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					                         HARASSMENT AND DISCRIMINATION
                          IN THE NEW, WIRED WORKPLACE

                                   Monique A. Tuttle
                                  Holland & Hart LLP


I.      New Wired Workplace
        A.   Explosion of Start-Up Companies
        B.   Explosion in Use of Internet/E-Mail in the Workplace

II.     Start-Up Companies
        A.     New employers
               1.     Foster non-traditional culture.
                      a)     Emphasis on camaraderie, informality, and familiarity.
                      b)     Possible escape from or rejection of formal corporate
                             world - policies and forms are “old school.”
                      c)     Organizations with more permissive norms regarding
                             social-sexual behavior, women experience more sexual
                             harassment than in organizations that are less tolerant.
               2.     Unaware of state and federal employment laws and when they
                      apply.
                      a)     Federal law
                             (1)    Title VII of Civil Rights Act - 15 employees
                             (2)    ADA - 15 employees
                             (3)    ADEA - 20 employees
                      b)     State laws - as few as 1 employee
               3.     Focus on growing business/putting out product/raising capital.
        B.     New employees
               1.     Generally, contingents of young people spending long hours
                      together.
               2.     Inexperienced managers/supervisors.
               3.     Interoffice dating.
        C.     Little human resources support
               1.     HR viewed as cost center not profit center.
               2.     No policies; nowhere to go to complain/raise issues; no training
        D.     Some sample cases.
               1.     Juno Online Services, Inc. hit by two sexual harassment
                      lawsuits, one in August 1999 and the other in November 1999.
                      a)     One plaintiff described company happy hours as “Roman
                             orgies.”
               2.     25 employee start up facing sexual harassment charge by
                      member of staff against owner/founder - among other things
                      complaining that when she presented him with research on an
                      opportunity abroad, he suggested the two of them go together to
                      check things out.

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        E.      More problems taken care of through severance packages and releases.
                1.    Last thing needed/wanted with IPO is lawsuit.
                2.    Pending matter has to be disclosed.
        F.      Some say start-ups have enjoyed temporary shield of vibrant economy.
                1.    If someone feels harassed or discriminated against, there are five
                      other jobs they can take.
                2.    With economy slowing, complaints may rise.
        G.      Most likely sexual harassment claims
                1.    improper use of Internet or email
                2.    offensive office discussion and displays
                3.    office romances
                      a)     if go bad, the person feels wronged
                      b)     by outsiders who feel created favoritism
        H.      Discrimination claims also problem for start-ups
                1.    Sex discrimination
                      a)     Women receiving fewer stock options than male
                             colleagues.
                      b)     Women hitting class ceiling.
                      c)     Downsizing.
                2.    Age discrimination - “youthful culture” coded in references and
                      language
                      a)     “that person’s from the typewriter age”
                      b)     “we need a younger group of managers that better
                             understands the Internet and technology”
                      c)     “we need to move at Internet speed. Can he move that
                             fast?”
                      d)     email from supervisor stating “it was great to see someone
                             your age accomplish something like this! You and George
                             Burns are an inspiration to the elderly everywhere.”
                      e)     ad for software engineers seeking “energetic people with
                             new and fresh ideas”
                      f)     woman over 50 told by boss in dot.com to get in touch
                             with today’s workplace by watching “Ally McBeal”
                3.    Lack of written evaluations and documentation of performance
                      issues creates proof issue on claims of discrimination.

III.    Internet/E-Mail in the Workplace
        A.    Background
              1.    With the simple push of the send key, employees can
                    communicate offensive, harassing, discriminatory material with
                    his/her employer’s fingerprint.
              2.    E-mail viewed as more relaxed and colloquial form of
                    communication than formal written letters or me moranda.
              3.    Employees include in e-mails things they would never write in a
                    memo or other more formal correspondence.


