Seyfarth Synopsis: In recent months, sexual harassment has seized national headlines and raised significant questions about company policies, procedures, and culture. In response, many companies and HR personnel have questioned how to appropriately respond to complaints of sexual harassment. A recent decision out of the Western District of Wisconsin provides a helpful summary of the state of Title VII, the federal anti-discrimination and harassment law, and the appropriate company response to harassment. Given the national debate and this recent decision, now is a good time for employers to implement some best practices to (1) prevent harassment before it occurs and (2) take appropriate remedial action if it does.

Sexual harassment has been around for a long time, but recently it has garnered national headlines. Movements such as #MeToo and Time’s Up have appropriately focused the spotlight on company policies and procedures. It is important for companies to continue to improve workplace culture and their responses to harassment when it does occur. At the same time, it is important for companies to understand the legal framework for a harassment claim, and their legal responsibilities.

A recent decision out of the Western District of Wisconsin provides an important reminder on the state of the federal law prohibiting sexual harassment in the workplace, and an employer’s responsibility to prevent and correct any harassing behavior.

Background on the Case

In Lee v. Dairyland Power Cooperative, the plaintiff alleged that several of her co-workers sexually harassed her, and that the company failed to take adequate steps to prevent the harassment. After an analysis of the applicable framework for sexual harassment under Title VII, the Court dismissed the plaintiff’s case, finding that she could not prevail on her harassment claim as a matter of law.

The facts of the case were largely undisputed and simple: on one occasion, the plaintiff overheard her immediate supervisor, a co-worker, and a security contractor—all male—discussing their desire for her to wear her “spring outfits.” They also compared her physically to another employee, who they described in a sexually suggestive manner; and they discussed the sex life of yet another employee. These facts were undisputed, and the plaintiff complained to Human Resources the same day. HR immediately investigated the incident and concluded that the sexually demeaning conversation had occurred.

The plaintiff’s supervisor personally apologized to the plaintiff and promised that the action would never happen again; that he would not engage in any further sexual harassment; and that he would protect the plaintiff from retaliation. The company asked the plaintiff to return to work, but she refused, believing the company’s response was inadequate. The company followed-up, explaining that there were no positions to which she could be transferred to be away from the supervisor. Feeling that the company had not fixed the situation, the plaintiff quit her employment. That same day, the company suspended the supervisor for two weeks without pay, and ordered him to attend retraining on the company’s sexual harassment policy.

Application of Title VII

The Court laid out the legal standard for maintaining a sexual harassment claim under Title VII (the federal law prohibiting harassment in the workplace): the plaintiff must prove that (1) she experienced unwelcome harassment, (2) the harassment was based on sex, (3) the harassment was so severe or pervasive that it altered the conditions of her employment and created a hostile or abusive environment, and (4) a basis exists for holding the employer liable. Here, it was undisputed that the plaintiff had experienced unwelcome harassment based on her sex. However, the Court found that she could not meet the third and fourth prongs of the test.

First, the Court found that overhearing the statements on only one occasion did not create an abusive working environment. Indeed, the Court applied Seventh Circuit precedent for the proposition that “verbal harassment limited to a one-time incident that was overheard, rather than intentionally inflicted, does not rise to the severe or pervasive standard under Title VII.”

Second, the Court found that the employer could not be held liable for the wholly inappropriate conduct of the supervisor. The company maintained an anti-harassment policy, which the supervisor violated. And as soon as the company learned that harassment had occurred, it initiated an investigation pursuant to its no harassment policy; and the company instituted discipline reasonably calculated to end the harassment. The Court found that the two-week suspension, apology, promise to protect the plaintiff from any harassment, and retraining on sexual harassment issues were sufficient for the company to meets its legal burden to resolve the problematic work environment. Accordingly, the company could not be held liable under Title VII.

Takeaways and Best Practices

When sexual harassment occurs in the workplace, nobody wins. And as the Dairyland Power case makes clear, even companies that have and enforce no harassment policies can face costly litigation. Given the current national debate over harassment, now is a good time for employers to review and reevaluate their sexual harassment policies and procedures.

Employers should consider several proactive steps—to help prevent sexual harassment on the front-end and then to appropriately handle the situation if it were to arise—including: (1) ensuring the company’s no harassment policy and reporting structure is up-to-date and clear; (2) providing harassment and employment law training to supervisors and managers; (3) taking all allegations and complaints of harassment in the workplace seriously; (4) immediately performing a thorough and complete investigation of any harassment complaints; and (5) implementing swift, appropriate, and proportional remedial action, including termination or suspension if necessary.

Above all, employers should strive to ensure that their company’s culture is one where sexual, or any other form of harassment, is simply not tolerated. Instead, each employee should enjoy a safe and respectful work environment, and feel empowered to raise any workplace harassment issue with his or her supervisor, manager, or HR. At the same time, the company should feel secure that taking proactive action on the front-end to eliminate any harassment before it occurs, and taking immediate action to stop and remedy any harassment after it occurs, is sufficient to satisfy its legal obligations under Title VII. Fortunately, the Dairyland Power decision continues to apply this legal standard.