Although settled quickly with no admissions of fault by either side, the October 2004 sexual harassment lawsuit filed by a former employee against Bill O’Reilly, host of the O’Reilly Factor, drew a substantial amount of attention in the TV media and press. It has been reported that the lawsuit has increased O’Reilly’s television audience by 30%, and the lawsuit ultimately benefited O’Reilly and his employer-Fox News. This is not the usual result---employers do not generally benefit when sued for sexual harassment.

Under Title VII of the Civil Rights Act, an employee cannot be held personally liable for sexual harassment which he or she may have committed---but the employer can. If held liable, the employer can be required to pay attorneys’ fees, back-pay, front-pay, and compensatory and punitive damages ranging from $50,000 to $300,000 depending on the employer’s size. Whether an employer will be held liable depends on the harassing employee’s position, the type of sexual harassment which has occurred and what steps, if any, the employer has taken to avoid and correct such harassment.

There are two recognized types of sexual harassment under Title VII:

Quid pro quo sexual harassment – where (1) an employee is subjected to unwelcome sexual requests or conduct, (2) the employee’s reaction to this harassment (refusal, indignation, avoidance, ignoring) results in an adverse tangible employment action (demotion, termination, denial of promotion, transfer to an undesirable job), and (3) the employer knew or should have known about the harassment and took no effective remedial action.

Hostile work environment – where (1) an employee is subjected to unwelcome conduct which was based on the employee’ sex, (2) the conduct was sufficiently pervasive or severe to alter the conditions of employment and create an abusive working environment, and (3) some basis exists for imputing liability to the employer. In assessing whether an environment is objectively sufficiently pervasive or severe to alter the conditions of employment, the courts consider all of the circumstances, including the frequency of the discriminatory conduct; its severity (words vs. actions); whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance.

EMPLOYER LIABILITY

Usually it is only a supervisor that commits quid pro quo harassment, since a supervisor has the ability to effectuate or cause the adverse tangible employment action. Knowledge is automatically imputed to the employer, and the employer will be liable for damages. Likewise, if hostile work environment discrimination is committed by a supervisor and includes a tangible employment action, the employer will automatically be liable for the supervisor’s discrimination.

However, even when an employer is liable for its supervisor’s quid pro quo or hostile environment discrimination, if the employer can show that it has implemented policies and procedures designed to avoid or eliminate sexual harassment, it can avoid punitive damages. The courts have held that the existence of a sexual harassment policy and complaint procedure is evidence of an employer’s good faith efforts to comply with Title VII and can result in the employer not being liable for punitive damages.

If hostile work environment discrimination is committed by a supervisor and does not include a tangible employment action, the employer can avoid liability if it establishes a two-part affirmative defense: (1) that it exercised reasonable care to prevent and promptly correct any sexually harassing behavior and (2) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer. Distribution of an anti-harassment policy has been held by the courts to constitute “compelling proof” that a company has exercised reasonable care in preventing and correcting harassment. The existence of a sexual harassment policy and complaint procedure is critical to the employer successfully establishing this affirmative defense and avoiding liability.

If hostile work environment discrimination is committed by a co-employee, the employer is liable if it knew or should have known about the sexual harassment and took no action. Under this rule, courts have held that an employer can be charged with constructive knowledge of the co-worker’s harassment where it fails to provide reasonable procedures for victims to register complaints. On the other hand, where an employer has set up a sexual harassment policy and complaint procedure and promptly addressed discrimination brought to its attention, the employer has not been held responsible for co-employee sexual harassment.

In short, it is clear that the existence and promulgation of a sexual harassment policy and complaint procedure which calls for a prompt investigation and appropriate discipline is essential in defending against sexual harassment actions brought against an employer. Drafting and promulgating such a policy and complaint procedure can be done quickly and inexpensively, and the benefits of having such a policy and procedure—avoiding or reducing monetary liability--far outweigh any incidental costs connected with implementing the policy.