As 2018 draws to a close, it is worth taking a closer look at the increasing legal impact of the #MeToo movement. The chorus of victims’ voices and the media spotlight exposed the prevalence of sexual misconduct in the workplace.  As a result, state legislatures passed reform measures to create new laws—from New York’s mandate to businesses to adopt comprehensive anti-harassment policies and training to California’s required percentage of women serving on boards of publicly traded companies—with many other states banning or seeking to ban mandatory arbitration and non-disclosure agreements in harassment cases.  This post examines what is happening in the courts and the effect of the #MeToo movement on sexual harassment litigation. So far, there has been a significant uptick in harassment claims, enforcement actions and damage recoveries at the Equal Employment Opportunity Commission (“EEOC”), indications of increased punitive damages awards from juries, and, perhaps most significantly, cracks in the foundation of the Faragher-Ellerth affirmative defense often relied upon by employers to win summary judgment in sexual harassment cases.

The EEOC Turns Up The Heat

The EEOC, the federal agency that enforces Title VII’s prohibition on employment discrimination, published an important Task Force Report in 2016 that comprehensively addressed the root cause of workplace sexual harassment and the best practices to eradicate it. https://www.eeoc.gov/eeoc/task_force/harassment/task_force_report.cfm.  In October 2018, the EEOC issued noteworthy statistics comparing FY 2017 (predating #MeToo) to FY 2018 (10 months after #MeToo exploded in the fall of 2017). There were significant upticks in activity in sexual harassment cases: charges filed were up by 12%, EEOC lawsuits increased by 50%, and damages recovered in cases increased by 67%.  Preventing systemic sexual harassment is one of the EEOC’s six substantive priorities for fiscal years 2017-2021 and this increased focus is here for the foreseeable future.

More Punitive Damage Awards

Two recent large punitive damage awards in sexual harassment cases in NYC and Boston may be a harbinger of a trend in trying such cases in the #MeToo era.  In March 2018, a New York federal court jury awarded a long term employee at a Yonkers sugar cane factory $13.4 million dollars, including $11.7 in punitive damages for the barrage of humiliating sexual comments from her stockroom supervisor she endured for years. The trial judge ultimately reduced the award to $800,000 to conform to federal and state law limits on damages but the jury’s strong message should be heard nonetheless. In August of 2018, a Boston state court jury awarded a salesperson at an auto dealership $3 million in punitive damages on her sexual harassment case for similar conduct.  In Massachusetts, a spike in punitive damage awards in all discrimination cases since the Weinstein case exploded is viewed by many employment lawyers as a response to the #MeToo Movement.

Informed by #MeToo, Court of Appeals Revisits Faragher-Ellerth Defense

In what may be the most legally significant development in the wake of the #MeToo movement, a federal Courts of Appeals has called into question the fundamental policies behind the Faragher-Ellerth defense based on the realities of the workplace as revealed by the #MeToo movement.  The U.S. Supreme Court established the Faragher-Ellerth defense to liability in hostile work environment cases for employers that could demonstrate: 1) they took reasonable steps to prevent the harassment (i.e., it had an anti-harassment policy and procedure and 2) the plaintiff employee unreasonably failed to avail herself of the corrective measure (i.e., complain under the policy). In the 30 years since, employers have routinely obtained summary judgment on this basis, even when the plaintiff claimed that fear of retaliation motivated her silence.

Earlier this year, in vacating a summary judgment in Minarsky v. Susquehanna County, 895 F.3d 303 (3rd Cir. 2018), the Third Circuit Court of Appeals interpreted the Faragher-Ellerth defense in light of the lessons learned from #MeToo. In what may be an oft-cited footnote, the Court stated, “[t]his appeal comes to us in the midst of a national news virtual firestorm of rampant sexual harassment that has been closeted for many years, not reported by victims.” The court continued: “while the policy underlying Faragher-Ellerth places the onus on the harassed employee to report her harasser … there may be a certain fallacy that underlies the notion that reporting sexual misconduct will end it. Victims anticipate negative consequences or fear that the harassers will face no reprimand; thus, more often than not, victims chose not to report the harassment.”  The court found that ”[w]hile an employee’s “generalized and unsupported fear of retaliation is insufficient to explain a long delay in reporting sexual harassment,” the plaintiff had offered several legitimate reasons that a jury could find reasonable: 1) her financial dependency on her job with a sick daughter to care for, 2) her fear of retaliation based on the harasser’s comments and 3) the perceived futility of reporting because the harasser’s comments were known to others.  In the evolving landscape of sexual harassment laws across the country, we will closely monitor whether the Third Circuit’s decision signals a shift in how courts interpret the Faragher-Ellerth defense moving forward.

Preventing sexual harassment remains the best defense and a respectful and inclusive workplace culture is the place to start.  Hogan Lovells’ employment attorneys are well-equipped to help employers take the steps necessary to comply with changes to harassment laws. Learn more about our Contemporary Anti-Harassment Training here.