What Foreign Employers Fear The Most:
The Sexual Harassment Lawsuit
Prescription Against Harassment Liability
 
Jeffer, Mangels, Butler & Marmaro LLP / February, 1999

For international businesses accustomed to a less regulated workplace than in the United States,  it is sometimes difficult to understand the type of behavior that can subject their businesses to multi-million dollar jury verdicts. However, in the United States, the law does not recognize cultural differences as a defense to workplace behavior. While a comment, a joke or even a friendly touch in the workplace may be perfectly innocuous on foreign soil, that same phrase or action may cost a company vast sums of money in a workplace governed by U.S. laws.  Foreign-owned companies doing business in the United States should learn the basics of American employment laws, and make sure their employees and supervisors are thoroughly trained in acceptable workplace behavior.

There are fundamental differences between U.S. and international attitudes towards regulating behavior in the workplace. These differences are largely reflected in state and federal employment-related laws adopted in the United States during the last 30 years. For example, most Asian and Latin American countries did not adopt Equal Employment Opportunity laws until the mid-eighties or later. And where adopted, most countries have not come close to regulating personal interaction in the workplace the way the U.S. has. Moreover, cultural as well as historical perceptions of the roles and rights of women in the workplace shared by many nations often cloud understandings of what is expected when conducting business in America.

The United States Supreme Court recently decided two very important cases imposing even stricter standards on employers in sexual harassment cases. In the first case, Burlington Industries v. Ellerth, the Court ruled that an employer is liable for a "hostile work environment" created by a supervisor - a dramatic shift from the prior negligence standard of "knew or should have known." In a second case, Faragher v. Boca Raton, decided the same week, the Supreme Court held that an employer cannot use a "reasonable care" defense to liability for a supervisor's harassment where it failed to maintain and disseminate appropriate sexual harassment policies.

Take heed! In the United States, employers have an affirmative obligation to create, implement, and disseminate effective anti-harassment policies. In fact, satisfying this obligation is the employer's sole protection in the event an employee complains of harassing or other discriminatory conduct. It is no longer a defense that management did not sanction the conduct or was ignorant of the offending conduct, and it will not help that the complaining employee suffered no adverse employment action.

To be sure, both American and other nations have centuries of unequal treatment of female workers. Yet unlike some cultures which have only recently confronted the issue, U.S. laws allow employees to sue for an alleged breach of law. And all too often, courts go out of their way to let the case go to full jury trial. In this environment, comments which may have been meant as "compliments" could lead to a multi-million dollar jury verdict.

Protect yourself now! Limit your liability with an internal audit conducted with the help of
competent counsel. If  you believe your company does not meet its requirements under state and federal law, internal adjustments should be made immediately before you are hit with a devastating lawsuit.

Don't wait until it is too late! You can save yourself a lot of trouble and expense if you take the following protective action now:
 

Prescription Against Harassment Liability
Adopt a written anti-harassment policy which meets the latest state and federal requirements.
Distribute your updated written policy to all employees.
Train all supervisors and mid level managers in the anti-harassment policies.
Conduct "sexual harassment awareness" training for all employees at least twice a year.
Update your harassment investigation policy to meet state and federal requirements.
Train your human resources personnel in proper investigation of harassment complaints.

For further information, please contact Marta M. Fernandez (mfernandez@jmbm.com) at 310-201-3534.

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CAVEAT: Nothing in this newsletter constitutes legal advice, which can only be given by a lawyer based upon all the relevant facts and circumstances of a particular situation. Please call us if we can assist you with legal advice!
 
JMBM is a full-service, business law firm of more than 140 attorneys with offices in Los Angeles and San Francisco and with an independent network of over 1,600 lawyers in more than 75 cities world-wide. We have been involved in hundreds of transactions spanning the globe and representing over $12 billion in total sales, financings, and acquisitions of lodging and leisure properties and companies. We handle: financing, acquisition, sale, bankruptcy, ownership structure and dispute issues, securities, litigation, mergers and acquisitions of companies, union and employment matters, employee benefits, repositionings, management of franchise matters, recreational use agreements, trademarks, litigation of any sort, insurance claim, disaster, timeshare and vacation ownership, tax, foreclosure, and virtually every other challenge.
 
For more information:
Visit Jeffer, Mangels, Butler & Marmaro LLP’s web site.
Email Jim Butler at jrb@jmbm.com
Email Peter Benudiz at pbenudiz@jmbm.com
Or contact:
Jim Butler or Peter Benudiz at the Firm
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars
Los Angeles, CA 90067
Phone: (310) 203-8080  
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