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Workplace hazing emerges from the shadows

Posted On: Sep. 3, 2019 7:00 AM CST

Hazing in the workplace

Hazing incidents or bullying in the workplace can be problematic for both public- and private-sector employers, and amid the #MeToo environment, awareness around the behavior is growing, experts say.

Several insurance coverages may come into play in hazing events, including general liability, employment practices liability and workers compensation policies, observers say.

Having strong workplace policies, procedures and training in place are critical for employers to manage and mitigate the risks, they say.

A recent case in Portland, Oregon, highlights the potential liability public entities can face from such claims. The city reached an $80,000 settlement, effective Aug. 2, ending a lawsuit brought by Adam Rawlins, a former employee who had claimed in U.S. District Court he was subject to battery and intentional infliction of emotional distress due to “extreme hazing” while working for the Portland Bureau of Transportation in 2016.

In one incident, Mr. Rawlins alleged he was held against his will and locked in a cage in a city shed while he was bound with zip ties and duct tape, according to court documents.

The city of Portland is self-insured for the first $1 million in liability coverage, including employment practices and auto claims, a spokesman in the city’s risk management division confirmed, though he declined to comment on the specific case.

Excess liability coverage, in excess of $1 million, is purchased separately and there is no exclusion for hazing, the spokesman said. Law enforcement claims have a self-insured retention of $2.5 million, he said.

While hazing in the college fraternity and sorority setting has been widely publicized, incidents of hazing in municipalities, school districts and townships have not been as prominent, experts say.

“I haven’t seen a massive rise. There have been several incidents the last three or four years. There’s a very fine line between hazing and bullying and sexual harassment or some sort of sexual assault,” said Dave Marcus, Boca Raton-based area chairman for Florida at Arthur J. Gallagher & Co.

“The reason we don’t hear about hazing per se is because it’s bullying, or it could be called sexual assault or molestation,” Mr. Marcus said.

“We’ve seen slight upticks in the type of behavior that often accompanies hazing, especially if it involves sexual misconduct,” said Jack McCalmon, owner of loss prevention consultant The McCalmon Group Inc. in Tulsa, Oklahoma. “Whether hazing has increased or whether public awareness after the #MeToo movement, Harvey Weinstein and issues involving child sexual abuse has made people more aware, it’s hard to say.”

“We have seen an uptick in people bringing claims, and sometimes they will characterize it as a hazing ritual,” Mr. McCalmon said.

The organizations at greatest risk are those with satellite offices and departments that are outside direct control, because they are not monitored, he said.

“The manager or person in charge has a lot of autonomy. They escape a lot of scrutiny,” he said.

From the insurance standpoint, workplace bullying is covered under a general liability policy, but when the behavior crosses into sexual assault, there may be separate coverage within a general liability policy, or the employer may have a separate policy, said Mr. Marcus.

“If the hazing turns into some sort of molestation, assault or harassment, it creates a different exposure that may or may not be covered under the GL policy,” he said, adding that sexual harassment may be excluded from the general liability policy.

“Public entities are ruled by the laws and statutes of the states they are in ... Some states have sovereign immunity (laws) or tort caps, and some states don’t. A lot of that (influences) how an entity purchases coverage,” Mr. Marcus said.

Workplace bullying incidents may trigger employment practices liability policies, subject to policy language, said Natalie Douglass, St. Louis-based chief legal director for the management liability practice at Gallagher.

“We would have to be able to trigger the definition of wrongful act, which could include workplace bullying,” she said.

“If that’s there, then we can trigger that policy subject to the bodily injury exclusion,” Ms. Douglass said.

While employment practices liability policies do not cover bodily injury, there is coverage for mental anguish and emotional distress, she said.

Workers compensation policies could also come into play, experts say.

“From the workers comp perspective, if the (individual) was injured during the hazing, if they had abrasions or, God forbid, broke a bone, in theory it should be covered by workers compensation because it was a bodily injury caused or aggravated by the conditions of their employment,” said Jessica Cullen, New York-based managing director of the casualty practice at Gallagher.

The challenge for employers in both the private and public sectors in dealing with workplace bullying and hazing is that “up to this point it’s not necessarily something that has been clearly against the law,” said Mark Swerdlin, a Baltimore-based partner at Shawe Rosenthal LLP.

Under federal law, Title VII of the Civil Rights Act of 1964 deals with harassment or discrimination in the workplace, he said.

“There’s case law and procedures in place to deal with sexual harassment, or harassment based on race or religion or any of the other protected classes. But bullying is not necessarily something that would be covered by those laws,” Mr. Swerdlin said.

“Absent a racial or religious or age component to how the alleged bullying happened to the victims, it would be dependent on each city or state or local law that might exist,” Mr. Swerdlin said.

“As an employer, a public entity is generally subject to the same liability any employer is, in that they have to ensure the workplace is one that does not foster an environment of discrimination or harassment or retaliation,” said Andrew Smith, senior counsel in the Los Angeles office of Tyson & Mendes LLP.

If “a rogue supervisor is trying to use the workforce as his personal dating pool, or a group of people are forcing others to do things that they wouldn’t want to do, or people are not being promoted based on their race, gender or disability … and a public entity doesn’t do what they are required to do under the law to prevent it from happening, there’s potential liability there,” Mr. Smith said.

Employers should mitigate the risks by having appropriate policies and procedures, experts say.

“Protecting people and their equal rights is important. Prohibiting certain forms of bullying conduct is important in a written format, but also having a mechanism where people feel they can report their reasonable concerns about violations of the policy without fear or intimidation is extremely important,” said Mr. McCalmon.

Employers should also have people on standby with the experience and expertise to conduct a thorough investigation, “to root out any conduct, ritualistic type of harassment or bullying or uncivil-type behavior,” he said.

“It’s not uncommon to see employers that want to conduct civility or harassment training with their staff, which would deal with these instances of bullying or inappropriate behavior,” said Mr. Swerdlin.

Bystander intervention training is also growing, he said. “There’s a big push to empower co-workers so that when they witness bullying or harassing behavior the bystander steps up,” he said.