NSPE's Gateway to Private Practice August 2010 

Professional Liability/ Risk Management Brief: Sexual Harassment

During strong economic times, professional service firms often develop a sense of teamwork and a mission that obscures many of a firm’s legal responsibilities to its employees. When the pace of business diminishes, however, employees sometimes refocus on their working conditions, opportunities for advancement, and issues that affect an employee on a personal level.

One of the areas of growing risk for construction-related professional service firms is claims of inequality in pay, status, and stability that are based on charges of sexual harassment. Sexual harassment is defined as “any unwelcome sexual conduct that is a term or condition of employment or that creates an intimidating, hostile, or offensive work environment.” The legal basis of this is Title VII of the Civil Rights Act of 1964, which imposes a duty on employers to maintain a workplace free from discriminatory ridicule and insult. Sexual harassment claims based on alleged actions by coworkers and supervisors have become common.

United States Supreme Court decisions have made employers subject to vicarious liability for unlawful harassment of employees by supervisors. The court holds that an employer is always liable for a supervisor’s harassment if it culminates in a tangible employment action. With quid pro quo sexual harassment—when submission to sexual conduct is explicitly or implicitly a term or condition of an individual’s employment—employers are strictly liable for the unlawful conduct.

Any employment action qualifies as “tangible” if it results in a significant change in employment status. An individual qualifies as an employee’s supervisor if: the individual has authority to undertake or recommend tangible employment decisions affecting the employee or has authority to direct the employee’s daily work activities. The question of liability arises only after there is a determination that unlawful harassment occurred.

Employer liability also exists in “hostile work environment” cases. If the plaintiff shows that he or she belongs to a protected class, was subject to unwelcome sexual harassment based on the plaintiff’s sex that was so severe and pervasive that it altered the employment conditions, and that the employer knew or should have known of the harassment and failed to take proper remedial action, the employer will be held liable. Federal law does not prohibit simple teasing, offhand comments or isolated incidents that are not “extremely serious.” Instead, the conduct must be “so objectively offensive as to alter the ‘conditions’ of the victim’s employment.”

The employer may avoid liability or limit damages by showing that it exercised reasonable care to prevent and promptly correct harassing behavior. To adequately prevent sexual harassment, a firm should have an effective training program that educates employees about their rights and the employer’s commitment to a harassment-free working environment. The firm can escape liability if the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the firm.

In order to prevent and correct harassment, firms should implement a written enforcement procedure that encourages employees to report harassment to management before it becomes severe or pervasive. Moreover, the employer should assure employees that it will protect the confidentiality of harassment complaints to the highest extent possible. This policy should state that the employer will not tolerate retaliation against anyone who complains of harassment or who participates in an investigation. Smaller businesses may be able to discharge their responsibilities through a less formal exchange. If an employer maintains regular contact with all employees, this complaint procedure information can be verbally disseminated at staff meetings.

© 2010, Victor O. Schinnerer & Co. Inc. Statements concerning legal matters should be understood to be general observations based solely on our experience as risk consultants and may not be relied upon as legal advice, which we are not authorized to provide. All such matters should be reviewed with a qualified advisor. Victor O. Schinnerer & Co. Inc. is managing underwriter for the CNA/Schinnerer Professional Liability Insurance Program, commended by NSPE/PEPP since 1957.


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Happenings on the Hill

Some small-business owners may soon face a multitude of new employee health plan requirements. Until a health insurance exchange program is available to employers in 2014, many small firms are counting on the “grandfathering” of their current health plans to maintain their existing health care coverage. NSPE believes that the grandfathering rules referred to in Docket OCIIO-991-IFC, titled The Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, are too restrictive.

Under the rules, a grandfathered plan cannot:

·         Significantly increase co-payments, deductibles, or out-of-pocket limits;

·         Raise coinsurance;

·         Make annual limits more restrictive or add new annual limits;

·         Significantly decrease the share of premiums that employers contribute for their workers in group plans; or

·         Eliminate covered benefits.

 The annual cost of health care is on the rise, however, and firms cannot always control their health plan costs. In order to maintain health insurance for employees, employers often need to work with their insurance carriers to adjust co-pays and cost-sharing so that they can continue to afford coverage. If grandfather status is revoked, the burden on some firms may force them to cancel employee health insurance.

