When is an Employer Responsible for Sexual Harassment?

Most people know what sexual harassment is when they see it.  Whether an employer is responsible for sexual harassment that occurs at the workplace, however, is a more complicated fact specific inquiry.

It is first important to understand the definition of unlawful sexual harassment.  Sexual harassment is a form of unlawful discrimination under the New Jersey Law Against Discrimination.  The first form of sexual harassment is quid pro quo harassment.  A claim of quid pro sexual harassment occurs when an employer attempts to make an employee’s submission upon a sexual demand or sexual proposition a condition of employment.  The second form of sexual harassment is a claim of hostile work environment sexual harassment.  The elements of a hostile work environment sexual harassment is when the harassment (1) would not have occurred but for the employee’s sex, and the harassment was (2) severe and pervasive enough to make a (3) reasonable woman believe that (4) the conditions of the employment are altered and the working environment is hostile or abusive.

The first issue to determining whether an employer can be liable for sexual harassment that occurs at its workplace in a lawsuit is to identify the damages an employee is seeking in the case.  An employer will be liable for equitable damages and relief  if he or she seeks restoration of the terms, conditions and privileges of employment that he or she would have enjoyed but for the discrimination or sexual harassment.  Equitable relief is not money damages.  Instead, an employee who seeks equitable relief as a result of sexual harassment is looking for the court to require the employer to act or refrain from performing a particular act such as stopping the harassment, job reinstatement or other non-monetary relief.

As to lawsuits in which the employee seeks monetary damages, an employers can be held liable for compensatory, emotional distress and/or punitive damages caused by workplace sexual harassment of its employees under two different  theories of liability.  The first category is for vicarious liability under Restatement §219(2)(d).  The second category is for negligence or recklessness under Restatement §219(2)(b).

The vicarious liability category for employer liability occurs when the sexual harassing supervisor purports to act on the employer’s behalf and there is reliance upon his or her apparent authority or because the harasser was aided in his or her misconduct by the existence of the agency relationship with the employer.  Whether an employer is vicariously liable for the sexual harassment of one its employees requires a four-part test which is as follows; (1) whether the employer delegated the authority to the supervisor to control the situation of the complaining employee; (2) whether the supervisor exercised that authority; (3) whether the exercise of authority resulted in the sexual harassment incident or conduct; and (4) whether the authority delegated by the employer to the supervisor aided the supervisor in sexually harassing the employee.  An employer will be held vicariously liable for the sexual harasser supervisor if the answers to these four questions are yes.

The negligence category for employer liability applies when the employer fails to exercise due to care with respect to sexual harassment that occurs in the workplace and the breach of this duty causes harm to the employee who was sexually harassed at work.  There are five factors relevant to a claim of negligence against an employer in a case of sexual harassment.  The first factor is whether the employer has in place formal policies prohibiting harassment in the workplace.  The second factor is whether the employer has formal and informal complaint structures in place for the employee to use in cases in of sexual harassment.  The third factor is whether the employer mandates sexual harassment training for its supervisors and managers and makes it available for all other employees. The fourth factor is whether the employer has effective sensing or monitoring mechanisms to check the trustworthiness of the policies and complaint structures.  The fifth factor is whether the employer has made an unequivocal commitment from the highest levels of the organization that harassment is not tolerated and can demonstrate that they are committed to this policy by consistent practice.

The New Jersey Supreme Court recognized in the case Aguas v. State, 220 N.J. 494 (2015) that an employer’s anti-harassment policy is relevant its liability under both the vicarious and negligence theories of liability.  In adopting the federal Ellerthl/Faragher affirmative defense for employer liability for sexual harassment, the court held that an employer will not be liable for sexual harassment at its workplace when the harassment does not result in any tangible employment action if it can show that (1) it exercised reasonable care to prevent and to correct promptly sexually harassing behavior; and (2) that the employee unreasonably failed to take advantage of preventive or corrective opportunities provided by the employer or to otherwise avoid harm.

The New Jersey Supreme Court’s decision to provide employers the Aguas affirmative defense has been severely criticized by many plaintiff-side employment lawyers and the #metoo movement.  According to the 2016 Select Task Force on the Study of Harassment in the Workplace, the least common response to harassment is take form of formal action by either reporting the harassment internally or filing a formal legal complaint.  Two studies cited by the Task Force found that 30% of victims of workplace harassment communicated the incident of harassment to a supervisor, manager or union representative – which means 70% of victims of workplace harassment do not say anything about the harassment to his or her employer.  Critics of the Aguas affirmative defense, including Supreme Court Justice Albin in his Aguas dissent, argue that by requiring employees to complain as a requirement to pursue a sexual harassment case in certain circumstances will result in sexual harassment victims being less likely to find relief in the courts.

Accessing whether an employer can be held legally responsible for workplace sexual harassment will remain a fact sensitive inquiry.  If you or a family member are the victim of sexual harassment, it is imperative that you seek advice and counsel from an experienced sexual harassment lawyer.  The team of sexual harassment attorneys at Smith Eibeler are centrally located in Holmdel, New Jersey and are available to discuss the facts and circumstances of your potential sexual harassment claim.