Jottings By An Employer's Lawyer

Monday, May 31, 2010

Bullying As a Cause of Action - One Large Step Closer

As long time readers may remember, I have for a long time been concerned about a proposed cause of action for bullying. My first post about bullying goes all the way back to January 12, 2003, Newest Workplace Problem? Bullying?

But later that year, my first mention of it as a cause of action was a post about a case decided in England, Can't Wait For "Bullying" Cause of Action to Cross the Atlantic. Four days later though, I had found mention of a proposed statute that would make bullying a cause of action, You Thought I Was Kidding About A Cause of Action For Bullying

So I have been writing about bullying almost as long as I have been blogging. Still, I have been remiss in reporting on a major development.
And the reason is simply that I am stunned and discouraged.
I really thought that it would be sometime before the Healthy Workplace Act, the model bill drafted by Professor David Yamada would advance through even one side of a state legislature. But thanks to the New York State Senate's action on May 12th, that threshold has been crossed. See, Anti-Bullying Legislation Passes NY Senate.

Discussion of that act has gotten some media attention which hopefully is a good thing. Professor Yamada has taken some of it on in a recent post, Why the Healthy Workplace Bill is not a "job killer".

Because David and I have engaged in a back and forth on this topic in our respective blogs, I am taking the liberty of setting forth his arguments in that article in full and giving my view on why I think his arguments miss the key point.

David's has five points in his rebuttal (in fairness to David, he was replying to a specific article and so I don't mean to say that these may be his only five points):
1. High standard for proving a case — The HWB requires an individual to prove that the bullying behavior was malicious and harmful to physical and/or mental health. By legal standards, that’s a high threshold.

2. Damage cap for lesser claims — In cases where the bullying did not include a negative employment decision such as a demotion or termination, emotional distress damages are limited to $25,000 and no punitive damages are allowed. In other words, the HWB blocks runaway jury verdicts for comparatively modest claims.

3. Preserves management prerogatives — The HWB expressly maintains traditional management prerogatives to evaluate employees. It does not do away with the rule of at-will employment.

4. Incentives — The HWB imposes liability on employers, but it provides them with incentives to reduce or avoid liability by taking adequate preventive and responsive measures toward bullying.

5. Notice – The New York version of the HWB requires employees to put employers on notice of bullying behavior as a pre-condition for filing a lawsuit.
Here is the problem. The limitations above are for the most part only defenses against liability or limitations on the ultimate damages that an employer may have to pay to if an employee sues.

What that ignores is the most basic principle of employment law litigation. Once an employer is sued, they have lost.

I can not over emphasize this point. Once an employer has been sued, they have lost.

Lawsuits once filed go away only one of four ways --
  1. voluntary dismissal (unlikely or it would not have been filed in the first place);
  2. by summary judgment (obtainable only after substantial discovery has been involved);
  3. settlement (only by payment of some sum that the plaintiff and his or her counsel will accept and rarely before substantial defense costs have been incurred); and
  4. at the conclusion of a trial and all appellate processes when a final judgment is entered.
As a practical matter, there is no recourse for the employer. While winning by summary judgment or trial is sometimes emotionally satisfying, it never comes close to matching either the hard dollar costs (the biggest component which is likely to be fees to law firms, including mine) or the "hidden" costs of employee time and stress that the human beings defending an employer's decision undergo over the course of litigation, which at a minimum is likely to extend over months, and where it goes all the way through the process, over years.

Here's a graphic way of saying basically the same thing that appeared as part of an April 23, 2007 cover  story in Business Week.

Although legal standards may allow under certain circumstances employers to recover their attorneys' fees, as a practical matter the chance is so slim as to not exist.

Although creating a bullying cause of action would be bad enough, it is made even worse because courts will be hard pressed to grant summary judgment.  Ask any plaintiff's employment lawyer what is their single biggest interim goal in any employment lawsuit, and they will tell you to avoid summary judgment. If they can force a trial on the merits, they know that the settlement value of the cases goes up substantially.

So, when you create yet another cause of action, this time based on conduct that is so subjective, you will have opened the door for almost any employee in any environment to bring a lawsuit, and worse, a law that is written in a manner so that summary judgment is almost impossible, it is in my view both a very dangerous and certainly very costly step.

Arguments can be made that cost is present in any employment law and in any event is justifiable. The first part of that is true.

Some causes of action do justify the costs. Discrimination tied to certain characteristics for example, passes that test. I do not believe bullying or in the words of the Healthy Workplace Bill, protection against an "abusive work environment," does, or even comes close.

Many will say that I am overstating how big a problem permitting employees to file suits based on "bullying behavior" will be. 

Check out the language from S.1823B passed in a 45-16 vote by the New York Senate. You tell me how hard it would be to initiate a lawsuit under this bill or to get past summary judgment.

The way the statute works, it is is illegal for an employer to "subject an employee to an abusive work environment." An abusive work environment is one where"abusive conduct" causes the employee to suffer physical or psychological harm.

Then look at the definition "Abusive conduct" and notice how many "fact questions" exist.  It means:
  • conduct, with malice,
  • taken against an employee by an employer or another employee in the workplace, that a reasonable person would find to be hostile, offensive and unrelated to the employer's legitimate business interests.
  • In considering whether such conduct is occurring, the trier of fact should weigh the severity, nature and frequency of the conduct.
  • Abusive conduct shall include but not be limited to, repeated infliction of verbal abuse, such as the use of derogatory remarks, insults and epithets; verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating; or the gratuitous sabotage or undermining of an employee's work performance.  A single act shall not constitute abusive conduct unless the trier of fact finds such act to be especially severe or egregious.  
Although it goes without saying that I deplore bullying behavior both as a moral matter, because it is bad business and because it puts employers at risk for numerous other adverse consequences, I remain adamant that it would be a disaster for the legislation to pass, in New York or anywhere else.

My thanks to my friend Jeff Polsky, who had one of the best headlines in reporting on this, The meek shall inherit their own protected category, at California Employment Law where he posts, for prompting me to finally respond.

Update: This is my quickest update ever. Probably before anyone has read it and that's because I had not checked my RSS reader or I could have linked to David Yamada's latest, New York workplace bullying legislation is in the news. In that post, he points out a number of negative comments about the New York bill and notes that many of them focus not on the employees who have been injured, but on litigation costs etc.
But there are times when those costs are so high and the disruption so great, that it can not be discounted so lightly. This is one of those times.


Michael you make a lot of cogent points. My prediction is that the courts will fix any problems you believe may pass. They will very likely set strict guidelines for "with malice", "severity, nature and frequency" and all the other fact issues you cite.

Intentional infliction of emotional distress in California is quite comparable to the HWB, but many plaintiff lawyers are careful to allege it noting the high standards judges impose on it at the summary judgment stage. There haven't been very many IIED verdicts in California that I am aware of.
Eugene, your "the courts will fix" this bad legislation is the entirety of the problem. It's bad enough that every employee unhappy with how they are being supervised claims "harassment" these days, but now they're going to allege "bullying" as well. The ONLY way to enact something like this is to include a loser pays provision. Otherwise, this will simply be used to extract severance for every employee termination - welcome to Canada everyone.
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