Beware Employers – The Holiday Season Can Be a Breeding Ground for Sexual Harassment Claims and Post Holiday Lawsuits
November 19, 2010
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November 2010 Newsletter
By: Charles H. Goldstein, Esq.
“Beware Employers – The Holiday Season Can Be a Breeding Ground for Sexual Harassment Claims and Post Holiday Lawsuits; and Is Your Arbitration Agreement in Danger of Not Being Enforced Because of a Recent California First District Court of Appeal Decision?”
I. Beware Employers – The Holiday Season Can Be a Breeding Ground for Sexual Harassment Claims and Post Holiday Lawsuits
The holiday season is fast approaching. The good cheer and informality of the holidays can create some serious problems for employers. This is because some employees believe that during the holiday season, the strict prohibitions against sexual harassment simply do not apply. Many employers have holiday office parties where alcoholic beverages are served. Employees often exchange gifts during the holidays and customers may give gifts to employees. Employees are generally less careful when it comes to their conduct at company social events than they are during work hours. This is particularly true when alcohol is served. Holiday parties can be a breeding ground for sexual harassment claims. This is especially true if what happens at the holiday party is part of a pre and post holiday season pattern of sexually harassing conduct. As an employer, what happens at an offsite, off the clock holiday party is still your responsibility because the holiday party is company sponsored. Although you don’t want to be the “Grinch who stole Christmas”, you don’t want any employee to be sexually harassed because of the inappropriate conduct of your managers or employees. As the employer, you have a legal duty to prevent employees from being sexually harassed whether at work or at a holiday party.
A. Common examples of sexual harassment at the holiday season that you should be aware of and should discourage
1. Employees giving sexually risqué “gag gifts” or inappropriate gifts i.e. lingerie or other sexually suggestive apparel;
2. Supervisors asking subordinates to dance and then making romantic propositions;
3. Employees telling lewd jokes and making comments about another employee’s body;
4. Forced kissing under the mistletoe by a supervisor or employee;
5. An intoxicated supervisor or employee groping another employee or pressing their bodies up against another employee in a sexually suggestive manner.
6. While not an act of sexual harassment, a female or male employee dressing in a manner than would be inappropriate for a business event. Dressing in this manner should be discouraged at all times, not just during the holiday season.
B. What Employers Can Do to Avoid Sexual Harassment Claims
1. Employers should send their sexual harassment policies to all employees reminding them that the prohibition against sexual harassment still applies during the holiday season.
2. Your managers and supervisors should be trained regarding proper conduct that is acceptable and unacceptable at holiday parties. Managers should be instructed not to invite employees to their homes or to a bar for a “get together” before or after the company holiday party. Claims of harassment are often made about conduct that occurred at these pre and post holiday party gatherings.
3. Employees should be encouraged to bring their spouses or significant others to the holiday party because their presence can discourage inappropriate conduct between employees.
4. If alcohol is served at the party, make certain that you limit the alcohol that is served and make certain that you have plenty of non-alcoholic beverages on hand as well. Designate some managers in advance to make certain that employees do not consume too much alcohol. If a manager reasonably suspects that an employee has consumed too much alcohol and may be intoxicated the manager should arrange for alternative transportation for the employee, such as a taxi cab, so that the employee can be taken home safely. Finally, many experts recommend that you stop serving alcoholic beverages at least ninety (90) minutes before the end of the party.
5. If you receive reports of sexual harassment occurring during the holiday season or at a holiday party, take immediate steps to investigate the conduct and take remedial action(s), if warranted.
6. Do not ignore conduct of any manager and/or employee that would be considered to be sexual harassment just because it occurred during the holiday season.
II. Is Your Arbitration Agreement in Danger of Not Being Enforced Because of a Recent California First District Court of Appeal Decision?
In Trivedi v. Curexo Technology Corporation, the employer failed to follow the simple rules of Armendariz v.Foundation Health Psychcare Services Inc. (2000) 24 Cal. 4th 83, and as a result, the employer’s arbitration agreement was denied enforcement. In Trivedi, the employer opted for an arbitration provision that failed to require the employer to pay the arbitrator’s fees and costs unique to the arbitration, as required by Armendariz, and instead inserted the following provision that the Court later found to be substantively unconscionable: “The prevailing party shall be entitled to recover from the other party all costs, expenses and reasonable attorneys fees incurred in any arbitration arising out of or relating to this Agreement and in any legal actions or administrative proceeding to enforce any arbitration award or relief.” (emphasis added)
The Court found this provision to be substantively unconscionable because it provided that attorneys’ fees could be awarded to the prevailing party and that would be contrary to the provisions of the California Fair Employment and Housing Act, the state’s antidiscrimination law. Under FEHA, a Court would only allow the imposition of attorneys’ fees and costs on an employee litigant if the employee’s claims are found to be “frivolous, unreasonable, without foundation, or brought in bad faith.” As a practical matter, in my experience such a finding is rare.
The Trivedi Court reasoned that if Trivedi had been able to bring his claim in a Court, he would not suffer the risk of having attorneys fees and costs imposed on him because no attorneys fees and costs would have been awarded to his employer, Curexo Technology Corporation, unless the Court found that Trivedi brought his discrimination claims frivolously, unreasonably, without foundation, or in bad faith.” The Court found that the arbitration provision was unfair because it would have discouraged Trivedi from filing his discrimination claims because in arbitration, Trivedi could have attorneys’ fees and costs imposed on him by the arbitrator if he lost his case. The Court also found that the agreement’s use of the American Arbitration Association (“AAA”) National Rules for Resolution of Employment Disputes, which allows arbitrators to award attorneys fees in accordance with applicable law, did not cure the Agreement’s defect. The Court further found the arbitration provision was deficient because although it stated that the arbitrator would be selected from the AAA pursuant to the AAA’s National Rules for the Resolution of Employment Disputes, employees were not provided with a copy of the AAA Rules. Finally the Court found that because at least two (2) provisions of the arbitration portion of the employment agreement were substantively unconscionable, the arbitration agreement was permeated with unconscionable terms and therefore refused to severe the unconscionable provisions and enforce the remainder of the arbitration agreement.
How to Prevent Your Arbitration Agreement from Being Denied Enforcement
1. Make certain that your arbitration agreements are reviewed to determine whether they fully comply with the fairness requirements set forth by the California Supreme Court in Armendariz;
2. Always remember that the purpose of having arbitration agreements is to secure a cost effective method of resolving disputes with your employees, not to deprive employees of their right to a full and fair hearing of their claims and to receive full remedy if their claims are proven.
3. Do not have any provisions in your arbitration agreements that could be construed by a court as denying basic fairness to employees, such as the following: (a) attempting to shift the costs of arbitration from the employer to the employee; (b) limiting discovery; (c) creating a statute of limitations for filing claims that is shorter than the statute of limitations for claims permitted by applicable law; (d) limiting damages permitted by applicable law; and (e) limiting the claims that will be subject to arbitration to only the claims that employees have against employers and that allows claims that you have against employees to be subject to court action.
4. If your arbitration agreement utilizes the AAA National Rules for Resolution of Employment Disputes, have the rules or the latest version of these rules available for employees to review before they sign the Arbitration Agreement. You can obtain a copy of these rules from the AAA website. If you use other rules for the selection of arbitrators and/or for the administration of the arbitration agreement, secure copies of the rules of those organizations and have them available when employees are reviewing and signing arbitration agreements.
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