How Much is a Policy Prohibiting Discrimination and Harassment Worth? A Recent Verdict Suggests at Least $350,000

A recent verdict from a federal jury in Baltimore, Maryland demonstrates the importance of having a well-drafted, widely disseminated, and consistently enforced  policy that prohibits discrimination and harassment in the workplace.  The jury awarded $350,000 to three former employees of a Baltimore-area medical practice, who claimed they were sexually harassed by the company’s chief executive officer and chief financial officer.  The case was brought on behalf of the employees by the U.S. Equal Employment Opportunity Commission (“EEOC”), the federal agency responsible for enforcing federal laws prohibiting employment discrimination.

Certainly, a contributing factor to the large jury verdict is the fact that the alleged harassing conduct was committed by high-level officials within the company.  In fact, the EEOC reports that the jury awarded each former employee $110,000 in punitive damages, which sends a clear message to employers that they should not – and cannot – condone improper conduct from even their highest level employees.  However, the EEOC’s press release provides another explanation for the company’s culpability for the harassment:  the failure to implement and enforce policies prohibiting such conduct.  The EEOC attorneys who prosecuted the case stated, “This case emphasizes the necessity of employers having in place meaningful and enforceable policies guarding against such mistreatment.”

A recent age discrimination case brought by the EEOC in Hawaii also drives this point home.  In that case, a court ordered the employer to pay its former employee over $190,000 in damages, after she was terminated because of her age.  (The plaintiff was 54 years old, and the company owner commented that the employee “looked old,” “sounded old on the phone” and was “like a bag of bones.”  The owner terminated the employee, despite her immediate supervisor reporting that she was a “thorough and efficient” worker.)  In addition to the monetary award, the court ordered that the employer develop and disseminate procedures designed to prevent such conduct in the future, as well as train supervisors on how to recognize and respond to complaints of discrimination and harassment.  The director of the EEOC’s Honolulu office said, “Employers should have a strong anti-discrimination policy and offer training to reinforce the goal of equal opportunity and to prevent future civil rights issues from arising.”

Want to know more?  Here are links to the EEOC’s press releases about the two cases:   http://www1.eeoc.gov//eeoc/newsroom/release/7-24-12.cfm?renderforprint=1   http://www.eeoc.gov//eeoc/newsroom/release/7-19-12.cfm   These cases offer a good reminder to review your policies prohibiting harassment and discrimination in the workplace, including your reporting procedures, and to train your supervisory personnel on the importance of recognizing and responding to claims of harassment, discrimination and retaliation in the workplace.  As a best practice, we recommend training whenever a new supervisor is hired or promoted, and on a regular basis thereafter.