Ohio Appeals Court Reverses Employer’s Summary Judgment on Sexual Harassment and Retaliation Claim

Last week, a unanimous Butler County Court of Appeals reversed an employer’s summary judgment on a sexual harassment and retaliation claim brought by a former grocery store employee.  Ellis v. Jungle Jim's Market, Inc., 2015-Ohio-4226.   The court found that there were factual disputes which prevented judgment on the employer’s defenses even though it did a lot correctly after learning of the alleged harassment.  In particular, the Court found there was enough evidence to show that the employer did not sufficiently prevent or remedy harassment because its management had not been trained about harassment or workplace investigations, it failed to obtain written statements from all witnesses in a timely fashion and its anti-harassment policy did not specifically address informal and verbal reports of harassment.  A jury could also find that the employer retaliated against the plaintiff for filing her OCRC Charge by immediately transferring her to a lower-skilled bagging position at the same rate of pay purportedly in order to protect her because it had not transferred her when she earlier complained about harassment and had not transferred or suspended the harassing employee.

According to the Court’s opinion, the plaintiff had been hired as a bagger and was subsequently promoted into the seafood department.  She had been given the employer’s sexual harassment policy, which directed her to bring concerns to her supervisor, her manager or to a certain employee (who had previously died) who chaired the store’s investigation committee.  About a month after her promotion in February 2013, she claimed that her supervisor subjected her on a daily basis to inappropriate sexual comments and suggestions, many of which were graphic and gross.   Although she regularly objected to his conduct and suffered emotional and physical distress from it, she did not report it to management because he told her that he was just kidding and implicitly threatened her when he said that he knew that she liked her job.

Another employee reported the alleged harassment of the plaintiff to the assistant store manager, who then reported it to the store manager (who now chaired the store’s investigation committee).  After speaking with the plaintiff, the store managers interviewed her supervisor and two other employees (who did not corroborate the plaintiff’s allegations).  They did not interview all of the department employees or obtain written statements from the department employees.  Nonetheless, they issued a disciplinary action on May 5 directing the supervisor to cease any sexual comments under penalty of immediate termination.  The plaintiff was instructed to report any further problems to the store manager and she declined the opportunity to transfer out of the department.  Her working hours were changed so that she would no longer work with her supervisor.

There was conflicting evidence about whether the inappropriate comments continued.  The plaintiff at one point testified that he only whispered about her to other employees.  She claimed, however, that he retaliated against her by denying her time off, etc.  She did not immediately bring these issues to management even though they regularly walked through her department and checked in with her in order to ensure that she was suffering no further harassment.  Nonetheless, the plaintiff filed an OCRC Charge on May 28 alleging sexual harassment.  She was almost immediately transferred back to bagging without any reduction in pay and declined the owner’s offer to return her to the seafood department.  She subsequently injured her knee and was medically restricted to a sitting position.  Accordingly, the store gave her its only light duty position as the store greeter.  However, she resigned because she felt that she had been put in that position in order to ridicule her.

The plaintiff filed suit in November.  The following May, the store finally interviewed the rest of the seafood department employees almost a year after its first investigation and received further corroboration of the sexual harassment and that it continued after the plaintiff had been transferred out of the department.

Unlike the trial court, the Court of Appeals found that the plaintiff produced sufficient evidence that her supervisor created a hostile working environment with his daily sexual comments and suggestions because his conduct could be found by a jury to be sufficiently severe and pervasive enough to alter the terms and conditions of employment.  The Court also found that the alleged harassment was also objectively and subjectively hostile to a reasonable person in the plaintiff’s position.  Evidence about her failure to complain, the testimony of co-workers that they never witnessed the alleged harassment and the fact that she accepted a ride home from the harasser only affected the weight of the employer’s defense and not whether the plaintiff could prevail at trial.

Unlike the trial court, the Court also found that there was sufficient evidence to hold the employer vicariously liable for the harassment.   First, it found that there remained issues of material fact about whether the employer could raise the “no tangible employment action” defense.  The plaintiff could not show that her harassing supervisor had taken any tangible actions because her transfers, etc. had been taken by upper store management.  Nonetheless, the employer was not entitled to summary judgment on the defense because it could not show that it took sufficient steps to prevent and remedy harassment.   In particular, its policy did not explicitly provide for informal or verbal complaints.   There were also issues as to whether the employer actively implemented the policy or trained supervisors or staff about it because it had not been updated following the death of the investigations committee chair and none of the managers had received training about harassment or how to conduct investigations. Second, the employer did not interview all of the departmental employees identified by the plaintiff in her interview or obtain written statements from any departmental employees until after the plaintiff filed her OCRC Charge.   The Court also faulted the employer for leaving the plaintiff in the department, only periodically touching base with her thereafter and not training the harasser about how his conduct had been objectionable.

