An Oregon ruling just changed what HR has to prove before naming an owner in a harassment case
Oregon's appeals court just narrowed when bosses can be personally on the hook for workplace harassment – and policy oversight alone is not enough.
On May 13, 2026, the Court of Appeals of the State of Oregon reversed a state labor agency ruling that had pinned aider-and-abettor liability on Todd Mitchell, an owner of Frehoo, Inc., for sexual harassment at the company's Stars Cabaret & Steak House. The court said a negligence-style test – whether an owner ought to have anticipated harassment – is not enough. Owners and executives have to know about the harassment, or have clear notice of it, before they can be liable personally under Oregon's anti-discrimination statute.
The underlying facts are disturbing. According to the decision, Frehoo hired a 15-year-old child sex trafficking victim, referred to as AP2, as a dancer. Customers touched her sexually at the club. A bartender recognized her from a missing persons photo and reported it to a manager and to Mitchell. The decision says Mitchell directed the club's general manager to contact law enforcement immediately.
The Oregon Bureau of Labor and Industries (BOLI) found Frehoo liable for creating a hostile work environment under ORS 659A.030(1)(b). That corporate finding is not disturbed by the appeal. BOLI also found Mitchell personally liable under former ORS 659A.030(1)(g) (2021), Oregon's aider-and-abettor provision. Its reasoning was that he was responsible for enforcing harassment policies, failed to enforce them, and ought to have anticipated harassment would follow.
The appeals court took apart that logic. Writing for the panel, Judge Kamins worked through the dictionary meanings of the statutory verbs – aid, abet, incite, compel and coerce – and concluded each one carries an element of knowing what you are helping along. The court also pointed to the Restatement (Second) of Torts and Oregon criminal accomplice cases, both of which require some form of knowledge. A pure negligence standard, the court said, was not what the legislature had in mind.
Applied to the record, that standard was not met. BOLI itself had found Mitchell was not involved in AP2's hiring, had never seen her, and acted promptly when told. The court cited Harris v. Pameco Corp. for the long-standing rule that an employer who learns of harassment and takes immediate remedial action is not liable.
BOLI's alternative theory - that Mitchell's industry experience and his role in shaping Frehoo's policies were enough – did not move the court. Responsibility for the policy file, the court held, is not the same as knowing about a violation.
For HR leaders in Oregon, the decision draws a clearer line. Corporate liability for harassment remains where it has long sat, with the employer that lets a hostile environment take root. Personal liability for owners and senior executives, by contrast, now demands a knowledge link to the actual conduct. Failing to enforce a policy, on its own, will not get the agency over the line.
The practical takeaways are familiar but reinforced. Train managers to escalate complaints. Document the escalation. Act fast once harassment is reported, because prompt remedial action is what blunted Mitchell's exposure here. And keep in mind that the underlying employer liability is not weakened by this ruling – it is the individual liability question that has tightened.
The case was reversed and remanded.
The case is Mitchell v. Bureau of Labor and Industries of the State of Oregon, 349 Or App 520 (2026).
