New Math. Old Math. Any Old Math Will Do.

By John Alan Doran

The Ninth Circuit Court of Appeals just struck down a trial court’s award of $300,000 in punitive damages in a sexual harassment case yesterday. State of Arizona and Angela Aguilar v. ASARCO. This was a sexual harassment lawsuit brought on behalf of former ASARCO employee, Angela Aguilar. The case went to trial and the jury found ASARCO liable for sexual harassment. However, the jury did not find that Aguilar suffered any compensatory damages, so it awarded Aguilar $1 in nominal damages. But, the jury then awarded Aguilar $868,750 in punitive damages. The trial court reduced this award to $300,000 because of the applicable Title VII damages cap. The real problem here remained—how can a punitive damages award be 300,000 times more than the actual award? That would seem to be a violation of the employer’s constitutional right to due process. This is so because the United Supreme Court has previously advised that punitive damages awards generally should not exceed a ration of 10 to 1 in comparison to the actual damages awarded.

The Ninth Circuit agreed that the $300,000 damages award was constitutionally excessive. But the court instead concluded that a ratio of 125,000 to 1 would be constitutionally acceptable. So, the trial court was instructed to reduce the damages award to $125,000 and if the plaintiff did not accept the reduced amount, the case will have to be retried. When one considers the Supreme Court’s admonition for ratios smaller than 10 to 1 in comparison to this court’s approval of a ratio of 125,000 to 1, one must wonder who’s using the “new math” and who’s using the “old math.”

“Because of Sex” Need Not Rely on Stereotypes

By Bill Wright

For a supervisor to engage in same sex harassment, his (or her) conduct does not need a basis in sex stereotypes. EEOC v. Boh Bros. Constr. Co., No. 11-30770 (5th Cir. September 27, 2013). In this case, a supervisor picked on an iron worker because the worker used Wet Ones to clean himself after going to the restroom. In an earlier ruling, a panel of the same court ruled that using Wet Ones was not “overtly feminine” and therefore picking on the worker because of it was not sex stereotyping. Now, the court has opined, en banc, that sex harassment is to be assessed from the point of view of the harasser. The harasser thought using Wet Ones was a feminine thing to do, so the harassment was based on that view of feminine conduct. If you’re concerned that this weakens the standard that harassing conduct must be objectively offensive, the rest of the conduct described at trial would have been objectively offensive – it included sexual orientation epithets, simulating anal sex and threatening nonconsensual oral sex. Nonetheless, shock-jock Howard Stern, a staunch proponent of Wet Ones, should find solace in this opinion.

Unpaid Volunteers Not Title VII Employees

By Elizabeth Chilcoat

Title VII defines “employee” as “an individual employed by an employer,” leaving the courts to square the circular definition. Some U.S. courts of appeals have adopted the common law/ economic realities test to determine whether a volunteer is really an “employee.” This test focuses on who controls the work and who has financial risk as a result of the arrangement. Because the putative employer “controls” the work of volunteers as well as employees, this test seems like the wrong one to use. Other courts of appeals require a volunteer to show that the employer paid the volunteer a salary or wage or provided the volunteer with significant indirect benefits before the court will consider the common law/ economic realities test. Indirect benefits might include pensions, life insurance policies, disability benefits, health insurance, and other employment-like benefits.

In a recent decision, the Fifth Circuit concluded that a volunteer firefighter was not an “employee” because the fire district neither paid her a salary or wages nor provided her with significant employment-like benefits. Juino v. Livingston Parish Fire District No. 5, No. 12-30274 (5th Cir. May 30, 2013).  As a result, the court affirmed summary judgment for the fire district on the plaintiff’s sexual harassment claims.

When are volunteers not really volunteers? When they are in it for the money.

Report of “Horrific” Conduct, without More, Was Unreasonable Failure to Complain

By Bill Wright

In the absence of a tangible employment action, employers may raise a Faragher-Ellerth defense to a claim of sex harassment. In a recent case, the employer obtained summary judgment on the defense because the alleged victim of harassment refused to tell the employer’s investigators any details about the harassment. The victim told Human Resources that her supervisor had done something “horrific” and when asked directly whether the harassment included a sexual advance, she nodded. Other than that, she refused to provide any details. The employer investigated anyway, interviewing the alleged harasser and other possible witnesses, without discovering any facts about the alleged harassment.

