United States: Avoid Paying The Piper: Tune Your Startup To Avoid Harassment Claims

Seyfarth Synopsis: Heeding some lessons from HBO's "Silicon Valley" can help employers avoid mistakes related to potential hostile work environments and discrimination that might occur in a startup environment.

In a world where life often imitates art, startups can avoid perceived gender bias and sexual harassment in the workplace by learning from the pitfalls of the socially awkward team at TV's fictional startup firm: Pied Piper. In honor of the upcoming return of Silicon Valley, we discuss five lessons for fledgling companies, using situations that may sound oddly familiar to fans of this geek squad.

1. She Loves Me Not: Workplace Romances Gone Wrong

Imagine that your programming engineer is flirting with one of the (few) female engineers on staff. She politely tries to discourage him, but he isn't taking the hint. What do you need to be concerned about?

Unwelcome conduct based on gender often forms the basis of a sexual harassment complaint. That's why it's important to take all complaints seriously and to both quickly and effectively address misconduct. An employer has a legal obligation to prevent harassment. Therefore, startups should have clear anti-harassment policies informing employees of their rights and outlining complaint and investigation procedures in place for addressing such complaints (more on this below).

But what, you ask, if the conduct is welcome? Does that mean all's well? Not quite. Although California law doesn't require employers to prevent all employees from dating or pursuing romantic relationships with their coworkers, a workplace romance between a supervisor and a subordinate can lead to prohibited conduct. Why? Such dalliances can lead to harassment or hostile work environment claims, as well as conflicts of interest and morale issues. In addition, some companies may want to consider implementing a "love contract" for peer relationships; review our prior blog post to see if one might suit your company.

2. Promise To Be Nice To Each Other? Pinky Swear? Not Enough

In the rush to open its doors, a startup might not contemplate certain policies until it becomes clear that they are necessary. For example, maybe you didn't think to launch your startup with a clear anti-harassment policy in place, but are prompted to by the recent hire of a woman into what was previously a small, all-male workforce (think Pied Piper). In this case, would the following policy suffice?

"Essentially, if you find the workplace hostile in any way you can submit a written complaint. It will be completely anonymous. Essentially don't do or say anything that might offend anyone. Okay? Thank you. That's the policy."

While well-meaning, the above policy falls short in a number of ways. California requires that employers prevent harassment in the workplace and take immediate and appropriate corrective action when harassment occurs. But blanket guarantees of confidentiality or anonymity are impractical because remedial action may require some form of disclosure of the complainant's identity. In addition, employer policies must use specific language that FEHA and DFEH regulations require. That includes clearly stating that the employer will not tolerate discrimination or harassment on the basis of protected characteristics including: age, ancestry, color, religion, race, national origin, citizenship, creed, ancestry, sex, gender, gender identity, gender expression, sexual orientation, medical condition, pregnancy, childbirth, or related medical condition, denial of family and medical leave, mental or physical disability, marital status, military and veteran status, and genetic information. It's also required to designate a specific person to whom these types of complaints can be made—someone other than the complainant's supervisor. Lastly, it's important to note that startups with 50 or more employees must provide interactive sexual harassment training to their managers and supervisors every two years (more on this training in one of our previous blog posts).

3. There Are Such Things As Stupid Questions: Discrimination During Hiring

Imagine your Silicon Valley-like CFO "struggles" between hiring a woman and hiring the "best" engineer, falsely believing these are mutually exclusive propositions. This CFO claims to understand the value of diversity, but at the same time, wants to ensure that he hires "the most qualified person for the job. But it would be better if that person was a woman even though the woman part is irrelevant."

California law, of course, protects against discrimination on the basis of gender, as well as the other protected characteristics mentioned above. An employer's obligation to prevent discrimination begins with the application and hiring process. Whether it's by asking questions during an interview that reflect a bias for or against a particular gender, or considering gender when deciding whether or not to hire, employers can expose themselves to liability. It's important that those with the authority to interview and hire are properly trained with respect to what can and cannot be considered when making hiring decisions.

4. Equal Pay Or Bust

Similarly, what if your previously all-male workforce expresses concern that a newly hired female programmer will be paid the same as her male counterparts?

As previously reported here, as of January 1, 2016, California has one of the most aggressive pay equity laws in the country. It requires that employers pay persons of different genders equally for substantially similar work, or else be able to explain legitimate differences. Recent amendments impose the same rule for employees of different races or ethnicities (which we discussed at length here).

5. Creativity v. Etiquette

You may face a scenario in which certain startup members rely, for creative inspiration, on crude or vulgar language in order to produce the outcome your customers expect. Does the creation of groundbreaking compression software, for example, justify workplace use of vulgar language?

Probably not. Vulgar and crude language, if sufficiently pervasive and gender-specific, may give rise to a hostile work environment. Standing alone, the above scenario might not rise to the severe and pervasive standard required for workplace harassment. But if persistent vulgar language exists, your startup could be in some hot water. If the language is related to or directed toward a specific gender, your version of Pied Piper may ultimately have to pay.

Workplace Solution:

Until we reach a post-gender culture, or until the next tech genius creates an algorithm to perfect these issues, businesses—especially startups—should not be afraid to seek legal counsel on how to best handle these issues in the workplace.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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