Hospitality Industry Vulnerability.

Hospitality industry employers are among the hardest hit when it comes to sexual harassment litigation.  They are particularly vulnerable to claims of sexual harassment due to a number of factors including high employee turnover, a high ratio of female to male employees and the fact that many employees work in various, and sometimes in isolated, areas of a property throughout the day.  As a result of two recent U.S. Supreme cases, however, there are specific steps employers can now take to reduce the potential for liability and high jury verdicts in sexual harassment cases. 

Expanded Potential for Liability. 

In the decisions of Farragher v. City of Boca Raton and Burlington Industries v. Ellerth, the U.S. Supreme Court reaffirmed existing law which provides that an employer can be liable for a supervisor’s sexual harassment of an employee where the employer had no knowledge of the supervisor’s harassing actions and also where the employee did not complain about the alleged misconduct. 

The court also held that an employee does not have to sustain an adverse employment action as a result of the sexual harassment in order to bring litigation. Thus, an employee does not have to suffer a tangible injury such as a demotion, loss of promotion or termination; the mere fact that sexual harassment took place is sufficient to state a claim. 

Employers Should Follow Prescription. 

Notwithstanding these tough rulings for employers, the U.S. Supreme Court specifically found that an employer may still raise an affirmative defense to dismiss sexual harassment claims against it if it is able to show that: (1) it exercised reasonable care to prevent the sexual harassment from occurring and promptly sought to correct any sexual harassing behavior brought to its attention; and (2) the plaintiff unreasonably failed to take advantage of opportun-ities the employer provided to prevent or correct the alleged sexual harassment through a sexual harassment complaint process. 

Take These Steps NOW!  To take advantage of the affirmative defense available to employers, hospitality industry employers should take the following immediate steps:
 

Remember!  Federal law holds employers liable for the sexual harassment actions of employees by independent contractors, customers and other non-employees. All your policies, practices and procedures should be developed with this in mind. 

Time to Consider an HR Checkup?

JMBM’s Labor and Employment experts believe in prevention. It is much cheaper to avoid labor and employment issues than to try to contain them once they erupt. 

Prevention starts with the JMBM team helping you perform a complete diagnostic checkup on your policies, procedures and potential areas of exposure.  We then make sure that everything is up-to-date, and can assist you with training for senior management and staff through customized seminars, handbooks and materials. 

Call one of our labor and employment attorneys to get your arms around the situation before it happens. And when disaster strikes, these are the folks to go to for advice and help:  Louise Ann (Luzann) Fernandez , Marta Fernandez, (310) 203-8080, and Patrick Jordan (415) 398-8080.
or Employment Practices Insurance? 

As employment-related litigation increases, employers are looking to employment practices insurance in hopes of avoiding large defense costs and protecting against huge verdicts.  However, not all policies will cover the more frequent and expensive discrimination and whistle-blower claims.  Be aware, that in a number of states, insurers cannot issue policies covering willful violations of the law, such as could be involved in sexual harassment lawsuits, and punitive damages, which of course is where the large awards tend to be. Before you buy this type of insurance you should be fully informed of the benefits and the risks.