Employment & Employee Benefits

Kendall Hoechst, Amy McLaughlin, Editors
Dinse, Knapp & McAndrew, P.C., Burlington

LEGISLATION

by Kendall Hoechst

Governor Phil Scott has signed two new laws that will have an impact on all Vermont employers. The first, a response to the #MeToo movement, is designed to protect Vermonters from sexual harassment. The second law restricts employers from making certain inquiries about applicants’ salary history, with an eye toward closing the wage gap between men and women. Both laws took effect July 1, 2018.

Preventing sexual harassment

Applicability. First, the new sexual harassment law expands the applicability of the state’s antiharassment statute to “all persons who engage a person to perform work or services” even if the individuals or entities involved might not have previously met the definition of “employer” or “employee.” That suggests the law is meant to apply broadly. The definition or meaning of “harassment” hasn’t been altered.

Antiharassment policies. Vermont employers are required to provide copies of written policies against sexual harassment to new employees upon hire. Now, you must also provide notice to all employees when you make any changes or updates to your sexual harassment policy. The statute encourages, but doesn’t require, sexual harassment education and training for newly hired employees as well as annual training for existing employees.

Employment contracts. Under the new law, you may not require any employee or prospective employee to sign an employment contract or a waiver that prevents her from opposing, disclosing, or reporting sexual harassment, or participating in a sexual harassment investigation. Likewise, you may not require employees to waive their rights or remedies with respect to a claim of sexual harassment. Any agreement that purports to do either of those things will be void and unenforceable.

Settlement agreements. The law also addresses the settlement of sexual harassment claims. Settlement agreements may not prevent an employee from working for the employer or any parent, subsidiary, division, or affiliate in the future. In other words, no-rehire clauses will render the entire settlement agreement void and unenforceable. A settlement agreement must also include certain statements affirming that the settlement does not prevent the accuser from:

• Reporting sexual harassment to an appropriate governmental agency;
• Complying with a discovery request (i.e., a request for evidence related to a legal claim);
• Testifying at a hearing or trial involving a claim of sexual harassment or participating in any related investigation; or
• Exercising his right under state or federal labor law to engage in concerted activity for mutual aid or protection.

A settlement agreement that doesn’t include those statements will be void and unenforceable. Furthermore, the settlement agreement must make it clear that the accuser isn’t waiving any rights or claims that might arise after the agreement is executed.

Enforcement powers. The new law imbues the Attorney General’s Office (AG)—or the Vermont Human Rights Commission (VHRC) if the employee works for the state—with the power to enter and inspect any place of business or employment, question any person who is authorized to receive or investigate complaints of sexual harassment, and examine an employer’s records, policies, procedures, and training materials related to sexual harassment. An employer must be given 48 hours’ notice prior to any on-site visit, but the employer can waive or shorten the notice period.

It’s important to note that an employer only has to provide redacted data on the number of complaints of sexual harassment it has received and the resolution of each complaint. You should preserve this kind of data going forward to make compliance with an inspection request from the state easier.

After an inspection, the AG must notify the employer of the results, including any issues or deficiencies; provide resources to assist with the prevention of harassment; and identify any technical assistance it may offer. If the AG deems it necessary, an employer can be required to conduct an annual education and training program, an annual anonymous workplace survey, or both, for up to three years. The AG is required to maintain the confidentiality of records and information related to or obtained through an inspection.

Notice to and participation by the state in private lawsuits. The AG remains empowered to bring enforcement actions, but individuals also have the option of filing sexual harassment complaints on their own without the state’s involvement. Any person who files such a complaint is now required to provide notice to the AG and the VHRC within 14 days of filing the complaint. Either agency has the option to intervene in the action or to file a statement with the court addressing questions of law without becoming a party.

Future efforts to reduce and address sexual harassment. Before December 15, 2018, the AG and the VHRC must develop enhanced reporting mechanisms to make it easier for employees and members of the public to submit complaints of discrimination and sexual harassment. Those mechanisms must include, at a minimum, an “easy-to- use” Web portal and a telephone hotline. The AG must submit a report on the implementation of the enhanced reporting mechanisms on or before January 15, 2020.

The law also appropriates $125,000 to the Vermont Commission on Women for the purpose of creating a public education and outreach program focused on making the public aware of methods for reporting discrimination and sexual harassment, where to find information on the laws against discrimination and harassment, and best practices for prevention.

