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In two recent decisions, the United States Supreme Court determined that under Title VII employers are vicariously liable for sexual harassment by supervisors regardless of whether the harassed employee suffered a tangible adverse employment action such as termination, demotion or a failure to receive a promotion. However, if no tangible adverse employment action has occurred, the employer can avoid liability by proving that: (1) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, for example, by making employees aware of the company.s harassment policy and complaint procedure; and (2) the harassed employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer (e.g., by following the complaint procedure) or to otherwise avoid harm.

These decisions highlight the importance of implementing an effective sexual harassment policy . requiring employees to bring any harassment to the attention of management, establishing a procedure for making complaints, and ensuring that all employees are aware of the policy.

Application to California Employers

In the two companion cases clarifying an employer.s liability under federal law for sexual harassment . Burlington Industries v. Ellerth, Case No. 97-569, 98 C.D.O.S. 5029 (June 26, 1998) and Faragher v. City of Boca Raton, Case No. 97-282, 98 C.D.O.S. 5048 (June 26, 1998) . female employees sued their employers under Title VII of the Civil Rights Act, the federal statutory scheme prohibiting discrimination and harassment in employment, alleging that their male supervisors had sexually harassed them during their employment. Burlington and Faragher articulate the standard of employers. liability for sexual harassment by supervisors under Title VII, applicable to nearly all employers in the United States. Because California employers were already subject to a vicarious liability standard for a supervisor.s sexual harassment under state anti-discrimination law (the Fair Employment and Housing Act or "FEHA"), these decisions do not impose greater liability obligations than have previously existed for California employers. Nevertheless, California courts look to Title VII law when interpreting FEHA, and these decisions are likely to be relied upon to clarify harassment standards even under California law.

Prompt, Fair and Effective Investigations of Employee Complaints

In addition to these Supreme Court decisions, two recent California appellate court decisions highlight the important role of prompt, fair and effective investigations of employee complaints of harassment or discrimination. Such investigations are vital to protecting the employer from liability to the complaining employee or the alleged harasser.

In Casenas v. Fujisawa, 58 Cal. App. 4th 101 (1997), a former sales representative complained that her supervisor had sexually harassed her. The employee sued, alleging that the company.s investigation of her complaints made her working conditions intolerable, resulting in a retaliatory constructive discharge. The appellate court disagreed, upholding a summary judgment in favor of the company. The court found that the company.s investigation of her complaints was "a textbook example of how to respond appropriately to an employee.s harassment complaint."

In Casenas, the employee sent a memorandum to the company.s personnel director, complaining that her annual performance rating and merit increase was unfairly low and that her evaluating supervisor had sexually harassed her. The company took the following "textbook" steps to investigate the employee.s complaint: (1) the personnel director first met with the employee to discuss the memorandum; (2) the personnel director and the accused harasser.s supervisor then met with the accused harasser and questioned him in detail about the complaints; (3) the personnel director interviewed all sales representatives who had worked under the accused harasser, asking if they had observed any inappropriate behavior; (4) the personnel director compared the employee.s performance rating and merit increase against those received by all other sales representatives in the company, including others supervised by the accused harasser, concluding that the rating and increase were fair and consistent with the employee.s quantitative goals and sales results; (5) the personnel director met with the employee to discuss her findings; (6) the employee was given a letter reporting the investigative findings and the actions taken against the accused harasser; (7) the accused harasser was given a written reprimand and warning stating that he had engaged in inappropriate conduct, any further similar behavior would subject him to termination, and he was prohibited from further contact with the employee; and (8) the employee.s new supervisor and the supervisor of the accused harasser held a meeting with the employee to thoroughly discuss all of her concerns and complaints.

Silva v. Lucky Stores, Inc., 65 Cal. App. 4th 256 (1998), also demonstrates that a fair and effective investigation can protect an employer from wrongful discharge claims by the accused harasser. In Silva, a male store manager was terminated after the company investigated complaints of sexual harassment by two female subordinate store employees, concluding that he had violated the store.s harassment policy. The manager sued the store, claiming that his termination was not for good cause. The appellate court found the employer.s investigation "appropriate under the circumstances" and affirmed the summary judgment granted in favor of the employer by the trial court. The Silva court described the essential elements of a fair investigation: (1) use a trained, uninvolved investigator who will ask relevant, factual questions of both sides, (2) maintain confidentiality insofar as possible, (3) provide the accused ample opportunity to present his position, and (4) carefully consider the evidence presented by both parties as well as any percipient witnesses.

Conclusion

These recent cases emphasize the fact that an employer.s policies and procedures, as well as its investigative response to harassment complaints, are critical in determining its liability in sexual harassment cases. They underscore the need to educate supervisors about the importance of avoiding any conduct that could create the appearance or impression of harassment, and the need to stress to employees that there will be no retaliation for a harassment complaint.

We recommend that employers carefully review their sexual harassment policies and ensure that they are as effective as possible, both in promoting a non-harassing work environment and in minimizing their risk of legal liability via an effective complaint procedure. Employers should also review their procedures for notifying and reminding employees about the company.s harassment policy and for investigating harassment complaints promptly and fairly when they arise.