Attorneys are expected to advocate strongly on behalf of their clients once they are sued. However, many of us ignore strategies for keeping our clients out of the courtroom altogether. In the past few years, the courts and the Equal Employment Opportunity Commission (EEOC) have created powerful incentives for employers to implement and enforce state-of-the-art measures to prevent harassment in the workplace. Unfortunately, many employers do not understand the importance of prevention until it is too late.

Employers with comprehensive, effective anti-harassment programs can, and will, limit their potential liability for harassment claims. On the other hand, where employers fail to implement and enforce anti-harassment measures, it will be easier for employees to recover damages. Thus, it is more important than ever for employers to promote positive employee relations and prevent harassment in the workplace.

The "Affirmative Defense"
Recent court decisions interpreting federal equal employment opportunity law establish that employers should be given credit for their efforts to prevent and remedy employment harassment. In the 1998 landmark cases of Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries v. Ellerth, 524 U.S. 742 (1998), the Supreme Court established an "affirmative defense" to harassment claims.

Until recently, it was unclear whether the federal defense set forth in Faragher and Burlington applied to claims under California's Fair Employment and Housing Act (FEHA). However, the United States Court of Appeals for the Ninth Circuit recently addressed this issue in Kohler v. Inter-Tel Technologies, 244 F.3d 1167 (9th Cir. 2001). In Kohler, the Court decided employers may avoid liability for sexual harassment under FEHA on the same terms as under federal anti-discrimination law.

The affirmative defense is based on employers' efforts to prevent unlawful harassment. Put simply, the court's decision in Kohler creates significant incentives for California employers to implement and enforce measures to prevent unlawful harassment in the workplace.

To take advantage of the defense, employers must prove several elements. First, the defense is available only in cases where there is no "tangible employment action" connected with the alleged harassment. That is, the employee's case must not involve a termination, demotion, denial of promotion, or other negative employment decision related to the harassing conduct. If no tangible employment action is involved, the employer may establish the defense if: (1) the employer uses reasonable care to prevent and correct any harassing behavior, and (2) the employee fails to take advantage of preventive or corrective opportunities made available by the employer or otherwise to avoid harm.

The First Prong: The Employer's Reasonable Care
The first prong of the defense requires the employer to show it used "reasonable care" to prevent and promptly correct any harassing behavior. What is meant by "reasonable care"? Generally, it is necessary for employers to establish, publicize, and enforce anti-harassment policies and complaint procedures.

According to the EEOC, an employer should provide every employee with a copy of the policy and complaint procedure and redistribute it periodically. Both the policy and the complaint procedure should be written in such a way to ensure they will be understood by the employees in the workforce. Employers also should post the policy and procedure in a central location and include them in employee handbooks. In addition, on an annual basis, employers should distribute the Department of Fair Employment and Housing's pamphlet on sexual harassment prevention to all employees. Finally, employers should provide training to all employees to ensure they understand their rights and responsibilities under the policy and the procedure.

The EEOC also provides guidance as to what information should be included in an anti-harassment policy and complaint procedure, including:

• A clear explanation of inappropriate and prohibited conduct;
• Assurances that employees who complain of inappropriate conduct or who participate in investigations of such conduct will be protected against retaliation;
• A complaint procedure that provides accessible avenues of complaint;
• Assurances of confidentiality to the extent possible;
• A process that provides for prompt, thorough, and unbiased investigations of complaints; and
• Assurances that immediate and appropriate corrective action will be taken if harassment has occurred.

In addition to implementing and enforcing an anti-harassment policy and complaint procedure, the EEOC suggests employers take the following additional preventive and corrective measures:

• Instruct supervisors and managers to report complaints of harassment to the appropriate internal department or individual;
• Respond to harassment regardless of whether an employee files an internal complaint;
• Ensure through periodic training that supervisors and managers understand their responsibilities under the anti-harassment policy and complaint procedure;
• Monitor supervisor's and manager's conduct to ensure compliance with the anti-harassment program; and
• Maintain records of all complaints of harassment.

The Second Prong: The Employee's Reasonable Care
To prove the second element of the defense, whether the employee unreasonably failed to complain of the harassment or otherwise avoid harm, the employer must prove the belief or perception underlying the employee's failure to complain was unreasonable.

