In a Second Circuit case, Karen Duch sued the State of New York for sexual harassment after she told a manager—who also served as an EEO liaison—about ongoing harassment at the Manhattan Midtown Community Court.
Duch told the manager, “I’m telling you as a friend,” and when asked if she wanted the harassment reported she said, “Absolutely not.” Because of that request, and despite the manager’s EEO responsibilities, the manager did not report the harassment to anyone.
The court ruled against Duch and highlighted several points employers should consider when assessing liability for coworker harassment.
When an employer can be liable for coworker harassment
When harassment comes from a co-worker rather than a supervisor, an employer is liable only if it fails to provide a reasonable avenue for complaint or fails to take appropriate remedial action after learning of the problem.
Here, the court found Duch had several reasonable avenues for complaint even though the EEO liaison was poorly trained and failed to report her concerns. Duch acknowledged she could have sought help from at least five different sources in addition to the manager she told.
When a manager's knowledge is imputed to the employer
- The official is at a high enough level of management to act as the employer’s proxy.
- The official has a duty to act on the knowledge and stop the harassment.
- The official has a duty to inform the company of the harassment.
The court held the immediate manager did not breach a duty to remedy the harassment because she honored an employee’s request for confidentiality. The court also said the conduct had not reached the point where a manager simply cannot stand by, even when asked to do so by the employee.
However, the court found a higher-level executive’s knowledge was imputed to the employer. The court explained that a supervisor’s purposeful ignorance of a complaint does not shield the employer from liability, even if that executive never directly witnessed the alleged harassment.
The case also noted a delay in formal investigation: a jury could find that the later manager’s knowledge and the three-month delay before a formal investigation began could make the employer’s response unreasonable.
Lesson learned
Be explicit about what you expect managers to do when they suspect or know about wrongful conduct so they can act consistently and lawfully.
Manager actions to clarify
- What should they do if they know about harassment but no one files a formal complaint?
- What should they do if an employee complains but asks for confidentiality?
- When should they override an employee’s request for confidentiality because the conduct is severe?
- How should they approach an employee if they suspect harassment but lack full information?
One suggested approach when talking with an employee: “Is Bob harassing you? Should I speak to the EEO about this? If you want me to keep it confidential I’m going to make a written note to protect the company and myself. If you feel you need help, you can go directly to the appropriate superior, or I can report it for you.”
Regular, documented compliance checks can help. For example, an Employee Compliance Survey conducted every six months can surface problems earlier and reduce second‑guessing about whether the employer acted appropriately.
Employers should also review available coverage and resources such as Understanding Employment Practices Liability Insurance and consider specific options like Sexual Harassment Defense Coverage (EPLI) or broader Sexual Harassment Insurance to help manage risk and defense costs.
If you need help reviewing options with an insurance professional, talk to an agent.
Frequently Asked Questions
Can an employee’s request for confidentiality prevent an employer from investigating?
An employee’s request for confidentiality is a factor, but employers may still need to investigate when the allegations are serious or when safety is at issue.
When is a manager’s failure to act imputed to the employer?
Knowledge is imputed when the manager is a high-level proxy for the employer, has a duty to act, or has a duty to report the complaint upward.
How quickly should an employer investigate harassment complaints?
Investigations should begin promptly after a credible complaint is received; unreasonable delays can increase liability risk.
Can insurance help with harassment claims?
Certain policies, like employment practices liability insurance, can cover defense costs and settlements, but coverage varies by policy and carrier.