Federal Appeals Court: Company May Fire HR Director Conducting Investigation; Harassment/Discrimination Policies Not a Defense Where Alleged Harasser is High-Ranking Supervisor

By Andrew M. Moskowitz, Esq.

Martha Townsend was an office manager and receptionist.  She alleged that, over a near two-year period, Hugh Benjamin, a vice-president, shareholder and husband of shareholder Michelle Benjamin, had sexually harassed her.  On March 17, 2005, Ms. Townsend reported the sexual harassment to the company’s HR Director, Ms. Grey-Allen.  Five days later, the company fired Ms. Grey-Allen, allegedly because she had discussed Ms. Townsend’s allegations with an outside party.  A day after Ms. Grey-Allen’s termination, Ms. Townsend resigned.

In Townsend v. Benjamin Enterprises (2d Cir. May 9, 2012), the Second Circuit Court of Appeals—which covers federal district courts in New York, Connecticut and Vermont—  addressed the above scenario..  The Court held that the HR Director’s initiation of an internal investigation did not constitute participation “in an investigation, proceeding, or hearing” as defined by Title VII of the Civil Rights Act of 1964.  The Court therefore affirmed the dismissal of the HR Director’s claim.

The Towensend Court also addressed when an employer may claim the Faragher/Ellerth affirmative defense.  This defense permits an employer who has not fired, suspended, or demoted an employee to assert as a defense its implementation of appropriate HR policies and the employee’s failure to avail herself of these policies.  The Towensend court held that, where the supervisor holds a sufficiently high position in the organization, the Faragher/Ellerth defense is not available.The Towensend Court noted that Title VII prohibits an employer from retaliating against an individual who has opposed an unlawful practice or who has participated in any manner “in an investigation, proceeding, or hearing.”  The HR Director, Ms. Grey-Allen, had not alleged that she had opposed an unlawful practice.  Instead, she argued that, by conducting an investigation into Ms. Townsend’s allegations of sexual harassment, she had “participated” in an investigation.

Although the U.S. Equal Employment Opportunity Commission (EEOC) had submitted a brief in support of Ms. Townsend’s position, the Towensend Court nevertheless held that participating in an employer’s internal investigation conducted apart from a formal charge with the EEOC was not an “investigation” as defined by Title VII.

The Towensend Court also addressed whether the Faragher/Ellerth affirmative defense remained available when, by virtue of his high position in the organization, Hugh Benjamin, the alleged harasser, functioned as the employer’s “proxy” or “alter ego.”  The Court held that, under such a scenario, this defense was unavailable.  The Court held that the jury did not err in holding that, as the company’s only corporate vice president, second-in-command and shareholder, Mr. Benjamin served as the employer’s proxy or alter ego.

Therefore, under the holding in Towensend, an employee who conducts an internal HR investigation of a claim that is not the subject of a formal charge with the EEOC does not possess a valid retaliation claim under Title VII.  Moreover, pursuant to Towensend, where a supervisor with a sufficiently high position in a company is the alleged harasser, an employer may not claim as a defense that it exercised reasonable care to prevent and correct sexual harassment and that the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.

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