Finally, the law directs the Office of Legislative Counsel to investigate several aspects of potential future legislation addressing nondisclosure provisions. The legislature is seeking research on requiring notice of settlement agreements that restrict the accuser from disclosing information related to a sexual harassment claim and rendering a nondisclosure agreement void and unenforceable if the alleged harasser is found to have harassed again.

Next steps. You should review your policies on sexual harassment and identify which individuals are designated to receive complaints. It would also be prudent to maintain records of any complaints you receive and all of the associated documentation. Continue to take steps to address any complaints of sexual harassment, including conducting investigations and maintaining appropriate documentation of the results as well as any remedial measures you take in response. You may want to revisit your policies and procedures to ensure they cover those issues.

You should also review your form settlement agreements to ensure they include the necessary statements and don’t contain a no-rehire clause. Finally, check your standard employment agreements to make sure they don’t limit an employee’s ability to complain about sexual harassment or participate in an agency investigation or any similar proceedings. You may want to consider adding a statement to that effect to your confidentiality provisions.

Inquiring about job applicants’ salary history

The other new antidiscrimination law prevents employers from relying on past compensation information to set the salaries of new hires. The term “compensation,” as used in the law, encompasses wages, salary, bonuses, core benefits, fringe benefits, and equity-based compensation. Employers may not:

• Ask either a prospective employee or his former employer about his past compensation;
• Require that a prospective employee’s previous compensation satisfy a minimum or maximum standard; or
• Determine whether to interview a prospective employee based on his current or past compensation.

Importantly, if a prospective employee voluntarily discloses information about her previous compensation, you may seek to confirm or request that she confirm the information, but only after you make a job offer that includes a compensation amount. Furthermore, you are permitted to inquire about an applicant’s salary expectations or requirements and provide information about the wages, benefits, compensation, or salary offered for a particular position without running afoul of the statute.

Next steps. Review your application materials to ensure they don’t include any requests for salary history information. You should also take care not to raise the topic during interviews or other hiring communications.

Bottom line

Even small changes in the law can have a significant impact on employers. These changes are fairly substantial and suggest that the state will have a more critical eye on employers going forward. Not only are preventing and responding to sexual harassment and reducing the wage gap now a more robust part of Vermont law, but they are also the right thing to do.

Kendall Hoechst can be reached at khoechst@dinse.com or 802-859-7042.

Karen McAndrew, Leigh Cole, Editors
Dinse, Knapp & McAndrew, P.C., Burlington

WRONGFUL DISCHARGE

by Karen McAndrew

In a recent decision involving the dismissal of a police officer “for cause,” the Vermont Supreme Court again tackled the difficult question of what constitutes grounds for termination when “cause” is required but not fully defined.

A police officer is, of course, a public employee, and as such, his terms of employment are governed by state statute. One section of the law states that an officer “shall hold office during good behavior, unless sooner removed for cause,” and another provision says that an officer may be suspended or removed, after a hearing, when he is found to have “become negligent or derelict in [his] official duty, or is guilty of conduct unbecoming an officer.”

That precise language is unlikely to be found in a private-sector employer’s employee handbook or employment contracts, but many private-sector agreements expressly require cause for termination (often after a specified probationary period). In cases where employee handbooks include a step disciplinary process, courts have found that there’s an implied agreement that an employer will not terminate an employee without following the disciplinary process and having some measure of “cause.”

The facts in this particular case are interesting, and may even leave you scratching your head over how so much time and ink could have been expended over the legitimacy of the officer’s termination, but the court’s decision provides some insight into how far the courts are willing to go to ensure that employees’ rights are respected.

Police officer admits to criminal conduct

Adam Hubacz was employed by the village of Waterbury as a police officer. While he was still working for Waterbury, he applied for a similar position in another town. In connection with his application for employment, he was asked to take a polygraph, which, by statute, may be required of an applicant for a law enforcement position.

As part of the standard protocol, Hubacz was given a copy of the questions that would be asked during the polygraph. In the prepolygraph interview about the questions, he admitted that he had cheated on a police exam, engaged in insurance fraud, taken uniforms from a former employer, failed to report income on his tax returns, and impersonated a police officer to obtain retail discounts and intimidate his high-school classmates. After those admissions, the polygraph was scrapped.

