Back in February we wrote about the NJ Supreme Court's decision in the Aguas case, which adopted the federal standard in hostile environment sexual harassment cases. As we noted then, Aguas cut back on employee rights by providing employers a good defense if they adopt and implement an effective sexual harassment policy.
On August 3 the Appellate Division took the first step in telling us how lower courts will implement Aguas. In Jones v. Dr. Pepper Snapple Group, the issue was not whether the employer had a policy, but whether the employee was aware of it. The employee said she was unaware and had never been trained about the policy. The employer disagreed. The Appellate Division ruled that the case had to go to trial.
To defend itself against a claim for negligence in a hostile work environment sexual harassment action, an employer must have in place, among other things, “formal and informal complaint structures” to enable an employee to report harassment, and the employer must provide anti-harassment training. In order for an employer's affirmative defense to succeed on a claim for vicarious liability, one of the three elements an employer must prove is that it exercised reasonable care to prevent and to promptly correct the sexually harassing behavior.
Although defendant may have had formal and informal complaint structures in place, in order for these structures to have been effective, its employees had to be aware of them.
Here the only way to resolve the difference was to order a trial. And with that trial comes opportunity for the employee and risk for the business.
The takeaway for employers is that NJ courts will focus on how businesses educate their employees about anti-harassment policies and the complaint structures that are in place. Fail to take the right steps and a court might disregard a policy that would otherwise protect the company from liability. It is critical for businesses, and especially smaller ones that operate informally without the benefit of a comprehensive HR structure, to have a sexual harassment policy, educate employees about it, and conduct periodic training. Only in this way can the protection of the policy be assured, and unpleasant surprises be avoided when an employee who is harassed claims ignorance of the employer's policy.