As for her retaliation claim, the trial court had found that the transfer back to a bagging position at the same rate of pay was lateral and therefore, not materially adverse.  The Court of Appeals found this to be a disputed factual issue because a bagger’s diminished responsibility might have deterred a reasonable person from filing an OCRC Charge.  Further, the plaintiff could show a causal connection between her transfer and her protected activity because she was transferred almost immediately (or within a few days) after the employer learned that she had filed her OCRC Charge.  It also found a factual dispute as to whether the employer’s legitimate business reason for transferring her – to protect her from further sexual harassment – was pretextual because it had not transferred her earlier even though she had allegedly complained about continued harassment.  A jury could reasonably find that she had been transferred in retaliation for filing her OCRC Charge because the harasser could have been transferred or suspended instead.

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.

Sixth Circuit: Judgment for Employer is Affirmed on Sexual Harassment Claim When Investigation and Termination Was Handled Properly.

This morning, the Sixth Circuit Court of Appeals affirmed summary judgment in favor of a hospitality industry employer on a sexual harassment claim when the employer properly investigated and terminated the employee. Balding-Margolis v. Cleveland Arcade d/b/a Hyatt Regency Cleveland, No. 09-3017 (11/10/09). Retired Justice Sandra Day O’Connor was part of the panel which issued the decision. The plaintiff was a long-time waitress who was found to have violated many cash-handling procedures over a period of time, including rules against increasing the amount of her tip on a customer’s credit card payment. After she was fired, she alleged that, among other things, she had been subjected to a hostile work environment and treated differently on account of her age and sex.

According to the Court’s decision, when the plaintiff was hired, she was given copies of several policies, including the employer’s sexual harassment policy (which permitted her to bring concerns to her manager, the Director of Human Resources and a national toll-free hotline), and that she could be immediately terminated for violating cash-handling procedures. Her employment was also governed by a bargaining agreement with the UNITE HERE union. “[T]he Cash Handling Rules generally prohibited an employee from altering a guest check; required that an employee follow proper procedures; and prohibited an employee from handling checks, cash, and credit cards in an improper manner. The restrictions on altering a guest check included prohibitions on changing the tip amount or closing out a check that differed in any way from the customer’s signed receipt.” Notwithstanding these rules, and the fact that she was a trainer who oriented new employees about these rules, “[i]n October 2005, she was issued a warning when two guests left the restaurant without providing a valid form of payment. In January 2006, [plaintiff] received another warning because of a large cash variance following her shift. In May 2006, [plaintiff] received a third warning—a “Final Written Warning”—for adding an additional eighteen-percent gratuity without the customer’s permission.”

A year later, her supervisor noticed that her credit card tips equaled almost 1/3 of her receipts for the day (not including cash tips). “The high tips-to-sales ratio was suspicious and caused [her supervisor] to audit [plaintiff’s] transactions that day. [He] concluded that there were problems with one-third of [her] sales, including receipts for discounted meals that lacked the required discount coupons; ten checks without a signed copy of the room charge, credit card, or other documentation; and two unsigned receipts with listed tips that exceeded the actual food-sales amount. [He] conducted an audit of the two workers with whom [she] had been serving that day but found no similar discrepancies.” He then went back and audited the prior few weeks and involved the Controller and Human Resources Manager, confirmed that there consistently were similar violations and decided to terminate her employment. She “was given the opportunity to explain the various discrepancies, but she failed to do so.”

During the termination meeting, [plaintiff] made general complaints regarding the way that [her supervisor] had administered the staff, but she made no complaints of sex- or age-based discrimination or harassment. Following her termination, Hyatt continued auditing [her] receipts for five dates in April 2007, revealing additional discrepancies. Because [she] had alleged during her termination meeting that [her supervisor] was attempting to get her fired and that he had papered her file and/or stolen the supporting documentation that she needed to explain the discrepancies, Hyatt conducted an audit of [her] transactions during a two week period prior to [his] employment at Hyatt. That audit revealed similar cash-handling problems. Hyatt also conducted an audit of all the checks closed out by the servers on April 25, May 1 through 4, and May 8, 2007, and found that none of them had discrepancies or cash-handling violations similar to [her] discrepancies.

Plaintiff then filed an EEOC Charge and union grievance alleging sexual harassment and age discrimination. Hyatt conducted an investigation, interviewed co-workers and did not find any basis for her claims. She then filed suit in federal court.