The officer who conducted the interview shared the information with Hubacz’s current employer, the Waterbury police chief, who forwarded the report to the Washington County State’s Attorney. The state’s attorney concluded that Hubacz’s past conduct so undermined his credibility that the state couldn’t use him as a prosecuting witness. (It was part of Hubacz’s job to present cases to the prosecutor and testify in court.) Waterbury then placed him on administrative leave, provided him notice of its decision to terminate him, scheduled a hearing, and ultimately terminated his employment.

Sounds like the kind of history that should convince a police officer to look for another line of work, right? Well, not so fast. Six years later, the Vermont Supreme Court was still wrestling with whether Waterbury had cause to terminate Hubacz.

Case bounces back and forth in the courts

Hubacz filed claims in both state and federal court, followed by appeals, dismissals, and remands for

further hearings. He appealed to superior court after the village trustees again found cause for his termination, this time based on a determination that he had become “negligent and derelict in his official duties” because the state’s attorney’s decision meant he couldn’t bring his cases to prosecution.

The trustees also found that the conduct Hubacz revealed in the prepolygraph interview was a sufficient basis for the state’s attorney’s conclusion that he engaged in conduct unbecoming an officer that eroded public trust in law enforcement. The trustees determined that the state’s attorney’s refusal to prosecute Hubacz’s cases meant that he effectively suffered from a “legal disability” that rendered him unable to perform the essential functions of his job.

The superior court concluded that because the trustees’ ruling was based on the state’s attorney’s decision rather than any independent finding of negligence, dereliction of duty, or conduct unbecoming an officer, it could not stand. The village asked for and was granted a special appeal. The Vermont Supreme Court agreed to consider whether the section of the statute that refers to “cause” provides a stand-alone basis for termination or whether the enumeration of three specific grounds—negligence, dereliction of duty, and conduct unbecoming an officer— means that cause is limited to those three grounds.

This is where a private-sector employer’s handbook language may come in. Many handbooks list various offenses or types of misconduct that constitute cause without making clear that the list isn’t exhaustive. If the specific conduct that led to his termination isn’t on the list, a disgruntled former employee may sue the employer, claiming wrongful discharge.

Supreme court kicks it back to the trial court

The supreme court found that the “cause” referred to in one section of the statute wasn’t limited to the three grounds listed in the other section, and Hubacz’s inability to perform the duties of his office—whatever the reason— constituted good cause for termination. Thus, the trustees didn’t have to make an independent determination about whether Hubacz had in fact engaged in the conduct he admitted to at the prepolygraph interview. (We have to wonder whether the truth of Hubacz’s admitted offenses is even relevant. Is a police officer who falsely boasts of engaging in felonious conduct any more reliable and credible than one who actually engaged in such conduct?)

The court’s decision is limited by a couple of caveats, however. First, the village must determine whether Hubacz’s inability to perform his duties because of the state’s attorney’s findings could be reasonably accommodated by other means, such as assigning him other duties or ensuring that his arrests were witnessed. The court recognized that factors such as the size of the police department would weigh in the evaluation of potential accommodations.

Another concern seemed to be that the statute vests town officials with the authority to hire and fire police officers and doesn’t give the state’s attorney control over those decisions. In that regard, the court held that the state’s attorney’s decision not to prosecute an officer’s cases must be premised on valid grounds. (Again, shouldn’t the officer’s admission that he engaged in misconduct be sufficient, whether or not it’s true?) Because a prosecuting attorney is generally required to disclose any evidence that’s favorable to the defense, it’s possible that the prosecutor would have to turn over evidence that could undermine Hubacz’s credibility—and therefore harm the state’s cases.

In light of those caveats, the court sent the case back to the superior court for a determination on whether the Waterbury Police Department could accommodate Hubacz’s inability to aid in the prosecution of cases and whether the state’s attorney’s decision not to prosecute his cases was “premised on valid grounds.” So six years after he was terminated, he still doesn’t know whether he will wear a Waterbury badge again. But the rest of us may know a little bit more about what constitutes “cause” for termination.

What are the lessons for employers?

First, and probably most important, if you promise employees, through handbook language or otherwise, that they can be terminated only for cause, you would be well-advised to provide some examples of conduct that may amount to cause. But be sure you make it absolutely clear that the list is not exhaustive. You might say something like, “The following examples of conduct may constitute cause and lead to immediate termination, but this list is not exclusive and is not intended in any way to be complete or to limit the types of conduct that may lead to discipline, up to and including termination.”

