Male Sexual Harassment Claims: Training Is the Best Prevention

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1 January 2013 Legal Report A Publication of the Society for Human Resource Management More in this issue The Three Fatal Flaws That Kill Noncompetes PAGE 5 Male Sexual Harassment Claims: Training Is the Best Prevention By Carolyn Rashby and Megan R. Hutchinson While sexual harassment often is treated as a women s issue, the problem of sexual harassment against men in the workplace is on the rise. Sexual harassment charges filed by men have doubled over the past two decades. In 2011, they accounted for 16.3 percent of all sexual harassment charges filed with the U.S. Equal Employment Opportunity Commission (EEOC) the largest percentage of such charges since the EEOC began reporting this data in Why the increase? A straightforward explanation is that there s simply more sexual harassment of men occurring in the workplace. It also could be that men have, over the years, become more comfortable lodging complaints about sexual harassment. The rise in the number of charges may also be tied to an economy that was stalled. In particular, some experts posit that men who feel powerless or fear for their job security may be more likely to lash out at co-workers female or male including by sexually harassing them. And, men who previously would have left a job instead of complaining if harassed now have decreased job mobility, translating into less opportunity to escape the harassment. Instead of leaving the employer, they may file charges when the situation becomes unbearable. Finally, some companies are saving money by cutting back on employee training, including harassment training for supervisors, so supervisors have less awareness of and fewer tools for continued on page 2

2 continued from page 1 dealing with harassing situations, especially the less common form of sexual harassment involving a male victim. Forms of Harassment Sexual harassment charges filed by men involve several forms of harassment. Charges occasionally involve female bosses or female co-workers making unwanted sexual advances toward male employees or making sexually offensive comments about or in the presence of male co-workers. Many complaints, however, involve same-sex harassment, which itself can take different forms. In some instances of same-sex harassment, men make unwanted sexual or romantic advances toward other men. When the male employee complained, his supervisors told him he should be proud that the woman had an interest in him and should sing, I m too sexy for my shirt. It can also involve a male perpetrator inflicting sexualized conduct on the male victim to humiliate or haze him, even though the perpetrator has no sexual interest in the victim. Depending on the facts and the state in which male-onmale harassment occurs, it also may amount to illegal sexual orientation harassment if the male employee is harassed for being gay or as a result of being perceived as gay. Whatever the basis, the increasing percentage of sexual harassment claims filed by men underscores the importance of preventing, recognizing and addressing workplace harassment, no matter what the gender of the alleged perpetrator or victim. Landmark Supreme Court Decision In 1998, the U.S. Supreme Court issued a landmark ruling in Oncale v. Sundowner Offshore Services Inc., 523 U.S. 75, holding that a claim for workplace sexual harassment may be brought where the harasser and the victim are the same gender. While working on an oil platform in the Gulf of Mexico, Joseph Oncale was sexually harassed by three co-workers, including a supervisor. The perpetrators initially subjected Oncale to verbal assaults, but eventually the harassment escalated to public humiliation and physical attacks, including a sexual assault. The Supreme Court noted that while ordinary workplace horseplay or flirtation may not constitute harassment, when one employee s behavior toward another creates an objectively hostile or abusive work environment, the behavior is illegal under Title VII, regardless of the gender of the victim or perpetrator. Female-on-Male Sexual Harassment Cases involving harassment of men by women are unusual, but there have nonetheless been some high-profile cases in recent years. For example, Austin Foam Plastics Inc. paid $600,000 in 2010 to settle a lawsuit in which a female manager allegedly made unwelcome sexual comments toward and physical contact with male employees. The men also alleged that the female manager had made their acquiescence to her sexual advances a condition for their gaining better employment terms. Similarly, movie theater chain Regal Entertainment Group agreed in 2009 to pay $175,000 to settle a lawsuit in which a male employee contended that a female co-worker sexually harassed him by repeatedly grabbing his groin. He also claimed he was retaliated against for complaining about her actions. And in a 2010 decision, EEOC v. Prospect Airport Services Inc., 621 F.3d 991, the 9th U.S. Circuit Court of Appeals reversed a lower court s dismissal of a male co-worker s claims that a married female employee made repeated sexual advances toward