Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw and Alayna Schroeder | The Daily Recorder | Aug 10, 2010

With the passage of Assembly Bill 1825, the law that requires many California employers to provide sexual harassment training to supervisors, today’s employers are better informed about how to prevent, recognize, and respond to inappropriate workplace conduct than ever before. But even when an employer follows best practices designed to eliminate workplace harassment, the process will not be perfect. Employees and others in the workplace will continue to engage in conduct contrary to an employer’s specific direction and policies.

Employers faced with harassment complaints must be conscientious about ensuring inappropriate conduct stops and take appropriate disciplinary action against an employee who violates policy. However, they must also be careful not to act rashly and discipline accused employees without making good faith efforts to substantiate claims against them. If an employer cannot establish whether allegations are true and continues to employ an alleged harasser, it can still avoid liability if it takes appropriate steps to investigate and avoid future misconduct. But when an employer knows about potentially harassing conduct and does nothing to investigate or correct it, it can face serious consequences.

The Ninth Circuit Court of Appeals’ Decision in Swenson v. Potter

In Swenson v. Potter, a 2001 Ninth Circuit Court of Appeals’ decision, an employer faced potential liability because, after an investigation, it was unable to validate an employee’s claims of harassing conduct. As a result, the employer did not take any disciplinary action against the alleged harasser.

Melody Swenson worked as a mail sorter for the U.S. Postal Service. She alleged that a co-worker, Phil Feiner, made sexual comments to her on several occasions. One time, he told her he wanted to kiss her and grabbed her by the hand.

Swenson complained to co-workers about the conduct. After the grabbing incident, a co-worker told Swenson’s supervisor, who immediately discussed the conduct with Feiner and told him to stay away from Swenson. Although Feiner disagreed with Swenson’s version of events, he agreed to stay away from her. He did approach her on one occasion to apologize.

Three days later, Swenson reported the grabbing incident to human resources. The Postal Service then initiated an investigation. Management also moved Swenson to another position (in the same facility) to limit her interaction with Feiner.

The human resources employee in charge of the investigation asked Swenson what she wanted done to resolve the complaint. Swenson requested to meet with Feiner to tell him to leave her alone. Before the meeting occurred, Swenson stopped working because she was afraid to work in the same building as Feiner.

The Postal Service continued to try to resolve the complaint, ultimately conducting another investigation with a different investigator. At the conclusion of the second investigation—which included meeting with Swenson three times, interviewing other witnesses and reviewing statements, transcripts, and documents—the investigator concluded there was insufficient evidence to support formal discipline against Feiner.

The investigator met with Swenson to discuss her return to work. The Postal Service allowed her to return permanently to a different position away from Feiner, without participating in the normal bidding procedure used to move employees to new positions. It also allowed her to work a customized schedule to minimize contact with Feiner. Swenson returned to work for a little over one year, during which she saw (but had no other contact with) Feiner 16 times.

Swenson claimed that the Postal Service violated the law by failing to take appropriate corrective action to correct workplace harassment. A jury found that the Postal Service knew or should have known of Feiner’s sexually harassing conduct and awarded Swenson damages.

In reversing the award, the Ninth Circuit Court of Appeals recognized that while an employer has a responsibility to take corrective action after learning of harassing conduct, it cannot be held liable for conduct of which it is unaware. An employer’s duty to determine whether inappropriate conduct occurred starts with a prompt investigation. After the investigation is complete, the employer must take prompt steps designed to end any inappropriate conduct and ensure it does not happen again.

But if the employers cannot substantiate the conduct, it has no duty to take corrective action. Ultimately, the Ninth Circuit found that as long as an employer acts reasonably to make this determination, it insulates itself from liability. This is true even though the employer may reach a mistaken conclusion as to whether the employee in fact engaged in the conduct alleged. As the court noted, the Postal Service never said the conduct did not occur—it just concluded, after its investigation, that there was insufficient evidence to support the allegation and justify discipline.

According to the court, the Postal Service met its obligation under the law. It commenced an investigation three days after Swenson’s co-worker reported the allegedly harassing conduct, on the same day Swenson reported it. Even though it could not substantiate the claims against Feiner, the Postal Service took permanent steps to separate Feiner and Swenson in the workplace. In the court’s view, although Swenson saw Feiner on several occasions, these sightings alone did not amount to a “hostile work environment.”

