When Can You Fire an Employee Who Fails to Timely Report Alleged Sexual Harassment?

In a divided decision, the U.S. 7th Circuit Court of Appeals (whose decisions apply to all Wisconsin employers) recently ruled that an employer was justified in firing an employee for failing to immediately report alleged sexual harassment after he had been instructed to do so when he filed a previous complaint. However, employers should tread carefully when imposing arbitrary limits on reporting harassment.

Developer fired after complaining of sexual harassment

In 2006, Ryan Lord was hired as a video game developer for High Voltage Software, Inc. Shortly after he was hired, he complained that his male coworkers were sexually harassing him by making jokes about his romantic interest in a female audio technician. His coworkers allegedly said he had the “audio bug.” Lord reported the behavior to the HR director, who investigated the allegations and concluded that no harassment had occurred. Although the “audio bug” joke did not amount to sexual harassment, Lord was told to report further instances of harassment to his supervisor “immediately.” He was reassigned to a different development team to avoid “team dynamic issues.”

After Lord was transferred to his new work group, the coworker with whom he shared an office, Nick Reimer, began to slap him on the buttocks and make other unwanted physical contact with him. Lord allegedly told Reimer to stop, and other coworkers witnessed the behavior. Lord did not immediately report the incidents to his supervisor, but he did complain about Reimer’s work habits to his supervisor. A month after the first slapping incident occurred, Lord filed another complaint with the HR director.

The day after he filed the complaint, Lord received an unrelated disciplinary memo (apparently in error) for technical difficulties that occurred during a presentation by his supervisor. Lord disputed his involvement in the incident by sending a “heated” e-mail to his supervisor. In the e-mail, he accused the company of retaliating against him for complaining about sexual harassment and threatened to file a complaint with the Equal Employment Opportunity Commission (EEOC).

Lord and Reimer were fired the next day. Lord’s personnel file indicated he was terminated for four reasons: (1) failing to immediately report sexual harassment as instructed, (2) failing to report harassment to his supervisor, (3) insubordination, and (4) obsessively tracking the work habits and productivity of coworkers.

Lord sued High Voltage for sexual harassment based on a hostile work environment and retaliation in violation of Title VII of the Civil Rights Act of 1964. The district court dismissed his claims without a trial. Lord appealed, and the 7th Circuit affirmed the dismissal of his claims.

Same-sex ‘horseplay’ does not rise to sexual harassment

The 7th Circuit first addressed Lord’s sexual harassment claim. It ruled that neither the “audio bug” joke nor the buttocks slapping constituted sexual harassment. The court explained that under existing precedent, jokes with sexual overtones and “sexual horseplay” do not constitute unlawful harassment unless they are motivated by an intent to discriminate against someone because of his sex. The court explained that while unlawful same-sex harassment is possible, there was no evidence that Lord was targeted because he is male or that only men were subjected to the conduct. Also, there was no evidence that Lord was targeted because he is homosexual or doesn’t conform to gender stereotypes.

A reasonable belief of sexual harassment

Next, the court concluded that Lord’s retaliation claim failed because he did not have an objectively reasonable belief that the conduct about which he complained constituted unlawful sexual harassment. The court explained that while a retaliation claim isn’t doomed simply because the complained-of conduct is not an unlawful employment practice, an employee must possess “a sincere and reasonable belief that he is opposing an unlawful practice” for Title VII’s antiretaliation provisions to apply. According to the court, although Lord may have sincerely believed he was subjected to unlawful sexual harassment, his belief was not reasonable because the conduct he complained about was not motivated by his sex. Without evidence of a prohibited motive, his belief that he complained about sexual harassment was objectively unreasonable, even though it was perhaps sincere.

Failure to timely report harassment is grounds for discharge

Finally, the court ruled that even if Lord’s complaints were protected by Title VII, he could not establish he was terminated because he complained about alleged harassment. Even though he presented evidence of “suspicious timing” (he was terminated two days after complaining of alleged harassment), High Voltage overcame any inference of retaliation by showing it had legitimate reasons for firing him.

The court explained that High Voltage’s records reflected numerous independent grounds that supported Lord’s termination, including his insubordinate behavior, failure to timely report harassment, and other performance issues. The court noted that he did not dispute that he was instructed to “immediately” report further acts of alleged harassment and failed to do so. Because Lord could not show that the reasons were pretextual (insincere), his retaliation claim failed.

While the 7th Circuit affirmed the dismissal of Lord’s claims, one of the judges on the panel, Judge Ilana Rovner, dissented in part, arguing employers should not be allowed to fire employees for failing to abide by internal timelines for reporting harassment. The judge recognized that case law is clear that an employer faced with allegations that an employee was harassed may assert that he failed to timely report the harassment and that it responded promptly when informed. However, the judge argued that an employer could set arbitrary limits for reporting unlawful harassment beyond the 180- and 300-day deadlines set forth in Title VII. The dissent argued that allowing employers to set arbitrary deadlines would create a “chilling effect” and discourage employees from reporting harassment, particularly when harassment takes the form of a hostile work environment that develops over time. The dissent also disagreed with the majority’s opinion that Lord’s belief that he was subjected to unlawful sexual harassment was not reasonable. Lord v. High Voltage Software, Inc., 839 F.3d 556 (7th Cir., 2016).

Bottom line

Be wary of reading this decision as announcing a clear-cut rule that employees can be fired for failing to timely report workplace harassment. First, the employee was terminated for several nondiscriminatory reasons. Failing to timely report harassment was one of several independent reasons justifying his termination. It is unclear whether the timing alone would have established Lord’s pretext argument.

Second, imposing an arbitrary reporting deadline could result in retaliation claims. It may be acceptable to have a companywide policy that requires immediate reporting of workplace harassment, but such a policy should be applied uniformly and consistently. Imposing a reporting deadline for an employee who has already complained of harassment could easily lead to a claim that he is being treated harshly for reporting the problem. That was not an issue in this case because the court concluded that Lord’s first complaint regarding the “audio bug” jokes did not constitute protected activity. Employers should think twice before taking the approach used by High Voltage.

High Voltage’s handling of Lord’s harassment complaints was laudable otherwise. When he complained about the “audio bug” jokes, the HR director immediately investigated and documented the incident, even though it was trivial by all accounts. Lord was advised that the conduct he complained of was not discriminatory. Also, the company put in place a procedure for him to report other instances of alleged harassment. To avoid further disruption in the workplace, High Voltage reassigned him to another development team without a material change in pay, benefits, or conditions of employment.

Moreover, High Voltage documented concerns about Lord’s performance issues (e.g., “obsessively tracking” other employees’ activities). His personnel file reflected that his termination was based on four independent grounds. Finally, High Voltage promptly terminated the employee who was harassing Lord once it was informed of the behavior. In short, High Voltage created a clear record showing it responded to Lord’s complaints, took appropriate action, and fired him for reasons that were unrelated to his allegations of harassment.

This article, slightly modified to note recent updates, was featured in the January 2017 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.