Sexual harassment charges seem to be everywhere – from Hollywood to Washington, from journalism to the arts, from sports, big business and publishing to restaurants, academia, even Las Vegas casinos. Yet the vast majority of co-op and condo boards have not taken steps to guard against the possibility of harassment claims. Legal experts agree that it’s time for boards to wake up.
Opportunities for bad behavior – and litigation – abound. Horseplay among staff members can easily escalate into what might be considered harassing behavior. A board member’s repeated flirtations with or sarcastic comments about a fellow director may not be taken lightly. A super who singles out a staff member for repeated ridicule could face complaints that he is creating a hostile work environment. “It is important that boards and management companies make sure that there is a set of anti-harassment policies that employees are aware of, and that they know to whom they should go with complaints,” says Lawrence M. Pearson, a partner at the Wigdor law firm who has litigated numerous workplace harassment and discrimination lawsuits.
Define the Terms
Attorney Andrew P. Brucker, a partner at Montgomery, McCracken, Walker & Rhoads, says the best way to prevent harassment – and to guard against liability should a claim arise – is to adopt a written policy establishing zero tolerance for harassment of any kind. Such a policy can be put together with the help of legal counsel. The policy should be distributed to board members and all staff, perhaps accompanied by some training. The board might also consider sending the policy – or at least notice of the policy – to residents, Brucker says.
Common in corporate environments, such policies typically include clear definitions of what constitutes prohibited conduct. They also spell out the procedure for employees to follow if they want to make a harassment complaint, and the range of disciplinary actions that may result if it is determined that harassment has occurred. Attorney Ken Jacobs, a partner at Smith, Buss & Jacobs, says he’s recently received two harassment-related complaints from clients, both involving board members. In one, a female member complained that a male colleague has suggested she “come up and visit him sometime.” In the other, a female board member complained that a male member has belittled her publicly. “Without judging the merits, I don’t know if these complaints would have been made without the advent of the #MeToo movement,” Jacobs says.
An anti-harassment policy template developed by his firm for co-ops and condos includes a section designating the person who is to receive complaints and field questions about inappropriate conduct. That person must keep the complaints confidential and be relied upon to look at them in good faith, Jacobs says. The most likely candidate would be the property manager, unless that person was the alleged harasser, in which case the designee could be the board president or another officer.
Having a written policy in place can potentially shield the co-op or condo from liability if an employee files a lawsuit without having first complained to a superior. “There are defenses under anti-discrimination case law that require employees to at least make the employer aware of the harassment,” says Pearson of the Wigdor law firm. That defense would be less likely to apply, however, if it was a manager committing the harassment.
Case in Point
A 2012 action against the Foundry at Hunters Point Condominium, a 57-unit association in Long Island City, illustrates the seriousness of harassment claims. In a federal civil rights lawsuit, Jerry Laraque, a former doorman, alleged discriminatory treatment and routine harassment by the condo, its management company, property manager, and super. A black man from Haiti, Laraque claimed in the suit that his white boss, superintendent John Olivieri, persistently verbally and physically abused him at work, including mocking him in racist terms – calling him names such as “monkey” and “black bastard” – and fondling him against his will. Laraque further claimed that when he complained about Olivieri’s behavior to some board members, their only response was to refer him to the property manager. Laraque claims he did that as well, but the manager also failed to act. Not long after, Laraque was fired.
In a response filed with the court, the defendants described a different scenario: Laraque had been involved in many altercations with co-workers, they claimed, and didn’t complain about harassment until around the time he was issued a written warning about his job performance. His firing, they said, was because of his performance, not his harassment charges.
The two sides settled before the case went to trial. Pearson, who represented Laraque, says he can’t discuss the terms of the settlement, but the case clearly demonstrates the potential legal peril facing co-op and condo boards when someone in the building raises a charge of sexual harassment or discrimination.
In addition to protecting boards against litigation, a written policy can also serve as a solid basis for disciplining or terminating a problem employee if that employee isn’t abiding by the terms, says attorney Jeffrey Schwartz, the managing partner at Schwartz Sladkus Reich Greenberg Atlas. The 32BJ contract covering workers in union buildings also provides a process for members to address harassment on the job. “If members face harassment in their building, the building’s shop steward or union representative may try to mediate and resolve the situation informally,” says Rachel Cohen, a spokesperson for the union. “There is also a formal grievance procedure that members can use to report harassment to the union and have it resolved through the legal process.” But Jacobs, the attorney, says that such having such a procedure does not mean boards in union buildings can simply expect the union to take care of harassment complaints. Workers can still take up their complaints directly with their employers.
Brucker emphasizes that it’s not enough to put a policy in writing – the co-op or condo has to follow through. “If you get a bunch of complaints and you do nothing,” he says, “that’s as bad as not having a policy.” In some cases, it might be necessary to bring in an outside investigator – someone completely independent – to thoroughly look into a complaint. “Remember,” he says, “this is a lawsuit waiting to explode in your face.” Along with instituting a policy, boards should also check with their insurer to make sure they are covered for harassment suits. Such coverage typically covers legal defense costs. Employment practices liability insurance covers harassment claims from employees, says Kevin Davis, president of Kevin Davis Insurance Services. Claims outside of that employer relationship – such as a shareholder vs. a board member – fall under directors and officers liability insurance, often called D & O.
Edward Mackoul, president of the insurance brokerage Mackoul Risk Solutions, advises boards to notify their insurance agent as soon as they receive a formal complaint. Insurers might want to get involved early if they feel there’s a potential claim, he says. And in the event that a complaint does turn into a lawsuit, the board doesn’t want to be in the position of having to explain to the insurer why it didn’t alert the company earlier.
“These are not cheap suits,” Mackoul says. “The awards can be very high.”