The Court concluded that she could not satisfy a prima facie case of age discrimination because she could not show that she was replaced by a substantially younger employee or that younger employees were treated more favorably. A bartender was not her “replacement” because he had already worked in the restaurant part-time before her termination. A “person is not replaced when another employee is assigned to perform the plaintiff’s duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work. A person is replaced only when another employee is hired or reassigned to perform the plaintiff’s duties.”

She also could not show that others were treated more favorably because their alleged violations were not the same.

She claims that the younger employees’ practice of marrying alcohol and their admitted but unproven failure to turn in receipts were sufficiently serious to merit comparison to the disciplinary violation that led to her termination—the cash-handling-policy violation and misappropriation of funds. . . . This is not the case. Marrying alcohol may be a violation of Ohio law, but [she] never engaged in the practice and was never disciplined for not participating. The fact that [she] was terminated for engaging in an illegal practice does not automatically make marrying alcohol and [her] infraction comparable. Misappropriation of funds and marrying alcohol are different circumstances involving distinguishable conduct.

Plaintiff also brought pay discrimination claims because trainers at non-Cleveland Hyatt hotels were paid more than her... However, she presented no evidence that she was paid less than co-workers outside of her protected class in Cleveland “‘for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. . . . . [She] concedes that she was the only server-trainer in Cleveland, and she has presented no evidence that other non-protected employees held “substantially equal” jobs and were paid more. . . . . . [She] further concedes that those employees who were paid a higher rate had greater seniority and were being paid pursuant to the provisions of the CBA.” She also presented no evidence about the age or sex of the non-Cleveland trainers, even if they could be considered as part of the same establishment.

The Court found that the plaintiff presented a prima facie case of sexual harassment, especially based on two allegations of improper physical contact and her supervisor’s daily bragging about his sexual life:

(1) The Director of Sexual “once invited [her] to lie down in his room;”
(2) The Security Director once told [her] that she was attractive;”
(3) The Director Security “once hit [her] on the buttocks and “untied [her] apron, which was tied in the back;”
(4) Her supervisor “once commented that he had a large penis;”
(5) Her supervisor “once told [her] that he had sex with one of her customers, [her] to provide a free meal to that customer, and then “put his hands . . . against the wall and dry humped it or did a pelvic thrust against it,” stating “I did her, I did her,”;
(6) Her supervisor “had once asked a female line cook to do the “boobie dance,” which involved putting the cook’s “hands underneath her chest” and moving them “up and down” and shaking “her hips;”
(7) Her supervisor “repeatedly bragged to [her] about the day that he had sexual intercourse with a fellow Hyatt server and [her] female co-worker at the Hyatt;”
(8) Her supervisor “repeatedly talked to [her] ‘about a sexual relationship he had with a former co-worker, how that co-worker was pregnant, how [he] needed to mail that pregnant woman a check so that the woman can pay for an abortion,” and how he wanted [plaintiff] to put [his] check in the mail.”

In light of her evidence of sexual harassment, Hyatt would be liable for the supervisor’s actions unless it could show by a preponderance of the evidence “that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior” and that [the plaintiff] ‘unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.’ . . . Generally, an employer satisfies the first part of this two-part standard when it has promulgated and enforced a sexual harassment policy.”

The Court found that Hyatt had an effective sexual-harassment reporting policy and that the plaintiff failed “to take advantage of Hyatt’s corrective policy was unreasonable.”

Although her post-deposition affidavit states that she complained to Hyatt management verbally over thirty times, [her] deposition testimony indicates that she never complained to anyone concerning [her supervisor’s] harassment and discriminatory conduct other than to [her supervisor] himself. Her deposition testimony further establishes that she never complained to anyone about [the Security Director’s] conduct. [Plaintiff] failed to make these complaints notwithstanding that she testified that she was aware of the open-door policy, the complaint procedure, and the fact that if her immediate supervisor failed to act on her complaint she could go elsewhere. [She] clearly took advantage of the complaint process with regard to a variety of run-of-the-mill matters, but she failed to take advantage of the policies when it mattered most.

Likewise, the Court rejected her retaliation claim. She failed to testify in her deposition about any instances of complaining to management about any sex or age discrimination, even though she complained in writing and verbally about a number of other matters. In order to invoke the protections of federal or state law, an employee needs to be direct in complaining about discrimination:

a vague charge of discrimination in an internal letter or memorandum is insufficient to constitute opposition to an unlawful employment practice. An employee may not invoke the protections of the Act by making a vague charge of discrimination. Otherwise, every adverse employment decision by an employer would be subject to challenge under either state or federal civil rights legislation simply by an employee inserting a charge of discrimination.

In any event, the Court also concluded that even if the plaintiff could satisfy her prima facie case, the employer had shown a legitimate, nondiscriminatory and non-retaliatory reason for firing her.

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/09a0732n-06.pdf.

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 change or be 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.