LEGL 4500/6500 - Employment Law

Dawn D. Bennett-Alexander, Esq.

Terry College of Business

Sex is everywhere you look in America. No escaping it. Newsstands spill over with glossy photos of bikini-popping babes. Radio jocks like Don Imus and Howard Stern dole out sexually tinges humor to go with your morning coffee. There are sexual fantasy telephone lines advertised on matchbook covers. Pay TV channels show male and female stripteasers and porn films day and night. Condoms are handed out like bubble gum, even to kids, sometimes courtesy of the Board of Education. Porn CD-ROMs like Virtual Valerie are big sellers.

Sex screams at us from the sides of buses with their underwear ads, and from TV sets carrying afternoon soap operas. But let anyone complain, and the affected interest, backed by the civil libertarians, scream censorship. Except. Except in the workplace. Don’t pin a Penthouse centerfold onto your office wall. Don’t repeat to a co-worker an off-color joke about the guy in the White House. And for heaven’s sake, don’t leave Virtual Valerie on your office desk.

Do any of these things and the federal government suddenly forget about the First Amendment. It could easily slap your employer with a six-figure lawsuit because you’ve created a "hostile environment" in the workplace.

"Outside of work, we face an incredibly permissive society," notes Louis DiLorenzo, a senior partner at Bond, Schoeneck & King, in Syracuse, N.Y., which represents companies in sexual harassment cases. "Yet we’re told, at work, make sure no one talks about race or sex."

Of all the crusades Washington has ever embarked upon, the current commitment to stamp out sex in the workplace surely ranks among the daffiest.

The U.S. Equal Employment Opportunity Commissions suing Mitsubishi Motors on behalf of women workers who claim that, among other things, they had their bottoms pinched by male workers at the Normal, Ill. plant. The bureaucrats want Mitsubishi to fork over a few hundred million dollars to the alleged victims. "This case is going to show that sexual harassment in the workplace is bad for the bottom line," harrumphed Paul Igasaki, EEOC vice chairman. Was Igasaki punning about bottom lines and bottom pinchers? If so, it’s a pretty expensive pun for the Japanese firm that created 4,000 jobs and is now threatened with severe punishment for failing to reform a randy aspect of American culture.

None of this is to excuse boorish behavior or to justify men-and women-who use economic power to exact sexual favors. But does the punishment truly fit the crime? Do we really want lawyers and bureaucrats dictating personal behavior?

An EEOC spokeswoman bragged to GORBES that the Mitsubishi suit could involve as many as 700 women, each eligible under federal law for as much as $300,000 in damages, $210 million in all. That would make it the largest harassment award in history. Besides bottom-pinching, what did the make workers actually do? There were charges of breast- and genital- touching and lewd remarks, and also of male workers’ slapping pictures of female sex organs on car parts. Distasteful stuff, certainly. Fining the guys who did it or even firing the most egregious offenders might be justified. But clobbering the company?

Take some of the EEOC’s bragging with a grain of skepticism. "It’s an election year, and a non-U.S. company," opines DiLorenzo. He expresses doubt that the suit could go forward with as many a s700 women, saying there would have to be proof they all experienced the same kind of harassment.

Still, the publicity, the legal costs and the resulting waste of managerial time will exact a heavy toll on Mitsubishi, costs perhaps exceeding any ultimate settlement.

How far can a company go monitoring employee behavior?

Businesses are damned if they do, damned if they don’t, points out Timothy Lynch, assistant director of the Cato Institute’s Center for Constitutional Studies in Washington, D.C. "Unjust dismissal laws were created on the state level with one set of objectives," Lynch says, "and sexual harassment on the federal level with another. Employers get it from all directions."

Sure. Fire a guy because he tells dirty jokes in front of female workers and he slaps you with a wrongful dismissal suit. Let him get away with it and the women sue you for not supervising him properly.

Consider the plight of Wal-Mart, with 630,000 employees and sales last year of $94 billion. Since punitive damages are allowed in sexual harassment cases, companies with the deepest pockets are hit hardest.

In just one recent case, for example, a jury awarded $50 million to Peggy Kimzey, a freight clerk at Wal-Mart store in Warsaw, Mo., agreeing that Kimzey’s supervisor had made crude comments about her body, and Wal-Mart management failed to stop him. The award was later reduced to $5 million, and that’s not counting legal costs for the company or the diversion of executive time and energy. Wal-Mart is appealing the decision.

For years Wal-Mart had a policy that barred dating between two people from the same office or store. Also, banned was nay dating that involved married employees. Offenders faced dismissal if caught.

In short, Wal-Mart tried to ban office romances. And it got hit with at least two lawsuits from employees who were fired for dating collegues.

New York State also sued Wal-Mart on behalf of two employees who charged that the company’s no-fraternization policy violated state labor laws.

Wal-Mart wound up amending its policy. Now Wal-Marters can date if they are on the dame level, but a supervisor can’t date a subordinate.

Does that mean an executive vice president can’t date an ordinary vice president? Or does the policy apply only to lowly workers?

How sill can things get?

United Technologies Corp., in Hartford, Conn., which employs 171,000 people, bars supervisors from dating anyone under their authority. IBM, with 110,500 domestic employees, tell supervisors that if they want to date subordinates they have to inform their supervisor. The superintendent must then transfer one of the two to a different department.

More and more Americans are building their social lives around their work, with the result that more and more people meet their future partners through business or in the office or factory. That certainly beats singles bars. But where there’s romance and wher there’s sex, there can be trouble.