The other lesson from this decision has to do with the level of scrutiny courts will give your termination decisions. As we’ve often said, if you’re going to terminate an employee for cause, you should have a wellarticulated explanation and be able to demonstrate that you’ve followed whatever prerequisite steps are laid out in your handbook or employment contract. If you haven’t followed those steps, it’s usually much less costly in the end to go back and give the employee a warning or reprimand before resorting to termination. If he then corrects the behavior, the problem will be resolved; if the behavior continues, you will have laid the appropriate groundwork for termination—which will hopefully allow you to avoid a nightmare like the six-plus years of litigation Waterbury has faced in the Hubacz case.

Karen McAndrew can be reached at kmcandrew@dinse.com or 802-864-5751.

Kendall Hoechst, Amy McLaughlin, Editors
Dinse, Knapp & McAndrew, P.C., Burlington

SEX DISCRIMINATION

by Kendall Hoechst

Vermont employers should know that the Vermont Fair Employment Practices Act (FEPA) explicitly prohibits discrimination based on not only employees’ sex but also their gender identity and sexual orientation (as well as other protected categories). Thus, on its face, Vermont law is broader than its federal equivalent, Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination on the basis of sex but doesn’t include the separate characteristics of sexual orientation or gender identity.

Previously, the U.S. 2nd Circuit Court of Appeals (whose rulings apply to all Vermont employers) held that sexual orientation discrimination claims, including claims that being gay or lesbian constituted nonconformity with a gender stereotype, weren’t covered under Title VII. The 2nd Circuit revisited its previous decisions in a rare en banc sitting—meaning with all the members of the court rather than a three-judge panel—in Zarda v. Altitude Express, Inc. The majority held that Title VII prohibits discrimination based on sexual orientation as discrimination “because of . . . sex.”

Facts

Donald Zarda, a gay man, was employed as a skydiving instructor at Altitude Express. He frequently participated in tandem dives with Altitude Express clients, which involved being strapped hip to hip and shoulder to shoulder before jumping out of the airplane. Zarda told a female client that he was gay to preempt discomfort with being strapped closely to a man. However, the client claimed that he touched her inappropriately and disclosed his sexual orientation to excuse his behavior. He denied inappropriately touching her. After the jump, the client told her boyfriend her allegation of inappropriate touching. The boyfriend told Zarda’s boss, who fired him.

Zarda sued his employer under both New York law and Title VII, claiming that he was fired because he referred to his sexual orientation and because he didn’t conform to the “straight male macho stereotype.”

The trial court held that Zarda’s Title VII claims were barred under the 2nd Circuit’s previous precedent and ruled in favor of the employer on the federal claim. After a trial on the state-law claim, which required a different standard of proof than the federal claim, the jury returned a verdict in favor of the employer. Zarda appealed to the 2nd Circuit.
Interestingly, the Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Justice (DOJ) took opposing views in amicus briefs submitted to the court—i.e., arguments intended to influence the court’s decision written by parties that are not directly involved in the case but have an interest in the outcome. The DOJ argued that Title VII doesn’t prohibit sexual orientation discrimination. The EEOC claimed to be the “primary agency” charged with interpreting Title VII and argued the opposite.
Opinions

The majority opinion had three primary holdings. First, the court held that sexual orientation is a function of sex and, by extension, sexual orientation discrimination is a subset of sex discrimination. The majority concluded that firing a man because he is attracted to men or a woman because she is attracted to women is a decision motived, at least in part, by sex.
Second, the court held that sexual orientation discrimination is rooted in gender stereotypes and thus is a subset of sex discrimination. It recognized that its previous precedents were unworkable because of the difficult lines that were required to be drawn. For example, a woman might have had a Title VII claim if she was fired for being perceived as too “macho” but not if she was fired for being perceived as lesbian.

Third, the court held that sexual orientation discrimination is based on an employer’s opposition to association between particular sexes and thereby discriminates against employees based on their sex. The 2nd Circuit had previously recognized associational discrimination as a violation of Title VII in the context of race discrimination. Thus, like antimiscegenation policies, discrimination based on sexual orientation is a form of associational discrimination prohibited by Title VII.

