Legal Analysts

Saturday, January 12, 2019

Risk and Penalties To Employers Who Fail To Provide Sexual Harassment Prevention Training in NY

Some employers want to know if they can chose to take the penalty and forego the NY required sexual harassment prevention training, policy and complaint form. Here is a cost benefit analysis explanation that you should read before making such a terrible decision.

The fines can be huge, although that isn't even the start of an explanation of the problems that an employer will face if they choose to forgo compliance with Labor Law 201-g (i.e., training their employees, providing a sexual harassment prevention policy, and offering a complaint form). Please understand that the penalties are applied per a provision of the law violated and not by an employer who violates, in general, as a single penalty. Therefore, each employee can represent at least 3 violations. The fines start at $100 per employee for the first violation and goes up from there (fines go up per number of violations such as not training, not providing a sexual harassment prevention policy and not supplying a complaint form with fines being compounded per employee).  So for a mid size company, fines can be in the tens to hundreds of thousands of dollars. We recommend taking a look at Labor Law 213 to understand further. When reading, you will learn that the real risk is that violating the Labor Law is chargeable with a misdemeanor and possible imprisonment. 

Beyond these surface Labor Law penalties, failure to train / have a policy / provide a complaint form will be catastrophic to an employer in defending a sex discrimination lawsuit because 2 important defenses will be lost, including:
  1. The Kolstad v. American Dental Association Affirmative Defense, which avoids punitive damages.
  1. The Burlington Industries Inc. v. Ellerth & Faragher v. City of Boca Raton Affirmative Defense, which avoids an employer being liable for a hostile work environment created by a supervisor if harassment doesn't result in a tangible employment action (e.g., denial of raise / promotion).
Beyond the loss of these defenses, it will be nearly impossible for any attorney, no matter how skilled, to defend a lawsuit where an employer willfully failed to comply with a law designed to prevent the very experience complained of by the victim in the first instance. Imagine the opening statements at a trial:

Ladies and Gentlemen of the jury, the defendants actively chose to forgo training their staff on sexual harassment prevention, as every other employer in this State is required to do, because they clearly want to maintain a chauvinistic workplace where women are treated as objects not equals. Today, we ask you to teach them a lesson. We ask you to teach all employers a lesson. Women matter. Women have rights. The workplace must be safe. The Labor Law insists that it is. We ask you to teach the defendants a lesson that violating the law is not a choice. New York State introduced Labor Law 201-g to prevent the very harassment that occurred to the Plaintiff. No, the defendants did not have a sexual harassment prevention policy to tell everyone what behavior was unacceptable in the workplace although they were required to have such a policy. No, the defendants did not have a sexual harassment prevention training to clarify what behavior was unacceptable in the workplace although they were required to have such a training. No, the defendants did not have a sexual harassment prevention complaint form to empower victims to protect themselves from unacceptable harassment occuring in the workplace although they were required to have such a complaint form. These defendants actively chose to violate the laws of this State and now they must answer. Some people only understand rules when they are forced to right a check. We ask you to teach them the rules. These defendants need to learn the rules about sexual harassment in the workplace. Sexual harassment will not be tolerated...   
To add insult to injury, it is anticipated that an employer with an EPLI policy in place to avoid this pain will learn quickly how easily coverage under such a policy can be disclaimed (i.e., no insurance defense or damages paid) for violating Labor Law 201-g. So, the employer will be stuck with paying exorbitant legal fees (i.e., these cases take a long time and are very fact intensive) and damages, without the very insurance policy, which they've been paying premiums on for years, in place. 
We are sure that you understand that this isn't the type of law that you can just do a cost / benefit analysis and decide to take the penalty. The risk is simply off the charts. In our opinion, if an employer defends a cognizable lawsuit without having complied with Labor Law 201-g, they may, very predictably, be going out of business. 

The trial will be painful for the employer to say the least.