Monday, April 9, 2018
New York court rules sexual harassment by itself is not against an employer's interest such that it breaches a fiduciary duty
A recent case out of New York, Pozner v. Fox Broadcasting Company, 652096/2017, is related to the growing spotlight on sexual harassment cases. In the case, Pozner was terminated from his employment based on sexual harassment complaints and sued for breach of his employment contract. Fox brought counterclaims for breach of contract and fiduciary duty.
I'm blogging this case because it has an interesting ruling on the fiduciary duty claim in the context of sexual harassment cases (which I assume we might see more of; or maybe not if maybe people just stop sexually harassing others /end wide-eyed optimism). The court found that the employee handbooks were contracts whose terms Pozner had agreed to abide to, but the court dismissed Fox's breach of fiduciary duty claim, because the fiduciary duty of loyalty is about the employee acting against the employer's interests, and no court in New York has found sexual harassment on its own can serve as a basis for a breach of that duty of loyalty. Fox did not allege enough to convince the court that Pozner's sexual harassment was against Fox's interest. The court noted that other cases where sexual harassment was part of a breach of loyalty involved other financial improprieties or allegations of fraud.