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An effective strategy to limit liability for harassment follows a familiar formula: Human resource professionals develop anti-harassment policies that call for training, complaint procedures, investigations and appropriate discipline. One potential weak link in the process, however, is the implementation of such policies. As a federal district court recently held, incomplete execution of the formula can erode defenses against harassment claims.
DynaServ Industries, a company that cleans and maintains street furniture in New York City, implemented a multifaceted approach to addressing issues of harassment. In April 2014, it conducted mandatory harassment training for its supervisors. In May 2014, it issued a revised handbook that included anti-discrimination policies and complaint procedures. Further, DynaServ maintained a labor contract with Local 3 of the International Brotherhood of Electrical Workers. The labor contract included, among other things, a mechanism for employees to make harassment or discrimination complaints to the union.
Shelton Holt was hired in November 2013 as a field technician for DynaServ. According to the court, one of Holt's co-workers in February 2014 allegedly called him the " 'n-word' who should be fired." Holt made a complaint to the shift supervisor, Curtis Callender. Callender told Holt that he would report the conduct to the president of DynaServ, Greg Montesano, if it did not stop.
After Holt complained of a second alleged, related incident, Callender told that co-worker to leave Holt alone. After a third incident of alleged racial harassment, Holt made a complaint directly to Montesano and the union. A joint investigation was conducted, which resulted in final warning notices being issued to the co-workers alleged to have engaged in the misconduct.
In February 2015, Holt took a leave of absence from work, purportedly for medical reasons. However, despite repeated requests from DynaServ for paperwork to substantiate the leave of absence, Holt failed to respond and was consequently terminated.
Holt filed a lawsuit against DynaServ and the co-workers, alleging unlawful racial harassment during his employment and retaliation and discrimination with regard to his termination. On a motion for summary judgment, the court dismissed the discrimination and retaliation claims. It found Holt's admitted failure to substantiate the reason for his leave of absence to be a legitimate, nondiscriminatory business reason for his discharge.
However, the court found that Holt's claims of racial harassment should be resolved by a jury. As a preliminary matter, the court noted that harassment claims can be based on evidence of a single incident and that "perhaps no single act can more quickly alter the conditions of employment and create an abusive working environment than the use of an unambiguous racial epithet" such as the "n-word."
Turning to DynaServ's Faragher/Ellerth defense, in which the company asserted that it exercised reasonable care to prevent and correct any harassment, the court held that a jury could find that DynaServ should have discovered and stopped the offending conduct earlier, when it was first reported to Callender. The court noted that each time Callender addressed Holt's complaints, he failed to elevate the complaint to anyone who could take disciplinary action and failed to stop the offending conduct.
The court also held that a jury could conclude that DynaServ's joint investigation, along with the union, was inadequate. It noted that the investigation did not include interviews of the alleged harassers and resulted in arguably insufficient discipline. The court concluded that an employer may be negligent in controlling working conditions and, therefore, liable for unlawful harassment when "it did not monitor the workplace, failed to respond to complaints, failed to provide a system for registering complaints or effectively discouraged complaints from being filed."
Holt v. DynaServ Industries Inc., S.D.N.Y., No. 14-8299 (Sept. 9, 2016).
Professional Pointer: Proper implementation of policies concerning complaint procedures, investigations and remedial action is essential to establishing a defense to claims of unlawful harassment. Laxness in the enforcement of such policies can render them meaningless.
Scott M. Wich is an attorney with the law firm of Clifton Budd & DeMaria, LLP in New York City.
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