him after he had recently lost his wife. The harasser allegedly gave the victim sexual notes and a revealing photo of herself, made sexually suggestive gestures and comments toward him on a daily basis, and sent him sexual invitations and other messages through co-workers, who later speculated he was gay for turning down her advances and derided him for it. When the male employee complained, his supervisors told him he should be proud that the woman had an interest in him and should sing, I m too sexy for my shirt. This case highlights the changing social and legal attitude toward the outdated perception that men, on account of their gender, should welcome unsolicited sexual attention. Male-on-Male Sexual Harassment Still other cases involve male-on-male romantic harassment, in which the harasser makes sexual advances toward the victim. continued on page 3 2

3 continued from page 2 For instance, Prestige Home Centers Inc. in Jacksonville, Fla., in 2011 agreed to pay $79,000 after a male supervisor harassed male employees by subjecting them to inappropriate touching, groping, requests for sexual favors and sexually explicit comments. $200,000 for emotional distress, sending a strong message that juries are willing to punish employers for allowing male-onmale sexualized hazing. There are a number of other high-profile cases where companies have paid out large settlements for male-on-male sexualized hazing. In 2009, Cheesecake Factory agreed to pay $345,000 to settle a lawsuit alleging that six male employees were sexually harassed by other men at one of the chain s restaurants in Phoenix. Cheesecake Factory managers allegedly stood by and watched without taking action to stop the harassment, as male kitchen workers made sexual comments to the male victims and dragged them kicking and screaming into a walk-in refrigerator, where the harassers would touch and grind against the victims genitals and simulate raping them. And in 2010, McDonald s USA paid $50,000 to settle allegations that a male supervisor allegedly made lewd comments toward and touched, spanked and hugged a teenage male co-worker, making the teen very uncomfortable. Similarly, Cintas Corp. agreed in 2010 to pay $152,500 to settle a lawsuit arising in Philadelphia, in which a male supervisor allegedly touched male co-workers bottoms, told them about his sexual exploits and fantasies, exposed himself to them, and requested sexual acts. It is worth noting that the harasser in each of these recent settlements was a supervisor, highlighting the importance of providing anti-harassment training to supervisors. Hazing Although all forms of harassment are inappropriate in the workplace, a troubling trend in sexual harassment claims filed by men involves male-on-male sexualized hazing. Notable recent developments include a 2011 verdict from a New Orleans jury finding Boh Brothers Construction Co. liable for a male superintendent s harassment of a male subordinate to the tune of $451,000. The supervisor was alleged to have verbally abused, taunted, made sexual gestures at and exposed himself to the male employee because he believed the employee was feminine and did not fit the rough ironworker stereotype. Flemings Prime Steakhouse and Wine Bar settled a high-profile case in Arizona last year for $248,750, after male employees alleged that managers knew the head chef used his hands and kitchen utensils to grab, grope or flick their genitals but did not take action to stop the misconduct. Training Model The rise in the number of sexual harassment claims filed by men underscores the need for employers to focus on harassment prevention in the workplace for all employees. A key first step is educating the workforce, and particularly supervisors, through an effective anti-harassment training program. The EEOC strongly encourages supervisor training as part of a harassment prevention program, and a handful of states have implemented anti-harassment training requirements. A California law, known as AB 1825, imposes particularly stringent anti-harassment training requirements for supervisors. Wherever they are located, employers can benefit from following the stringent requirements under California law as a guideline for their anti-harassment training programs. Following is an overview of what s required under AB Under California s AB 1825, employers with any employees in California that have 50 or more employees anywhere must provide their supervisors with two hours of anti-harassment training every two years. While the law requires training only for supervisors who are actually located in California, the The award included $250,000 in punitive damages and continued on page 4 3

