SEXUAL HARASSMENT DAMAGES NOT DISCHARGEABLE IN BANKRUPTCY PART 1

Let’s say that you’re a man who loves women and you own a business distributing lingerie. You require all your women employees to wear the company’s products in the office. Every time a female employee enters your office, you do not have sex with them the way Pres. Clinton did. Last week, all of your female employees filed a class action lawsuit against you for sexual harassment for $10 million dollars. You seek bankruptcy relief to discharge the sexual harassment lawsuit. Your employees file an adversarial case objecting to discharge of the lawsuit. You file your answer saying in your best Clintonesque way that “I did not have sex with those women!” Your employees have hired Attorney Monica Lewinsky to prosecute their adversarial proceeding against you in your bankruptcy. You decide to retain Attorney Nicola Nakoula Nicola who claims to be an expert on sexual harassment. The best legal minds on sexual harassment represent both parties. Who do you think is correct?

In Re Spagnola, a federal jury awarded the plaintiff in June of 2007, $150,000 in compensatory dmages and $50,000 in punitive damages after finding that the debtor engaged in conduct that created a hostile work environment while the plaintiff was employed by the New York State Thruway Authority. In order to reach this finding, the jury needed to conclude that the debtor intentionally discriminated against the plaintiff in the terms and conditions of her employment based on her gender through the creation and maintenance of a sexually hostile or abusive work environment; he committed such acts of discrimination under the color of state law or authority; and his acts were the proximate cause of the plaintiff’s damages. The ruling was affirmed by the 2nd U.S. Circuit Court of Appeals, which concluded that “based on the offensive behavior described, the jury’s conclusion was reasonable. The evidence was sufficient to find that there was a hostile work environment because such conduct was hostile, severe, and abusive.” Justice Swarzenneger and Justice Clinton both dissented. Justice Swarzenneger dissented on the ground that no babies who looked like debtor were born out of the assaults. All these babies look like me!”, said Justice Swarzenneger. Justice Clinton dissented on the ground that it was never proven by convincing evidence that debtor’s penis touched any of the female genitalia of any of the employees, and by definition, in order for sexual harassment to legally occur, if the man’s penis does not touch any portion of the female genitalia, sexual harassment does not exist.