Personal liability is nothing new to HR professionals. Since 2012, it has been very clear that both managers and HR employees can be held personally liable for retaliatory measures related to discrimination and harassment claims. This information is generally included in our Discrimination and Sexual Harassment training. But in case you don’t know why here is the case that made it clear.
On May 24, 2012, the Seventh Circuit Court of Appeals concluded that an employee who does not directly make the decision to terminate another employee, but who influences that decision on the basis of an impermissible bias, may be held individually liable under 42 U.S.C. § 1981 in a subsequent lawsuit. In this case, https://casetext.com/case/smith-v-bray, Darrel Smith was an African-American process technician who filed suit for discrimination and retaliation against his employer and two individual employees – his immediate supervisor and the HR manager. By the time the suit was filed, the company had filed for bankruptcy protection and was discharged from liability. As a result, the suit proceeded against the supervisor and the HR manager, as individuals. Although individual employees cannot be held personally liable for discrimination or retaliation under Title VII, an individual may be held personally liable under Section 1981, which prohibits race discrimination in contractual relationships such as employment and under which Smith’s suit was brought.
Although this is a well-known fact, many HR professionals are still under the impression that if a claim was filed against the company, and them personally, the company would defend them and/or they would be protected under the corporate umbrella. This is not always the case. As in the Smith case, the company may file bankruptcy, may choose not to pay for the defense of the HR employee, or the Employer Professional Liability (EPL) Insurance doesn’t cover the HR employees’ personal charges. And, of course, 7 out of 10 businesses don’t even carry EPL insurance.
The good news is there are steps that can be taken to protect HR from personal claims. The first and most important is to investigate all claims that have a potential relation to discrimination or harassment. Not just the blatant claims, but also the rumors, side remarks and observances that may be a precursor to a claim. If the company would rather avoid investigations, make it clear in writing to the CEO or GM that you are advising that an investigation be done. The second step is to be involved in the investigation. If this is not possible, review every step to ensure that no bias has taken place and that every potential source of information needed to make a fair determination has been uncovered and reviewed. And finally, compare any potential corrective or punitive steps proposed against other outcomes for similar matters to ensure consistent and legally defensible adverse actions.
For this and other articles for HR professionals involved in conducting workplace investigations, see the HR Investigations Newsletter Q2 2017.