Under Title VII of the Civil Rights Act and the New Jersey Law Against Discrimination, an employer can be held liable for acts of unlawful harassment committed in the workplace against its employees by other individuals, including supervisors, co-workers and third-parties.

There are several types of liability that may be imposed on employers for unlawful workplace harassment or discrimination. Employers can be held liable for equitable relief, which may require reinstatement of the individual and/or remediation of the hostile work environment. Employers also may be held vicariously liable for compensatory damages caused by the discriminatory acts of its employees. Punitive damages (the amount of which is unlimited in New Jersey ) may also be assessed against an employer when the harassment was either authorized, participated in, or ratified by the employer's upper management. And, often one of the most significant components of damages against an employer, is liability for the plaintiff's attorneys' fees.

Establishing a “safe harbor” can help employers prevent and defend against these types of claims and the potential corresponding damages.

Under both federal and state laws, there are steps an employer can take to limit its exposure in a harassment action. Courts have held that a “safe harbor” from vicarious liability may apply if an employer can show it has exercised due care to prevent a hostile work environment by devising and supporting an active anti-discrimination system.

An effective anti-discrimination system includes a variety of components, primarily:

• A formal policy prohibiting unlawful harassment and discrimination in the workplace, which is published and available to all employees;
• Periodic distribution of the policy to employees through updated and accurate employee handbooks;
• An effective and practical grievance process, which employees who are subject to harassing conduct may utilize, and which includes clear procedures for the reporting of any complaints through multiple channels;
• Prompt and thorough investigation of all harassment and discrimination claims;
• The implementation of effective remedial measures, when necessary; and
• Mandatory training on harassment identification, prevention and remediation for all supervisors and non-supervisory employees.

In essence, an anti-discrimination system that evidences an employer's unequivocal commitment to create a work environment free from harassment, which is equipped with mechanisms for an employee to report and obtain resolution of such behavior, affords the highest potential for protection against liability. Although there is no guaranteed “formula, ” taking all of these steps puts an employer in the best possible position to defend itself against any claims that might arise.

No. Although a critical piece of any anti-discrimination system, the mere presence of a policy alone will not create safe harbor protection in a harassment lawsuit. An employer must take additional steps to create a multi-faceted program to prevent unlawfully harassing behavior and to address and remediate complaints that are brought to its attention. The courts have recognized that mandatory training is one way to bolster an existing anti-discrimination system.

Although you cannot prevent individuals from filing suit, the institution and consistent adherence to a well-planned anti-discrimination program provides an employer with multiple benefits. The creation of a well-educated workforce and an environment that is intolerant of harassment will reduce the incidences of harassing conduct and create a more positive, productive and successful workplace. Similarly, the provision of established channels for the reporting and resolution of inappropriate behavior also may reduce the number of lawsuits filed. Finally, should a suit be brought against an employer, an active and effective anti-discrimination program can operate as a safe harbor and protect the employer from vicarious liability for damages.