Cases Since Swenson

Courts have continued to apply the principles outlined by the Swenson decision, both to insulate employers who properly respond to complaints and find no basis to discipline an accused employee, and to uphold judgments against employers who fail to take action when they know about alleged inappropriate activity.

For example, in Fairley v. Potter, another case involving the Postal Service, the U.S. District Court for the Northern District of California awarded summary judgment to the employer on the employee’s claim of a “hostile work environment.” The court found there was no genuine issue of material fact as to the adequacy of the Postal Service’s investigation and corrective actions. As in Swenson, in the Fairley case the Postal Service launched an immediate investigation as soon as it learned of the allegedly inappropriate conduct. It also separated the complainant from the alleged harasser. Again, even though the Postal Service was unable to substantiate the claims and did not discipline the alleged harasser, it instructed him to stay away from the complainant (and vice versa) and ensured the complainant did not have to come into regular contact with him.

On the other hand, in Gober v. Ralphs Grocery Co. , the defendant grocery store faced compensatory and punitive damages when the evidence showed it was aware of a Store Director’s history of allegedly harassing conduct and did nothing to stop it. Instead, the company transferred the Store Director to a new location, where he engaged in inappropriate sexual conduct toward employees. Although the company investigated when the plaintiffs complained, it had not done so on previous occasions. While the court reduced the initial punitive damages award, it did not eliminate the award entirely because the employer knew of the conduct and by transferring the “harasser,” let it go on undeterred.

Together, these cases suggest that when an employer learns of allegedly harassing conduct and acts quickly to investigate it, it will insulate itself from liability even when it is unable to establish whether the alleged harasser engaged in the conduct. On the other hand, when an employer does not investigate or act after receiving a complaint, this will affect liability when the same individual repeats the conduct—even if the employer investigates on those subsequent occasions.

Lessons for Employers

The Swenson court provided employers with some very clear guidance on steps to take to shield themselves from liability. In short, an employer can continue to employ an alleged harasser without liability if it can show it attempted to discover the truth and took disciplinary action commensurate with the situation. The process does not need to be perfect. The ultimate measure by which the employer will be judged is not the accuracy of the conclusion—something that may be difficult or impossible to find in some circumstances—but how reasonable the response.

Unfortunately, because the adequacy of an employer’s response is so situation-specific and fact-based, employers will likely face careful scrutiny from courts presented with these issues. However, there are some clear steps employers can take to put themselves in the best possible position.

The employer’s first step, when it hears of allegedly inappropriate conduct, is to conduct a prompt and thorough investigation. After all, before drawing any conclusions, an employer needs to gather the important facts. At the same time, as the Swenson court noted, an investigation communicates to employees that the employer takes allegations seriously and does not tolerate inappropriate conduct. This protects the employer not only in the immediate situation, but helps prevent future problems because employees know there are consequences for such behavior.

In addition to gathering the facts, the Postal Service in Swenson took several other important steps that helped at trial. For example, the Postal Service asked the complainant what outcome she wanted from the investigation. While an employer can not always give the complainant what he or she wants, asking this question communicates that the employer is sensitive to the employee’s needs and committed to finding an appropriate solution.

Also, the Postal Service ultimately found that it could not substantiate the complaint—not that the complaint was untrue. Because “harassment” cases are often “he said, she said,” and employers will not have enough direct evidence to validate such claims, it is important that employers come to an accurate conclusion about what occurred, but do not draw conclusions they cannot support.

Finally, even though the Postal Service could not substantiate the claims, it still took steps to improve the situations for Swenson—namely, by moving her to another position where she would not have to see Feiner as often, without requiring her to go through the normal bidding process. While Swenson later criticized the Postal Service’s decision to move her, the court rejected the suggestion that transferring a complainant is always an inappropriate response.

On the other hand, in the Gober case, the employer’s decision to use an alleged harasser’s transfer as a means of avoiding a potential problem, without taking any further disciplinary steps, was ultimately very costly. The alleged harasser, in a position of power (the Store Director was the highest level position in the store), repeated the abusive behavior, doubtlessly believing it was acceptable or ratified by the employer. Even when the employer investigated and took disciplinary action after the plaintiffs complained, that did not overcome its previous failure to act.

The Swenson court and the cases that followed reaffirm an employer’s duty not only to an employee claiming to be harassed, but to an employee accused of harassment. When an employer acts reasonably in investigating claims, it can protect itself from claims by either party even when it continues to employ the alleged harasser. Employers should think flexibly about what options will allow both parties to get a fair shake, without compromising objectivity or integrity.