When the lawsuit came, the court granted the employer summary judgment because of the plaintiff’s unreasonable failure to use the employer’s complaint procedure. Stephanie Crockett v. Mission Hospital, Inc., No. 12-1910, (4th Cir. May 30, 2013). Even the best investigators need something more to go on than “horrific”, and apparently a wink and a nod isn’t that “something more”, at least in the Fourth Circuit Court of Appeals.

$3.5M in Punitive Damages Vacated

By Rose McCaffrey

An employer avoided $3.5M in punitive damages by proving it took sufficient steps to stop and prevent harassment. Otto May Jr. v. Chrysler Group, LLC, Nos. 11-3000 & 11-3109 (7th Cir. May 14, 2013). In this case, the plaintiff was subjected to dozens of threats and derogatory graffiti messages, from 2002 until 2005, based on his race, religion, and national origin. He complained to his employer about the co-worker harassment. He specifically asked the employer to install cameras near his work station; the employer did not. He provided a list of nineteen employees that he suspected of involvement in the harassment, but the employer never formally interviewed the employees. Still, the employer did take multiple steps to ameliorate the harassment, including hiring a forensic document investigator to help identify the source of the harassment, and the harassing conduct did eventually cease. The court reasoned that, “while far from perfect, [the employer’s] actions did have a positive effect on the harassment” and held there was no evidence in the record to support the jury’s finding that the employer acted with the requisite “malice” or “reckless indifference” to uphold an award for punitive damages.

This employer’s “far from perfect” response to a harassment claim may have been enough to avoid punitive damages, but it takes something close to perfection to avoid a verdict in the first place.

Sexual Assault Was Not Sexual Harassment

By Andy Volin

A security guard and her husband thought she had claims for harassment and retaliation after she was sexually assaulted (unwanted kissing and groping) at work by an employee of a customer, but the First Circuit recently upheld the dismissal of her claims on summary judgment. The harassment claim failed because the employer had a strong anti-harassment policy in place, and the alleged victim never reported that the customer’s employee was sexually harassing her before the assault occurred. Instead, she had only complained about a couple of phone calls that bothered her. That was not enough to put her employer on notice that the customer’s employee was sexually harassing her. After she reported the assault, the customer’s employee was immediately moved to a different city, ending any potential for further harassment.

Her retaliation claim failed as well. She claimed her employer reduced her hours after she reported the assault, but work records showed that wasn’t the case. She also complained that a person conducting sexual harassment training singled her out for humiliating questions at a training session, but that person did not know about her sexual assault, and so the questions could not be considered retaliation for reporting it. Medina-Rivera v. MVM, Inc., No. 11-2419 (1st Cir. Apr. 10, 2013).

The case is a good reminder that employers must have robust anti-harassment policies in place, and those policies must address harassment both by co-workers and by outsiders who have access to employees as a result of their jobs.

Anti-Harassment Policy Covers Anti-Union Harassment

By Rose McCaffrey

Employees who engage in pro-union campaigning are protected from retaliation by the National Labor Relations Act, but not when campaigning activity reaches the level of harassment or intimidation. But where is that dividng line? A recent case gives an example. NLRB v. Arkema, Inc., No. 11-60877 (5th Cir. Feb. 28, 2013). In this case, a “chief operator” told a female co-worker that, if she did not support the union in a de-certification vote, relationships would change at the plant. “Fearing for her safety and job,” the woman complained. She said the chief operator had told her that male employees would not come to her aid in an emergency if she did not support the union. During the resulting investigation, the chief operator confirmed that he had said he wouldn’t help her “carry her load,” but maintained that he would still help her if she were in danger. He denied mentioning the woman’s sex when he spoke to her. The employer disciplined the chief operator under its anti-harassment policies and also sent out a notice to employees advising them that the union could not harass them for anti-union views.

