Monday, April 27, 2015

Sixth Circuit Affirms $1.5M Verdict for Sexual Harassment of and Retaliation Against Temporary Employees

Last week, a unanimous Sixth Circuit affirmed a $1.5M jury verdict against a logistics employer which fired three women and one male employee who protested sexual harassment by a supervisor who also played significant roles in having each of them fired.  EEOC v. New Breed Logistics, No. 13-6250 (6th Cir. 4-22-15).  The Court rejected the employer’s argument that opposing and protesting a supervisor’s sexual harassment to his face is not protected “opposition” under Title VII and specifically noted that the statute does not require the employee to protest to anyone in particular.  The Court also found the employer could be held liable for punitive damages based solely on the harassing supervisor’s knowledge and conduct and because the employer did not distribute the anti-harassment policy to temporary employees, did not conduct a good faith workplace investigation of the anonymous harassment complaint about the supervisor, and terminated three of the four plaintiffs during the workplace investigation.

According to the Court’s opinion, the defendant employer operated with mostly temporary employees assigned from staffing companies.  It only provided employee handbooks to its regular employees.  One of its supervisors had the authority to terminate temporary employees and was regularly harassing female subordinates with lewd comments and physical contact.   Not only did the employees object to his conduct, a male co-worker also requested that he stop it.  Only one of the employees ever complained to management and only did so anonymously.  The subsequent investigation was initially limited to interviewing the harassing supervisor.  All of the plaintiffs were ultimately fired shortly after the anonymous complaint was made.  Two of them were fired for purported attendance issues and two for making a mistake.   The harassing manager was found to have been the decisionmaker or to have played a role in all of their terminations.  The employees denied having attendance issues and evidence was presented that other employees had made mistakes without being fired.

The employer had argued that the plaintiffs could not prove retaliation because they could not show that they engaged in any protected conduct before their termination.  Only one of them had made an anonymous complaint to management prior to her termination.  The employer contended that the employees’ protest to the harassing supervisor himself and resistance to his harassment was not protected conduct.  Surprisingly, two other court decisions agreed with this argument, with one of them noting that resistance to harassment could not be protected conduct or every harassment claim would automatically constitute a retaliation claim as well.  The Sixth Circuit rejected this argument because Title VII’s opposition clause in the anti-retaliation provision prohibits retaliation against any employee because the employee opposed an unlawful employment practice.   The Supreme Court has previously noted that “oppose” means to resist.  Therefore, the Sixth Circuit has found protected opposition with informal complaints of discrimination:
[A] demand that a supervisor cease his/her harassing conduct constitutes protected activity covered by Title VII. Sexual harassment is without question an “unlawful employment practice.” If an employee demands that his/her supervisor stop engaging in this unlawful practice—i.e., resists or confronts the supervisor’s unlawful  harassment—the opposition clause’s broad language confers protection to this conduct. Importantly, the language of the opposition clause does not specify to whom protected activity must be directed.

Because the supervisor knew of their protests of his behavior and played a role in their terminations, the Court had no difficulty finding sufficient evidence of but-for causation in their retaliation claims.   Where he merely played a role in two plaintiffs’ termination, the decisionmaker relied upon his evaluation of their work and gave inconsistent explanations about why she held them to a higher standard than other employees.   There was also a strong temporal proximity between the time of the protected conduct and the retaliatory terminations.  In addition, the EEOC was able to provide evidence that the reasons given for the terminations were pretextual because the harassing supervisor had told one of the employees that he would disguise her tardiness (instead of discharging her), one of the employees had never been accused of attendance issues before he was fired shortly after being interviewed during the harassment investigation, and two of the employees could show that other employees had make similar mistakes and not been fired.

The Court also refused to consider the employer’s Ellerth affirmative defense because each of the plaintiffs suffered a tangible employment action when they were fired.
The Court found that the employer could be held liable for punitive damages.  The Court rejected the employer’s argument that it could not be liable since sexual harassment was outside the scope of the supervisor’s employment because the tangible employment action -- firing the employees -- was within the supervisor’s authority.  The Court also rejected the employer’s defense that management could not have acted with deliberate disregard of federal law since management did not previously know about the harassment because the supervisor clearly knew about the harassment. “The EEOC only had to show that the “individual[] perpetrating the discrimination [or, here, retaliation]” acted with malice or reckless disregard for federally protected rights.”   

Further, the Court rejected the employer’s good faith defense because it did not undertake efforts to prevent and remedy the harassment by, for instance, providing an employee handbook or harassment policy to the temporary employees.  It also had initially only interviewed the supervisor after the anonymous complaint was made and did not interview all of the potential witnesses identified. “In assessing whether an employer engaged in good-faith efforts to comply with Title VII, we focus “both on whether the defendant employer had a written sexual harassment policy and whether the employer effectively publicized and enforced its policy.’”  Finally, the jury was entitled to infer a lack of good faith from the fact that three of the plaintiffs were terminated during the employer’s investigation of the anonymous complaint.  

The jury instruction on punitive damages omitted language about the employer’s good faith defense.  The Court found that the employer had waived its objection to this omission by failing to argue about the missing language during the charge conference even though the employer had submitted a proposed jury instruction with the missing language.   The Court also rejected the employer’s argument that it constituted plain error for the jury instruction to omit the employer’s good faith defense because the employer did not make an argument about its good faith during its closing arguments to the jury. 

The Court also rejected challenges to the jury instruction use of “because of” instead of “but for” in the retaliation instruction.  

The EEOC press release about its victory mentions that the lawsuit was first filed in September 2010 and the jury reached its verdict in May 2013.

 
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.