Is “Employee” Written in the Cards? 2019-07-26T13:45:55-07:00

Posted on July 26, 2019

A federal jury will decide whether a tarot card reader who performed at the Colorado Renaissance Festival for thirty years is a Title VII employee for purposes of her retaliation claim. Plaintiff claims that she was not invited back for the 2016 season in retaliation for her complaint of sexual harassment.

Plaintiff’s lease agreement with the Colorado Renaissance Festival, through which she leased a space for her palm and tarot carding reading booth, contained a provision titled “Independent Contractor Status,” where she acknowledged she was not an employee of the Festival. The Colorado District Court, however, looked at the actions of her engagement with the Festival and found that her employee status is a question for a jury. In deciding to deny the Festival’s summary judgment motion, the court first looked at whether the Festival was an employer and then whether the Plaintiff was considered an employee, both under Title VII.

Festival as an employer: Title VII defines “employer” as “a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” Although the Colorado Renaissance Festival alone may not have the requisite fifteen employees, it is an integrated enterprise with the Pittsburgh Renaissance Festival, and the two combine to likely meet the requirement of a Title VII employer. The court noted the two festivals shared a payroll software license, website and ticket design, employment applications, vehicles, and employees, from which a jury could find the companies to be an integrated enterprise.

Plaintiff as an employee: To determine an individual’s status as a Title VII employee, the court used the Tenth Circuit’s “hybrid test,” to determine whether Plaintiff was truly an independent contractor, with the main focus on “the employer’s right to control the ‘means and manner’ of the worker’s performance.” The court first found it undisputed that the festival did not pay Plaintiff any direct compensation (no salary or hourly wage), and so, the court looked to the “threshold-remuneration test” for other direct or indirect benefits Plaintiff received from the Festival. The court found that the Festival was the ultimate source of her income because the Festival controlled Plaintiff’s access to customers who paid a fee for her services at the booth, which was evidence of direct or indirect benefits received by a Title VII employee.

The positive outcome of the threshold-remuneration test was in addition to the employment relationship a reasonable jury could conclude existed based on the level of control the Festival exercised over Plaintiff’s work. The Rules of Plaintiff’s lease agreement governed the specific hours to staff her booth; fines for closing without permission during inclement weather; her manner of speech, decorum, hairstyle, covering of tattoos, and performance; goods or services sold; equipment she could use; pre-approval for booth changes; discipline for violating festival Rules; advertising of her booth; and other terms.

The court’s analysis found enough evidence to survive summary judgement for the retaliation claim, but it is still up to a jury to determine whether the tarot reader will be dubbed an employee. Businesses that dictate the terms of a contractor’s independent work need to beware of being found to be an employer. This applies even when the contractor has to fit the theme of the workplace—here a renaissance village.

St. Michael v. Rocky Mt. Festivals, Inc., Civil Action No. 1:16-cv-02969-SKC, 2019 U.S. Dist. LEXIS 114040 (D. Colo. July 10, 2019).

Employee’s Personal Notes Lead to Trial 2019-05-20T16:01:24-07:00

Posted on May 20, 2019

By Lindsay H.S. Hesketh

A correctional officer will be going to trial against her former employer in the District of Arizona on hostile work environment claims. The plaintiff alleged multiple instances of harassment, including being the target of crude comments, having to listen to sexually explicit stories, and being sexually assaulted in her car by a coworker. The plaintiff complained to her supervisors, but her employer did not respond in accordance with its policies. During a work investigation on a different issue, her employer found the plaintiff’s handwritten notes documenting the alleged harassment.

While the defendant won summary judgment on the plaintiff’s retaliation claim, the Court denied summary judgment on the hostile work environment claim. The defendant had argued that the plaintiff’s case for hostile work environment lacked a key element—the plaintiff’s subjective belief that the alleged harassment was offensive. The defendant pointed out that the plaintiff had included only one instance of alleged harassment in her personal notes, an incident the plaintiff later claimed “did not even matter.” Despite the defendant’s argument, the Court concluded that a reasonable jury could also find that plaintiff’s contemporaneous notes evidenced that she had found the conduct “disturbing” enough to keep notes. Thus, the claim could not be resolved without a trial.

Based on the facts of this case, an employee’s contemporaneous notes of workplace events could provide evidence that conduct is subjectively “disturbing” or offensive. On the other hand, the significance of notes may become diluted if employees routinely take them. Notes or not, though, employers should follow up on employee complaints about alleged misconduct. Having and following proper policies can provide employers with a separate defense against these types of claims.

Hogan v. CoreCivic of Tenn. LLC, No. CV-17-03752-PHX-DLR (D. Ariz. May 8, 2019).

The Importance of Reporting Procedures 2018-12-04T14:48:22-07:00

Posted on December 4, 2018

By Matthew Hesketh

Employee Handbooks should have procedures for reporting harassment, and employers should take prompt remedial action once the procedures are initiated by an employee. Employers who take such action may escape Title VII liability even in cases where an employee can show harassment. That’s the lesson from a District Court decision last month in Texas. Johnson v. Hyatt Corp., No. SA-17-cv-00442-OLG (W.D. Tex. Nov. 8, 2018).