For its part, the NLRB concluded that the employer had no basis to believe that the employee had violated company policy, because the employee “did nothing that could conceivably be considered to have created an offensive environment.” On the other hand, the court concluded the employee’s threat to the female co-worker was “eminently credible” because the chief operator’s conduct was designed to threaten or intimidate, rather than to persuade; the chief operator admitted that he intended to communicate to his co-worker that he would withdraw the help on which she depended to do her job; and the chief operator was in a position to actually enforce his threat because of his rank and position at the plant.

Harassment and intimidation are not protected concerted activities, but, despite this case, there’s still a large tract of gray between pro-union campaigning and harassment. Employers should always consult labor counsel before disciplining in the gray zone.

Corporations Can’t Be Harassed

By Bill Wright

The Tenth Circuit Court of Appeals has identified one way in which corporations aren’t people: corporations can’t suffer a hostile work-environment. Allstate Sweeping, L.L.C. v. Black, No. 12-1027 (10th Cir. February 7, 2013). In this case, a woman-owned power-washing company alleged (among other claims) that an African American municipal employee created a hostile work environment in violation of 42 U.S.C. § 1981. Specifically, Allstate Sweeping LLC asserted that Black made its contract with the city unprofitable and made its owners’ lives miserable. The Tenth Circuit noted: A hostile work-environment claim requires proof that the plaintiff was offended by the work environment. “Being offended presupposes feelings or thoughts that an artificial entity (as opposed to its employees or owners) cannot experience.” (Emphasis in original.)

So even if you have a corporation with a heart, it’s still not a person–at least according to the Tenth Circuit.

Personal Conflict Becomes National Origin Claim

By Bill Wright

Even a personal conflict can become a discrimination claim.  Two bus line employees had an off-work conflict.  Dominic had an affair with Enio’s wife.  When Enio found out and obtained a divorce, Dominic married Enio’s ex-wife.  Thereafter, Enio complained several times to Human Resources that Dominic was bringing this personal conflict to work, harassing and threatening him.  Enio did not mention that Dominic was calling him “spic” and “Taco Bell.”  Dominic also complained that Enio was threatening him.  The Vice President of Human Resources looked into the complaints and expressed his concern about the ongoing hostility over “problems in [their] personal home lives.”

Four years after the conflict started, Enio filed a Charge of Discrimination, alleging an “old boys club” of Italian American descent was conspiring to get him fired.  Enio still did not mention any ethnic slurs.

Nevertheless, Enio’s lawsuit will have to go to trial.  Enio gave evidence about extensive bullying and physical harassment – possibly included in the previous internal complaints – and also stated that he heard Dominic call him “spic” three times and “Taco Bell” “anywhere from ‘[e]very time’ he pulled into the garage to ‘about five’ times.”  Other witnesses verified that similar terms were used outside Enio’s hearing as well.

The employer must have felt blind sided.  The use of ethnic slurs added an element of discrimination to what Human Resources had thought was conflict over a romantic triangle.  Now the employer will have to rely on the thoroughness of HR’s investigation to convince the Court that it was not negligent in responding to Enio’s complaints. Rivera v. Rochester Genesee Regional Transportation Authority, No. 11-762-cv (2d Cir. December 21, 2012)

Firing Supervisor for Threats Is Not Retaliatory

By Bill Wright

There are limits to self-help, even if you believe you have been subjected to harassment.  In Gaff v. St. Mary’s Regional Med. Center, No. 12-6064 (10th Cir. December 19, 2012) (unpublished), the employer discharged a supervisor for her reaction to an employee’s joke.  The joke was in poor taste: the employee “joked” that the supervisor’s husband was leaving her for another woman.  In times past, the same employee had told her: “All you need is a good f[---].”  But the supervisor’s response to the “joke” this day was to say that she owned a gun, knew how to use it, and that the employee’s comment was “the kind of joke that can get someone shot.”  The employer fired the supervisor and she sued.  The Court ruled that – with just these two comments and other innocuous conversations – the supervisor cannot have had a reasonable belief that the employee was harassing her.  More to the point, the only evidence in the case showed that the supervisor’s threat was the real and only reason for the discharge decision. 

These days, everyone has good reason to be leary of threats in the workplace.  The courts seem to support employers who take those threats seriously.