4 continued from page 3 best practice is to train supervisors who have any supervisory authority over California employees, even if the supervisor isn t located in California. AB 1825-compliant training may be provided in a variety of formats, including live training, webinars or e-learning (online) courses, which have become increasingly popular with many employers. To be compliant with AB 1825, anti-harassment training in any format must: Be interactive. Challenge the supervisor with questions that assess learning. Provide skill-building activities that assess the supervisor s application and understanding of content learned. Provide numerous hypothetical scenarios about harassment, each with discussion questions so that supervisors remain engaged in the training. The training also must address a number of specific topics, including: Anti-harassment training that addresses only traditional, expected forms of sexual harassment may leave supervisors unprepared to adequately prevent the variety of types recognized today. The definition of sexual harassment under California and federal law. California and federal principles concerning the prohibition against and the prevention of unlawful sexual harassment, discrimination and retaliation in employment. Types of conduct that amount to illegal harassment. Remedies. Prevention strategies. Limited confidentiality of the complaint process. Resources for victims, including complaint procedures. The obligation to conduct an effective investigation of a harassment complaint. What to do if the supervisor is personally accused of harassment. The essential elements of an anti-harassment policy. In addition to covering these topics, supervisors must receive either the employer s policy or a sample anti-harassment policy. Anti-harassment trainings should also cover other forms of harassment (e.g., race, age, disability). Anti-harassment training that addresses only traditional, expected forms of sexual harassment (such as sexual harassment of a female employee by a male co-worker or supervisor) may leave supervisors unprepared to adequately prevent or address the variety of types of workplace harassment recognized today, including the increasingly prevalent and serious male-on-male sexual harassment. Training Checklist If your organization needs to train or retrain supervisors, here is a quick checklist of what to look for when selecting or designing an AB 1825-compliant and effective training program: Will the training take two hours, excluding breaks? What protections are built in to prevent the trainees from leaving early, diminishing the screen (for a webinar) or clicking through (for e-learning)? Does the course outline cover all of the required content under AB 1825? Does it address emerging harassment issues, such as male-on-male harassment and sexual orientation harassment? Will the training program refer to your company s antiharassment policy, or will someone in your company, such as one of your HR professionals, separately provide that information? Is the training program designed by employment law experts? Are you engaged when you take the training, and do you think that your supervisors also will be? Does the training give examples to illustrate legal principles? Is the training interactive? Does the training include role plays or examples that are relevant for your workforce, including same-sex harassment? Does the training give your employees the skills they will need to prevent and address workplace harassment? While employers outside California are not covered by AB 1825, the law s mandates are now considered a best practice. Complying with some of the strictest standards in the country is a good defense under federal law should claims arise. Carolyn Rashby is special counsel and Megan R. Hutchinson is an associate with Miller Law Group, an employment law firm with offices in San Francisco and Los Angeles. 4

5 The Three Fatal Flaws That Kill Noncompetes By Joseph A. Dougherty In the past, it was common for employees to work for one company for their entire career, slowly making their way up the corporate ladder to senior management. That is no longer the norm. According to a 2010 report from the U.S. Bureau of Labor Statistics, the average American now holds 11 jobs between the ages of 18 and 44. Especially for younger workers, the number of jobs held has steadily increased over the last few decades. In 1983, workers younger than age 35 changed jobs every three years, on average. Today, that number has dropped by half to 18 months. Because of this shift, we ve learned that regardless of the state of the economy, employee turnover is now an anticipated event and a considerable cost of doing business that can t be underestimated or overlooked. The burden of dealing with this problem falls largely to HR managers. While HR professionals usually do all they can to retain a high percentage of employees by creating a positive work environment, there isn t much they can do to stop job-hopping completely. Unfortunately, this reality creates considerable risk. Anyone who takes the time to develop skills and become successful within a particular industry is likely, upon departure, to accept another job within that same industry. For a business, this often means that the employee is leaving to join a direct competitor. Since key employees are likely to know all of your best customers and most sensitive company information, they could conceivably take that information with them, with the intent to use it to undermine any competitive advantage you might have. This is a threat not only to a company s hard-earned success but also to its very survival. But