Sexual Harassment: Was Employee Subjected to Unwelcome Workplace Harassment?

A recent case from the Tennessee Court of Appeals acts as a reminder of the importance of implementing and enforcing policies aimed at preventing sexual harassment in the workplace. The outcome of the case also shows that while you may not be able to prevent all inappropriate behavior by your supervisors, how you respond to such behavior may end up deciding your fate if you are sued for workplace harassment.

Sexual Harassment

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Facts

An employee at a Wendy’s near Tennessee State University in Nashville claimed that during her employment, she was constantly harassed by the restaurant’s manager. She claimed the manager repeatedly indicated that he was sexually interested in her and threatened to cut her hours if she refused his sexual advances.

On one occasion, the employee and her manager met at a motel and had sex, after which he paid her. She says she had sex with him only because she was afraid he would cut her hours. He said he never threatened to cut her hours and that the incident was strictly a consensual, money-for-sex deal (although he admitted paying only $260 out of the $400 that was promised).

Toward the end of her employment, the employee secretly taped a conversation in which the manager offered her $40 to strip for him in the restaurant’s bathroom, although the tape also seemed to indicate that she had initiated the conversation.

Shortly after the bathroom-stripping incident, the employee sued Wendy’s. Although Wendy’s maintained a written sexual harassment policy, she never submitted a harassment complaint to the company before filing the lawsuit.

After learning of the complaint through the lawsuit, Wendy’s upper management immediately visited the restaurant and conducted an investigation, interviewing the manager and the employee’s coworkers. The manager denied harassing the employee or threatening to cut her hours. However, he admitted to the stripping incident, and as a result, he was relieved of his keys and told not to return to the restaurant. A few days later, he was officially terminated.

The case proceeded to a four-day bench trial (a trial without a jury, where the judge alone weighs the evidence). The court ruled in favor of Wendy’s because the employee failed to prove the sexual conduct between her and her manager was unwelcome. She appealed.

Court’s Ruling

The court of appeals affirmed the lower court’s verdict, holding that there was sufficient evidence—including the testimony of coworkers as well as contradictions within the employee’s testimony—to support the court’s conclusion that the sexual contact between the manager and the employee was consensual rather than unwelcome.

The employee also raised another issue on appeal, specifically, that Wendy’s failed to establish what is known as the Faragher affirmative defense, which permits an employer to avoid liability if there has been no tangible employment action against the employee and it can show that it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and . . . that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”

The appeals court disagreed, finding that Wendy’s had established a Faragher defense at trial. In fact, the court was so adamant about Wendy’s Faragher defense that it expressly held this was an alternative basis for the lower court to have ruled in favor of Wendy’s, even though the lower court’s finding that the employee failed to established unwelcome conduct (as affirmed by the court of appeals) meant Wendy’s didn’t need an alternative basis for winning the case.

The court of appeals noted that Wendy’s had presented extensive evidence of its sexual harassment policy and how it was communicated to employees and enforced, including that the policy was in the handbook distributed to all new employees. (Although the employee testified she had never seen the policy, she signed a form acknowledging receipt of the handbook.)

The court of appeals further noted that while the employee had plenty of opportunities to report the alleged harassment, she never did so. Finally, the court of appeals approvingly noted that Wendy’s had initiated a “prompt and serious” investigation as soon as it learned of the complaint and had immediately fired the manager when he admitted to the stripping incident.

Bottom Line

Obviously, it’s never a great idea for a manager to engage in sexy times (for money or otherwise) with a subordinate employee. The manager’s conduct in this case—even assuming, as the court concluded, that the employee was a willing participant—exposed his employer to potential liability and—win or lose—a significant financial expenditure in defending this case through trial.

It’s unclear whether the manager received supervisory training, but it’s absolutely essential for all supervisors to receive periodic harassment and discrimination training to help avoid these kinds of situations. Employers may also wish to consider enacting nonfraternization policies.

Of course, even with the best rules and training, some supervisors will go astray. But even when supervisors act inappropriately, you may still be able to prevail if you can show you did everything you could to put policies in place to prevent harassment.

In this case, Wendy’s might still have won the case even if the manager’s conduct was deemed unwelcome because it was able to show it had solid policies—properly distributed to employees and consistently enforced—and because, once it learned about the issue, it conducted a prompt investigation and terminated the offending manager.

Also, it’s important to note that the manager was terminated even though his alleged victim was no longer employed by the company—this is a key decision-making point in many cases, as employers often incorrectly assume that no action is needed to investigate a harassment claim if the complaint is received after the complaining employee quits or is fired.

Bottom line, this case demonstrates the importance of implementing workplace policies on reporting harassment and investigating harassment complaints because such practices may save the day in future harassment claims.

Kara E. Shea—an attorney in Butler Snow’s Nashville office—is an editor of Tennessee Employment Law Letter.  She can be reached at kara.shea@butlersnow.com.

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Author: Kara E. Shea