$500,000 in “Failure to Tell” Harassment Case
In a case that is highly instructive for employers, Dillard’s department stores has agreed to pay $500,000 to settle sex harassment claims filed by twelve female employees.
The suit revolved around allegations of harassment against Scot McGinness, an assistant manager at the company’s Palmdale, California store. After several female subordinates complained of harassment by McGinness, the company transferred him to a management position at its Westminster, Colorado store.
The critical question facing the company at that point was a common one: Should we tell anyone at the employee’s new location about the allegations?
Dillard’s answer to that question apparently was “no.” Not too long thereafter, a female employee at the Westminster store complained that McGinness inappropriately touched her. McGinness was given a verbal warning. Ten months later, an 18-year-old employee complained that McGinness had physically and verbally harassed her. Dillard’s fired McGinness based on those allegations.
In its press release announcing the settlement, the EEOC blasted Dillard’s decision not to inform the second location about the allegations against McGinness: ”By failing to notify the Colorado store about this man’s sexual harassment in California at the time of his transfer to Colorado, Dillard’s permitted its Westminster employees to go in harm’s way.”
The result? In addition to paying $500,000, Dillard’s agreed to implement a comprehensive anti-harassment prevention program, including training on how to conduct investigations and a process for notifying stores prior to transferring an employee with a history of harassment. Dillard’s also agreed to provide reports to the EEOC of any sex harassment complaints made against the company.
The lessons? My suggestion to avoid a similar result is fairly simple: investigate thoroughly, take action promptly and communicate appropriately.
If the investigation conclusion is that harassment occurred, the “punishment” should fit the crime. The employer should take the following into consideration: (1) the severity and pervasiveness of the conduct; (2) the alleged harasser’s past record; and (3) the company’s past discipline in prior circumstances.
The goal is fairness to all parties — the alleged victim(s), the alleged harasser and other employees.
If, as in the Dillard’s case, the decision is to transfer the alleged harasser to another location, communication is key. The investigation results should be communicated to management at the new location on a “need to know” basis. Those informed should then take whatever reasonable steps are necessary to reduce risk of further harassment. General all-employee communications such as “Hey, a harasser has joined the team!” aren’t a good idea due to defamation and fairness concerns. Instead, focus on fairly and consistently enforcing existing anti-harassment policies and follow the tips outlined above.
