Law Briefs Featured

10:03am EDT July 22, 2002

When it comes to sexual harassment in the workplace, what employers don't know can still hurt them.

Two U.S. Supreme Court decisions earlier this year give notice to employers that they can be held liable for sexual harassment by supervisors, even if their companies had no knowledge of the supervisors' behavior.

Craig Brooks, a director with Pittsburgh law firm Houston Harbaugh who specializes in employment law, says a supervisor's negative job action, such as a dismissal or denial of a promotion because of an employee's refusal to give in to a demand for sex, can put a company at risk.

Companies can defend against sexual harassment claims if they can demonstrate that there was no negative job action taken, that they have good policies in place, and that they have undertaken a prompt investigation when the complaint does occur.

Brooks suggests that employers train their supervisors to adhere to a policy of zero tolerance for sexual harassment, implement a policy that offers clear reporting procedures for employees, and get proper guidance once a report of sexual harassment has been filed.

-Ray Marano

Harassment policy guidelines

To create an effective policy, employers should follow these guidelines:

  • Obtain and retain signed receipts that show that all employees (including managers and supervisors) received a copy of the policy.

  • Post the policy in a prominent location in the workplace and document with a photo or videotape that it was, in fact, posted.

  • Conduct regular sexual harassment-training sessions, keep a record of employee attendance at those sessions, and retain the materials that were used and distributed at the sessions or even videotape the sessions.

  • Document sexual harassment investigations and corrective actions taken and retain them in confidential files.

    -William E. Adams and Lisa M. Passarello, Eckert Seamans Cherin & Mellott, LLC

    How employee fraud can mean employer liability

    Employers normally are interested in their workers' productivity or sales figures. But business owners also should take an interest in and supervise their employees concerning their relationships and activities with clients, customers and other third parties in making business deals.

    Indeed, an employer can be held liable for the fraudulent activities of its employees, regardless of whether the scam was conducted outside the course and scope of employment. That's what the Pennsylvania Superior Court affirmed this May in the case of Heller v. Patwil Homes Inc.

    In that case, a Patwil Homes sales employee swindled potential home-buying customers out of their money during a two-month investment scam, which he operated out of the company's office. The customers who fell victim to the employee's investment ruse sued Patwil Homes for allowing the fraud to take place under the employee's guise of building capital to purchase a Patwil Home.

    The Court said the employer negligently supervised its employee and that the total absence of supervision on the job put the employer/defendant on "constructive notice" of the employee's fraudulent activities. The Court said the company, if it had exercised ordinary care, would have become aware of the employee's dishonest behavior.

    -William E. Adams, Eckert Seamans Cherin & Mellott, LLC.

    Eckert Seamans is a national law firm based in Pittsburgh.