Four concurring opinions and three dissenting opinions were authored by various judges. Judge Dennis Jacobs concurred in only the associational discrimination justification and found it unnecessary to reach the others, explaining, “A ruling based on Mr. Zarda’s same-sex relationship resolves this appeal; good craft counsels that we go no further. Much of the rest of the Court’s opinion amounts to woke dicta [socially conscious observations that aren’t binding as legal precedent].”

Judge Robert Sack’s opinion also concluded that the appeal could be decided on the “simpler and less fraught” theory of associational discrimination. He noted that the court is in “the context of something of a revolution in American law respecting gender and sex” and therefore thought it best to tread carefully.

Judge José Cabranes concurred only in the judgment in a very brief opinion, essentially opining that his colleagues spilled too much ink getting to the point that sexual orientation is a function of sex, end of story. Judge Cabranes even dropped a footnote quoting a text from the third century B.C. to underscore his point that less is more. Judge Raymond Lohier, Jr., favored a textualist approach and concluded that sex subsumes sexual orientation just as race subsumes ethnicity.

The primary dissent was authored by Judge Gerard Lynch. He explained that he would be “delighted to wake up one morning and learn that Congress had just passed legislation adding sexual orientation to the list of grounds of employment discrimination prohibited under Title VII” and would be “equally pleased to awake to learn that Congress had secretly passed such legislation more than half a century ago.” However, “we all know Congress did no such thing.” He examined the historical context of the passage of the Civil Rights Act of 1964 and essentially concluded that classifying people by sexual orientation isn’t the same as classifying them by sex. Discrimination against people whose sexual orientation is homosexual rather than heterosexual, however offensive, isn’t discrimination that treats men and women differently. He also distinguished the majority’s arguments from the U.S. Supreme Court’s constitutional analysis of gay marriage.

Impact

The 2nd Circuit is the third federal appellate court to consider sexual orientation discrimination questions recently. The 7th Circuit, also sitting en banc, ruled in Hively v. Ivy Tech that discrimination based on an employee’s sexual orientation violates Title VII. The 11th Circuit, however, held the opposite in Evans v. Georgia Regional Hospital and declined to hear the case en banc. The 8th Circuit is the next court to consider the issue.

Recently, Vermont Attorney General T.J. Donovan joined other attorneys general in filing an amicus brief arguing that Title VII encompasses discrimination on the basis of sexual orientation.

There’s now a split among federal circuit courts. The split could be resolved by the Supreme Court or Congress, but the latter seems unlikely in the current political climate. For now, the 2nd Circuit’s decision is the law in Vermont, New York, and Connecticut.

While it was—and remains—illegal to discriminate on the basis of an employee’s sexual orientation in Vermont, the 2nd Circuit’s decision will permit employees to pursue federal discrimination claims based on sexual orientation. That makes it more likely that employees will file future claims in federal court.

Furthermore, Vermont courts still look to federal law when interpreting state law, so future federal decisions regarding discrimination based on sexual orientation will have implications for state law.

Kendall Hoechst can be reached at khoechst@dinse.com or 802-859-7042.

Amy M. McLaughlin, Kendall Hoechst, Editors
Dinse, Knapp & McAndrew, P.C., Burlington

by Jeff Nolan

Soon, it will be legal in Vermont for people who are 21 or older to possess limited quantities of marijuana and marijuana plants. You may be wondering whether the new law affects your ability to enforce rules on smoking or the use of drugs in your workplace. In short, the answer is, nope. In crafting the law, the Vermont Legislature specifically addressed workplace issues and made clear that the law doesn’t require employers to change their policies or permit the use or possession of marijuana at work.

General provisions of the law

The new law, titled “An act relating to eliminating penalties for possession of limited amounts of marijuana by adults 21 years of age and older,” was signed by Governor Phil Scott on January 22, 2018. The portions of the law relevant to our discussion will go into effect on July 1. The law defines “marijuana” as “all parts of the plant,” including seeds, resin, and compounds derived from the plant, its seeds, or its resin, but not mature stalks, hemp, or other excluded parts.

As of July 1, 2018, individuals who are 21 years old or older will be permitted to possess up to one ounce of marijuana or five grams of hashish, and cultivate up to two mature marijuana plants or four immature marijuana plants. Criminal penalties apply if a person possesses more than is allowed by those limits. The criminal penalties increase with second and third offenses, and with larger amounts of marijuana.

