Employment Law Group Update: Employer Prevails Where Alleged Sexual Harassment Victim Failed to Avail Herself of Company Policy

A recent California case underscores the importance of an employer's efforts to prevent and correct promptly any sexually harassing behavior. In Kohler v. Inter-Tel Technologies, a federal district court threw out an employee.s claim of sexual harassment where the company had a sexual harassment policy in place and the employee failed to use it.

The court found that the employer, who was represented by WSGR.s Employment Law Group, could avoid liability under both state and federal law by showing that (1) it had a proper harassment policy in place; (2) the Company followed that policy in responding to complaints; and (3) the employee unreasonably did not avail herself of the procedures established in the policy. Significantly, the case represents the first time any court has applied such a defense to a sexual harassment claim brought under California.s anti-discrimination statute (FEHA).

In light of this decision, it is critical for employers to make sure that they have comprehensive sexual harassment policies which are widely distributed to and reviewed with all employees. Employers should also conduct regular sexual harassment training seminars and review sexual harassment policies and procedures with managers and supervisors responsible for implementing the policies so that the established procedures are correctly followed and enforced.

California Court Highlights Pitfalls for Employers Doing Background Checks

For many employers, a background check on a new employee is standard operating procedure. A recent decision however, underscores that employers making decisions based on those background checks must be careful. In that case, Mathew v. Government Employees Insurance Co. (March 19, 1999), a California court held an employer liable for not giving applicants notice that their rejections were based upon negative credit reports, as required by the Fair Credit Reporting Act. The case highlights the importance of following the mandated procedures under both federal and state law . the Fair Credit Reporting Act and California Consumer Credit Reporting Agencies Act (the .Acts.) . when conducting background checks.

Significantly, the Acts are broad in scope and can include investigations for drug and alcohol policy violations, theft, sexual harassment and workplace violence, and routine background checks when these are done by or involve a third party. For example, when an employer obtains criminal and DMV reports directly from the public agency, the employer does not invoke the acts. However, if the employer engages a third party to obtain the reports, this falls within the scope of the Acts.

Simply put, before an employer request a consumer report or hires a third party to perform an investigation or background check of an employee or job applicant, the employer must obtain the employee or applicant.s written authorization. The employer must also clearly disclose that a consumer report may be obtained for employment purposes, provide the consumer reporting agency.s name, and include a check box for the employee or applicant to request a copy of the report. The disclosure must be a separate document that consists solely of the disclosure and authorization and while it may be included in an employment application, the employer must also disclose in a completely separate document that the report may be obtained for employment purposes. No later than three days after a report is first requested, the employer must also provide the employee or applicant with additional information including the employee.s right to request disclosure of the nature and the scope of the investigation and a summary of his or her rights.

The company must also certify to the consumer reporting agency that (1) it has disclosed to the employee or applicant that a report may be requested and obtained authorization from the employee or applicant; and (2) it will comply with the conditions on use for adverse actions, should it decide to take adverse actions based on the report.

Before taking any adverse action based on a consumer credit report, a company must provide the employee or applicant with a copy of the report and a description of the employee or applicant.s right to receive written disclosure of his or her rights from the consumer-reporting agency. The company must also provide written notice of the adverse action to the employee or applicant, provide him or her with the name, address and telephone number of the consumer credit reporting agency, provide a statement that the decision to take adverse action was based in whole or in part upon information contained in the credit report, and provide the employee or applicant with written notice of his or her right to obtain within 60 days a free copy of the credit report from the agency and the right to dispute the accuracy or completeness of any information in the report. The letter should also indicate that the agency did not make the decision to take the adverse action and is unable to provide the employee or applicant with the specific reasons for the adverse action. This must be done within three days of taking the adverse action.

In short, businesses must be aware of how federal and state laws pertain to their various investigations and background checks of both applicants and employees. Employers should be careful to comply with those laws, as failure to do so can lead to significant liability.