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                4.   Employees mistakenly think that an e-mail or Internet site is
                     deleted from the system when that often is not the case.
              5.     E-mail messages and images can be forwarded to large groups of
                     people quickly and easily.
        B.    Statistics
              1.     98% of all companies with more than 1,000 employees have
                     Internet access.
              2.     45% of businesses with 20 to 99 employees are online.
              3.     E-mail is replacing telephone as preferred means of
                     communication.
                     a)     As of the end of 1998, U.S. workers were sending 1.1
                            billion e-mail messages a day.
                     b)     By 2002, e-mail traffic may reach 8 billion messages a
                            day.
                     c)     Average U.S. worker receives 30 e-mails a day.
              4.     A Nielsen Media Research Survey found that employees at IBM,
                     AT&T, Apple, NASA and Hewlett-Packard visited the
                     Penthouse site at work thousands of times a month.
              5.     Monitoring - American Management Association surveys
                     a)     1997 - 5% of companies
                     b)     1998 - 20% of companies
                     c)     2000 - 40% of companies monitored e-mail and 54%
                            monitored Internet usage
              6.     A survey of 224 companies revealed that 68% had disciplined
                     employees for Internet abuse and 1/3 had terminated employees
                     for such abuse.
              7.     70% of employer/employee cases now use e-mail as a strategic
                     part of evidence.
              8.     56% of employees with Internet/e-mail access have received e-
                     mail of a sexist, racist, or inappropriate religious nature.
        C.    Costs/Benefits
              1.     Benefits
                     a)     Greatly facilitates communication.
                     b)     Provides access to current information.
              2.     Costs, among others
                     a)     Circulation of harassing or discriminatory e-mail or
                            Internet images.
                     b)     Creation of “smoking gun” communication.
                            (1)    Treatment of email like back room discussion but
                                   really creation of evidence.
IV.     Cases/Anecdotes/Settlements of Interest (in no particular order)
        A.    Park v. Juno Online Services, Inc. (pending in New York) - sexual
              harassment
              1.     Claims against company and two of its former principals by
                     former software engineer for sexual harassment and a hostile
                     work environment.

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                2.      Arbitration of claims compelled because arbitration clause in
                        employment agreement included all claims arising out of
                        Plaintiff’s employment at Juno, including sexual harassment.
        B.      Coniglio v. City of Berwyn, No. 99 C 4475, 1999 WL 1212190 (N.D. Ill.
                1999) - sexual harassment
                1.      City sued by former legal secretary for sexual harassment
                2.      City’s comptroller directly supervised legal secretary, who was
                        promoted to the position of computer manager in 1990.
                3.      In 1990, comptroller began circulating a list of movies he had on
                        videotape, including pornographic titles. He offered to lend the
                        movies to employees, brought the tapes to work and tried to
                        circulate them among the employees, including the plaintiff.
                4.      In 1995, comptroller started using his work computer to access
                        pornographic websites on the Internet. Other employees could
                        see the images on his computer because his office had a glass
                        wall.
                5.      Comptroller would call plaintiff into his office and attempt to
                        elicit her reaction to the pornographic images on his computer.
                6.      Plaintiff complained to the mayor after each incident. Altho ugh
                        the mayor assured her the conduct would cease, it continued.
                7.      Then Plaintiff started receiving unsolicited emails from
                        pornographic Internet sites containing sexually explicit or
                        suggestive images.
                8.      Plaintiff started to work half-time to accommodate anxiety
                        problems that developed. Comptroller fired her when she failed
                        to return to full-time work after her accrued leave time expired.
        C.      Knox v. State of Indiana, 93 F.3d 1332 (7 th Cir. 1996) - sexual
                harassment
                1.      Court affirmed jury verdict in employee’s favor for claims of
                        sexual harassment and retaliation based on e-mail in which a co-
                        worker asked to have sex with the employee.
        D.      Scott v. Plaques Unlimited, Inc., 46 F. Supp. 2d 1287 (M.D. Fla. 1999) -
                sexual harassment
                1.      Court permitted claim of sexual harassment claim to proceed
                        where claim based in part on fact that plaintiff found her
                        supervisor and a customer looking at pornography.
        E.      Strauss v. Microsoft Corp., No. 91 Civ. 5928 (SWK) - gender
                discrimination
                1.      Plaintiff relied, in part, on sexually related e-mails received from
                        supervisor, including
                        a)      An advertisement for “mouse balls”
                        b)      A news report on Finland’s proposal to institute a sex
                                holiday
                        c)      A parody on a play entitled “A Girl’s Guide to Condoms”
                        d)      A message entitled “Alice in UNIX Land,” that mixed
                                computer language with sexual references