The plaintiff was a waitress in a hotel bar. She alleged sex harassment by two different customers. The first customer made harassing comments to her for approximately two years. The employer’s handbook said employees could report harassment to HR, a general manager, or an ethics hotline, but the plaintiff only reported the harassment to her direct supervisors. When HR learned of the harassment, nearly two years after it began, the customer was banned from the bar (and the entire hotel). A second customer physically assaulted the plaintiff. The plaintiff did not immediately report the incident, but the employer learned about it from a witness. Hotel security responded in 10 minutes and removed the customer from the bar. Police responded 20 minutes later and arrested the customer. When the customer returned from the police station, he was evicted from the hotel.

The court found that the conduct of either customer might be severe or pervasive enough to support a hostile work environment claim under Title VII. Applying Fifth Circuit precedent, however, the court concluded that the employer was not liable because it took “prompt remedial action” that was “reasonably calculated to end the harassment.” The employer was not liable for the first customer’s harassment because “an employer’s obligation to take prompt remedial action is triggered only when the employee follows the reporting procedures in the employer’s anti-harassment policy.” For two years, the plaintiff only talked to her supervisors about the customer’s conduct, which did not comport with the employer’s procedures.

The lesson: Employers should have harassment reporting procedures and make their employees aware of them. But don’t stop there, because not all courts are this pedantic when it comes to employees following harassment reporting policies to the letter. All supervisors should also be trained to promptly follow up on allegations of harassment by either direct action or by escalation to more senior management. Allegations of harassment should be taken seriously, including a prompt and thorough investigation followed by remedial measures as necessary.

Get Your Story Straight! 2018-10-16T14:59:52-07:00

Posted on October 16, 2018

By Alyssa Levy

An employer’s facts in an investigation did not match those it reported to the EEOC in response to the same allegations. The employer created its own factual discrepancy, and based on the discrepancy, the 7^th Circuit reversed the employer’s summary judgment. In this case, the Plaintiff reported to Human Resources that a manager was engaged in sex harassment towards another employee. Days later, HR started a separate investigation into Plaintiff’s own conduct at an offsite event with company vendors six weeks earlier. At the event, Plaintiff took photos of a vendor’s CEO, drunk. The employer fired Plaintiff for taking such photos of the valued partner.

The Plaintiff filed an EEOC charge for retaliation based on her reporting the sex harassment. In response to the EEOC charge, the employer said the decision-maker saw the photos the night they were taken and was not amused, but when Plaintiff’s claims reached court, the employer’s story changed. Suddenly, the decision-maker had heard nothing about the photos until HR started an investigation 6 weeks after the event. The District Court granted summary judgment for the employer, but the 7^th Circuit ruled factual disputes required a trial.

If the employer had presented a single version of the facts, it might have kept its summary judgment ruling. Either story – that the decision maker had or had not seen the photos before the investigation – would have worked. But not both. In the end, the double talk compromised the employer’s defense. This once again highlights the extraordinary legal significance of position statements and reminds us to take the position statement process very seriously.

The case is Donley v. Stryker Corp. , No 17-1195 (7^th Cir. Oct. 15, 2018).

Wholesale Harassment 2018-09-18T10:17:50-07:00

Posted on September 18, 2018

By Joe Hunt

A customer at a members-only wholesale club frightened an employee with his constant attention. He asked personal questions, repeatedly asked her out and offered his phone number, touched her face while he asked about darkness under her eyes, tried to hug her twice, and filmed her with his cell phone. When she reported his attentions to her manager, the manager confronted the customer and told him to leave the employee alone. The manager did not ban the customer from the store or revoke his membership, and the harassment continued. The employee called the police and, after more than a year of frequent, unwelcome contact, obtained a restraining order, but the damage was done – the employee had to take unpaid leave because of the stress. Although the employee never returned from leave, the employer went on to ban the customer from the store where the employee had worked, and told her that her internal complaint was closed. When the employee ran into the customer at another store, he screamed profanity at her. Then, the employer canceled the customer’s membership.

Was the customer’s conduct harassment? The employer’s defense was that the customer’s conduct did not rise to the level of severe or pervasive, hostile conduct. A better defense would have been that the employer had taken effective measures to stop the customer’s conduct – if only that had been true. In fact, the employee won at trial on a claim for sexual harassment.

The same standard – severe or pervasive, hostile conduct – applies to both co-worker and customer harassment. Even conduct that is not lewd and offensive in and of itself might count as harassing – especially in the context of stalking. There was plenty of evidence that the employee was terrified by the customer’s conduct and that, by itself, should have been enough for the employer to act. Relying on a careful comparison of legal precedent was the last ditch, and the employer lost.

The case is EEOC v. Costco Wholesale Corp., Nos. 17-2432 & 17-2454 (7th Cir. Sept. 10, 2018).

