Lessons from U.S. Sexual Harassment Class Actions for Canadian Employers

Torys Quarterly: The Cross-Border Update

The #metoo movement has crystallized the need for employers to actively mitigate the risk of sexual harassment and discrimination class actions. As we outlined in a previous article, although there have been few of these claims commenced to date in Canada, the risks for employers are real. The flood of sexual harassment class actions in the U.S. demonstrates the urgency of this issue.

In this article we identify trends emerging from U.S. sexual harassment and discrimination class actions which are or could be making their way to Canada. The purpose is to identify lessons learned and to outline pro-active advice for employers. Our review of the legal landscape leads to three suggestions for employers seeking to reduce their exposure to the threat of sexual harassment and discrimination class actions:

  • ensure that workplace harassment policies are comprehensive, understood by employees and consistently enforced;
  • promote and maintain diversity across all levels of the organization; and
  • put in place formal investigation and complaint resolution mechanisms for sexual harassment and discrimination complaints.

Trends in Sexual Harassment Class Actions

Weinstein-Style Harassment Claims

Historically, U.S. sexual harassment class actions have been brought where harassment is alleged to have been committed by multiple perpetrators across an organization. The claims often alleged that a “culture” of harassment or discrimination was tolerated, or even encouraged.1 However, a new trend has emerged in the wake of the #metoo movement. There has been an influx in “Weinstein-style” sexual harassment actions, where one individual is alleged to have harassed or abused multiple people across the organization.

Our review of U.S. sexual harassment and discrimination class actions has shown that claims appear more likely to arise in highly gendered work environments with pronounced divisions in gender roles.

The lawsuit against The Weinstein Company is the paradigmatic example of this trend.2 The plaintiffs alleged that Harvey Weinstein engaged in unwanted sexual conduct against the plaintiffs, who operated under duress and the threat of being blacklisted. Furthermore, The Weinstein Company, Miramax, and others in the industry are alleged to have covered up Mr. Weinstein’s harassment. The recent class action filed against the University of Southern California (USC) is another example of this trend. This claim states that Dr. Tyndall, a gynecologist at USC, sexually harassed patients and the university failed to stop his behaviour.3 The central allegation in these claims is that the employer was aware of, turned a blind-eye to and failed to prevent the perpetrator’s behaviour.

In Canada, we have seen a similar trend in claims against Bruce Monk of the Royal Winnipeg Ballet,4 and Gilbert Rozon of Just for Laughs.5

Environments with a Noticeable Gender Imbalance

Another trend that we have identified in our review of U.S. sexual harassment and discrimination class actions is that claims are more likely to arise in highly gendered work environments with pronounced divisions in gender roles: the mining industry, the entertainment industry, a highly stratified retail environment, a women’s prison, etc.

This trend has been visible since the very beginning of sexual harassment class actions. The first U.S. sexual harassment class action was commenced against the mining company Eveleth Taconite Co.6 The plaintiffs alleged that the company’s predominantly male employees and management engaged in verbal and physical sexual harassment, gender-based discrimination, and sexual stereotyping of female subordinate employees.

A similar gender dynamic is apparent in almost every U.S. sexual harassment class action since. For example, Sterling Jewelers is currently involved in a class action arbitration in which the plaintiffs allege that the company’s principally male managers created an environment in which female employees were expected to accede to sexual overtures, including soliciting sexual relations as a quid pro quo for employment benefits.

Class actions tend to be filed in work environments where sexual harassment and abuse are “open secrets,” forcing employers to grapple with years of unresolved complaints when a legal claim is brought forward.

An identical trend is developing in Canada. We have seen claims commenced against the military and police forces,7 the entertainment industry, and the airline industry. For instance, a proposed class action commenced against West Jet—a company operating in an industry with a pronounced divide between male pilots and female flight attendants—alleges that the company failed to properly investigate and respond to claims of sexual harassment.

Failure to Appropriately Resolve Complaints

Finally, our review of the U.S. experience suggests that the surrounding context and history of mishandled or ignored complaints are relevant precursors to the commencement of class action litigation. Class actions don’t appear overnight—the majority of claims commenced to date in the U.S. have emerged after decades of employers allegedly disregarding or inadequately responding to complaints of harassment and discrimination. In Chi v USC, the plaintiffs alleged that complaints about Dr. Tyndall’s behavior began to surface in the 1990s, but USC did not take action until 2016. A recent class action filed against the New Jersey Department of Corrections tells a similar story. The plaintiffs claimed that there has been decades of recognized and documented sexual assault and harassment of female inmates by prison employees, agents, administrators and other inmates at Edna Mahan Correctional Facility for Women.

In Canada, a similar pattern is emerging. The plaintiffs in the lawsuit against the RCMP alleged that female employees were subjected to sexual discrimination, bullying, and harassment as far back as 1974—the first year that women became eligible to join the institution.8 In two class actions commenced against the Canadian Armed Forces, the plaintiffs complaints go back even farther.9 These claims alleged systemic and historical failures to prevent sexual assault and harassment by discouraging victims from reporting, failing to have proper training and policies in place, failing to investigate reported incidents, and retaliating against members who come forward.