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                2.     District court denied summary judgment for Microsoft holding
                       that e-mails could lead a jury to concluded that Microsoft
                       discriminated against Plaintiff because of her gender.
        F.      Curtis v. Citibank, No. 97 Civ. 1065 (DAB), 1998 WL 3354 (S.D. N.Y.
                Jan. 5, 1998) - sex discrimination and sexual harassment; 1999 WL
                544729 (S.D. N.Y. July 27, 1999) - race discrimination
                1.     Two African-American employees brought a class action against
                       Citibank based, in large part, on e-mail messages allegedly
                       containing racist jokes circulated among Citibank managers.
                2.     Court permitted employees to amend their complaint to include
                       employer as a defendant in sexual harassment and
                       discrimination case based on offensive e-mail messages sent
                       among supervisory employees.
        G.      Owens, et al. v. Morgan Stanley & Co., No. 96 Civ. 9747 (DLC), 1997
                WL 793004 (S.D.N.Y. Dec. 24, 1997) - race discrimination and
                retaliation.
                1.     Two African-American employees brought a $60 million
                       discrimination and retaliation suit, claiming, among ot her
                       things, that they were retaliated against complaining about an e -
                       mail containing a racist joke.
                2.     After Morgan Stanley’s motion to dismiss was denied, the
                       parties reached a confidential settlement.
                3.     Holding that sending of single, racist e-mail, while entirely
                       reprehensible, cannot form the basis of a hostile work
                       environment.
        H.      Nardinelli, et al. v. Chevron (1995) - sexual harassment
                1.     Suit based, in part, on circulation by co-workers of an e-mail
                       message which listed “25 reasons beer is better than women.”
                2.     Matter settled for $ 2.2 million plus attorneys’ fees and costs.
        I.      Martens v. Smith Barney Inc., 181 F.R.D. 243 (S.D.N.Y. 1998) - sexual
                harassment
                1.     Hostile work environment class action based on failure to
                       regulate employee access to sexually explicit materials on the
                       Internet.
        J.      Greenslade v. Chicago Sun-Times, Inc., 112 F.3d 853 (7 th Cir. 1997) -
                sexual harassment
                1.     Newspaper’s computers used to engage in sexual harassment via
                       e-mail.
        K.      Firing for pornographic email deemed excessive by arbitrator
                1.     Male employee’s e-mail displayed a sexually graphic message
                       that was seen by female co-worker who shared the computer.
                2.     Employer, which is unionized, fired the male employee for
                       violating its electronic communications policy.
                3.     Arbitrator decided that employee could not be held accountable
                       for violating policy that was not distributed to him, determining


