Employer Law Blog

In the Tax Cuts & Jobs Act, congress in its infinite wisdom, determined to publically shame or, alternatively, financially burden companies that settle claims of sex harassment. Under the new law, taxpayers will not be allowed to take a business deduction: For any settlement or payment related to sexual harassment or sexual abuse claims if the settlement or payment is subject to a nondisclosure/confidentiality agreement; For any attorney fees related to such a settlement or payment subject to a nondisclosure/confidentiality agreement.

As seemingly daily revelations surface of sex harassment allegations in the entertainment/media industry it is imperative for organizations to learn from the mistakes of others when it comes to sexual harassment in the workplace. The plethora of harassment complaints in is not a recent dilemma. In fact, there have been federal and state laws prohibiting “harassment” in the workplace for over 30 years. In this regard, on June 19, 1986, the U.S. Supreme Court ruled unanimously that sexual harassment violated federal laws against discrimination and that companies could be held liable for sexual harassment committed by supervisors — even if the company was unaware of the harassment.

In a case straight from “Bad Grandpa” the Eighth Circuit Court of Appeals further confirmed an employer’s obligation to provide a work environment free of all forms of discrimination and harassment. In Chavonya Watson v. Heartland Health Laboratories, the 8th Circuit “assumed” for sake of analysis that an employer can be held liable under the Missouri Human Rights Act (“MHRA”) for harassment by a third-party who is not an employee. Ultimately, however, the 8th Circuit found that the incidents of harassments did not rise to the level of “hostile work environment” and affirmed summary judgment on behalf of the employer.

A New York court recently entered a judgment of about $700,000 against the owner of a limousine company for sexually harassing a female dispatcher. The judgment consisted of $450,000 in compensatory damages, $100,000 in punitive damages, $167,478 in attorney fees and $3,168 in litigation costs. The case presents an almost classic example of sexual harassment.

The EEOC recently announced an increase in the penalty for employers who fail to conspicuously post the equal employment opportunity (EEO) notices of rights of employees and job applicants. The penalty per violation has almost doubled as of April 18, 2014, from $110 to $210.