The New Jersey Supreme Court last week gave New Jersey employers an early Valentine’s Day present, with a decision that recognizes that an employer may defend a “hostile environment” sexual harassment claim under the New Jersey LAD (Law Against Discrimination) using the“Faragher/Ellerth” defense.  In other words, if the employer can show that it “exercised reasonable care to prevent and correct promptly any sexually harassing behavior” and that the employee “failed to take advantage of any preventive or corrective opportunities,” the employer may be able to defend against vicarious liability for sexual harassment by a manager.  In so doing, the court backed away from a 1993 decision in Lehman v. Toys R Us, which had held that employees were vicariously liable for harassment by supervisors under principles of agency law.

Before the celebrations begin, a couple of warning points:

  • First, an employer cannot use this defense if the alleged harasser took actual adverse action against the employee (i.e. demoted, suspended or fired the victim).
  • Second, this defense will not be effective if your company cannot show that its harassment procedures were both published and enforced.

All said, however, this is excellent news for New Jersey employers.  It should encourage all employers to take down from the shelf and “dust off” the handbook, make sure to re-publicize your anti-harassment policy and grievance procedure, and remind all employees (and managers) that you have zero tolerance for such behavior.  Employees should be encouraged/required to report issues internally, and there should be multiple avenues for them to make such a report.  Also, managers should be trained, both in how they should behave and how to recognize and report harassment if they witness it. Lastly, your policy should be vigorously enforced.  If complaints are made, they should be promptly investigated and responded to.

If you do not live by the words of the policy, it will not have the effect which you want it to have on your workplace.