China employment lawI previously wrote how an employer would be required to pay statutory severance to an employee who unilaterally terminated his or her employment contract because of employer abuse. One such ground is the employer’s failure to provide necessary labor protections for employees. For example, China’s Law on the Protection of Women’s Rights and Interests explicitly prohibits sexual harassment against women and the law further provides that female sexual harassment victims may file a complaint with their employer and/or with the authorities. Nonetheless, not all female employees have prevailed in getting the employer to pay.

Let’s take a look at a case from Zhejiang province.

Employee (plaintiff) entered into an employment contract with her employer (defendant) and thus established an employment relationship with the employer in December 2011. In May 2014, the employee found some strange fluid in her mug on her desk and suspected it was semen and reported this to her Employer. The employer contacted the police department and pulled surveillance video. The next day, the plaintiff/employee took the surveillance video and the mug to the local police. That same day, a male company manager who worked in the same department as the suspect asked the employee who had found the mug on her desk not to press charges so that he wouldn’t lose face. The following day, the suspect went to the police and confessed to everything. The police eventually imposed an administratively detained the suspect for three days as punishment, but brought no criminal charges against him.

The following month, the female employee provided notice to her employer of her intention to terminate the employment contract due to the employer’s failure to provide labor protection and labor conditions required under the law. The employee demanded three months’ statutory severance but the employer refused to pay. The employee filed a claim against the employer at the labor arbitration center but she lost. She then filed a lawsuit against the employer in the local court.

The court first acknowledged that the Special Rules on the Labor Protection of Female Employees and other relevant laws and regulations regarding protection of women’s rights require an employer prevent and stop sexual harassment against female employees. But the court then went on to say this does not make employers strictly liable for every illegal act that occurs at the employer’s workplace. The court then ruled that even though the suspect was an employee of the defendant, the suspect committed the illegal act himself and it was his act that directly and proximately caused plaintiff’s emotional stress, which led to her leaving the employment. According to the court, the suspect had acted completely on his own, and the employer had no way of predicting and controlling the suspect’s action. After the employer received the employee’s report, it handled the incident as best as it could by timely contacting the police in a timely and pulling the surveillance video. The court went on to hold that the department manager who asked the female employee to withdraw her complaint about the incident was not representing the employer with that request and thus his actions also did not constitute employer action. Finally, after the police had punished the suspect, the employer terminated him. So there was no factual or legal basis to support the employee’s demand for severance when she unilaterally terminated the employment relationship with the employer. Thus the employee lost at the court level as well.

How would a U.S. court have handled this same case? To get an answer to this, I turned to my friend, Ada Wong, a Seattle-based employment attorney licensed in the states of Washington and California. She surprisingly responded by saying that a Washington State Court would probably have handled the case quite similarly:

In Washington, employers also have a duty to prevent workplace harassment, including sexual harassment. However, employers are not automatically held liable for every employee’s actions. Under federal law, an employer is subject to vicarious liability to employees for an actionable hostile work environment created by a supervisor. It is unclear from the facts of this case whether the suspect/perpetrator would be considered a “supervisor” so as to render the employer strictly liable for that person’s actions. If the perpetrator had held the power to hire, fire, demote, fail to promote, etc., then that person would likely have been considered a supervisor for this purpose.

If the employer had reason to know – “knew or should have known” – that the perpetrator was engaging in this type of behavior or was going to engage in this type of behavior, and still failed to prevent it, then the employer could be held liable for allowing the perpetrator to carry out his actions.

The employer took the correct action by immediately reporting it to the police and starting an investigation by pulling the surveillance video.

In terms of the department manager who requested that the harassed employee withdraw her complaint, it is unclear whether he represented the employer when he made that request. If he did this while at the office during working hours, then plaintiff could argue that she was under the impression that if she did not withdraw her complaint, she could face adverse employment action. Had she reported this to her employer and was terminated or faced adverse employment action, that would have provided her with additional grounds for a lawsuit. The department manager’s telling the plaintiff/employee not to press charges was clearly inappropriate, but it may not give rise to a claim against the employer.

If this matter were heard in a Washington State Court and there had been no evidence of any prior notice of the suspect’s inappropriate behavior, the plaintiff employee likely would not prevail on a sexual harassment claim against her employer for the suspect’s action, especially because the employer took appropriate measures, including contacting the police and terminating the suspect upon learning of the incident. If plaintiff employer could show that the department manager was acting in his supervisory capacity when he made the request for her to withdraw her complaint, then the employer may be deemed liable.

This case is unusual in that the suspect’s action was so bizarre that it is hard to imagine the employer could or should have foreseen it. Still, the Chinese court never even discussed the “notice” element: did the employer have reason to know (or even have an inkling) that the perpetrator would do something like this?

What is also unusual about this case is that the employer chose to spend money fighting this battle in a court and thereby allowing all of this to become public, rather than just paying the employee her three months.

What do you think?