Can an Employer Limit Damages an Employee Recovers for Unlawful Harassment if S/He Chooses to Sue?

A California employer can limit damages awarded to an employee under California law based on the doctrine of avoidable consequences. To prevail on this defense, an employer must prove three elements:

  1. The employer took reasonable steps to prevent and correct workplace sexual harassment;
  2. The employee unreasonably failed to use the preventive and corrective measures that the employer provided; and
  3. The reasonable use of the employer’s procedures would have prevented at least some of the harm that the employee suffered.

The employer must be prepared to show that it adopted appropriate anti-harassment policies and communicated essential information to its employees concerning the policies and implementing procedures.  In addition, the procedures must protect confidentiality as much as practicable, and the employer consistently and firmly enforces its policies.

Moreover, the employer will also want to show all evidence tending to show that the employer took effective steps to encourage individuals to report harassment and for the employer to respond effectively.

If an employer can show that if the employee had taken reasonable steps to utilize the complaint procedures, the harassing conduct would have stopped, the employer will still remain liable in all instances for any compensable harm the employee suffered before the time at which the harassment would have ceased.

Note: under federal law, this defense acts as a complete affirmative defense barring any recovery, but most cases in California are not brought under federal law.