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When Is It “A Bit” of Sexual Harassment in the Workplace??

Breaking: Verdict In Alexandra Marchuk v. Faruqi & Faruqi

We’ve been eagerly awaiting the verdict in Marchuk v. Faruqi, the high-profile sexual harassment lawsuit filed by Alexandra Marchuk against her former firm and one of its most prominent partners, Juan Monteverde. Trial started on January 12. The jury got the case on Tuesday and deliberated for about eight hours over three days.

And now the jury has spoken. Here’s a report from Law360 (sub. req.):

A New York federal jury on Thursday found Faruqi & Faruqi LLP and partner Juan Monteverde partially liable for creating a hostile work environment in a closely watched sexual assault case that has cast a harsh spotlight on the securities boutique.

An eight-member jury found Faruqi and Monteverde liable on former associate Alexandra Marchuk’s New York City law hostile work environment claims and partially granted her request for damages. She sought $2 million in damages. She was awarded $90,000 plus punitive damages to be determined later.

The economic damages — back pay, front pay, compensatory damages — are probably disappointing for Marchuk. But who knows what the punitive-damages award might bring?

On the bright side for the defendants, Monteverde and Faruqi were cleared of federal and state law claims of creating a hostile work environment. Recall also that Judge Alvin Hellerstein narrowed the case by dismissing various other claims, including Marchuk’s defamation and retaliation claims.

As of now, until we get the punitives, the outcome can’t be called as a huge win (or loss) for either side. This makes some sense given that both sides had their strengths and weaknesses at trial. But if the punitives turn out to be modest, then chalk this up as a defense victory — big headlines, small damages.

UPDATE (4:35 p.m.): Per Max Stendahl of Law360, who has been doing a great job covering the trial, the jury has reached a verdict on punitive damages. We’ll update as soon as it’s announced.

UPDATE (4:45 p.m.): From Max Stendahl: “Jury awards $45,000 against partner Juan Monteverde, $5,000 against Faruqi [as a firm].”

UPDATE (4:55 p.m.): Said one observer to me just now, “So all of that, and she ends up with $140k?

****************
And now, the EEOC regs:

The U.S. Equal Employment Opportunity Commission


Questions and Answers on Employer Liability for Harassment by Supervisors

Title VII of the Civil Rights Act (Title VII) prohibits harassment of an employee based on race, color, sex, religion, or national origin. The Age Discrimination in Employment Act (ADEA) prohibits harassment of employees who are 40 or older on the basis of age, the Americans with Disabilities Act (ADA) prohibits harassment based on disability, and the Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits harassment of an employee based on genetic information. All of the anti-discrimination statutes enforced by the EEOC prohibit retaliation for complaining of discrimination or participating in complaint proceedings.
The Supreme Court issued two major decisions in June of 1998 that explained when employers will be held legally responsible for unlawful harassment by supervisors. The EEOC‘s Guidance on Employer Liability for Harassment by Supervisors examines those decisions and provides practical guidance regarding the duty of employers to prevent and correct harassment and the duty of employees to avoid harassment by using their employers’ complaint procedures.

1. When does harassment violate federal law?

  • Harassment violates federal law if it involves discriminatory treatment based on race, color, sex (with or without sexual conduct), religion, national origin, age, disability, genetic information, or because the employee opposed job discrimination or participated in an investigation or complaint proceeding under the EEO statutes. Federal law does not prohibit simple teasing, offhand comments, or isolated incidents that are not extremely serious. The conduct must be sufficiently frequent or severe to create a hostile work environment or result in a “tangible employment action,” such as hiring, firing, promotion, or demotion.

2. Does the guidance apply only to sexual harassment?

  • No, it applies to all types of unlawful harassment.

3. When is an employer legally responsible for harassment by a supervisor?

  • An employer is always responsible for harassment by a supervisor that culminated in a tangible employment action. If the harassment did not lead to a tangible employment action, the employer is liable unless it proves that: 1) it exercised reasonable care to prevent and promptly correct any harassment; and 2) the employee unreasonably failed to complain to management or to avoid harm otherwise

4. Who qualifies as a “supervisor” for purposes of employer liability?

  • An individual qualifies as an employee’s “supervisor” if the individual has the authority to recommend tangible employment decisions affecting the employee or if the individual has the authority to direct the employee’s daily work activities.

5. What is a “tangible employment action”?

  • A “tangible employment action” means a significant change in employment status. Examples include hiring, firing, promotion, demotion, undesirable reassignment, a decision causing a significant change in benefits, compensation decisions, and work assignment.

6. How might harassment culminate in a tangible employment action?

  • This might occur if a supervisor fires or demotes a subordinate because she rejects his sexual demands, or promotes her because she submits to his sexual demands.

Our opinion? (Not that anyone asked but if that’s the criteria, the Bulletin would be a weekly blank page.) Defense win.  Let’s face it – $140,000 for all of the effort that undoubtedly went into the case to arrive at this trial level?  No clear “message” was sent to employers in similar situations other than “Gentlemen, mind your manners”.  

I find it interesting that the partners fined were found “partially guilty” of creating a hostile work environment.   Were there other supervisors who were more culpable for allowing a sexually harassing environment to exist but had not been named? <tongue boring a hole through cheek> We’ll await the actual trial transcripts and report back.

For employers/supervisors:  Keep it in your pants/under your skirt and your hands (among other body parts) to yourself and mind your words.  Seems simple enough, doesn’t it?  Yes, a charged environment is highly competitive and there can be raging egos and through-the-roof biochemistry surges but check your bank account first and be mindful of the firm’s reputation.

BNI Operatives:  Street smart; info savvy.

As always, stay safe.

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