there is some good news for HR managers and businesses: There are steps you can take to protect your company s sensitive information and the business relationships you have with your best customers. The solution is a restrictive covenant, which is more commonly referred to as a noncompete agreement. A second type of restrictive covenant is the nonsolicitation agreement. However, this solution is not as simple as it might sound. Noncompete agreements and other restrictive covenants can be left open to legal challenges if not written carefully. When drafting a noncompete agreement, it is important to first understand that the enforceability of these contracts varies from state to state. California, for example, does not allow them at all. However, most states do allow for the enforcement of some sort of reasonable restrictive covenant. While it is always best to consult an attorney who is familiar with applicable state law, there are certain aspects of a noncompete agreement that are consistently required, regardless of the state law that applies. Unfortunately, these basic considerations are sometimes overlooked, subsequently rendering many noncompete agreements completely useless. Let s refer to them as the three fatal flaws. You Can t Get Anything for Free Nothing in life is free. That is why it is important that restrictive covenant agreements be signed as part of the initial terms of employment. Every type of restrictive covenant requires some sort of consideration in order to be recognized as valid. That means an employee must be given something in return for signing it. The best practice for employers is to require employees to sign restrictive covenants or noncompete agreements at the outset. This agreement should be, at a minimum, referenced in the initial offer letter or, even better, attached to it for the candidate to see its terms and understand its scope, and understand that he or she is required to sign as a condition of employment. While this may seem relatively obvious, it is sometimes the simplest steps that are ignored. Asking a current employee to sign a restrictive covenant after he or she has been with the company for a period of time can be dangerous. While some states hold that continued continued on page 6 5

6 continued from page 5 employment is sufficient to support a new restrictive covenant, other states require additional new consideration to support that same agreement. This additional consideration often takes the form of a promotion, raise or one-time financial payment. It is critical that you are aware of whether such additional consideration is necessary. You Can t Protect Everything While commonly called a noncompete agreement, that title is somewhat misleading. Legally speaking, you can t prevent all competition. What businesses do have a right to prevent is unfair competition. Generally, this means businesses have the right to protect legitimate business interests. So, when drafting a noncompete agreement, businesses need to be specific about what they are trying to protect and consider whether or not the employee signing it actually poses a threat to the protectable business interests. Let s first identify the three legitimate business interests that most states find protectable: trade secrets and confidential information; customer relations and good will; and specialized training and unique skills. Trade secrets and confidential information can encompass a range of different areas related to how the business operates. This can include customer lists, bid proposals, pricing and profitability, manufacturing processes, formulas, designs, and other data that is not known outside the company. Information falling into this category can be particularly damaging if an ex-employee passes it on to a competitor, as trade secrets are often part of the very foundation of a company s success and advantage over its competitors. The protection of customer relations and good will is especially important for businesses in client service industries. For these companies, clients are the No. 1 source of revenue, and developing and maintaining positive client relationships is a critical part of building the business. While individuals may be responsible for nurturing these relationships and contacts, they would be unable to do so without the support and resources of their employer. That s why the law typically allows and enforces contracts that restrict the ability of an ex-employee to divert clients when he or she moves to a new company, at least for a reasonable amount of time. This gives the employer a fair opportunity to retain customers and transition the relationship to a new company representative after a key employee has left. Finally, truly specialized training given to an employee or skills that were fostered while on the job can also be protected by a noncompete agreement. For this particular business interest to be recognized, the employer must demonstrate that the training was unique and extensive, and was not the product of standard training procedures. This protection is often difficult to establish in court and very factually specific. Another factor businesses should