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You Can’t Fix Problems You Can’t See

Business people often toss around the trite-yet-usually-true expression, “You can’t manage what you can’t measure.” Today I offer a more consistently valid variation: You can’t fix problems you can’t see.

I take no credit for this insight, however. Any royalties should go to the Supreme Court. Lost amid the headlines over this week’s decisions on voting rights and gay marriage were two rulings that set sensible ground rules for how to redress discrimination in the workplace.

Of course, since we are discussing the current Supreme Court, the fact that these decisions were sensible and low-profile does not mean the justices agreed over them. Both decisions were 5-4, with the four horsemen of the Court’s liberal wing - Justices Ruth Bader Ginsburg, Elena Kagan, Sonia Sotomayor and Stephen Breyer - dissenting in each case.

Any good employer recognizes and accepts a duty to provide a working environment that is productive and wholesome. Though not all workplaces can be made perfectly safe - a construction site is not an office, for example - every job site can be made respectful and tolerant. If it isn’t, various legal sanctions may kick in.

Consider what happens when an employee experiences racial or sexual harassment on the job. If the harassment comes from the employer directly, or from a supervisor selected and empowered by the employer, then the employer is directly liable for the misconduct. The employee need not notify the employer or complain about the mistreatment, because the employer is deemed to already know about the problem. On the other hand, if the alleged misconduct is committed by an employee’s co-worker, the employee is expected to make the employer aware of the offense. An employer that establishes appropriate policies and takes prompt action to enforce those policies generally will not be held responsible for conduct it could neither see nor control.

But who, exactly, is a supervisor? The Supreme Court resolved that question this week in Vance v. Ball State University, upholding a lower court finding that under Title VII, the law governing job bias, a supervisor is someone with the power to “take tangible employment actions against the victim,” such as hiring, firing, withholding promotions or making inferior assignments. Merely directing the victim’s day-to-day work or assigning tasks doesn’t count.

In her dissent, Justice Ruth Bader Ginsburg backed a broader position taken by the Equal Employment Opportunity Commission, which is that a supervisor should be defined as anyone with power to take tangible action or anyone with authority “to direct the employee’s daily work activities.” Ginsburg complained that many employers might be unaware of an employee’s improper behavior, and thus escape liability for not correcting the behavior they knew nothing about.

Ginsburg’s reasoning makes sense if you think an employer should be made to pay damages to an employee if anything bad ever happens to that employee in the workplace. It makes much less sense if you think the employer should pay only for bad things that it could have either anticipated or reasonably prevented.

Contrary to Ginsburg’s contention, the court’s definition of a supervisor does not give an employer a free pass. An employer who receives a complaint should make a good-faith effort to investigate the claim. If necessary, the employer should take immediate steps to discipline the offender and stop the inappropriate behavior. Either way, an employer should never retaliate against the employee who made the complaint, which is crucial in making sure employees actually do come forward in cases of lateral harassment.

Retaliation was at the heart of this week’s other little-noticed decision of importance to employers. In University of Texas Southwestern Medical Center v. Nassar, an employee alleged that his employer retaliated against him for making a discrimination complaint. The employer, which had revoked an offer of employment to the complainant, said it would have withdrawn the offer regardless of any intent to retaliate. In another 5-4 decision, the Supreme Court ruled that an employee who claims to be a victim of retaliation must show that the adverse action would not have occurred but for the alleged retaliation.

This is a tougher standard for the employee claiming retaliation to meet, compared to what is required of an employee who simply says he or she was subject to illegal discrimination. In non-retaliation cases, the employee must only prove that the protected category at play, such as race, gender or religion, was a “substantial” or “motivating” factor in an employment decision. Proving the action would have happened anyway can shield the employer from damages, though not injuctive relief or legal fees.

This is a technical issue, but still an important one. Anti-discrimination laws cannot work unless they protect victims from retaliation for complaining. Employers who want to do the right thing should encourage victimized employees to come forward, not deter them from doing so. It is difficult for an employee to get inside the mind of an employer to show, for example, that a demotion or reassignment would not have occurred “but for” the fact that the employee had previously complained of misconduct.

On the other hand, employers do things for a lot of reasons, and often more than one applies in a particular decision. We should avoid creating situations in which a poorly performing employee, sensing that his or her job is in jeopardy, is motivated to bring a discrimination complaint in order to claim that any ensuing discharge or demotion had some vague connection to reporting the incident and was, therefore, retaliatory.

In practice, I imagine employees will simply take the position that the alleged retaliatory act would not have occurred “but for” the desire to retaliate. Employers will then be obliged to demonstrate that they would have taken the same action even if no complaint had ever been made. This is a fair result. These days, any knowledgeable employer tries to keep well-documented files to support future assertions that any given personnel decision was made for the right reasons.

You may not have heard much about these two cases this week. They certainly do not command the public’s attention the way trending topics like gay marriage and voting rights do. But they matter a lot to everyone who draws a paycheck and to everyone who issues one.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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