Limiting Employer Liability Part III

By Frank Thompson on Jul 04 in Employment Practices.

Frank B. Thompson, CPCU
President PT Risk Management

In part one of this article on harassment and what to do in the event of an allegation of harassment, we gave the scenario of a supervisor looking at pornography while at his desk leaving it visable for female fellow employees to see. One of the female employees has met with senior management after discussing the incident with her husband and he instructed her to quit and file suit.

The owner notified his EPLI insurance agent and put the insurance company on notice, and at their suggestion has interviewed the complaining employee using a set of questions and taking careful notes.

Now after spending several sleepless nights and going through the whole array of emotions, from asking questions like “why me?” To “I didn’t need this problem in my life,” you must meet with the alleged harassing employee and begin the investigation by asking the following questions:
• Begin by explaining that the company will investigate the allegations thoroughly, the investigator is neutral, and that the alleged harasser is not presume guilty.
• Emphasize the importance of telling the truth. Remind the employee that lying may result in discipline, up to and including termination (assuming that your company policy and procedures provide for this type of discipline.
• Start with broad questions. You might ask the alleged harasser if they have ever engaged in the generally described conduct with any employee.
• Then more on to more detailed question, but do not use leading questions. Open-ended questions allow for open ended discussion, which should be the goal of the investigation.
• Inquire about each and every instance of unwelcome conduct the victim has alleged. Note areas of agreement and disagreement.
• If the accused claims the accuser is lying, ask him/her why he/she believes the accuser is lying. The answer may provide answers as to what motivated the complaining employee for raising harassment allegations.
• If the alleged harasser admits any of the alleged conduct, he /she should be advised that the conduct is unwelcome, that the company will not tolerate it, and the company will determine what disciplinary action is warranted.
• Ask the employee for names of any witness he/she believes can corroborate his/her version of events.
• Conclude by advising the employee that if additional facts come to mind or additional explanation to please contact you.

The investigator should then contact the witnesses to the harassing incident. Witnesses should be told that their cooperation is appreciated. They should be warned not to discuss your conversation with anyone. Be aware of any bias that the witness may have when asking questions.

The witness should also be reminded of company policy regarding harassment and remind them that the interview is part of enforcing the company policy.

Remember, that it is the interviewer’s job to get the facts, not hear say or gossip. Can the witness corroborate the facts that the accuser has alleged? Ask for a written statement, if the witness can provide critical information.

Once the investigation is complete, a written report should be prepared for the company.
The report should clearly state if no harassment was found. However, if the investigation shows that a violation has occurred the violation should be identified as well as what company policy the conduct violated.

The report should summarize the key fact uncovered, any inconsistencies and describe the credibility of the witnesses. It is at this point that we recommend contacting your attorney before finalizing your report. The report may well be an exhibit if you are forced into litigation.

The results of the investigation should be reported both to the complaining employee and to the alleged harasser.

The employer must now determine what discipline is warranted in the event that the complaint is justified. The key is that discipline must be consistent with your written harassment policy.

Discipline may include the following: verbal warning, written reprimand, suspension with or without pay, attending a training session, transfer, relocation, a financial payment to offset the cost of the investigation, and or payment for damages caused by the harassers actions, firing.

At the same time, you may wish to offer remedies to the victim. Transfer to another department or office might be offered. However, before you make any changes, make sure you have the complaining employee’s consent.

Lastly, you need to document the complaining employee’s file and the harassing employee’s file. The document should thank the complaining employee for coming forward and making the complaint. The results of the investigation should be mentioned and the outcome. The statement that your company will continue to enforce its policy on harassment in the future should be clearly mentioned.. And remind the employee to come to you with any issues that appear to be retaliation for making the harassment complaint.

Finally, if your company has an EPLI policy, remember, that taking the alleged complaint and bypassing the insurance companies claims department by using your own attorney to settle the claim without the insurance companies consent will in all likelihood void coverage. Once you have knowledge of an incident, put the insurance company on notice and wait for their instructions.
Be ready to take a strong stance with the insurance company claims adjusters if you feel that the suit or allegations are unjustified. Many claims adjusters are too willing to settle quickly, and are not aware of the damage that can be caused to your companies reputation and with other employees who are tempted to sue for quick money.

EPLI claims are very expensive both in money spent in defense but also in loss of productivity. The other factor to consider is the negative publicity that arises in the community when lawsuits are filed.

The best advice we can give is to strive to make and keep your company an harassment-free workplace.

Frank Thompson

Frank B. Thompson is a chartered property and casualty underwriter based in Phoenix. He is the owner of PT Risk Management, an independent insurance company specializing in writing propane and petroleum risk policies throughout the U.S.