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                       that the only place the policy appeared was on a pop-up screen
                       for about five seconds as the computers turned on.
                4.     Arbitrator found that the employee’s actions did violate the
                       employer’s sexual harassment and general Internet usage
                       policies, which he had received. Suspension was appropriate
                       discipline since other employees investigated in the matter
                       received only warnings or suspensions.
        L.      Crangle v. Stanford Univ. - retaliation and sex discrimination
                1.     Verdict of $541,000 for Plaintiff
                2.     E-mails chronicled ongoing communication between plaintiff
                       and superiors.
                3.     One e-mail by superior termed the “smoking gun”
                       a)     Plaintiff sent him an email complaining of discrimination.
                       b)     Superior sent email to others stating “I’d like to see what
                              options we have right now simply to lay her off.”
        M.      Blakey v. Continental Airlines, No. A-5-99 (Supreme Court of N.J. June
                1, 2000) - sexual harassment
                1.     In December 1989, Blakey became the first female captain to fly
                       an Airbus for Continental Airlines.
                2.     Shortly thereafter, she complained of sexual harassment and a
                       hostile work environment.
                3.     Starting in February 1991, she complained about pornographic
                       pictures that appeared in her plane’s cockpit as well as vulgar
                       gender-based comments directed at her.
                4.     In February 1993, she filed a charge of sex discrimination and
                       retaliation with the EEOC and filed a claim against Continental
                       in the District Court in Seattle, Washington, her home state for
                       failing to remedy the hostile work environment.
                5.     The District Court transferred the case to New Jersey at
                       Continental’s request because her major flight activities were
                       out of Newark Airport and the alleged unlawful employment
                       practices occurred there.
                6.     From February to July 1995, while the suit was pending,
                       Blakey’s colleagues allegedly continued to harass her by posting
                       derogatory and insulting remarks about her on Continental’s on -
                       line computer bulletin board, the Crew Members Forum.
                       a)     The forum was a bulletin board where employees could
                              post messages to each other.
                       b)     All Continental pilots and crew members had access to it.
                       c)     Management was not permitted to post or reply to
                              messages on the forum, its chief pilots, who are
                              considered management, and its assistant chief pilots had
                              access to it.
                       d)     The remarks ranged from calling her a “feminazi” to
                              questioning her ability as a pilot and her motives for filing
                              the lawsuit.

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                7.    Blakey filed another complaint in New Jersey state court against
                      Continental and the pilots for defamation, sexual
                      harassment/hostile work environment, business libel, and
                      intentional infliction of emotional distress.
                8.    The New Jersey state court dismissed the suit against
                      Continental because its was not responsible for the defamatory
                      statements on the bulletin board.
                9.    In the meantime, Blakey won her sexual harassment suit in
                      federal court. Blakey v. Continental Airlines, Inc., 992 f. Supp. 731
                      (D.N.J. 1998).
                10.   The New Jersey Supreme Court held that:
                      a)      Even though the bulletin board was located outside the
                              workplace, Continental still had a duty to correct off-site
                              harassment by co-workers otherwise it would be sending a
                              message that the harassment is acceptable and
                              management supports the harasser.
                      b)      The Court was careful to note that employers do not have
                              a duty to monitor the private communications of their
                              employees but,
                      c)      Once an employer knows or has reason to know of co -
                              worker harassment in the workplace or in settings related
                              to the workplace, then it does have a duty to take effective
                              measures.
        N.      Adelyn Lee v. Oracle Corporation - sexual harassment; People v. Lee, 1999
                WL 22027986.
                1.    After termination, Lee sued Oracle for sexual harassment. She
                      had an affair with the CEO and was terminated after her last
                      date with him. Her suit was based on an e-mail message from
                      her boss to the CEO stating “I have terminated Adelyn per your
                      request.”
                2.    Lee and Oracle settled the matter for $100,000.
                3.    Thereafter, Lee was convicted of falsifying the e -mail message
                      and obliged to return the settlement. She had broken into
                      Oracle’s computers and sent the e-mail message herself.
        O.      Discriminatory discharge suit against Morgan Stanley
                1.    Plaintiff attempted to show that proffered reason for termination
                      was pretextual by claiming that Morgan Stanley conspired with
                      an informant who agreed to manufacture false e-mails.
                2.    Plaintiff eventually arrested of forgery charges after he allegedly
                      paid an undercover cop to plant a fabricated e-mail at Morgan
                      Stanley to bolster his claim.

