Failure to Address Sexual Harassment Allegations May Result in Unemployment Liability
Sexual harassment allegations raise a number of potential legal issues for any employer. In addition to exposure to liability under Title VII of the Civil Rights Act of 1964 and the Arkansas Civil Rights Act, the Arkansas Court of Appeals recently addressed the potential impact of sexual harassment allegations on an employer’s liability for unemployment compensation claims. In Tyler v. Dir., Dept. of Workforce Servs., 2017 Ark. App. 545 (Oct. 25, 2017), the Court of Appeals analyzed whether allegations of sexual harassment were sufficient to constitute “good cause” for an employee to voluntarily leave her position. Under Arkansas unemployment law, when an employee voluntarily leaves her position without “good cause,” she is disqualified from receiving unemployment insurance benefits. Ark. Code Ann. § 11-10-513(a)(1) (2012). The employee has the burden of showing that she quit for good cause connected with her work. The Arkansas Court of Appeals has described good cause as because that would reasonably compel “the average able-bodied qualified worker to give up employment,” and includes an analysis of “whether the employee took appropriate steps to prevent the mistreatment from continuing.” Teel v. Daniels, 606 S.W.2d 151, 152 (Ark. App. 1980).
In Tyler, the plaintiff-employee complained to human resources that her supervisor had walked up behind her and pulled her shirt up without permission. She was told that the accused supervisor would no longer be her supervisor and that she would no longer have to work near him. The next week, however, the same man was assigned to work approximately ten feet from the plaintiff, which she said caused her extreme anxiety. The plaintiff spoke to her new supervisor on multiple occasions about why the former supervisor was working near her. On one occasion she was discouraged from speaking with human resources. On another occasion, she was told that the human resources representative was in meetings all day and unavailable. The plaintiff quit her job the same day and later filed for unemployment compensation benefits. The Department of Workforce Services denied the plaintiff unemployment benefits, finding that she had voluntarily left her job without good cause, and that she was, therefore, disqualified from receiving benefits. The Arkansas Board of Review agreed and affirmed the denial of unemployment benefits.
On appeal, the Arkansas Court of Appeals disagreed and reversed the decision, finding that the plaintiff did have good cause for voluntarily leaving her job, and was not disqualified from receiving unemployment benefits. Specifically, the Court of Appeals found that the plaintiff had “attempted to remedy a problem created by the employer.” The Court of Appeals noted that the plaintiff was forced to work within ten feet of her former supervisor and that she had made multiple attempts to speak with her new supervisor and with human resources. Accordingly, the Court of Appeals held that there was no substantial evidence to support a finding that the average person would not have quit under those circumstances. The Court of Appeals also rejected the Board of Review’s reasoning that the plaintiff’s primary reason for quitting her job was that her former supervisor was not disciplined within the timeframe she wanted. Instead, the Court of Appeals found that the employee’s efforts to prevent the mistreatment from continuing were sufficient and that she had good cause for voluntarily leaving her employment.
The Tyler case serves as a prime example of how sexual harassment allegations that are not properly addressed can expose an employer to legal liability on multiple fronts. Sexual harassment allegations may not only lead to an EEOC charge or a lawsuit against the employer related to the harassing behavior but as in the Tyler case, may also expose the employer to other areas of liability. Importantly, the Court of Appeals’ decision in the Tyler case turned on the employer’s failure to respond to the employee’s complaints and failure to remedy the on-going situation. That is, it was the employer’s failure to respond to the employee’s allegations, rather than the alleged behavior itself, that established the “good cause” for the employee voluntarily leaving her job. Therefore, having proactive and responsive processes in place for employees who report sexual harassment is important not only for fostering healthy workplaces but also for limiting potential legal liability on a number of fronts.
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This news alert is written by the attorneys in the Labor & Employment Practice Group at Friday, Eldredge & Clark, LLP. The information provided is not a substitute for legal advice and should be considered for general guidance only. Please contact one of our attorneys for specific legal advice regarding this matter.