In EEOC v. Bud Foods, LLC, the United States District Court for the Western District of North Carolina recently issued a decision which offers significant guidance to employers regarding hostile environment sexual harassment.    In that case, the Equal Employment Opportunity Commission sued employer Bud Foods alleging that the company was liable for a manager’s sexual harassment of a female subordinate employee.  The Court granted summary judgment to the employer in part based upon a finding that the employee had failed to report the alleged harassment in accordance with the employer’s established sexual harassment policy.

During an eleven day period following her date of hire with the employer, the female employee claimed that she was subjected to a series of graphic sexually related comments and other offensive conduct by one of the employer’s managers.  After about a week of such conduct, the employee complained to a manager trainee.  The trainee testified that he did not recall reporting this complaint to anyone else at the company.  The employee resigned after eleven days on the job.   

In support of its summary judgment motion, the employer asserted the well-established “Faragher” affirmative defense established by the U.S. Supreme Court in its opinion in Faragher v. City of Boca Raton.  That defense provides that the employer can avoid liability for a manager’s hostile environment sexual harassment of a subordinate employee if: 1) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior; and 2) the harassment victim unreasonably failed to take advantage of any preventive and corrective opportunities provided by the employer or to avoid harm otherwise.  The Court found that Bud Foods satisfied the first element of this defense because the employer had implemented a sexual harassment policy (which the employee acknowledged that she had received during her employment).  Significantly, the policy stated that employees were required to report acts of harassment to the company representative who was specifically named in the policy.  The representative’s telephone number was also provided in the policy.  Because the employee in the lawsuit failed to utilize this procedure by not reporting her alleged harassment to the named corporate representative, the Court found that the employer likewise satisfied the second element of the defense.  The Court concluded that the employee’s complaint to the manager trainee did not excuse her unreasonable failure to take advantage of the employer’s “corrective opportunities.”

This case demonstrates the importance of several good employment practices.  First, employers should review their anti-harassment policies to ensure that they contain a specific procedure by which employees should report alleged harassment in the workplace.  Second, employers should ensure that all employees have received and understand the policy and its complaint procedure.  This can be accomplished through employee training, preferably whenever the policy is distributed to new employees and periodically thereafter.  Employees should also be required to sign a document acknowledging their receipt of the policy.  Third, employers must train all managers who are designated by the policy to receive complaints of harassment.  Those managers should specifically be instructed on the terms of the complaint procedure, what to do when complaints are received, and how to recognize harassment in the workplace.  Any manager who has authority to receive a complaint of harassment, but fails to act on such complaint in accordance with the employer’s policy, potentially deprives the employer of the “Faragher” defense in a subsequent sexual harassment lawsuit.  Lastly, employers who receive complaints are required to investigate the matter promptly and take appropriate corrective action necessary to address any harassment that is found to exist.

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