How To Handle Third-Party Harassment

October 30, 2012 at 7:22 am Leave a comment

Suppose an examiner or a member starts making one of your employees feel uncomfortable by greeting her with sexually charged innuendos and asking her out on dates. Is  the credit union  on the hook for this harassment since the examiner is not an employee of the credit union or under the control of the credit union?  The short answer is absolutely: 29 CFR 1604.11, promulgated by the EEOC,  provides that:

(e) An employer may also be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases the Commission will consider the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of such non-employees.

For those of you who have been reading the trade press lately, you know that on November 7 NCUA will dust off its highest administrative appeals panel, the SRC, to hear an appeal of Ohio credit union Commodore Perry.  The credit union contends that it was punished  with a lower CAMEL rating by an examiner who found out that the credit union had complained to his regional office that he was sexually harassing and bullying staff members.  A subsequent investigation of the allegations by NCUA’s Office of Inspector General concluded that there was no harassment and the regional director denied the appeal.  I have no way of knowing what ultimately happened at the credit union, but, in addition to providing an important  example  on sexual harassment liability, the situation demonstrates yet again the need for a truly independent administrative appeals process.

A credit union shouldn’t have to make a Hobson’s choice between exposing itself to a sexual harassment lawsuit by failing to take appropriate action when confronted with a claim or risking retaliation by the examiner accused of the harassing conduct.  Similarly, I have no reason to doubt the integrity of any of the regulators involved in this dispute and no one should be placed in a situation where the decisions they make are inherently suspect.  A truly independent arbiter would not only give credit unions a disinterested set of eyes to review examiner determinations, but would give regulators the opportunity to show why their decisions were consistent with industry standards.  Unfortunately, since NCUA serves as judge, jury and executioner in the current process, its determinations are inherently suspect.


Entry filed under: Advocacy, HR, Regulatory. Tags: , , , , , .

Prepare for the Worst, but Hope for the Best. NCUA does what it can; the rest is up to us.

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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