Wednesday, March 9, 2011

Jury Slaps Tennessee Employer With $1.5 Million Verdict For Sexual Harassment

A federal jury in Memphis has sent a blunt message to one of its local employers: sexual harassment is wrong and you cannot retaliate against employees who reject and report it.  Sounds clear enough, but this message came with a $1.5 million price tag.

The jury found that two male managers at the company, which distributes promotional products and office supplies, subjected three female employees to severe and unwelcome sexual harassment for two years.  According to trial testimony, a manager exposed his genitals and forced one of the women to place her hand on his private parts.  Another manager demanded that the women participate in a "kissing" or "smooching" club in order to receive accounts and sales leads necessary to earn commissions.  Not surprisingly, the women complained and two of them were fired.  The jury found those terminations to be in retaliation for their rejection of the managers' advances and for complaining about them.

Had that been the whole story, it would have cost the company about $400,000 in back pay and compensatory damages, which would have been a sizable verdict by most standards.  But there were a few other issues that really got the jury's attention.

During the two years that the harassment took place, the company had no sexual harassment policy, no training on sexual harassment, and no reporting procedures.  Worse, management officials testified that they didn't think such policies and procedures were necessary, so the women's complaints fell on deaf ears.  The icing on the cake was the human resource manager's testimony that she really didn't know what sexual harassment was at the time of the events.  Sufficiently outraged by these revelations, the jury tacked on $1.1 million in punitive damages.

The Tennessee verdict comes close on the heels of another sexual harassment case in which a jury in upstate New York awarded $1.26 million to 10 female employees who were sexually harassed over a period of 10 years by a grocery store's general manager.  Although the women repeatedly complained about the misconduct, it was not until after the general manager had pled guilty to criminal harassment charges and sexually harassed yet another employee that the store's owner finally terminated him.

The lesson from these recent cases is old hat to most employers, but it is amazing how many companies still haven't gotten the message.  Businesses -- all businesses -- should have a policy against harassment, must train employees and managers about the policy and about how to prevent unlawful harassment, and must let employees know how to report harassment that they experience or witness.  As these two recent cases show, the price for not learning this basic lesson can be painfully high.

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