#MeToo Impacts Harassment Damages/Taxes 2018-01-16T15:16:52-07:00

Posted on January 16, 2018

By Mike Dubetz and Steve Miller

The recently-enacted Tax Cut and Jobs Act (the “Tax Act”) includes an unheralded change to the tax law that will directly affect sexual harassment settlements. As a direct result of the recent highly-publicized cases involving sexual harassment of employees, a new provision (Section 162(q)) has been added to the tax code to deny a business deduction for “any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement.” The new provision, which is already effective, also denies a deduction for the attorneys’ fees related to such a settlement or payment.

As a result of the new law, an employer making a settlement payment in connection with a sexual harassment case will have to balance the monetary benefit of a tax deduction against the potential harm that could be done to its business if a plaintiff is permitted to publicize the details of the settlement and the claim.

Update Faragher-Ellerth Policies 2017-11-10T07:43:03-07:00

Posted on November 10, 2017

By Bill Wright

An employer recently found itself in a Catch-22 over treatment allegedly suffered by a transgender employee. The employee claims that she suffered harassment at the hands of her employer by being restricted in the use of restrooms, among several other claims. As relevant here, the employer raised the Faragher-Ellerth defense that the employee had failed to bring the alleged harassment to the employer’s attention. The court noted however that the employer only had a standard sex harassment policy and it did not explicitly apply to transgender issues. Because the cases the employer had cited in support of its defense required a specific policy calling for reports of harassment, the court denied the employer’s motion for summary judgment on its defense.

Although we have been focused on the debate concerning whether discrimination based on a person’s transgender status is sex discrimination, it may be time to review our workplace policies to be sure that any complaint of harassment is reported in a timely manner to Human Resources. And if your current policy prohibits “sexual” harassment without also prohibiting all other forms of unlawful harassment, then you REALLY need a policy overhaul. Tudor v. SE Okla. State Univ., No. 5:15-cv-00324-C (W.D. OK October 26, 2017).

Respond to Employee Restraining Orders 2017-07-28T11:41:10-07:00

Posted on July 28, 2017

By Bill Wright

An employer will face a trial on whether it negligently supervised an employee’s co-worker. The two workers had a relationship that ended when the man sexually assaulted the woman in her home. After trips to the emergency room and the police (resulting in a criminal assault charge for the man), the employee obtained restraining order against him. It was amended to include no contact at work and was provided to the employer. Despite the restraining order, the employer allowed the man to change shifts and transfer to a work area closer to the woman. The woman complained that she had almost run into the man twice, and finally, while she was in an employee break room to use the time clock, he came in and caused her fear and emotional distress.

On the negligence claim, the employer argued that it could not have foreseen that she would be in that break room. (She was only there because the time clock closest to her work was broken.) Also, it argued it could not have foreseen that the man would be working at that time because he had picked up an extra shift. The argument failed, and now the dispute will go to trial.

What should the employer have done? The court took no position on whether the employer should have terminated or suspended the man on the basis of the restraining order, but it noted the disputed facts over the employer’s control over the workplace – the employer allowed the man to pick up extra shifts and overlap with her shift, and did not find a way to warn the woman about the man’s schedule. An undercurrent in the order is whether the employer should have “investigated” the man upon learning of the sexual assault charge. In short, the employer appears to have done nothing about the restraining order it received. Brantley v. American Airlines, Inc., No. 16-350 (E.D. Pa. July 25, 2017).

Sexual Orientation: Status Or Conduct? 2017-03-14T16:16:39-07:00

Posted on March 14, 2017

By Bill Wright

In Evans v. Georgia Regional Hosp. et al., No. 15-15234 (11^th Cir. March 10, 2017), the panel of three Court of Appeal judges produced three opinions. Two of the judges argued amongst themselves over a point of legal analysis. One judge maintained that Title VII does not protect people from discrimination based on their “status” as a homosexual, but from discrimination based “conduct” by which the person shows he or she varies from gender stereotypes. The other judge maintained that, when an employer discriminates against a person for being sexually attracted to people of the same biological sex, that is necessarily discrimination because the person does not conform to a gender stereotype.

It is a distinction without a difference. To prevail on a gender stereotyping claim, the plaintiff has to show the decision-maker somehow knew the plaintiff failed to conform to the gender stereotype. Once the plaintiff alleges a basis for the claim, the analytical point evaporates. The battle yet to come for these two judges is over discrimination based on a false belief that the plaintiff varies from gender stereotypes.

The panel of judges reached a decision because the third judge, a District Court judge sitting by designation, argued that current precedent dictated the result. In the end, the case was remanded so the plaintiff could plead more facts about gender stereotyping. We should expect more philosophizing to come.

Comment While You Can 2017-02-22T15:45:59-07:00

Posted on February 22, 2017

EEOC Preparing to Adopt New Harassment Guidance

By Beth Ann Lennon

The EEOC recently issued new proposed Guidance regarding how EEOC investigators should process charges of discrimination alleging harassment. The new Guidance describes heightened requirements for employers seeking to rely on their anti-harassment policies and reporting procedures to avoid liability. Many of the EEOC’s “suggestions” illustrate the agency’s disconnect from the realities most employers face. If you have concerns about these new requirements, you may submit your comments directly to the EEOC before the Guidance is formally adopted. But act fast – the comment period closes March 21, 2017. Comments can be submitted here.

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