Brenda Feis quoted in Bloomberg News About Confidentiality of Sexual Harassment Investigations and Settlements

Article Snapshot:

• Federal agencies look to draw line between privacy, labor rights
• Confidentiality may encourage victims, shield alleged harassers

By Chris Opfer

Aug. 8 — Two federal agencies have discussed trying to resolve a rift over a central question highlighted in the #MeToo movement: Should sexual harassment investigations at work be confidential?

An Equal Employment Opportunity Commission task force says harassment probes should be kept as private as possible to encourage victims to come forward, guard against retaliation, and protect witnesses and persons accused of bad behavior. But the National Labor Relations Board in a 2015 ruling said workers’ “concerted activity” right includes the freedom to talk to each other about job-related complaints.

“Some victims want confidentiality, some want to blow the story open on a predator,” Brenda Feis, a Chicago attorney who represents mostly management-level workers in sex harassment cases, told Bloomberg Law. “By keeping victims in the shadows and not letting them know that there may be other victims out there, the Weinsteins of the world are able to thrive.”

The EEOC and the NLRB have had at least preliminary talks about threading a needle between their competing positions, sources tell Bloomberg Law. The extent of those discussions isn’t clear, but the idea is to give businesses a better idea of when they can force investigations to be on the hush.

The talks, which started under the NLRB’s previous general counsel, come amid growing public attention to sexual harassment stemming from allegations against high-profile figures, like Hollywood mogul Harvey Weinstein. That has emboldened victims of sexual assault and harassment to come forward and has sent businesses scrambling to shore up prevention and investigation efforts.

“The board’s decision is problematic because it makes it incredibly difficult to conduct investigations with the confidentiality that you need to protect the integrity of the investigation and protect the people involved,” Jonathan Segal, a Philadelphia attorney who represents businesses in harassment and other cases, told Bloomberg Law. “There is sometimes unwarranted shame that people who have been harassed feel and sometimes there is warranted fear of retaliation.”

The EEOC is the agency tasked with enforcing a federal ban on sex harassment in the workplace. Acting Chairwoman Victoria Lipnic (R) and Member Chai Feldblum (D) have made that a priority for the commission in recent years.

“Commissioner Feldblum has told us she is keen on seeing joint guidance from the two agencies so that employees can have clarity on this issue,” Sharon Masling, Feldblum’s chief of staff, told Bloomberg Law.

The NLRB enforces a separate labor law that gives workers the right to unionize and “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” General Counsel Peter Robb signaled shortly after joining the agency last year that he wants to revisit the board’s approach to the confidentiality question.

An NLRB spokeswoman didn’t immediately respond to Bloomberg Law’s request for comment.

‘We Need to Break the Veil of Silence’

The case that brought the conflict to a head came in 2015, when the board considered unfair labor practice claims centering on an Arizona hospital worker who complained about being told to use hot water from a coffee machine to sterilize surgical equipment. The board’s Democrat majority said in Banner Health System that the hospital violated federal labor law by asking the worker not to discuss the situation with his colleagues while an investigation was pending.

An employer can require confidentiality in a workplace investigation only if it has a “legitimate and substantial business justification” that outweighs workers’ right to engage in concerted activity, the board said. That case-by-case analysis includes sexual harassment investigations, the board said, pointing to a separate 2002 decision in which the NLRB shot down a company’s blanket confidentiality rule.

“The Banner Health case in a way anticipates the #MeToo movement by saying, ‘Look, we need to break the veil of silence,’” Feis said. She added that the decision aligns with efforts to scrap forced arbitration and nondisclosure agreements that allow harassers to avoid public scrutiny.

Feis also said the board acknowledged that a business may have a legitimate interest in protecting confidentiality in certain situations. The Banner Health decision puts the burden on an employer to explain those reasons.

Critics say the board is forcing human resources officers to make complicated legal decisions based on the circumstances of each particular case.

“How can you really know at the outset whether you’re going to have a specific reason for confidentiality?” Segal said.

“If it’s a case involving nonconsensual touching, I don’t think you have to say, ‘Let me tell you why this is something you should be concerned about keeping confidential,” he added. “And, from a practical standpoint, what employer is going to say, ‘I’m telling you this because you’re the kind of person who may destroy evidence or be retaliated against?’”

Segal and Feis were part of the EEOC’s task force of lawyers, academics, and advocates brought together in 2016 to discuss workplace harassment. The EEOC’s Lipnic and Feldblum issued a report based on input from the task force some 16 months before allegations of sexual assaults by Hollywood producer Weinstein launched the #MeToo movement.

“Investigations should be kept as confidential as possible, recognizing that complete confidentiality or anonymity will not always be attainable,” they wrote in the report.

Board Teeing Up Question?

Meanwhile, the NLRB may revise its stance on confidentiality in workplace investigations before any meeting of the minds with the EEOC. The board has moved to overturn a number of Obama-era decisions since Republicans took control of the NLRB late last year.

“We are returning already to a more normal view of what is protected concerted activity,” Mark Kisicki, who represented Banner Health in the NLRB case, told Bloomberg Law. “A sexual harassment complaint might implicate other employees, but that doesn’t mean that requiring confidentiality is inhibiting protected concerted activity.”

The NLRB in December loosened restrictions on general workplace rules that don’t immediately appear to infringe on workers’ concerted activity rights. Robb, in a memo interpreting that decision, said the board’s lawyers should look at the actual impact the rule has rather than its potential to limit protected activity.

Robb has also instructed the board’s regional enforcers to send cases involving the confidentiality issue to the NLRB’s division of advice.

