“Sticks and stone may break my bones”…but names in the workplace may cost you a fortune! The Proposed Workplace Bullying Law and its Likely Consequences for Massachusetts Employers.

When I was a newly minted attorney a superior once hurled the f-bomb at me because he did not like the answer I was giving to a legal question. He told me I had “a (expletive deleted) annoying way of never answering a question directly.” When I related the incident to another supervisor, he said the fellow had no business speaking to me that way.

As insulting as the incident was, should it provide grounds for a lawsuit? It very well may, if a certain bill – “[a]n Act addressing workplace bullying, mobbing, and harassment” – S. 916 -becomes law during the next legislative session on Beacon Hill.

Senate Bill 916 provides simply that “[n]o employee shall be subjected to an abusive work environment.” An “abusive work environment” is defined as “an employment condition where any employee, acting with malice, subjects another employee to abusive conduct so severe that it causes tangible harm to the target of the abusive conduct[.]” The term “tangible harm” is defined broadly as “psychological harm or physical harm.”

The term “abusive conduct” is defined to include: “repeated infliction of verbal abuse such as the use of derogatory remarks, insults and epithets; verbal or physical conduct of a threatening, intimidating or humiliating nature,” and sabotaging or undermining an employee’s work performance. Attempts to exploit an employee’s known psychological or physical vulnerability also qualify as abusive conduct under the proposed law.

The proposed bill makes the employer “vicariously liable” for an abusive work environment created by its employees. The “bullied” employee is given a “private right of action,” i.e., a right to sue the employer, and may be awarded punitive damages as well as attorneys’ fees. The Act also allows the bullied employee to sue a perpetrator individually.

While the intent of the Act may be laudatory – an aspirational condition referred to as the “Healthy Workplace” – the effect on Massachusetts businesses should S. 916 become law promises to be draconian. This is so because the proscribed activity is comprised of vague and  hazy behavioral concepts which may lend themselves well to the “I know it when I see it” subjective standard of analysis, but which tend to defy objective scrutiny and definition.

In the context of a lawsuit, the Act allows the employer several so-called affirmative defenses. For instance, where “[t]he complaint is based on an adverse employment action reasonably made for poor performance, misconduct, or economic necessity.” The term “adverse employment action” is defined nebulously as “an outcome which negatively impacts an employee.” This definition includes, but is not limited to, “termination, constructive discharge, demotion, unfavorable reassignment, failure to promote, disciplinary action, or reduction in compensation.”

Under the proposed statutory framework, the employer is left having to prove in court that the complained about conduct did not rise to the level of “bullying.” The employer is saddled with the burden of demonstrating that any “adverse employment action” was the result of legitimate business necessity, and not part of the unlawful employment practice complained of by the employee.

It is not too far a stretch to imagine that under the auspices of S. 916 the abusive conduct complained of – such as the sabotaging or undermining of an employee’s work performance – will become, from the plaintiff’s perspective, part and parcel of any adverse employment action such as “demotion, unfavorable reassignment, failure to promote,” and the like. Thus, a depression (a condition fitting the “tangible harm” definition) stemming from the failure to obtain that much-sought-after promotion may give rise to a civil suit. All plaintiff need do is allege that the failure to promote was motivated by malice or active ill will.

And it is unlikely that such a complaint would be amenable to disposition on a motion to dismiss. There are far too many complicated evidentiary issues put into play by the statute’s vague definitions – issues such as motivation, state-of-mind, degree of severity and the like, which are extremely unlikely to be determined one way or the other by a court reviewing initial allegations. A reviewing court is also empowered with the ability to order the offending conduct to stop, to reinstate the bullied employee, or to remove the offending party or bully from the workplace.

All of this means that the employer faced with a “bullying” lawsuit will be compelled to either settle-out quickly, or proceed with a very costly, time-consuming litigation process, the final outcome of which cannot be predicted given the extremely subjective nature of the “abusive work environment” concept intoned by the proposed law.

Ironically, under the present state of federal law, an employer may not be able to sufficiently protect itself via promulgation of an anti-bullying code of conduct.  The National Labor Relations Board ruled recently that employee handbook language which included a courtesy rule requiring employees to be “courteous, polite and friendly” to one another, and refrain from being disrespectful or using profanity, could be considered unlawful.

Massachusetts businesses are already confronted with a bramble bush of rules and regulations relative to the employer/employee relationship. Senate bill 916, while well-intentioned, promises to create an extremely difficult and unacceptably expensive  “walking on eggshells” work environment.

Employer liability for harassment in the workplace is before the U.S. Supreme Court.  On November 26, 2012, the Supreme Court heard oral argument in Vance v. Ball State University.  At issue is the scope of the “Supervisor” Liability Rule in discrimination cases under Title VII.  This is a long awaited case on who qualifies as a “supervisor” for purposes of establishing employer liability in the workplace context.

The determination of whether there is a basis for employer liability under Title VII depends on whether the harasser is a supervisor or a co-worker.  In Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), the Supreme Court held that an employer is vicariously liable under Title VII for severe or pervasive harassment of an employee by a supervisor.  This Supervisor Liability Rule applies even if the employer is unaware of the discrimination.  On the other hand, if the employee’s harasser is a co-employee, the employer is not liable unless the employer was negligent in allowing the conduct.

In Vance, an African-American server in the Banquet & Catering Department at Ball State University complained that she was continually harassed at work due to her race by her co-workers.  One of those co-workers oversaw and directed plaintiff’s daily work but did not have the power to hire or fire plaintiff.  In upholding summary judgment for the employer, the Seventh Circuit held that harassment by an employee who was considered a supervisor by the employer because of the authority to direct and oversee the plaintiff’s daily work was not sufficient to make the employer strictly liable because the harasser did not have the power to take formal employment actions against the plaintiff.

Vance will decide a split in the Circuit Courts since Faragher and Ellerth.  The First, Seventh, and Eight Circuits limit the scope of “supervisor” liability to those harassers who have the power to hire, fire, demote, promote, transfer,  or discipline the victim.  The Second, Fourth, and Ninth Circuits expand liability to include harassment by those with oversight authority in the workplace generally.

A decision is expected before the end of the term in June 2013.  If the Supreme Court holds a “supervisor” includes the broader category of employees with authority to direct and oversee another employee’s daily work, employers could see an increase in claims of discrimination for hostile work environment.  Employers should continue to  implement anti-harassment training for all employees, including those with any supervisor or managerial job duties.

See Vance v. Ball State University, No. 11-556.