Another Hurdle for California Employers: Employer Liability for Sexual Harassment by Non-Employees

July 1, 2004

By: Thomas Dias

The road for California employers just became rockier as a result of the recent court decision in Salazar vs. Diversified Paratransit, Inc. (2004) 117 Cal.App.4th 318. In Salazar, the plaintiff (a female) was a bus driver whose job required her to transport mentally disabled adults. A male passenger (client of Salazar's employer) with the mental capacity of a 3-5 year old child attempted to touch plaintiff and exposed himself. There had been prior incidences involving the same passenger, which included brandishing a knife and exposing himself to other female drivers. Plaintiff quit her job shortly after the incident and sued her employer under California's Fair Employment and Housing Act, codified as Government Code Section 12900. The employer obtained a non-suit trial on the claim for sexual harassment, which was affirmed in the Court of Appeal. However, two months after the Supreme Court granted review, the California Legislature took action. Assembly Bill 76 was introduced and was passed by both Houses and approved by the Governor in early October of 2003.

California's Government Code Section 12940(j)(1) was amended by Assembly Bill 76 to include language as follows:

The statute further states that an entity shall take reasonable steps to prevent harassment from occurring.

How can the employer protect/defend itself?

Advise/Warn Your Employees Of Their Work Environment When Hired

The employer in the Salazar case was aware of the offending passenger's conduct due to prior reports/complaints from other female drivers, yet did nothing to advise the plaintiff of the conduct. Accordingly, it would appear that one way to avoid liability for an employer would be to advise an employee of the conditions they would be subjected to in the work place at the time of being hired. Had Ms. Salazar been told of the passenger's prior conduct at the time she was hired, she may have decided to work elsewhere or, it could be argued that she voluntarily consented to the behavior. It would certainly be difficult for her to argue that conduct she was aware of and told to expect, could amount to sexual harassment.

Require Employees To Immediately Report Sexual Harassment / Inappropriate Behavior To A Supervisor

According to Government Code Section 12940(j)(1), the employer may be held responsible " . . . where the employer, or its agents, supervisors, knows or should have known of the conduct . . ." As a result, employers would be wise to update their policies and procedures manual to require all employees to report sexual harassment or any other inappropriate behavior to a supervisor. As the statute is written, failing to advise the employer of the offending behavior, is a defense. A plaintiff is going to have a difficult battle trying to establish that the employer "should have known of the conduct" if the offended employee failed to comply with company policies by reporting the conduct to a supervisor. To the extent an employer has a written policy requiring that employees report not only the improper conduct of co-employees, but also sexually offensive conduct by non-employees, the employer will be able to utilize that policy at the time of trial. Obviously, the employer will be able to argue that the employee never reported the offensive conduct, because it really wasn't offensive enough to rise to the level of sexual harassment. A simple update of the company's policies and procedures manual would provide direction for employees and a viable defense in the event a claim is brought.

Take Action Immediately

This is obviously the trouble spot for employers. Certainly, if the offensive conduct is coming from a delivery person, such as a Federal Express Delivery person, the Sparkletts Representative, that conduct is usually remedied with a phone call to the representative's employer. The real question for employers is what do you do when the offensive conduct is coming from a major client. What happens when your best client repeatedly makes sexual advances towards your female receptionist or other office personnel? Clearly, you do not want to irritate your clients so that the business wanders elsewhere. The employer could consider moving the offended employee to another similar position, but must be careful not to transfer the complaining employee to an "objectively less desirable" position [Swenson vs. Potter (9th Cir. 2001) 271 F.3d 1184.].

The immediacy and reasonableness of action taken by an employer will be the primary source of litigation. Realistically, there is no easy answer as to what action an employer should take and the statute provides no guidance except to say that the employer "... shall take all reasonable steps to prevent the harassment from occurring" and that "... the extent of the employers' control and any other legal responsibility which the employer may have with respect to the conduct of those non-employees shall be considered." Unfortunately, the statute does not provide any guidance as to exactly how those factors shall be considered. The trial court must consider the employers' ability to control the alleged harasser. While it is doubtful that the court would require an employer to sever ties to a client, especially a major client, as being unreasonable, the court may require a request by the employer to the alleged harasser's employer for a different contact person. Obviously, any action by the employer may have a detrimental effect on the business relationship between the employer and harasser's employer. At a minimum, the courts will most likely require a prompt and thorough investigation of the alleged incident and communication of some form to the alleged harasser. It is not unreasonable to expect that whatever corrective action is taken to remedy the situation is communicated to some extent to the offended employee. These actions by the employer may not prevent a lawsuit, but would provide ammunition for defense counsel in the event a lawsuit is filed.

Conclusion

On a positive note, most insurance policies should cover litigation for an alleged violation of Government Code Section 12940(j)(1), since the focus of the statute is not sexual harassment by the employer, but negligence for failing to take reasonable steps to prevent sexual harassment from occurring. Remember, the employer is not the person alleged to have been engaged in the harassing behavior, it is only their response or lack thereof that is being called into question.

Questions remain regarding how "pervasive" or "severe" the offending conduct must be. In situations involving a co-worker the sexually offensive conduct must be "sufficiently extreme to amount to a change in the terms and conditions of employment" to survive under Title VII of the Civil Rights Act of 1964 [Faragher v. City of Boca Raton (1998) 524 US 775]. Obviously, the legislature wants a harassment free work environment. However, unfortunately for California businesses, exactly how that is to occur and what steps California employers must take will be left in the hands of the trial courts.