While there are limited credits available for small businesses to help offset the cost of providing insurance, the credits dwindle if a firm has more than 10 employees and are completely phased out if the firm has 25 or more employees. The credits are also phased out for employers with even modest-sized compensation packages.

NSPE recommends that until the health insurance exchange program is implemented in 2014, small and medium-sized firms be permitted to make cost-saving changes to co-payments and cost-sharing and to change insurance carriers, as long as they do not reduce the per-employee amount they pay for insurance. This would allow the firms to maintain health plans for employees without placing undue financial strain on the firms.

For more information, please visit http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480b03a71.


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NSPE Helps You Meet Your Continuing Education Requirements

NSPE kicks off the fall Webinar series on September 23 with Successfully Building Green in a Bad Economy, then follows that up with the first in the popular Ethics Forum series, Key Issues in the Aftermath of the Gulf Oil Spill, on September 29. 

See NSPE’s fall Webinar schedule on the web. Don’t miss out. Sign up online today. The member price is $99 per site. Get a group of your colleagues together in the conference room, and all of you can participate and receive credit for the one low price of $99. The more people you have in the room, the cheaper the price per person! Don’t forget to login to the Web site before you purchase to receive the member price. 

Download Fall Web Seminar Flyer (pdf)

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Company Earns Prestigious Award for Mentoring Culture and In-House University

Howard R. Green Co. was recently awarded the Professional Development Award by the National Society of Professional Engineers’ Professional Engineers in Private Practice. The award was officially presented during NSPE's annual conference July 15–18, 2010, in Orlando.

The PEPP Professional Development Award is presented to employers that exhibit exceptional career development initiatives and have made outstanding contributions to the advancement and improvement of the engineering profession through its employment policies and practices. The purpose of the award is to recognize those firms with the best engineering employment practices, and to encourage all firms to adopt progressive policies and practices.

Howard R. Green Co., an engineering and architectural firm based in Cedar Rapids, Iowa, enhances their business through the development of progressive people programs. These programs include its in-house Green University curriculum, formal mentoring programs, and active career development planning processes. The internal training program, Green University, has a number of specialized curricula designed to provide job-specific and technical knowledge that enhances the ability of its employees to better perform their jobs and expand personal expertise. A broad array of courses in four educational tracks—interpersonal skills, project management, business development, and technical curricula—are offered, along with a particular focus on developing future and emerging leadership within the firm. Some 1,450 hours of training were delivered to staff last year by in-house experts.

Founded in 1913, Howard R. Green Co. is a professional services firm with nearly 400 employees offering planning, engineering, transportation, community resources, water/wastewater, construction, environmental, buildings, technology, and renewable energy services to clients in diverse markets. The firm operates 13 offices located in six states and moved up more than 150 places to 205 on the 2010 edition of ENR's Top 500 Design Firms.

The selection for the national award is made by the PEPP Awards Committee on the basis of both current and longtime reputation of the organizations under consideration, with particular emphasis on the preceding twelve months. Criteria for the judging of the award includes engineering personnel/licensure information, recruitment, employment, professional development, and special employment practices. Nominations for the award must be originated by local chapters or practice divisions of an NSPE-affiliated state society and are due by March 1.

For more information about the program or how to submit nominations for 2011, contact Kim Granados at kgranados@nspe.org or visit the Web site at http://www.nspe.org.


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PEPP 2010-11
Executive Board

Mark Davy, P.E.
La Crosse, WI

Andrea Martinez-Graves,
Tampa, FL

Dawn Edgell, P.E.
Chicago, IL

Immediate Past Chair
Bill Clarke, P.E., F.NSPE
St. Louis, MO 

Vice Chair, Northeast Region
Randy Petersen,
Washington, DC

Vice Chair, Southeast Region
Charlotte Maddox, P.E., F.NSPE
Tampa, FL

Vice Chair, Central Region
Kent Buehrer, P.E., F.NSPE
Maumee, OH 

Vice Chair, North Central Region 
Karen Stelling, P.E.
Kansas City, MO

Vice Chair, Southwest Region
Chris Richard, P.E.
Lafayette, LA

Vice Chair, Western and Pacific Region 
Wes Segawa, P.E.
Hilo, HI 

Young Engineer Representative 
Carlos Gittens, P.E.
Deltona, FL

SSEC Representative
Pat Christians
Birmingham, AL

PEPP Staff
Kim Granados, CAE
1420 King Street
Alexandria, VA 22314
tel: 703-684-2857
fax: 703-836-4875


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