Together, these examples underscore that class actions tend to be filed in work environments where sexual harassment and abuse are “open secrets,” forcing employers to grapple with years of unresolved complaints when a legal claim is brought forward.

Suggestions for Employers

Implement Comprehensive Workplace Harassment Policies

Since the United States Supreme Court’s 2011 decision in Wal-Mart v Dukes, U.S. courts have consistently reinforced the importance of rigorous workplace harassment policies. In particular, the implementation of these policies has assisted employers in resisting claims that they have a policy or practice of encouraging or facilitating harassment.

Anti-harassment policies need to be consistently enforced. Employers that make exceptions to these policies or fail to follow their requirements are putting their employees and the success of the company at real risk.

However, in the #metoo era, the mere existence of a workplace harassment policy is not an adequate defense against litigation. For example, in the lawsuit filed against USC, the university admitted that official complaints about Dr. Tyndall’s behavior did not receive proper investigation. To be an effective tool to defend against litigation, anti-harassment policies must be actively understood and consistently applied.

A study conducted on behalf of the Government of Canada found that, although the majority of workplaces have sexual harassment and violence prevention policies in place, employees do not receive training on them.10 This is a strategic error on the part of employers. Anti-harassment policies are best deployed as a deterrent and first response against sexual harassment.

Employers should implement regular training sessions on these policies and include a review of their policy on anti-harassment as part of onboarding for new employees. Employers may also consider requiring employees and managers to sign-off on the policy on a yearly basis.

Finally, anti-harassment policies need to be consistently enforced. Employers that make exceptions to these policies or fail to follow their requirements when presented with complaints or information from whistle-blowers risk creating additional liability.

Promote and Maintain Diversity Across All Levels of the Organization

Increasing diversity may also be an effective means of reducing sexual harassment and discrimination claims. One of the key risk factors for sexual violence, harassment and discrimination is adherence to traditional gender norms. A study found that female respondents who experienced sexual harassment tended to work in environments with a higher ratio of men in positions of power. Furthermore, 94% of people who reported experiencing sexual harassment were women.11

The benefit of greater diversity in the workplace doesn’t only apply to gender diversity. The same study conducted on behalf of the Government of Canada found that people with disabilities and members of a visible minority were more likely to experience harassment than other groups. For the greatest impact, employers should interpret “diversity” as a broad move towards multiple types of inclusion.12

Implement Appropriate Investigation and Dispute Resolution Mechanisms

If sexual harassment complaints do arise, it is essential that employers have appropriate investigation and dispute resolution mechanisms in place. Failing to put in place such processes represents a significant liability for employers. However, these processes must be rigorously adhered to.

Having a nominal dispute resolution mechanism in place is not effective if complainants fear retribution if they speak out, or fail to receive effective follow up after making a complaint. Employers should ensure that (a) employees are actively made aware of these channels; (b) managers are trained on the availability of the channels and what their roles are; and (c) these procedures are followed with consistency.

The importance of maintaining rigorous investigation and dispute resolution mechanisms is particularly acute in Ontario, which has eliminated limitation periods for proceedings based on sexual assault. Similar legislative changes have occurred across Canada in British Columbia, Saskatchewan, Manitoba and Nova Scotia.

Given the developing area of the law, coupled with the broader social and political pressures of the #metoo movement, Canadian employers should be vigilant with regards to workplace sexual harassment. Employers can protect themselves and their employees by enforcing rigorous anti-harassment policies that focus on prevention, workplace diversity, and the effective dispute resolution.

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1 For example, see Jenson v. Eveleth Taconite Co., the Sterling Jewelers class action arbitration, and the claim commenced against the New Jersey Department of Corrections.

2 Jane Doe v. The Weinstein Company Holdings

3 Chi v. University of Southern California

4 Doucet v. The Royal Winnipeg Ballet.

5 Les Courageuses c. Gilbert Rozon.

6 Jenson v. Eveleth Taconite Co.

7 See Davidson v. Canada (Attorney General); Merlo v. Canada (Attorney General); Heyder, Graham, Schultz-Nielsen v. the Attorney General; Ross, Roy, Satalic v. Her Majesty the Queen; etc.

8 Davidson v. Canada (Attorney General) and Merlo v. Canada (Attorney General).

9 Heyder, Graham, Schultz-Nielsen v. the Attorney General and Ross, Roy, Satalic v. Her Majesty the Queen

10 Harassment and Sexual Violence in the Workplace: Public Consultation (2017). Online: http://www12.esdc.gc.ca/sgpe-pmps/h.4m.2@-eng.jsp?utm_campaign=not-applicable&utm_medium=vanity-url&utm_source=canada-ca_publicentre-esdc

11 Ibid.

12 Ibid.

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