V.      Defense Strategies
        A.    Preventive program on discrimination and harassment, proper
              investigation of claims, and formulation of electronic communications
              policy can help defend and protect employers. Employers have

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                prevailed because courts recognize use of reasonable care by, for
                example, disciplining employees who use the Internet and e -mail for
                inappropriate purposes, and implementing a policy to curb the use of
                company computers for dissemination of inappropriate material.
        B.      Sample Cases
                1.    Schwenn v. Anheuser-Busch Inc., 1998 WL 166845 (N.D. N.Y.
                      1998)
                      a)     Court dismissed sexual harassment claim because of
                             prompt response by employer.
                      b)     The company issued a warning to employees not to abuse
                             e-mail.
                2.    Mieritz v. Hartford Fire Ins. Co., No. 3:99-CV-121-R (N.D. Tex.,
                      Apr. 17, 2000) - religious discrimination.
                      a)     Employee “witnessed” his Christian faith by including
                             biblical quotes in e-mails to co-workers, speaking to his
                             co-workers directly about his faith, posting copies of
                             prayers in his work area, and using a Christian screen
                             saver on his office computer.
                      b)     Employee’s position along with three others eliminated.
                      c)     Court granted summary judgment to employer.
                             (1)    Mieritz aware of Hartford’s policy prohibiting the
                                    use of company computers for “solicitation or
                                    proselytizing” but did so anyway.
                             (2)    Nothing in Mieritz’s religion required him to use
                                    the computer system to “witness” his faith so there
                                    was no conflict between his bona fide religious
                                    beliefs and Hartford’s policies.
                3.    Daniels v. Worldcom Corp., No. A.3:97-CV-0721-P, 1998 WL
                      91261 (N.D. Texas Feb. 23, 1998).
                      a)     Court found that corporation not liable for racially
                             offensive e-mail because of its prompt response.
                      b)     The company gave a warning to the employee who sent
                             the e-mail and held a company-wide meeting to discuss
                             the policy on e-mail use.
                4.    Stuart v. General Motors - sexual harassment
                      a)     In July 1996, Stuart complained about sexual harassment,
                             including a computer in her work area that contained a
                             pornographic program
                      b)     GM’s responded by:
                             (1)    removing the computer;
                             (2)    starting an investigation;
                                    (a)    every computer investigated
                                    (b)    30 employees interviewed
                             (3)    offering to move her to another area in the same
                                    position, which she refused; and,
                             (4)    updating Stuart three times on the investigation.

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                         c)  GM learned that the source of the program was a retired
                             employee. It sent a letter and pamphlet to all employees
                             describing its harassment policy.
                      d)     Stuart then complained that someone place pornographic
                             pictures in her locker.
                      e)     GM promptly investigated but could not id the
                             perpetrator.
                      f)     Shortly after her initial complaint, Stuart was suspended
                             for one day for taking excessive breaks; for three days for
                             insubordination; for one week for being under the
                             influence of drugs and alcohol; for two weeks for
                             tardiness; and, finally, for thirty days for tardiness.
                      g)     On January 7, 1997, she was terminated for engaging in
                             an indecent act with a male co-worker in a supervisor’s
                             office. Both employees were terminated.
                      h)     Stuart filed suit claiming hostile work environment and
                             retaliation.
                      i)     Court held that no rational jury could find that the
                             employer’s response was neither prompt nor adequate.
                             (1)    Court noted the transfer offer and prompt and
                                    thorough investigation as well as the republication
                                    of the harassment policy.
                5.    Sherrod v. AIG Healthcare Management Servs., Inc., 2000 U.S. Dist.
                      LEXIS 1626 (N.D. Tex. Feb. 4, 2000)
                      a)     Court held that female employee terminated for
                             legitimate, nondiscriminatory reasons when company
                             fired her for violating its policy prohibiting employees
                             from downloading pornographic images and storing them
                             on company’s computers.
                6.    Spencer v. Commonwealth Edison Co., No. 97-7718, 1999 WL
                      14486 (N.D. Ill. Jan. 6, 1999).
                7.    Rudas v. Nationwide Mut. Ins. Co., 96-5987, 1997 WL 634501
                      (E.D. Pa. Sept. 26, 1997).
        C.      Basic Steps
                1.    Draft an e-mail and Internet policy (sample attached).
                      a)     Clearly define proper use of electronic communications in
                             the workplace.
                             (1)    Primarily business purposes
                             (2)    No derogatory, offensive, or otherwise
                                    inappropriate messages
                             (3)    Specify that the e-mail and Internet system is the
                                    property of the company
                             (4)    Inform employees that the system and all e-mail
                                    and downloaded material are subject to
                                    monitoring, at any time, without notice
                             (5)    Prohibit solicitation for any purpose through e-mail

