Sexual harassment litigation is expensive

Thursday, 12 October 2017

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As the latest news cycle reminds us, sexual harassment continues to plague American workplaces. In addition to affecting leadership confidence, employee morale, and public opinion, claims of sexual harassment carry with them another negative: Litigating sexual harassment claims is expensive.

Not only are sexual harassment cases expensive to litigate and win for employers, they are especially expensive to lose. This point is clearly illustrated by reviewing cases from the last several years that were won by plaintiffs in the U.S. District Courts of Alabama, Florida, and Georgia.

Summary of cases

Pollard v. Metro Dental, LLC, 2016 WL 3087915 (N.D. Ga., decided April 28, 2016): The receptionist at a dental office sued her employer because her supervisor (the dentist) made inappropriate sexual comments to her and subjected her to unwanted sexual touching in his office on several occasions. Although the receptionist complained to the office manager, the harassment did not cease, and the receptionist was terminated because of her complaints. The jury awarded the receptionist—

$64,000 for loss of wages and benefits.
$50,000 for emotional pain and mental anguish.
$60,000 for punitive damages.
Costs and interest.

EEOC v. Moreno Farms, Inc., 2015 WL 9234214 (S.D. Fla., decided September 10, 2015): The U.S. Equal Employment Opportunity Commission (EEOC) accused a farm of sexual harassment and retaliation against female employees who complained about the harassment. Two sons of the defendant company’s owner and a third male supervisor were accused of engaging in sexual harassment of female workers, including regular groping and propositioning, threatening female employees with termination if they refused the supervisors’ sexual advances, and attempting to rape and actually raping multiple female employees. The farm fired the five women for opposing the sexual harassment. Because the farm defaulted (didn’t show up for a trial on the facts of the case), the trial was limited to damages. The jury awarded the five women—

$2,425,000 in compensatory damages.
$15,000,000 in punitive damages.

The court also granted injunctive relief, so that the employer had to—

Implement equal employment opportunity (EEO) policies.
Provide EEO training to all owners and managers.
File reports with the EEOC for 5 years.

EEOC v. U.S. Security Associates, Inc., 2011 WL 2165585 (N.D. Ala., resolved on May 31, 2011): On behalf of six women, the EEOC filed suit because a district manager had subjected the women to unwelcome sexual demands, demeaning gestures, inappropriate touching, and other sexually offensive conduct. The parties resolved the lawsuit with a consent decree that required the defendant to pay the women $1.95 million. As part of the settlement, the defendant also had to—

Revise its policies and complaint procedures to appropriately address sexual harassment and retaliation.
Train all staff on anti-harassment procedures.
Establish a centralized process for investigating and tracking sexual harassment complaints.
Hold supervisors and managers accountable for eliminating such misconduct in the workplace.
Hire a consent-decree coordinator to be responsible for submitting reports to the EEOC for 3.5 years.

Types of damages

When a court rules that a defendant has wronged a plaintiff, the law awards damages. Put another way, damages are how much the defendant has to pay the plaintiff. Remedies are things a court can do to “make things right.” For example, if a defendant has wronged a plaintiff, one remedy is for the defendant to pay the plaintiff damages. But another remedy is for the court to order the defendant to do something or not do something, typically called “injunctive relief.”

So if you’re wondering why harassment and discrimination litigation can be particularly expensive, keep in mind the following types of remedies that can be awarded in these types of cases:

Back pay: If an employee quits a job or is terminated from a job and then files suit, the employer may have to pay him or her from the point he or she quits or is terminated to the point of settlement or court award.

Front pay: This is pay the employee would have after the date of settlement or court award but for the employer’s illegal actions.

Compensatory damages: These monetary payments compensate the plaintiff for injuries sustained or replace the losses caused by the wrongful employer actions. These may include money to compensate for physical injury (caused by an assault), but more commonly involve physical injuries or physical sickness caused by the workplace environment or employer actions. Keep in mind that emotional stress can sometimes lead to physical sickness.

Punitive damages: This is a monetary award set by the jury and designed to punish the employer for wrongful conduct and to deter the employer from continuing this conduct in the future.

Pre- and post-judgement interest: In addition to the damages mentioned above, the court may add interest payments, especially when it has taken a while for the parties to reach a settlement.

Attorney fees and costs: The plaintiff’s attorney and the costs of litigation will sometimes be paid out of the damages the plaintiff receives. But most federal employment statutes require the losing defendant to pay the plaintiff’s attorney fees and the costs of litigation. In fact, paying attorney fees may be the largest liability in some cases where the underlying damages are not substantial.

Injunctive relief: This is a court order that tells the defendant to do something or not do something. For example, the defendant may be required to reinstate the plaintiff to his job. And it’s not unusual for defendant-employers to be ordered to revise practices and procedures, provide anti-discrimination training, post notices, and appoint an equal employment opportunity (EEO) coordinator or supervisor.

Employer take away

So we’ve established that litigating sexual harassment claims is costly—both in time and money—even when the employer wins the case. But it can be overwhelmingly expensive if the employer loses the case. As with many employment issues, the best defense is a good offense. Taking steps to prevent sexual harassment is the best way to avoid incurring litigation costs.

As I’ve mentioned before, putting an effective and comprehensive anti-harassment and anti-discrimination policy in place is key. Once a policy is in place, it is critical that employers distribute the policy to all of their employees. The next step is to provide training to staff and supervisors, including how to respond when an employee makes a complaint about harassment or discrimination. The last component involves following the policy consistently and fairly. This includes appropriately investigating allegations of harassment or discrimination and taking necessary remedial action Although nothing can guarantee that an employee won’t file a lawsuit or make claims against his or her employer, these steps can help minimize that possibility.

Items on this web page are general in nature. They cannot—and should not—replace consultation with a competent legal professional. Nothing on this web page should be considered rendering legal advice.