By: Carol Keough

You are the general contractor on a billion-dollar construction pipeline project. The project is nearly completed and you are about to release all personnel, including the temporary office personnel. The temporary secretary\clerk in the onsite office comes to you and tells you that one of your managers has been sexually harassing her and forced her to have a sexual relationship with him in order to keep her job. She tearfully tells you that when she refused to continue the relationship with the manager he threatened to fire her. The alleged harasser, is the person who has prepared the list of the personnel who are to be released and her name is on that list. This scenario may sound far fetched, but it is not. Hundreds of cases of sexual harassment are reported to the Equal Employment Opportunity Commission (EEOC) which investigates harassment and discrimination claims for the Federal Government. In the year 2002, there were 84,442 charge filings with the EEOC, 25,536 of those claims were alleged sex\gender discrimination. What's Happening at the EEOC, by Suzanne M. Anderson, Supervisory Trial Attorney, U.S., EEOC Dallas District Office, published July 10, 2003.
Sexual harassment is defined by the EEOC as follows:

Unwelcome sexual advances, requests for favor and other verbal or physical conduct of a sexual nature constitutes sexual harassment when:

1. Submission to such conduct is made either explicitly or implicitly a term or condition or employment;
2. Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual; or
3. Such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile or offensive work environment.

In 1998, the Supreme Court held the that an employer will be automatically liable and without a defense, if a supervisor harasses an employee and that harassment results in a "tangible employment action." If the supervisor's harassment of an employee does not result in a "tangible employment action" or the harassment of an employee takes place by a subordinate, the employer may be allowed to assert a defense if the employer uses reasonable care to prevent harassment and takes immediate corrective action when the harassment occurs.

Employers have a wide range of responsibility to ensure that the workplace is free from harassment. Employers can also be liable for sexual harassment if the harassment of an employee is the result of harassment on the part of a customer, vendor, or subcontractor. The law protects employees from harassment based on religion, sexual orientation, national origin, disability, age and race.

Since an employer has no defense against liability for harassment by a supervisor which results in a "tangible employment action," it is important to understand what those terms mean. An example of some of these actions include: undesirable work assignments, demotion, failure to promote, hiring, firing, changes in compensation and benefits. Consider the following example:

Marjorie works for a building contractor developing bids for the contractor to obtain new contracts from owners and other contractors. Tom, Marjorie's supervisor, has asked Marjorie to go out with him after work for drinks, dinner and other social functions unrelated to work. Marjorie has refused to go on any of these "dates." When Marjorie comes up for review or a raise, Tom reports to upper management that Marjorie has been inefficient in her job in obtaining bids for the company and should be demoted to be the assistant to another employee who provides bids. This demotion would take away Marjorie's ability to earn additional commissions.

Marjorie's demotion and loss of commissions, which has caused her both economic and professional harm, would be considered a "tangible employment action."
Therefore, when Marjorie makes her claim of sexual harassment against the Company, her employer would be liable for sexual harassment by Marjorie's supervisor, Tom, without a defense.

Even without a tangible employment action, the employer can have liability for harassment by a supervisor, another employee, vendor, subcontractor, or customer.
The employer who knows or should know about the harassment but fails to use reasonable care in protecting an employee against the harassment, can be liable for a harassment claim. An example of this situation would be as follows:

Shawna works as the clerical receptionist at the onsite office for XYZ Construction Company. One of the men working for the electrical subcontractor on the job has been coming into the onsite office everyday using sexually explicit language and telling obscene jokes. Shawna has asked the subcontractor to stop, but the subcontractor continues this behavior whenever he enters the onsite office. Shawna has reported the conduct to her immediate supervisor. However, the supervisor not wanting to offend the subcontractor, takes no action to eliminate the subcontractor's harassing behavior.

In this instance, the employer has made two mistakes. The employer does not have in place a complaint procedure in which the employee can seek relief from the harassment of the subcontractor. In addition, when a supervisor was informed of the improper conduct on the part of the subcontractor, the supervisor does nothing, even though the employer is now on notice regarding the sexual harassment. Under these circumstances even though there is no tangible employment action, the employee can file a claim and recover for sexual harassment.

The motto of the Boy Scouts of America "Be Prepared" should be the philosophy of every employer who seeks to prevent liability for the company when sexual harassment occurs at the workplace. With careful supervisor selection, effective training, a solid written policy, appropriate investigation procedures and a plan for corrective action, an employer can be well armed to defend a sexual harassment claim in the ever changing work environment for owners, contractors, subcontractors and other construction industry employers.

Editor's Note: Carol Keough is a shareholder at Coats/Rose in Houston.