According to the EEOC, an employee should not be necessarily expected to complain to management about minor or relatively trivial incidents. Similarly, in an effort to resolve a situation informally, an employee may want to speak directly with the harasser about the matter and not report the conduct to management immediately. An employee also may fail to report harassment for fear of retaliation, or based on a belief the complaint process will be ineffective or is unduly burdensome. If any of these circumstances is present, an employee could be deemed reasonable in failing to complain, thereby defeating the second prong of the defense.

The Court's Decision in Kohler
In the Ninth Circuit's Kohler decision, the plaintiff sued her employer, Inter-Tel, for unwelcome sexual remarks, sexual advances, and physical contact by her direct supervisor that she believed constituted sexual harassment. Ms. Kohler filed a lawsuit in the federal district court seeking relief for sexual harassment, discrimination, and retaliation in violation of Title VII and California's Fair Employment and Housing Act.

The district court determined that the federal affirmative defense adopted in Faragher and Ellerth applied to Ms. Kohler's sexual harassment claim under FEHA and insulated Inter-Tel from liability. Ms. Kohler then appealed the district court's ruling dismissing her FEHA claims for sexual harassment and retaliation, arguing that the affirmative defense only applied to Title VII claims.

A panel of the U.S. Court of Appeals for the Ninth Circuit agreed with the lower court, explaining that the anti-discriminatory objectives and overriding policy purposes of Title VII and FEHA are identical. The court also analyzed the text of Title VII and FEHA and noted significant similarities between the language of FEHA and the duties imposed under Title VII. The court also noted that the majority of states that have addressed the issue of whether the affirmative defense applies to their anti-discrimination laws have adopted the defense.

California courts of appeal have yet to apply the affirmative defense set forth in Faragher and Ellerth to claims under FEHA. However, the Kohler decision will be very influential until the California courts review the issue.

The "Affirmative Defense" and Punitive Damages
The importance of anti-harassment measures was further reinforced by the Supreme Court's decision in Kolstad v. American Dental Association, 527 U.S. 526 (1999), in which an employee claimed she was denied a promotion because of her sex and won a jury verdict, including an award of punitive damages. Relying upon Faragher and Burlington, the court recognized that employers should not be assessed punitive damages if they implement in good faith sound anti-discrimination policies and practices.

In EEOC v. Wal-Mart Stores, Inc., 187 F. 3d 1241 (10th Cir. 1999), one of the first decisions to interpret Kolstad, the court made clear that "good faith efforts" means more than just having and distributing a policy. In that case, a store manager terminated a hearing-impaired employee after the employee requested an interpreter to explain the reason for a transfer he received. The employee sued under the Americans with Disabilities Act ("ADA") and the jury awarded the employee $75,000 in punitive damages.

Wal-Mart appealed, arguing that its preparation and dissemination of a manual on the ADA should preclude liability for punitive damages. The court acknowledged the policy, but stated that a policy alone was not enough. The court noted that supervisors involved in the employee's termination had not received training about the ADA or employment discrimination principles.

What Should California Employers Do To Take Advantage of the "Affirmative Defense"?
Employers and their attorneys currently involved in harassment litigation should carefully evaluate their cases to ensure the defense is asserted in appropriate cases (where no tangible employment action would preclude the defense). The best way to ensure applicability of the defense, however, is to take appropriate steps before litigation commences.

Employers must take "all reasonable steps necessary to prevent discrimination and harassment from occurring." Employers are required by both state and federal law to promulgate and support effective preventive measures. Following the EEOC's guidelines should be the first step.

In addition to establishing an effective anti-harassment policy and complaint procedure, employers should provide training programs for all employees. Employees should be informed regarding the specifics of the policy and the complaint procedure, including what conduct is prohibited by the policy. Providing effective prevention training enhances an employer's ability to take advantage of the defense set forth in Faragher, Ellerth, and Kohler. Beyond this, effective training will decrease the likelihood an employee will engage in harassing conduct and increase the likelihood supervisors and managers will respond appropriately to complaints.
While the courts have provided employers with a way to avoid liability if they use good-faith efforts to prevent harassment and discrimination, the courts at the same time made it easier for employees to prevail in cases where employers were not diligent. To minimize their risk, employers and their counsel must take notice of the recent focus on preventive measures.