While employers must act quickly to stop sexually harassing conduct when it occurs, the New Jersey Appellate Division recently issued a decision that emphasizes the importance of also promulgating effective policies calculated to prevent such conduct from occurring in the first place. In Allen v. Adecco, Inc., 2011 N.J. Super. Unpub. LEXIS 197 (App. Div. Jan. 27, 2011), although the employer generally took appropriate steps to stop a supervisor's alleged sexually harassing conduct, the Appellate Division reversed summary judgment for the employer and remanded the case for a trial on the employee's hostile work environment sexual harassment claim, concluding that factual issues existed as to the effectiveness of the employer's anti-sexual harassment policy.  

The Facts

Plaintiff Jessica Allen worked through an employment agency, defendant Adecco, Inc., for defendant University of Medicine and Dentistry of New Jersey ("UMDNJ") as a temporary Patient Service Representative ("PSR"), answering telephones, registering patients and scheduling outpatient appointments. According to Allen, her supervisor frequently engaged in inappropriate conduct toward her, including using vulgar and graphic language, commenting on her clothing and appearance, asking her out on dates, telling her about his sexual fantasies about her, brushing against her, pulling on her undergarment and touching her buttocks, thighs and back.

Allen allegedly objected to her supervisor's conduct, but he "was not deterred" and told her that she would lose her job. Allen eventually reported his behavior. Within hours, UMDNJ transferred her supervisor to another position and began a formal investigation.  

The Trial Court

Allen ultimately filed a lawsuit that included a claim against UMDNJ for hostile work environment sexual harassment under the Law Against Discrimination, N.J.S.A. § 10:5-1, et seq. (the "LAD"). The trial court granted UMDNJ's motion for summary judgment, dismissing this claim. In reaching its decision, the court relied heavily on UMDNJ's prompt reassignment of Allen's supervisor upon learning of the alleged sexual harassment. Allen appealed and the Appellate Division reversed.

The Appellate Division

According to the Appellate Division, there was "no question" that Allen's allegations establish a prima facie case of hostile work environment sexual harassment under the LAD, as they set forth conduct by her supervisor "that would not have occurred but for her gender and that was sufficiently severe or pervasive to make a reasonable woman believe that the condition of her work had been altered and the work environment was hostile."

The Court explained that one circumstance under which an employer may be liable for a supervisor's harassment is if the employer "is negligent in protecting against a hostile work environment." The Court further explained that "[p]roof of an effective [anti-harassment] policy provides some evidence of the employer's due care which is relevant to defeat a claim of negligence." The Court listed the following components of an effective anti-harassment policy: (1) a "formal prohibition of harassment"; (2) "formal and informal complaint structures"; (3) "anti-harassment training"; (4) "sensing and monitoring mechanisms for assessing the policies and complaint procedures"; and (5) "unequivocal commitment to intolerance of harassment demonstrated by consistent practice."

Moreover, according to the Appellate Division, an "employer's anti-harassment policy has relevance beyond negligence; it is an affirmative defense to vicarious liability imposed on an employer under principles of agency that do not require proof of negligence." The Appellate Division indicated that in order to defeat a sexual harassment claim arising under a theory of vicarious liability, an employer must establish the existence of an anti-harassment policy that is effective in the following respects: (1) it is periodically published to the workforce; (2) it includes an "effective and practical grievance process"; and (3) workers, supervisors and managers receive training on "recognition and eradication of unlawful harassment."

The Appellate Division observed that in this case, factual issues precluded summary judgment based upon UMDNJ's policy under either a negligence or vicarious liability theory. In particular, UMDNJ was unable to demonstrate that Allen had received its anti-harassment policy or participated in its annual training on workplace discrimination. Additionally, Allen's supervisor had received the policy and training, but was unable to recall details of the policy or the complaint procedure during his deposition.

According to the Court, there was also no evidence that UMDNJ maintained "effective monitoring and sensing mechanisms." The Court noted, among other things, that UMDNJ did not monitor the alleged harasser's interactions with PSRs, despite the fact that a previous (though less egregious) complaint about him was under investigation when Allen reported him. The Court recognized that an employer's prompt reassignment of an alleged harasser is a component of an effective anti-harassment policy, but emphasized that this remedy "does not shield the employer from liability based on its prior negligence or vicarious liability that led an employee who does not know about the employer's policy procedures to endure harassment before reporting it."

The Court concluded that Allen was entitled to have a jury "determine whether [UMDNJ's] anti-harassment policy provided effective and practical anti-harassment prevention and protection mechanisms that shield [it] from liability for the alleged wrongdoings ... or whether it was an anti-harassment policy that existed in name only."

Bottom Line

When the employer in the Allen case received a complaint about a supervisor, it promptly reassigned him and initiated an investigation. Nonetheless, the employer did not shield itself from the plaintiff's hostile work environment sexual harassment claim, largely because it could not demonstrate that she had received the anti-sexual harassment policy and training that the employer apparently provided routinely to other staff. The employer's failure with respect to this individual appears to have been due to her status as a temporary worker technically employed by an outside agency. Employers should remember that the LAD applies to all full-time, part-time and temporary employees. Liability under the LAD can also arise from a joint employer or independent contractor relationship. Thus, all workers should receive an anti-harassment policy and training, and employers should ensure that effective monitoring mechanisms apply to all personnel.

Click here for a link to the Allen decision.