The law prohibits the consumption of marijuana in a “public place,” which is defined as “any street, alley, park, sidewalk, public building other than individual dwellings, any place of public accommodation [as defined in the Vermont Public Accommodations Act, or VPAA], and any place where the use or possession of a lighted tobacco product, tobacco product, or tobacco substitute . . . is prohibited by law.”

The law doesn’t protect people who possess or consume marijuana from laws related to driving under the influence of marijuana or consuming marijuana while driving, it doesn’t limit the authority of primary or secondary schools to impose administrative penalties for the possession of marijuana on school property, and it doesn’t prohibit landlords from, among other things, banning the possession or use of marijuana in lease agreements.

Provisions of particular interest to employers

Some provisions of the law actively prohibit marijuana use in workplaces, while others explicitly allow employers to continue to regulate whether marijuana can be possessed or used on their premises.

In terms of active prohibitions, as noted above, the law prohibits the “consumption” of marijuana in a “public place,” which includes “any place of public accommodation as defined in” the VPAA. The definition of “public accommodation” in the VPAA is broad and includes “any school, restaurant, store, establishment, or other facility at which services, facilities, goods, privileges, advantages, benefits, or accommodations are offered to the general public.” That means people will still be prohibited from consuming marijuana in a workplace that falls within that definition, regardless of the employer’s policies.

Similarly, the law actively prohibits the consumption of marijuana in “any place where the use or possession of a lighted tobacco product, tobacco product, or tobacco substitute” is prohibited by law. As Vermont employers know, Vermont law generally prohibits, with some exceptions, smoking in “an enclosed structure where employees perform services for an employer.” That means people are not permitted to consume marijuana in the vast majority of workplace settings that are not specifically exempted from the law prohibiting smoking in the workplace.

The new pot law also reserves for employers the ability to continue to regulate the possession or use of marijuana on the job. Specifically, the law provides that none of its provisions should be construed to:

• Require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana in the workplace;

• Prevent an employer from adopting a policy that prohibits the use of marijuana in the workplace;

• Create a claim against an employer that terminates an employee for violating a policy that restricts or prohibits employees’ use of marijuana; or

• Prevent an employer from prohibiting or otherwise regulating the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana on the employer’s premises.

Those provisions mean you are essentially free to maintain or create policies that prohibit the possession, consumption, sale, or cultivation of marijuana and terminate employees who violate your policies, and the law doesn’t create a method by which employees can sue you for doing that (known as a “private right of action”).

It should be noted that the marijuana law doesn’t mention Vermont’s drug-testing law. As Vermont employers know, the drug-testing law places strict limitations on when and how employees can be subjected to drug testing. Those restrictions must continue to be observed carefully, and you shouldn’t view the legalization of marijuana as permission to conduct more stringent drug testing that isn’t allowed by the drug-testing law. On the other hand, if you permissibly test an employee and the result is positive for marijuana use in violation of your policies, the marijuana law wouldn’t prevent you from taking action under your policies to the extent permitted by the drug-testing law.

Medical marijuana

The medical marijuana/disability issue is also worth noting. Employment disputes involving medical marijuana usually revolve around questions of whether the use of marijuana is “lawful.” The use of medical or recreational marijuana remains unlawful under federal law, regardless of Vermont’s new marijuana law. So if an employee appears to be under the influence of marijuana at work, you can take action even if the employee is authorized to use medical marijuana.

However, if an employee tests positive for marijuana use through a drug test, there’s no question about whether he’s impaired at work, and he explains that he uses marijuana for medical reasons, it would be worthwhile to consult legal counsel about the best way to arrive at a practical solution that could resolve the issue while respecting any safety-related requirements of the employee’s job and your worksite. (For more on Vermont’s medical marijuana law, see “Employers’ medical marijuana rights, obligations under Vermont law” on pg. 1 of our February 2016 issue.)

Policy implications

Many employers have enacted policies that prohibit the possession, consumption, or distribution of “illegal drugs” but do not mention marijuana specifically or list all of the drugs that are prohibited. As we noted above, marijuana remains an illegal drug under federal law. The new Vermont marijuana law eliminates only state-law penalties for the possession and use of marijuana within certain parameters. Therefore, a policy that references “illegal drugs” would still technically be effective. However, if you want to clarify the point and avoid after-the-fact policy interpretation arguments with your employees, you may wish to specifically identify marijuana as a prohibited substance in your policies.

