In Schiano v. Quality Payroll Systems, Inc. , 445 F.3d 597 (2d Cir. 2006), the Second Circuit Court of Appeals ruled that hostile work environment claims require a case-by-case factual analysis to determine whether summary judgment is appropriate. In the case before it, the Second Circuit reversed the District Court's grant of summary judgment to an employer and the alleged harasser on plaintiff's claims, among other things, that she was subjected to a hostile work environment on the basis of her sex in violation of federal and state law. The Second Circuit's decision in Schiano serves as a useful reminder to employers that they must act aggressively, both to prevent such claims in the first instance and after receiving a complaint, if they hope to defeat such claims prior to trial.
The main incidents giving rise to the action occurred at the employer's Christmas party in Virginia in December 2001, two months after the plaintiff (a corporate financial assistant) began dating a co-worker. The plaintiff and the alleged harasser (a vice president with the power to discipline and terminate non-officer employees, including the plaintiff) traveled to Virginia from the employer's Long Island office; the plaintiff's boyfriend did not attend the party. During the party, the vice president began discussing a potential raise; after the plaintiff suggested an amount, the vice president replied that if she wanted that much money, she was "sleeping with the wrong employee." The employee asserted that she immediately complained to the employer's president about the comment, but he acted dismissively towards her complaint. The plaintiff alleged that later that evening the vice president put his hand on her thigh, pulled her skirt up a few inches and took a picture of his hand on her leg. She alleged that she told her boss (the supervisor of the tax and accounting department) that the vice president was making her uncomfortable. As the Long Island-based employees were leaving the party, the alleged harasser asked if he could come to the plaintiff's hotel room.
The alleged inappropriate conduct continued after the employees returned to their Long Island office, including the following: (i) the vice president repeated his comment that the plaintiff was "sleeping with the wrong employee" to her twice, including one occasion in the employer's lunchroom in front of the plaintiff's boyfriend and other employees; (ii) on five or six occasions, while the plaintiff was seated at her desk, the vice president approached her from behind and placed his hands on her back or neck and leaned into her while she worked; (iii) on two occasions, the vice president commented to the plaintiff that she should take him on vacation with her instead of her boyfriend because of the boyfriend's fear of flying; and (iv) the alleged harasser remarked to the boyfriend about how "hot" the plaintiff was and inquired as to what type of underwear she wore.
The plaintiff alleged that from January through April 2002 she complained to her supervisor on a weekly basis about the vice president's behavior. At the plaintiff's request, the supervisor had a partition assembled around the plaintiff's cubicles, in part to insulate her from the vice president. The vice president reacted negatively to the installation of the partition, allegedly leering at her repeatedly as he passed the cubicle.
In late April or early May 2002, the boyfriend spoke with the supervisor about the vice president's conduct, and in early May, the supervisor requested the plaintiff's permission to raise the vice president's conduct with the president. The following day, the supervisor met with the plaintiff and asked her to put her complaints in writing. The plaintiff ultimately decided not to memorialize her complaint because she was unsure how it was going to be used and the repercussions it would have. The plaintiff also refused the supervisor's request that she speak with the president about the situation. The supervisor then told her that from that point forward she should no longer report to him, but rather she should report directly to the president. The plaintiff resigned the next day and refused to reconsider this decision following the supervisor's apology and statement that she should continue to report directly to him.
Thereafter, the plaintiff brought various claims against the employer and the vice president, including hostile work environment claims. The Second Circuit ruled that the District Court "erred in concluding that [the vice president's] conduct did not, as a matter of law, unreasonably interfere with [the plaintiff's] job performance because it did not rise to the same level of interference as did the misbehavior" in two cases in which the Second Circuit had decided summary judgment was inappropriate. The Second Circuit also addressed another prior decision in which it had affirmed a grant of summary judgment and stated that "the fact that such actions did not constitute a hostile work environment in [that] case, when considered as part of all the circumstances there, does not establish a rule that similar actions in another context would not, as a matter of law, amount to one."
The Second Circuit confirmed that summary judgment determinations "are to be made on a case by case basis considering all the individual facts at hand." While noting the fact-based nature of hostile work environment claims and that summary judgment often is inappropriate with respect to such claims, the Second Circuit further confirmed that "[t]here are, of course, cases in which it is clear to both the trial court and the reviewing court that after assessing the frequency of the misbehavior measured in light of its seriousness, the facts cannot, as a matter of law, be the basis of a successful hostile work environment claim." In the case before it, however, the Second Circuit ruled that summary judgment was not warranted on the plaintiff's hostile work environment claims in light of the frequency of the misbehavior complained of, the nature of the exchanged words, the context in which they were stated, the physical nature of certain acts, the vice president's response to the steps the plaintiff took to repel the advances and the effect of the vice president's conduct on the plaintiff's ability to do her job.
Assuming the truth of the plaintiff's allegations, Schiano is a textbook case for what an employer should not do. Missteps which if handled differently may have prevented such a claim from ever being filed (or enhanced the employer's chances of defeating the claim prior to trial), include:
• The president's alleged indifference to the plaintiff's initial complaint during the employer's Christmas party.
• The failure to discipline the vice president for his conduct during the Christmas party or thereafter.
• The failure of the plaintiff's supervisor to raise the vice president's conduct to the attention of the president during the Christmas party or at any time following the alleged weekly complaints made by the plaintiff.
• The supervisor's request to the plaintiff that she put her complaints in writing and his statement that she should no longer report to him, but rather she should report directly to the president.
It is unclear whether the employer in Schiano had a policy prohibiting sexual and other unlawful harassment. The action serves as a useful reminder that employers must adopt such policies which describe, among other things, (i) what sexual and other unlawful harassment is and provide representative samples, (ii) to whom an employee who believes he or she has been a victim of such harassment must report the conduct (it is best if a senior Human Resources representative and responsible member of senior management are designated, although this depends on the size of the employer), (iii) that investigations into alleged violations of the policy will be handled as discreetly as practicable, (iv) that retaliation against employees who complain and those who assist in the investigation is strictly prohibited and (v) that appropriate corrective action will be taken whenever violations are determined to have occurred, up to and including termination of employment.
It also is unclear whether the employer in Schiano provided training concerning sexual and other unlawful harassment. Such training, whether limited to supervisors or for all employees, helps ensure awareness of the employer's policy, the type of conduct prohibited by such policy, to whom complaints should be raised and that retaliation against employees who complain or those who assist in investigations is strictly prohibited.
Kevin B. Leblang is a Partner and Chair of the Employment Law Practice of Kramer Levin Naftalis & Frankel LLP. He can be reached at (212) 715-9306. Robert N. Holtzman is a Partner in the Employment Law Practice of Kramer Levin. He can be reached at (212) 715-9513.