The U.S. Equal Employment Opportunity Commission filed the complaint against Monterey Collision Frame and Auto Body on behalf of Joseph Lowe, a technician of Chinese and Italian descent. Other employees allegedly mocked him by calling him Bruce Lee and mimicking the late movie star's martial arts move, according to the San Jose Mercury News.
A consent decree entered by the court that approved the settlement said there was no finding of discrimination and there is no admission of liability, according to the shop's attorney. The parties reached this agreement to avoid the time, expense and uncertainty of further litigation.
Shop owners can avoid employment lawsuits by having and enforcing written anti-harassment policies that explain consequences.
"It's the duty of the company to have a quality, legally compliant anti-harassment policy in place, and managers who are trained on what the policy means and how to enforce it," says Cory King, a labor/employment attorney with Fine, Boggs and Perkins LLP, Carlsbad, Calif.
"Employees also need to know that if they violate these policies, they are subject to discipline up to and including termination," says King, who is chairman of the Collision Industry Conference human resources committee. "If an employer becomes aware of sexual harassment, they have an obligation to investigate and eradicate it from the workplace. Punitive damages can go through the roof if they know they have a problem and don't address it properly."
Punitive damages are designed to punish offenders so they don't do it again, while compensatory damages compensate the aggrieved party for what they suffered. It's not just these damages that can end up hurting businesses.
"In a typical harassment case that goes to trial, attorney fees can run from $100,000 to over $250,000, and in many states if the employee wins, the employer must pay the employee's attorney's fees too," King says. "In today's world, if it is a harassment case, plan on it making the news. Even if you did not do what they said you did, the story clearing your name will not make the front page like the story trashing your name."
Under one type of harassment known as "hostile work environment," it typically takes a pattern of practice to rise to the actionable harassment level, King said. "Liability could arise from a single incident if the behavior is extreme or outrageous, but typically there needs to be a critical mass of less severe harassment to create the hostile work environment. For example, a single offensive term that is dropped once typically will not create liability, but if it is a particularly offensive term used in a particularly offensive manner, or is used repeatedly, the chances of it creating liability are much greater."
If harassment occurs by a manager or supervisor, that's worse because the law says they are supposed to know better, King said. "This creates what is known as strict liability and there is really no defense, it is going to be about how big the damages will be."Another type of harassment is quid pro quo, which is Latin for "this for that." For example, if you perform certain favors for me, I will not fire you or give you a promotion.
"I advise my clients to have non-fraternization policies to keep supervisors from dating subordinate employees," King says. "Having and enforcing such policies decreases the opportunity for a jilted 'ex' to go after the shop for quid pro quo harassment by saying, 'I was afraid I was going to lose my job if I didn't go out with him/her.' "
King also advises clients to have a quality binding arbitration agreement in place with all employees. "Have them sign it when they are hired," he says. "If there is ever any issue, it allows the parties to go to mandatory binding arbitration before a retired judge instead of a jury. Overall, it is much less expensive, quicker and just as fair to everyone. Plus, arbitration cases typically receive little or no media cover-age because the employee's lawyers have no incentive to hold a press conference to try and influence a potential jury."
