Foley & Lardner Labor and Employment Law Weekly Update (Week of June 6, 2011)

Foley & Lardner Labor and Employment Law Weekly Update (Week of June 6, 2011)

Anti-Gay Harassment Claims Need to Be Investigated
By John L. Litchfield

The employee in EEOC v. Cromer Food Services, Inc., brought a harassment claim under Title VII, complaining his employer failed to protect him from regular anti-gay harassment by two individuals who were not co-workers. In adopting a negligence standard for considering whether an employer may be liable for the activities of non-employees in a claim for sexual harassment, the federal Court held that the employer would be liable if it knew or should have known that the employee was the subject of anti-gay harassment and failed to take appropriate actions to stop it. From the facts available to the appeals Court, it was reasonable to conclude that the employer had such knowledge, didn't follow its own harassment complaint procedure, and ultimately failed to protect the employee from lewd, unwanted, and inappropriate anti-gay harassment.

In defending against the claim, the employer argued that the employee's complaints were too vague, and that the employee failed to follow the company's required harassment complaint procedure by not reporting the harassment directly to the president of the company. The trial court agreed, ruling in favor of the employer.

Reversing the trial court on appeal, the Fourth Circuit held that the reasoning of the employer and the trial court ignored the "clear evidence" that the employee tried to report the nature and extent of the harassment and was "effectively ignored at all levels" of management. The Court found that the employer "still had a duty to investigate or take other measures to combat harassment."

There are a number of lessons that employers can take away from EEOC v. Cromer, not least of which is that harassment of lesbian and gay employees may be illegal under federal law, despite the fact that there are no specific protections. Employers should be keenly aware of this precedent and take steps necessary to conform their policies and practices. Proper training of employees as to what constitutes "harassment" is imperative - same-sex harassment and harassment of gay and lesbian (and, arguably, bisexual and transgender) employees is still considered "harassment" under the law. It is critical that employers review and update their harassment policy statements, reporting mechanisms, and employee training to ensure compliance.

Another key take-away from EEOC v. Cromer is that a complaint procedure whereby employees must report harassment to a company executive, without an alternative procedure, is most times insufficient. The Court pointed out that employees are often intimidated by top executives, or lack knowledge of who the higher-ups are. Therefore, employers are encouraged to provide alternate methods of reporting harassment - such as to human resources - and to properly train supervisors and human resources personnel on handling such reports.

Finally, employers can be held liable for harassment of employees by non-employees. If the employer knows or should know that an employee is being subjected to harassment by non-employees, a failure to take steps to protect the employee exposes the employer to liability. Maintaining a policy that requires reporting of this kind of harassment is a best practice, but ensuring compliance with the policy is what will help prevent liability.

Supreme Court Upholds Arizona Law Sanctioning Employers for Hiring Unauthorized Aliens
By Caroline A. Hogan

In Chamber of Commerce v. Whiting [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], the United States Supreme Court upheld a controversial Arizona law that imposes penalties against employers who knowingly hire illegal immigrants. The Court held that the federal Immigration Reform and Control Act (IRCA) did not preempt Arizona's Legal Arizona Worker's Act of 2007, which allows Arizona courts to suspend or revoke the business licenses of employers who knowingly or intentionally employ unauthorized aliens. The Arizona law sets forth a graduated series of sanctions for violations of the Arizona Act. For example, employers who violate the law a second time by knowingly hiring an unauthorized alien can lose their business licenses. The Arizona law also requires Arizona employers to participate in the federal E-Verify program to check an employee's eligibility to work.

The majority opinion, authored by Chief Justice John Roberts, explained the statutory background of IRCA and E-Verify. IRCA, enacted in 1986, makes it unlawful for an employer to knowingly hire unauthorized aliens and imposes civil and criminal sanctions for such violations. IRCA also prohibits any state or local law from imposing civil or criminal sanctions "other than through licensing and similar laws" upon employers who employ unauthorized aliens. E-Verify, which Congress enacted 10 years later in 1996, allows (but does not require) an employer to verify an employee's status to legally work in the United States.

Chief Justice Roberts gave short shrift to the argument that IRCA preempts Arizona's law by focusing on the express language of IRCA that allows states to impose penalties "through licensing and similar laws." The majority ruled that Arizona's procedures "simply implement the sanctions that Congress expressly allowed Arizona to pursue through licensing laws" and Arizona "went the extra mile in ensuring that its law closely tracks IRCA's provisions in all material respects." The majority opinion also held that Arizona's use of E-Verify did not conflict with federal law and noted that "the federal government has consistently expanded and encouraged the use of E-Verify."

In his dissent, Justice Breyer argued the Arizona law may increase job discrimination against Hispanic-American workers because employers might discriminate against "legal workers who look or sound foreign" rather than risk the permanent loss of the right to do business or the "business death penalty" by hiring unauthorized aliens. The Chief Justice, however, believed any fears about the law leading to discrimination against Hispanics were unwarranted. He argued that the "most rational path for employers is to obey the law - both the law barring the employment of unauthorized aliens and the law prohibiting discrimination - and there is no reason to suppose that Arizona employers will choose not to do so." He further noted that license termination is the sanction for "egregious violations of the law" and "an employer acting in good faith need have no fear of the sanctions."

This decision means a state may sanction an employer who knowingly employs unauthorized aliens by suspending or revoking its business license. Several states, including Colorado, Georgia, Missouri, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, and West Virginia have enacted laws similar to Arizona. The ruling may indicate that the Court will determine that Arizona's controversial immigration law, SB1070, is also constitutional.