In the case of Modern Continental/Obayashi v. Massachusetts Commission Against Discrimination, the Supreme Judicial Court recently considered a question that has plagued many employers: how to address harassing conduct by or against non-employees. Fortunately, the Court adopted an approach that rewards diligent employers and penalizes only those who ignore a real problem.
Shortly after being hired by Modern Continental, a female carpenter, Ms. Edmunds, found herself locked in a portable restroom at her "Big Dig" worksite, with someone watching her through a vent. The individual was later identified as an ironworker employed by one of the other subcontractors working on the site. Ms. Edmunds informed her foreman, who in turn notified the project manager and the subcontractor's management of the incident. Although Modern Continental requested an investigation and transfer of the perpetrator offsite, the steel subcontractor refused to take any action.
A week later, the first in a series of graffiti outbreaks occurred, which included derogatory pictures of Ms. Edmunds drawn on the restroom walls. Modern Continental assured Ms. Edmunds it would address the situation. Modern Continental's EEO officer asked Ms. Edmunds to identify the perpetrator in workplace surveillance tapes and to make a written statement regarding both incidents. Since Ms. Edmunds was unable to identify the perpetrator from the tapes, the EEO officer received no cooperation or additional information from the steel subcontractor. Modern Continental also sponsored a sexual harassment seminar and initiated a grievance hearing to address the hearing.
At the step-one grievance hearing, the subcontractor was extremely uncooperative, and threatened to strike if any of its employees were removed. The hearing did result in a decision to segregate the toilet facilities by separating them with fencing and securing them with padlocks. Modern Continental also revised the project's work schedule, moving the ironworkers to a new location on a different shift. At the step two-grievance hearing, Modern Continental confirmed its commitment to separate the toilet facilities and agreed to hire a security monitor. Ms. Edmunds agreed not to file for arbitration.
The graffiti, however, continued and Modern Continental drafted a memo announcing severe punishment for such harassing behavior, distributing it to all employees. As the harassment continued, however, Ms. Edmunds agreed to transfer to a less challenging offsite position. Encountering further harassment from the same subcontractor, she quit and filed a complaint with the Massachusetts Commission Against Discrimination (MCAD), charging her employer, Modern Continental, with sexual harassment.
The MCAD found Modern Continental liable because it failed to protect one of its employees from harassment by a subcontractor. The employer sought judicial review and the Superior Court affirmed the MCAD's decision. The employer once again appealed and the Supreme Judicial Court took the case on its own motion.
The SJC reversed the lower court, announcing a reasonableness standard of liability. It held that even in circumstances where non-employees cause harassment of employees, the employer must take reasonable steps to remedy the harassing conduct. Consequently, the SJC rejected the contention that employers can never be liable for sexual harassment perpetrated by third parties that are, ostensibly, beyond the employer's control.
However, the Court held that Modern Continental had taken reasonable steps, under the circumstances, to remedy the harassment and that even though the harassment continued; Modern Continental's actions shielded it from liability.
The Court's decision affirmed the advice that management attorneys have often given their employer-clients: do not ignore complaints of harassment, even if they are based upon conduct of individuals beyond the employer's control. After Modern Continental, employers must take reasonable steps when addressing all complaints of harassment or face the prospect of being held liable for acts committed by non-employees. Conversely, employers should take decisive steps to deal with complaints about their employees, even if lodged by non-employees.
Employers should be encouraged by this decision, as it indicates the SJC understands the sometimes-difficult situations that complicated workplaces can present. By adopting a reasonable action standard, the Court has given conscientious employers the ability to control their exposure when presented with non-employee harassment.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.
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