Hostile work environment sexual harassment liability is the kind of nebulous legal concept that drives many employers crazy. Just what exactly is a “hostile work environment”?

In a welcome ruling for California employers, the state Court of Appeals has provided some detailed insights on the kind of conduct that does—and doesn’t—make for a hostile work environment. And in throwing out a $250,000 jury award to an employee, the appellate court reinforced previous judicial statements that the Fair Employment and Housing Act (FEHA) is not a civility code.

Employee Is Offended
"Shannon" began working for Newport Beach-based Townsend & O’Leary Enterprises as an assistant media planner in 1991. She rose steadily through the advertising agency’s ranks, serving as an account supervisor and vice president when she resigned in January 2005.

Shannon was close to owner "Rick", whom she described as a second father. She regularly confided in him about her personal life and dating relationships. At one point, she told him about a sexually transmitted disease she had contracted from a boyfriend. He would sometimes make inquiries related to her personal and dating life.

In the period running from 2000 to 2003, Shannon attended two off-site Christmas parties and an off-site bachelorette party for agency employees. Shannon felt that these parties included sexually offensive conduct, but she never complained about it.

She did, however, complain about an email sent in August 2004 by "Chet", the agency’s executive creative director, to another executive. The email was about an employee’s departure from the agency and referred to Shannon as “big-titted” and “mindless.” The departing employee somehow received the email and forwarded it to Shannon, who complained to her supervisor (neither the original sender nor the intended recipient were Shannon’s supervisor).

The Employee Takes Action
After the email incident, Shannon started speaking to former and current employees of the agency to learn whether sexual harassment had previously occurred at the agency. She discovered that Chet sent an email to a co-worker that referred to a female client in derogatory terms, called that same client a profane term in conversation, and made inappropriate comments to female co-workers.

After the August email incident, Shannon received an apology from O’Leary and saw a letter of reprimand warning Chet not to violate the agency’s sexual harassment policy. Nonetheless, citing other examples of sexual harassment but refusing to provide details, Shannon requested a “constructive discharge” that would include a compensation package for her. Rick asked her stay on multiple occasions over several weeks and did not offer a compensation package.

In November 2004, the agency brought in someone from outside the firm to investigate sexual harassment in the workplace. Shannon refused to speak with him. On January 4, 2005, she gave one week’s notice; she subsequently sued the ad agency and Chet for hostile work environment sexual harassment under FEHA.

The Jury and the Judge Disagree
A jury found that Shannon was subjected to severe or pervasive harassment because she was a woman. It awarded her $250,000 in damages—$200,000 from the agency and $50,000 from Montgomery.

The trial court judge, however, disagreed with the jury and entered a “judgment notwithstanding the verdict” (JNOV) in the defendant’s favor, based on insufficient evidence that Shannon was subjected to severe or pervasive workplace sexual harassment. Shannon appealed this judgment.

‘Hostile Work Environment’ Legal Standard
To prevail on hostile work environment claims under FEHA, employees must show that the harassing behavior was severe enough or sufficiently pervasive to alter the conditions of employment and create a work environment that qualifies as hostile to employees because of their sex. As the Court of Appeals noted, it takes more than harassment that is occasional, isolated, sporadic, or trivial.

The employee’s hurdle is even higher if the conduct was aimed at individuals other than the employee herself. If the employee was not personally subjected to offensive remarks or touchings, the conduct must have permeated her direct work environment. Generally, the court explained, the employee must show that she personally witnessed the harassment.

Conduct Was Not Severe or Pervasive
The Court of Appeals quickly dispensed with the question of whether Shannon was subjected to severe harassing behavior. Neither the August email nor any other evidence showed that Shannon was ever assaulted, subjected to unwelcome physical contact, threatened, propositioned, or subjected to explicit language directed at her or anyone in her presence. She also was never subjected to verbal abuse or harassment.

The court further agreed with the trial court that the conduct was not pervasive. The August email was the only incident of harassment based on her gender directed at Shannon. Although the email was “rude, insulting, and unprofessional,” it was an isolated event, and it wasn’t intended to be shared with anyone other than the original recipient.

Shannon argued that besides the email, the jury’s verdict was supported by the three incidents she witnessed at off-site parties, none of which involved Chet. But the court found that the incidents and the email occurred over the course of a 4-year period with a frequency of 6 months to years between incidents. The incidents, therefore, didn’t establish a concerted pattern of harassment of a repeated, routine, or generalized nature.

Rick’s inquiries about Shannon’s personal life and relationships fell short of constituting pervasive harassment as well. The court saw no evidence that she found any of those inquiries offensive. Moreover, the need for evidence of the unwelcomeness of any or all of Rick’s inquiries was underscored by Shannon’s testimony that she used profanity at work and sent emails with sexual material to co-workers from her work computer at work.

As for the incidents she uncovered in her own investigation, the court found that they couldn’t have permeated her work environment when she hadn’t even been aware of them before her investigation.  The Court of Appeals affirmed the lower court’s judgment. Brennan v. Townsend & O’Leary Enterprises, Inc., Calif. Court of Appeals (Dist. 4) No. G042398, (2011).

A Word of Caution
The appellate court’s ruling was obviously a victory for the employer, and other employers can take comfort knowing that occasional incidents of unacceptable conduct don’t necessarily amount to an actionable hostile work environment. Bear in mind, though, that a jury did find the employer liable, and JNOVs are rare. The agency surely lost a significant amount of time and money, too.

The best way to avoid such headaches is to train your employees regularly on your antiharassment policy, investigate employee complaints on a timely basis, and take appropriate remedial measures. Prompt action can snuff out bad behavior before it becomes severe or pervasive.

Practice Tip: Courts have ruled that a single harassing incident that involves physical violence—or the threat of physical violence—can qualify as "severe" and trigger employer liability.