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Winter, 2006
Employment Law Bulletin

Massachusetts Employers May Be Liable for Sexual Harassment by Employees of a Third Party
By Daniel J. Blake

The Commonwealth’s highest court recently considered whether and under what circumstances an employer can be liable for sexual harassment perpetrated by third parties, rather than by its own employees. In Modern Continental v. Massachusetts Commission Against Discrimination, 445 Mass. 96 (2005), the Court decided that an employer can indeed be liable for sexual harassment by third parties, but that the employer may avoid such liability by taking prompt and appropriate corrective action to remedy the harassing conduct.

The case arose on a Big Dig work site. The plaintiff in the case was a woman employed by Modern Continental as an apprentice carpenter. Shortly after her hire, male ironworkers employed by a subcontractor spied on the plaintiff and locked her into a portable toilet facility. After she complained to her supervisor, vulgar graffiti directed at the plaintiff appeared on the toilet facility. Modern Continental discovered other inappropriate graffiti in the following weeks.

Modern Continental took a number of steps in response, including relocating the ironworkers away from the plaintiff, asking the subcontractor to remove one of its employees who had admitted responsibility for some of the conduct, and taking security measures regarding the toilet facilities. These efforts were not completely successful in preventing the harassment.

The plaintiff eventually left her job and brought sexual harassment charges against Modern Continental and the subcontractor at the Massachusetts Commission Against Discrimination (“MCAD”). The subcontractor settled with the plaintiff. The MCAD found that Modern Continental violated the law against sex discrimination, even though employees of the subcontractor and not its own employees committed the harassment. Modern Continental appealed, and the case eventually reached the Massachusetts Supreme Judicial Court (“SJC”).

The SJC said that under Massachusetts law an employer can indeed be liable for sexual harassment by the employees of a third party such as a subcontractor. It noted that an employer who passively tolerates the creation of a hostile work environment by employees of another entity in fact encourages such misconduct and “effectively communicates to the victim of harassment that her employer does not care about the hostile environment in which she must work.”

The SJC went on to say, however, that an employer is not automatically liable for harassment of its employees by third parties. Rather, the standard is whether the employer acted reasonably under the circumstances, and not whether its efforts were ultimately successful in completely preventing the harassment. The SJC held that Modern Continental had acted reasonably by taking prompt measures that were calculated to end and deter the harassment and that those measures were largely successful. Based on this determination, the SJC reversed the finding of discrimination.

Particularly in light of the Modern Continental case, employers should continue to take prompt and reasonable action in response to incidents of harassment, even when the misconduct involves the employees of third parties.

Employers at Risk for Failure to Maintain Proper Records

As two recent cases illustrate, courts continue to be intolerant of employers’ shortcomings with regard to recordkeeping procedures. In Wiedmann v. The Bradford Group, Inc., 444 Mass. 698 (2005), an employee claimed that her former employer had not paid commissions owed to her and she filed a claim under the state wage law. In the course of the lawsuit, the plaintiff discovered that the employer could not produce certain employment records, including documents showing how her commission payments were calculated. Under Massachusetts law, wage records must be maintained for a minimum of two years, and employment records for a minimum of three years. Further, records cannot be disposed of in the event that the employer has notice, as it did in the Wiedmann case, that an employee is pursuing a claim against it.

The plaintiff asked the trial court to impose sanctions on the employer based on its inability to produce her employment records. The employer argued that its paper records had been lost during the closing of its Boston office and that its electronic records were not retrievable because of corrupted computer software. The trial court noted, however, that the employer had failed to respond to a request from the plaintiff when records were available and that the records had apparently been destroyed thereafter. It ordered as a sanction that the employer could not challenge the plaintiff’s calculations of her earned commissions, or assert a claim that the plaintiff was in fact overpaid based on the employer’s commission formula. The Massachusetts Supreme Judicial Court agreed with the trial court, finding that the employer’s destruction of documents when it knew that the plaintiff had a potential claim for unpaid commissions was improper.

A Massachusetts federal court also had occasion recently to consider an employer’s recordkeeping practices. The plaintiff in Briddell v. Saint Gobain Abrasives, Inc., 2005 WL 3065925 (D. Mass. 2005), brought race discrimination claims against his employer. In an effort to show that the employer had engaged in a pattern of discriminatory conduct, the plaintiff sought records regarding disciplinary actions against other employees for certain types of offenses over a five-year period. The employer argued to the court that the request was too burdensome. The employer pointed out that disciplinary records were maintained as part of each employee’s general personnel record and that there was no way for the employer to locate information on particular types of disciplinary infractions without reviewing every personnel file. The employer told the court that it would take 175-200 hours to review the personnel records of some 700-800 employees in order to locate instances of the requested types.

Although it limited the information the plaintiff could obtain, the court did order the employer to produce to the plaintiff documents showing safety violations over the five-year period. In doing so, the court noted that the employer’s “own record keeping policies … have contributed significantly to the burden imposed on it” and that it was “inconceivable” that the employer “would not have a more rational method of tracking which employees have been subjected to disciplinary action.”

The Weidmann and Briddell cases confirm that employers should pay careful attention to maintaining employment records. Where such records are voluminous, practices such as indexing disciplinary infractions may aid the employer’s analysis of other disciplinary matters and save the employer time and effort in the event of future litigation.

Daniel J. Blake is a member of the firm’s Employment Law Practice Group, and practices primarily in our Boston office. He can be reached at [email protected] or (617) 368-2504. You can contact the Employment Law Practice Group through its Coordinator, Mary Jo Kennedy, at [email protected] or (413) 272-6242.