policy is “actually not very effective at all.”  Evidence showing that managers failed to promptly respond to and investigate sexual harassment complaints demonstrates that the employer’s sexual harassment policy is not only ineffective, but is deficient and dysfunctional.    

Consultation With Employment Law Attorney   

We have extensive experience protecting and vindicating the rights of sexual harassment victims.  If you have been the victim of sexual harassment, or have questions about your employer’s sexual harassment policy, please contact our office for a free consultation.  We take sexual harassment on a contingency fee basis.  This means that there are no attorney’s fees incurred unless there is a recovery and our attorney’s fees come solely from the monetary award that you recover. 

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