Two big sexual harassment cases: where the employers went wrong

As an employer, what can you do to protect yourself when one employee claims severe sexual harassment and the other party denies it or claims it was all consensual?

The Marchuk v. Faruqi & Faruqi trial (daily updates here) is far from over, but that case, as well as one involving CRST Van Expedited in California, provide some valuable opportunities for us to learn from other employers' mistakes.

(Click to enlarge) Don't be a cautionary tale for others!


First, a quick recap of what each of these cases is about:

Marchuk v. Faruqi. Plaintiff Alexandra Marchuk was an associate attorney at Faruqi & Faruqi, LLP, a  New York City law firm. On her third day on the job (in 2011), she alleges that Juan Monteverde, a partner and big "rainmaker," kissed her and grabbed her breast. About three months later, around 3 a.m. after the firm holiday party, the two of them went to his office and had "rough, consensual sex" if you believe him, or "rough, non-consensual rape" if you believe her. According to the firm's co-founder, when he found out about the post-holiday party incident, he called Mr. Monteverde a "f**ing idiot," put him on "probation," and denied him a bonus in 2013 and 2014. (He apparently got his 2012 bonus -- did they decide to withhold his bonuses only after they got sued? I don't know -- and he is still with the firm today.)  On the other hand, Ms. Marchuk did quit soon after the party, and then she sued. The firm filed a counterclaim, alleging in essence that Ms. Marchuk had a "fatal attraction" to Mr. Monteverde ("I'm not gonna be ignored, Juan!"). The firm later realized this counterclaim probably wasn't the best idea in the world, and voluntarily dismissed it.

Want the blow-by-blow account of each day's testimony in the Faruqi sexual harassment trial? Here ya go!

Shank v. CRST. Then we have the CRST case. A California appeals court just upheld a $2 million jury award to a truck driver trainee, Karen Shank, who claimed (among other things) that she was sexually harassed by her driving trainer. Ms. Shank's evidence indicated that CRST would not pay for separate motel rooms for co-drivers, which meant that Ms. Shank was economically pressured to spend the night in the same motel room with her trainer, who liked to take all of his clothes off in front of her and eventually (allegedly) raped her. Ms. Shank's story struck me as questionable, but the jury believed her, so that's that. She complained about him while she was still employed (although the sex allegations at that time were pretty weak), and then she left and made more serious allegations.

Both cases involve "he said/she said" allegations of sexual harassment. In Ms. Marchuk's case, it's possible that she did have the hots for Mr. Monteverde -- or acted foolishly with him after having had too much to drink and didn't regret it until afterward. It's also possible that Ms. Shank and her trainer were having a consensual sexual relationship, which would explain why they stayed in a motel room together and why he thought it was ok to take off his clothes in front of Ms. Shank.

These are tough situations for employers. On the one hand, you certainly don't want to ignore a credible complaint of sexual harassment. On the other hand, you have to be fair to the accused. And you don't want to be a nanny, policing every personal relationship in your workplace.

The courts and the EEOC understand that employers are in that boat. But based on the news reports, it doesn't appear that Faruqi or CRST did everything they could have to protect themselves (in admittedly difficult situations) from liability and weeks-long jury trials. Here, in my opinion, is where they went wrong.


Mistake No. 1 - Not strictly prohibiting intimate relationships between direct reports. It's much easier to prevent danger than it is to repair damage after it has occurred. Mr. Monteverde had no! business! whatsoever! fondling a three-day associate, whether it was consensual or not. (And his wife was reportedly pregnant at the time - don't even get me started.) Nor should any trainer be having consensual sex with the individual he or she is training.

Make sure your nepotism policy addresses relationships like these, in addition to familial relationships. And then follow your policy. (If you think that the relationship may be consensual, it's always a good idea to check with both parties. If they both confirm that, then all you will have to do is separate them. And maybe get something in writing for your protection and theirs.)

Mistake No. 2 - Asking for trouble. Requiring driving partners to pay out of pocket if they don't want to sleep together? Seriously? (DISCLAIMER - I don't know whether this was really CRST policy. But if true, it is a terrible idea.)

PS - And don't think you're protected if you require only that members of the same sex bunk together. Same-sex attraction (and same-sex-ual harassment) is a thing.

Mistake No. 3 - Believing everything's fine until you get a sexual harassment, assault, or rape claim. Whenever you become aware of a relationship between direct reports, or a relationship where there is a significant "power imbalance," you ought to automatically be concerned about the possibility of coercion. Sure, maybe she just wants his money, or is intoxicated by his power or the thought of being Mrs. Juan Monteverde. Or maybe they really do genuinely like each other. But always consider the possibility that she needed a job to pay off her $300,000 in student loan debt and was too scared to say no to a big important boss. If you wait to see how everything shakes out, you've already waited too long.

Mistake No. 4 - Believing that if it's off-site or after-hours, it's not your problem. Think again. You can be liable as an employer for sexual misconduct that occurs any time, any place, as long as one or more of your employees is involved.

Mistake No. 5 - Mediocre or no investigation. You're the employer. You know all these people. You know he's a great guy. You know she's a fruitcake/gold-digger/stalker. Or he's been around forever and she's new, so she must be lying. Why waste everybody's time on a thorough investigation, amirite? Well, here's why -- First, you ought to care about the truth, and even a "fruitcake" can be right twice a day. (Or is that a "stopped clock"?) Second, even if you are sure you already know the truth, you should care about protecting your company from claims and lawsuits, and a thorough investigation of any allegation of sexual misconduct (no matter what you think you already know) will always put you in a stronger defensive position.

So, dive right in! Embrace the investigation! I guarantee that one of the following good outcomes will be yours:

1) Your investigation will prove that the alleged harasser is innocent. Super -- I always liked that guy!

2) Your investigation will prove that the alleged harasser did it. Terrible for the victim, of course, but at least you know and can take appropriate action, which is a very good thing.

3) Your investigation will be inconclusive, but now you can show the world (including the EEOC, plaintiffs' lawyers, and the courts) that you took the allegations seriously and did your best to determine what happened even though you did not succeed. We'd rather know, but this works.

4) Your investigation reveals that you have other workplace issues that need resolution -- more widespread sexual harassment, bad managers, too much cursing and horseplay, you name it -- and now that you know, you can do something about it. Great!

See? You have nothing to fear but fear itself!

I'll continue to follow the Faruqi trial testimony each day, and when it's over, I'll be back with a wrap-up analysis.


Are you, or may you be, a federal contractor? Then please register here for Cara Crotty's webinar on the OFCCP's New Section 503 and VEVRAA Requirements: Are You Ready for Subparts C? 1-2 p.m. Eastern, Wednesday, February 4!

Robin Shea has 30 years' experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act). 
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