California employers are strictly liable (i.e. there is no defense) for unlawful harassment by their supervisors. While there is an affirmative defense under federal law to supervisor hostile work environment where no tangible employment action is taken against the alleged victim, that wont apply under California law.
Supervisor harassment: If you're an employer and worried abouot liability, the best case under California if a supervisor is the alleged wrongdoer, is the company will be liable, but the amount of damages (money) it must pay can be reduced. The employer must show (1) it took reasonable steps to prevent and correct workplace sexual harassment; (2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and (3) reasonable use of the employer's procedures would have prevented at least some of the harm that the employee suffered. This does not eliminate liability, but it can reduce the amount of money your business has to pay.
Nonsupervisory harassment: For unlawful harassment by non-supervisors, a California employer is liable for such co-worker harassment only if (1) its management knew or should have known of the harassing conduct and (2) failed to take immediate and appropriate corrective action. Therefore, if your mangers/supervisors learn of an unlawful harassment complaint, immediate action, including immediate commencement of an investigation and taking prompt corrective action as necessary, would be prudent.
50 or more workers: California companies with 50 or more employees are required under California law to train all supervisory employees for at least two hours every two years in unlawful harassment and discrimination. The training must be in the classroom or other effective interactive training and be presented by qualified trainers with knowledge and expertise in the prevention of harassment, discrimination and retaliation. See http://www.fehc.ca.gov/act/SEXUAL_HARASSMENT_training.ppt for the Fair Employment and Housing Commission's guidelines on training. Federal law imposes no such requirement.
Summary: To summarize, California imposes the following duties on employers:
(Reviewed 9-08)