"The relationship gone sour-there’s nothing uglier," says margaret Strange, an attorney with Jackson, Lewis, Schnitzler & Krupman in Hartford, Conn. "It’s in these cases that you hear the most outrageous-and sometimes fictitious-claims."

A case can be made that the whole issue is more about power than about rights. This much is certain: There is a double standard at work here.

Take the case of Linda LaMar, a clerk at Nynex Service Co. in New York. LaMar accused her female supervisor of sexual harassment based on five incidents in 1990 and 1991. On four occasions, the supervisor, Elaine Mangiero, told dirty jokes in from of a group of employees. And on one occasion, the supervisor grabbed LaMar’s hand and told her that she "looked really hot" when she’s come to work particularly well dressed.

LaMar got short shrift. A New York federal judge dismissed the case before trial, ruling that the allegations were neither sever nor pervasive enough to constitute sexual harassment. Imagine how the case would have gone had the harasser been a male.

Courts aren’t even sure whether same-sex harassment falls under Title VIII of the Civil Rights Act of 1964, which is the watershed legislation prohibiting sexual discrimination in the workplace.

In 1994 three women sued their former employer, Crossland Mortgage Corp., in Glendale, Calif., alleging sexual harassment by two former female supervisors. Pretty raw stuff. The female supervisors allegedly bared their breasts to their female subordinates, pinched them and displayed pictures of nude men, condoms and a dildo at an office birthday party.

In dismissing the Crossland case, a Johnson appointee, U.S. District Court Judge Manuel Real, wrote: "In the male-female context, sexual and gender-oriented comments are discriminatory… When the alleged offender and the alleged victim share the same gender, similar sexually suggestive words and acts can take on the whole other meaning."

Untangling the judge’s turgid prose, he’s saying that when a woman bares her breast to another woman in the work environment, that’s just girls being girls. When a man shows off his pecs to a woman in a similar circumstances, it’s sexual harassment.

Oh.

Contrast the outcome with another case, lodged by the former clerk at a Kmart store in Sonora, Calif. She charged that her make supervisor often touched her on the shoulders, teased her about carrying on with deliverymen and laughed off her complaints.

Last month Kathryn Nordlin was awarded $1.5 million. What the hell, the jury apparently decided. Better the woman should have the money than Kmart.

It’s the free speech that bothers legal scholars. "If you have actual sexual extortion going on, then something should be done," says Eugene Volokh, who teaches constitutional law at the UCLA School of Law, and who has written extensively about Title VII’s infringement on the First Amendment rights. "What’s really problematic is when you’re talking about imposing liability for speech."

As in the case of Sandra Shope, head of housing services for Loudoun County, Va. She went to court because her ex-boss said she "looked ridiculous" in one of her dresses, and he often called her a "stupid woman." Could she still have sued if he had just called her a stupid person? At any rate, a jury awarded Shope $675,000 in damages.

Suppose an executive does abuse his position, either to demean a woman or to extort sexual favors from her? Why should his employer be punished? Shouldn’t the offender pay? That’s a fair question, but it makes attorneys laugh. "In most cases, it’s not an issue, because the company has the deep pockets," says Mark Dichter, a partner at Morgan, Lewis & Bockius in Philadelphia.

Now you know why Mitsubishi makes such a nice target: It’s big, it’s rich-and it’s Japanese.

Federal bureaucrats target big companies, too, because they get major press when the companies are large and when the amounts sought are huge. Who cares if the male owner of a dry cleaning outfit makes a pass at a female clerk?

When they discover a deep pocket, the EEOC bureaucrats and lawyers move in for the kill. Florida’s Publix Super Markets Inc., for example, is facing a class-action suit involving sexual harassment and sexual discrimination claims. It’s a doozy: The class action certified in March, could include as many as 100,000 present and former female at Publix’s 514 grocery stores in Florida, South Carolina and Georgia. Hundreds of millions of dollars could be at stake.

There are 12 plaintiffs charging gender discrimination, with 9 also charging Publix with creating a pervasively hostile work environment. Charges range from frank propositions to comments about being overweight and needing makeup.

Follow the green and ask who is behind the Publix plaintiffs. Answer: Barry Goldstein of Saperstien, Goldstein, and Demchak & baller, an Oakland, Calif. law firm. Goldstein’s firm won a sexual discrimination case against State Farm Insurance in 1992 that resulted in damages of $157 million, a new record for any kind of discrimination suit. Goldstein’s firm pocketed some $30 million. It could do better in the Publix case.

The EEOC promises more class actions similar to the one filed against Mitsubishi Motors. "We’ll get a much bigger bang for the buck doing class actions," brags Cynthia Pierre, deputy district director of the EEOC’s Chicago office. "In class actions, we can impact more people."

Thus do taxeaters persecute taxpayers. The suits will have impact, all right. They will promote strained, tense relationships in the workplace. Sheila Wellington runs Catalyst, a New York firm that researches the advancement of women in the workplace. She says: "If men and women can’t be comfortable together as colleagues, it has an impact on every aspect of the business. If men are worried about interacting with women and women with men, it can’t be a healthy organization where people focus on the task at hand."

"Lawmakers should step back and look at the whole range of things they’ve done been doing over the years," says Cato Institute’s Timothy Lynch. "Any fir-minded observer has to come away thinking that it’s ridiculous-the government has gone too far."
 
 

Forbes Magazine, May 6, 1996