consider when drafting a noncompete is the role an employee plays within an organization. A low-level employee will not have the same skills or access to sensitive information as a senior manager or executive-level manager. Asking every employee in a company to sign a noncompete agreement, regardless of the risks associated with the employee s departure and association with a competitor, can prove unwise and counterproductive. It is prudent for a noncompete agreement to explicitly identify the business interests and protections that the company seeks. Not every business will have the same concerns or risks. While one company might be focused on keeping a former employee from taking customers with him or her to a new job, another will need to protect a long-held company secret. Careful introspection will help the company focus on what its true goals and risks are while crafting its restrictive covenants. You Can t Keep Someone Out of a Job While many employers would prefer to prevent ex-employees from competing in any way, at any time and in any location, this is not a realistic expectation. For a noncompete agreement to be enforced, its duration and geographic scope have to be deemed reasonable by the courts. What is considered reasonable often depends on the scope of the individual s role in the business. For example, an individual with national responsibilities and access to customers throughout the country likely will be subject to broader geographic restrictions than an individual responsible for a defined region or specific set of identifiable customers. The key to creating enforceable geographic and time-specific restrictions is having meaningful justifications for them. For example, if a sales manager has a territory of 35 miles, a court may find a noncompete agreement restricting him from working anywhere within 75 miles to be unreasonable. Meanwhile, a national company may have more leeway in how large a geographic area it can restrict an ex-employee from working in. Either way, the geographic scope cannot be unlimited or unrelated to the individual s actual former duties and geographic region. Similarly, time restrictions cannot be unlimited. A business cannot restrict an employee from ever working for a competitor for the rest of his or her life. It is important to set a specific amount of time. Usually, a safe marker is the time it will take to continued on page 7 6

7 continued from page 6 adequately train a replacement for the job. For higher-level jobs or positions where contact with the customer is less frequent, employers may seek an even longer time restriction. While a longer time restriction may be found reasonable by the court, the longer the duration of the restriction, the higher the burden to convince the court that the time period is reasonable and necessary. There is no one-size-fits-all solution for selecting geographic and temporal restrictions for noncompete agreements. Just because another business has a one-year restriction for its ex-employees does not necessarily mean that will work for your company. Assigning an unreasonable time frame or geographic scope to a noncompete can be a fatal flaw that nullifies the whole agreement. Be sure you can articulate a good-faith basis why such restrictions are appropriate and not punitive. Conclusion Drafting a noncompete agreement may seem like a fairly straightforward administrative task that can be easily accomplished using templates found on the Internet. In reality, every noncompete agreement should be tailored to the interests, needs and risks associated with each individual company that seeks to implement them. Being aware of and addressing the above three fatal flaws will give a company a solid start in developing an enforceable noncompete agreement. That being said, it is always best to consult with an attorney who is knowledgeable in this field to ensure that the company s business interests are truly protected. Joseph A. Dougherty is the co-managing shareholder in the Philadelphia office of Buchanan Ingersoll & Rooney. Dougherty chairs the firm s Trade Secret and Restrictive Covenant Practice Group, and can be reached at joseph.dougherty@bipc.com or (215) The Society for Human Resource Management (SHRM) is the world s largest association devoted to human resource management. The Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 250,000 members in over 140 countries, and more than 575 affiliated chapters. Visit The SHRM Legal Report is a newsletter intended as general information, and is not a substitute for legal or other professional advice. The opinions expressed by the authors do not necessarily reflect those of the Society for Human Resource Management. Editors: Allen Smith Joanne Deschenaux Copy Editor: Erin Binney Designer: Mari Adams 2013 Society for Human Resource Management 1800 Duke Street Alexandria, VA USA (U.S. only) (Int l) TTY/TDD FAX Internet: Allen.Smith@shrm.org Please contact the Copyright Clearance Center for permission to reprint complete articles or article excerpts by calling If you would like to order glossy reprints or seek to reproduce an article on your website, please contact the YGS Group by calling