Protect Your Cannabis Business from the Bad Acts of Your Employees

Ignore harassment complaints and face liability.

If you have a successful cannabis business, you likely have employees. Whether you have a few or many employees, your cannabis business can be liable for the actions of those employees. This post (the first in a series) will explore the various ways your cannabis business could be liable for the actions of your employees and the ways you can protect against such liability.

We recently discussed the importance of your cannabis business having a sexual harassment policy. A sexual harassment policy is important to establish a workplace that is safe for all employees but it is also an important tool to protect your cannabis business from liability for sexual harassment claims.

There are two types of sexual harassment: Quid pro quo and hostile work environment. Quid pro quo harassment is committed when some type of employment benefit or employment decision is made contingent on sexual advances or favors. Examples of quid pro quo harassment are when a supervisor fires an employee after the employee refuses the supervisor’s sexual harassment or if the employee does not receive a deserved bonus after refusing sexual advances. Only supervisors can commit quid pro quo harassment. Employers are automatically liable for quid pro quo harassment that results in a tangible job detriment.

A hostile work environment occurs when there are frequent or pervasive unwanted sexual comments, advances, requests, contact, conduct, or other similar conduct. Any employee can create a hostile work environment. Unlike quid pro quo harassment, employers are not automatically liable for employee actions that result in a hostile work environment. An employer is not liable if it can prove that it (1) exercised reasonable care to prevent the sexual harassment, (2) remedied the harassment and (3) that the aggrieved employee unreasonably failed to take advantage of those preventive and remedial measures.

An employer can demonstrate reasonable care to prevent sexual harassment by having a comprehensive non-harassment policy and complaint procedure in place. Merely having the policy in place is not enough. The employer must actually follow the policy. For instance, if the employer has a complaint procedure policy that requires employees to report the harassment to a specific person but that person is never available, the complaint procedure is not reasonable.

The employer must also have taken remedial action once it knew of the harassment. Remedial action includes a comprehensive investigation into the allegation and disciplinary action to ensure the harassment stops. If these procedures are in place, but the aggrieved employee unreasonably failed to take advantage of the preventive and remedial measures, an employer may not be liable for the alleged harassment.

If an employer knew or reasonably should have known about harassment, it can be found liable even if the employee victim does not follow the complaint procedure. For example, if a supervisor or someone else with decision-making power views an employee harassing another employee and does not investigate further, the employer may be liable for the bad acts of the employee.

The bottom line is that your cannabis business should create a strong no-harassment policy and complaint procedure and carefully follow it. You also should perform investigations when sexual harassment complaints arise and take disciplinary action as necessary. You cannot control the actions of your employees at all times, but you can take steps to protect your cannabis business from the bad acts of your employees. For more on drafting a strong anti-harassment policy and following the policy, view our post here.