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                                  (6)Prohibit access to or disclosure of co-workers’ e-
                                     mail without authorization
                              (7)    Specify that violations of the policy may result in
                                     disciplinary action, up to and including discharge
        B.      Distribute the policy
                1.     If do not distribute as separate policy that employees sign,
                       include in policy manual with statement that use of the system is
                       acknowledgment
                2.     Want employees to acknowledge receipt and understanding of
                       the policy and employer’s right to monitor
        C.      Enforce the policy
                1.     Monitor e-mail and Internet use
                2.     Investigate complaints of improper use
                3.     Discipline offenders
                4.     Employers are cracking down on employees who send
                       inappropriate e-mails or view inappropriate Web sites. For
                       example, in the last few years:
                       a)     New York Times fired 20 employees
                       b)     Edward & Jones terminated 19 employees and disciplined
                              41 additional employees
                       c)     Salomon Smith Barney fired several analysts
                       d)     Citibank fired or discipline five employees
                       e)     Xerox fired 40 employees
                       f)     First Union fired 7 employees
                       g)     Honda of America fired or disciplined 88 employees
        D.      Implement/review harassment and discrimination policies
                1.     Consider explicitly stating that use of the email and Internet
                       systems to communicate harassing, discriminatory, obscene,
                       derogatory, sexually explicit, racially charged, or othe rwise
                       inappropriate messages is prohibited.
        E.      Conduct/review harassment/discrimination prevention training
                1.     Include discussion of use of e-mail and Internet to harass or
                       discriminate.
                2.     Sensitize employees to discrimination and harassment issues.
                3.     Teach managers how to deal with such issues.
        F.      Investigate all complaints promptly and thoroughly and take
                appropriate action

VI.     Additional Issues
        A.    Multinational Employers
              1.     A U.S.-based employee of an English company controlled by a
                     U.S. parent logs on to the employer’s job posting Intranet site.
                     The site posts a London-based job opportunity and states a
                     preference for female employees under the age of 30.
              2.     Judges have permitted discovery concerning employment
                     decisions made overseas because could infer that overseas

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                      policies would be applied in U.S. Pisacane v. Enichem America,
                      Inc., 1996 WL 391865 (S.D.N.Y. 1996) (age discrimination
                      claim where age based decision making presumptively legal in
                      country where parent located).
        B.      Internet Applications/Resumes
                1.    Who is an applicant for EEO purposes?
                2.    How do you maintain records on applicant flow by race and
                      gender over the Internet?
        C.      Resume Screening Software
                1.    Software screens for “key words” - make sure key words are job
                      related and consistent with business necessity
                2.    Two cases against Walt Disney alleging adverse impact against
                      African-Americans because key words recognized by program
                      were not necessarily words customarily used by minority
                      applicants.
                      a)     Rivers v. Walt Disney Corp., No. 97-CV-1499 (C.D. Cal.)
                      b)     Hightower v. Walt Disney World Co., No. 97-661-CIV-ORL
                             (M.D. Fla.)




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