Feis said one way to resolve the issue is to give employees the right to decide whether investigations should stay private. Kisicki suggested the board may limit the time period on gag orders or try to distinguish between complaints that raise workers’ collective concerns and those that focus on an individual employee’s rights.

“I think we’re going to see a much more reasonable balance that takes into consideration that an employee may not want everyone to know about it when they get investigated,” Kisicki said.

Brenda Feis Featured in American Bar Association Spotlight

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Brenda Feis Quoted in Bloomberg News on Recent Seventh Circuit Retaliation Decision

Article Snapshot:

• Jury reasonably found employer’s conduct reprehensible
• Amount within Title VII’s damages cap generally won’t be overturned
• Decision helpful for employees, a cautionary tale for employers

By Kevin McGowan

Nov. 29 — A female manager fired after she filed a sexual harassment charge against SigmaTron International Inc. can keep an award of $300,000 in compensatory and punitive damages, a federal appeals court in Chicago ruled (Gracia v. SigmaTron Int’l, Inc., 2016 BL 395261, 7th Cir., No. 15-3311, 11/29/16).

SigmaTron, a circuit board manufacturer that employs about 2,500 workers in U.S. and foreign plants, was found liable for retaliation after a jury trial.

The company argued that $250,000 in punitive damages to former employee Maria Gracia must be vacated as “excessive” and the product of jury bias. The jury awarded Gracia more than she had requested even though it found SigmaTron liable only for retaliation, not sexual harassment, the company said.

But the U.S. Court of Appeals for the Seventh Circuit declined to overturn a damages award that fits within Title VII’s $300,000 damages cap.

The decision isn’t surprising, but it’s helpful for workers who may face retaliation for bias complaints, according to lawyers who represent employees.

‘Great Language’ for Discrimination Plaintiffs

Courts generally defer to jury awards supported by sufficient evidence and within the relevant damages cap, said Carolyn Wheeler, senior counsel with Katz Marshall & Banks in Washington.
“I don’t find it surprising that the jury would award punitive damages on the retaliation claim even though it found against the plaintiff on her harassment claim,” Wheeler said in an e-mail to Bloomberg BNA Nov. 29.
“The retaliation was much more obvious and egregious in terms of the company’s officials engaging in a cover-up and creating false records to justify the termination,” Wheeler said. “That is exactly the type of conduct that punitive damages were designed to deter.”
Wheeler, a former Equal Employment Opportunity Commission appellate attorney, wasn’t involved in the SigmaTron case.
The court’s compensatory damages discussion also is helpful, said Brenda Feis of Feis Goldy LLC in Chicago, who represents employees.
In accord with Seventh Circuit precedent, the court said a jury can award damages for pain and suffering based on the fired employee’s testimony alone, Feis told Bloomberg BNA.
There’s no requirements for medical or expert testimony and in this case, even Gracia’s relatively brief testimony that she was depressed was held sufficient, Feis said.
The decision is “nothing new” but it includes “some great language” for discrimination plaintiffs and their lawyers, she said.
The court gave “pretty standard treatment” to the damages issues raised on appeal, said Kathryn Korn, a Chicago attorney who represented Gracia.
The district court also awarded Gracia $75,000 in equitable relief, representing back pay and benefits, Korn told Bloomberg BNA Nov. 29.
That amount wasn’t appealed by SigmaTron but it could have been lost if the Seventh Circuit had reversed on liability, Korn said.
Attorneys representing SigmaTron weren’t immediately available for comment.

Jury Found ‘Reprehensible’ Conduct

The jury had sufficient evidence to find SigmaTron’s conduct “reprehensible” as it determined Gracia was fired on trumped-up charges two weeks after the company received her EEOC harassment charge, the court said Nov. 29.
There’s also “no rule prohibiting a jury from awarding more in damages than a plaintiff requests,” Judge Ilana Diamond Rovner wrote in an opinion joined by Judges Joel M. Flaum and Diane S. Sykes.
Punitive damages are available under Title VII if an employer discriminates with “malice or reckless indifference” to a worker’s federally protected rights.
The U.S. Supreme Court said that means “an employer must at least discriminate in the face of a perceived risk” that its actions violate the anti-discrimination laws.
That standard is met because the jury found SigmaTron retaliated against Gracia and then tried to hide its misdeeds by “creating a false paper trail” purporting to show she engaged in misconduct worthy of discharge, the court said.
“One of the purposes of punitive damages is to limit” an employer’s “ability to profit from its wrongful conduct by escaping detection,” the court said.

Ratio Between Awards No Problem

SigmaTron argued the five-to-one ratio between the $250,000 punitive damages award and the $50,000 in compensatory damages makes the punitive award suspect.
But such a ratio between punitive and compensatory damages has been approved in prior cases, the court said.
Title VII cases are “very fact-specific,” and the court “will not normally disturb an award at or near the statutory cap,” because that decision largely rests with the jury, the Seventh Circuit said.

‘Easily Prevails’ on Liability

SigmaTron also appealed the jury’s finding of liability for retaliation under Title VII.
But the Seventh Circuit said Gracia “easily prevails” when the court credits the evidence in her favor and disregards evidence in SigmaTron’s favor that the jury wasn’t required to believe.
The dispute at trial was whether Gracia’s supervisor and upper management decided to fire her because of her sexual harassment charge or because Gracia mishandled an incident in which a subordinate employee used the wrong type of “solder” on a circuit board.
The jury was free to believe the testimony of Gracia and some of her former colleagues that the explanation for her discharge was a pretext, the court said.
The timing of her termination for what normally wouldn’t be a firing offense also bolsters the jury’s finding of retaliation, the court said.
Hall Adams III in Chicago also represented Gracia. Howard & Howard Attorneys PLLC represented SigmaTron.