Bottom line

It’s good to see that lawmakers were thinking of Vermont employers when they crafted the new marijuana law and eliminated some potential questions before they could even be asked. In sum, if your organization prohibits the possession, use, and distribution of marijuana on the job, it will be business as usual. That shouldn’t be surprising since employers can obviously prohibit the use of legal substances such as alcohol in the workplace, and the liberalization of marijuana laws shouldn’t affect employer discretion on safety-related issues.

If you don’t have explicit policies addressing marijuana use but anticipate that you may be asked about your stance in light of the new law, you should consider creating some policy language clarifying your organization’s position on marijuana use, particularly in workplace areas covered by the law prohibiting smoking in the workplace and in places of public accommodation. Then, if an employee asks to use pot at work and tells you that you can’t prohibit it under the new law, you can say with confidence: “Dude, you must be high! Read the policy!”

Jeff Nolan can be reached at jnolan@dinse.com or 802-864-5751.

Amy M. McLaughlin, Kendall Hoechst, Editors
Dinse, Knapp & McAndrew, P.C., Burlington

by Amy McLaughlin

The “#MeToo” movement is sweeping across the country and calling well-deserved attention to the issue of sexual harassment. The U.S. Court of Appeals for the 2nd Circuit (whose rulings apply to all Vermont employers) is following suit. In a recent decision, the 2nd Circuit chided an employer for not doing enough to monitor the work environment and ensure it was harassment-free. Employers, pay attention: This case illustrates the new standard of heightened awareness.

Facts

In late 1999 or early 2000, a female dental assistant complained to the Connecticut Commission on Human Rights and Opportunities that Dr. Michael Young, the dentist with whom she worked at University of Connecticut Health Center (UConn Health), had harassed her. The dental assistant alleged that Young sent her gifts and notes saying things like “You’re beautiful” or “I love your smile.”

The complaint resulted in a “last-chance” agreement between Young and UConn Health that required Young to see a psychiatrist and imposed a 10-day suspension on him for “offensive conduct towards a [coworker], poor judgment, and not cooperating during the initial investigation.” The agreement further provided that he could be fired for “any future instances of unsolicited flirtatious letters or comments to any employee, or any behavior similar to this.”

When he returned to work following his suspension, Young received no additional attention, monitoring, or training. Further, UConn Health never informed his subsequent supervisors that he had been the subject of a sexual harassment complaint or that he was disciplined as a result of the complaint, including being put on a last-chance agreement.

Fast-forward to March 2008, when UConn Health hired Mindy MacCluskey as a dental assistant. MacCluskey began working with Young two days a week at Manson Youth Institute, a Connecticut Department of Corrections facility. Approximately six months after she began working at Manson, Young started making comments about MacCluskey’s appearance and what she was wearing, called her “young and beautiful,” and commented that he was surprised she had three children. He also asked her personal questions that made her uncomfortable, such as inquiring about her relationship with her children’s father and asking whether “anybody has ever cheated.” Moreover, he stood very close to her in a way she described as “creepy.”

MacCluskey reported Young’s conduct to both a coworker and a nurse who was also a union representative. Someone then reported to Dr. Alexis Gendell, who supervised both Young and MacCluskey at Manson, that there was a concern at the dental clinic. Gendell stopped MacCluskey in the hallway and asked “if there was a situation, is everything [OK],” to which MacCluskey replied, “There is a situation and I’m all set. It is under control.”

UConn Health never made Gendell aware of the earlier sexual harassment complaint against Young or his last-chance agreement. Gendell didn’t follow up on the conversation with MacCluskey to inquire about the nature of the concern at the dental clinic, make any effort to investigate whether Young had a history of “concerns” with other coworkers, or monitor Young’s conduct.

Because she needed more hours to support her family, in August 2010, MacCluskey requested a transfer to MacDougall-Walker Correctional Institution, where she would be assigned to work with Young three days a week. Her transfer request was approved, and she began working at MacDougall-Walker in December 2010. According to MacCluskey, Young’s behavior toward her escalated over a series of months and included the following incidents:

• He repeatedly commented on her appearance and asked her out.
• He brought lingerie and bathing suit catalogs to work and asked her to model the clothing in them.
• He sent her e-mails asking how he could make her “blush”; telling her that there were “rules” for her position, such as kissing him before and when she left work; asking her about “crazy hookups”; and telling her, “I love you.”
• He repeatedly bumped into her, touched her hair and hands, gave her shoulder rubs, stared at her, and sent her a Valentine’s Day gift.
• On one occasion in 2011, he stood in a doorway and blocked her from leaving a room, and when she tried to leave, he grabbed her waist, pulled her close, and put his hand up her shirt.

After Young put his hand up her shirt, MacCluskey reported the sexual harassment to Rikel Lightner, her supervisor at MacDougall-Walker, and filed an incident report. Lightner, in turn, reported the complaint to UConn Health. Young was placed on paid administrative leave while UConn Health conducted an investigation. After the investigation revealed that he had violated the internal sexual harassment policy, Young chose to resign rather than be fired.

In September 2013, MacCluskey filed a sexual harassment lawsuit against UConn Health. The case went to trial, and the jury found in MacCluskey’s favor, awarding her $200,000 in damages. UConn Health appealed the jury’s verdict to the 2nd Circuit, arguing there was no legal basis for imputing liability to it because it had no knowledge of Young’s harassment of MacCluskey before she complained in 2011 after the incident in which he put his hand up her shirt.

2nd Circuit’s decision

To prevail on a hostile work environment claim, an employee must prove that (1) the workplace was permeated with discriminatory intimidation that was sufficiently severe or pervasive to alter the conditions of her work environment and (2) there is a specific basis for imputing the conduct that created the hostile environment to the employer. When a hostile work environment claim involves conduct by a coworker rather than a supervisor, the employer is liable only for its own failure to exercise reasonable care to address the harassment. Therefore, the test is whether the employer failed to provide a reasonable avenue for complaint or whether it knew, or in the exercise of reasonable care should have known, about the harassment yet failed to take appropriate remedial action.

On appeal, it was undisputed that UConn Health provided a reasonable avenue for complaint, and Mac- Cluskey didn’t report Young’s conduct prior to 2011. The question, then, was whether UConn Health had constructive notice of the harassment. In other words, the crucial issue the appellate court faced was whether UConn Health should have known about the harassment in the exercise of reasonable care.

After considering all the evidence presented at trial, the 2nd Circuit concluded that there was sufficient evidence for a reasonable jury to find that UConn Health should have, in the exercise of reasonable care, known about Young’s harassment. The court specifically highlighted the following facts:

• After Young sexually harassed another assistant in 2000, he was disciplined and subjected to a last-chance agreement.
• Young’s supervisors, including Gendell, weren’t made aware of the last-chance agreement.
• Young’s supervisors should have been monitoring him.
• From 2009 through 2011, Young made inappropriate comments about MacCluskey’s appearance, inquired about her personal life, and invaded her personal space.
• At some time between 2009 and 2010, MacCluskey complained about Young’s behavior to two coworkers.
• Gendell was alerted to a possible issue at the dental clinic involving MacCluskey, but when she asked about the “situation,” she did so in a hallway rather than a private setting and didn’t ask follow-up questions, raise the issue again, or take any further action.
• Had Gendell been informed about Young’s earlier harassing conduct and his last-chance agreement, she would have conducted a more robust inquiry when she became aware that there was a “situation.”

Given that evidence, the court concluded that UConn Health should have known about Young’s harassment of MacCluskey in 2009 or 2010 and should have taken steps to remediate the situation.

Lessons learned

Given today’s climate in which an ever-increasing number of sexual harassment allegations are being made, employers need to be especially cautious. Certainly, the holding in this case significantly reinforces that need.

Even though UConn Health had an antiharassment policy and MacCluskey didn’t avail herself of its provisions until more than two years after Young began harassing her, the employer was still held liable. The court concluded that given its knowledge of Young’s past harassing behavior, UConn Health didn’t do enough to ensure a harassment-free work environment and protect its employees. For example, it could have monitored Young’s behavior, informed his new supervisors of the last-chance agreement, and, perhaps most important, thoroughly delved into MacCluskey’s report of a “situation.”

Bottom line: It’s clear from this case that today’s environment requires employers to take a proactive approach. You must always be mindful, attentive, and cognizant of the work environment, and if there’s any potential issue that might rise to the level of concerning behavior, you must take immediate steps to address it.

Amy McLaughlin can be reached at amclaughlin@dinse.com or 802-859-7031.