Manager’s Observation of Harassment Places Liability on Employer

Under generally accepted Title VII principles, an employer can be held liable when a co-worker harasses a co-worker if a supervisor is aware of the harassment, but fails to take prompt corrective action. This principle was reiterated in EEOC v. Driven Fence, Inc., where an African American Plaintiff quit his job after being subjected to various racially derogatory remarks and being asked to put his head in a noose hanging from the ceiling. Although the misconduct was the acts of non-supervisory staff, the Court ruled the manager, who saw the noose, had “a duty to pass on the information to someone within the company who ha[d] the power to do something about it….”  Because the manager failed to report the conduct as required by the employer’s policies and case law, the Court denied summary judgment.

This decision serves as a significant reminder that employers must train their managers regarding their obligations to report potentially discriminatory/harassing conduct under both the employer’s policies, as well as applicable law.  Managers, in turn, must be mindful to be vigilant and observe and report any potential discriminatory or harassing conduct. Failure to do so can create liability to the employer simply because the manager failed to report.

Seventh Circuit Weighs in on Obesity as a Disability under the ADA

In an issue of first impression in the Seventh Circuit, the Court of Appeals upheld summary judgment in favor of the employer dismissing the Plaintiff’s claim that obesity qualified as a disability under the Americans with Disabilities Act (“ADA”). Richardson v. Chicago Transit Authority. Plaintiff, a former Chicago Transit Authority (“CTA”) bus operator, alleged that CTA violated the ADA when it refused to allow Plaintiff to return to work after a flu-related absence because it regarded him as too obese to operate a bus. Plaintiff, who weighed over 400 pounds, was transferred to a Temporary Medical Disability Area designated for employees found medically unfit to work. Following a driving performance test, CTA concluded it would be unsafe for Plaintiff to operate a CTA bus. He remained in the temporary area for two years and was discharged after he failed to submit medical documentation to extend his time in the temporary area.

Plaintiff alleged that his extreme obesity met the definition of a “physical impairment” thereby constituting a disability under the ADA. However, the appellate court sided with several other Circuit and District courts, finding that “obesity is an ADA impairment only if it is the result of an underlying physiological disorder or condition.” Plaintiff failed to present any evidence proving an underlying physiological disorder or condition caused his extreme obesity. Accordingly, the Seventh Circuit grant Defendant’s motion for summary judgment and dismissed the case.

Although the Seventh Circuit joins three other federal appeals courts in holding that obesity alone does not constitute a physical impairment under the ADA, the issue remains unsettled in other jurisdictions and under state and local laws.

EEOC Subpoena of Pattern-Or-Practice Information Based On Individual Charges Upheld

Contrary to the U.S. Supreme Court’s restriction of class actions in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), courts have granted the Equal Employment Opportunity Commission (“EEOC”) broad power to issue nationwide pattern-or-practice subpoenas even though only individual charges were filed against the employer. For example, eleven current and former employees, working among multiple locations, filed disability discrimination charges against their employer alleging wrongful termination by refusing to allow them to return to work after medical leave. Rather than focusing upon those eleven workers and their own grievances, the EEOC issued an administrative subpoena seeking extensive information about other workers who were employed at those eleven sites if such employees, between August 2009 and August 2014, requested an accommodation due to a medical condition or were identified as disabled. Rejecting defenses of relevance, timeliness and undue burden, the federal Tenth Circuit Court of Appeals upheld the subpoena and granted broad pattern-or-practice level investigative authority. EEOC v. Centura Health.

Among the lessons are: (1) be certain that accommodation and compliance policies are lawfully drafted and fairly enforced; (2) ensure that managers and HR understand obligations imposed by the ADA as well as state or local disability discrimination laws; and, (3) do not expect that claims will remain local if works from multiple sites raise similar allegations.

New York State Broadens Its Pay Equity Law

On July 10, 2019, the Governor of New York State signed into law a bill extending New York’s pay equity protections to pay differentials based not only on gender, but also those caused by discrimination on the basis of age, race, sexual orientation, disability, and domestic violence victim status.  The bill lowers the burden of proof by eliminating the necessity of proving that claimant and the comparator performed truly “equal” work.  In short, the bill makes it easier for potential plaintiffs to establish liability by allowing them to compare themselves to workers who do not necessarily perform the same job as they do – it broadens their potential pool of comparators.

Pay differentials still are permitted when they are based on a bona-fide seniority system, a methodology measuring earnings by quantity or quality, or a bona fide reason other than the individual’s membership in a protected class. The pay differential must be job-related and due to business necessity, such as geography, education, or experience. The law allows a successful plaintiff to recover treble damages.  Additionally, the law bans employers from inquiring into a job applicant’s prior salary history.

The law takes effect on October 8, 2019. Insureds should review job applications to confirm compliance with the new law and should consider undertaking a review/audit of pay practices.  A pay equity analysis now should be run across all employees and protected categories, not just comparisons of male and female employees.  Since employers’ pay policies tend to impact multiple employees, claims likely will take the form of class actions and could expose insureds to significant liability.

Federal Court: Federal Arbitration Act Preempts New York Law Banning Arbitration of Sexual Harassment Claims

According to the Southern District of New York, the Federal Arbitration Act preempts the recently enacted New York State law that bars arbitration agreements of sexual harassment cases.   To read a complete analysis of one of the first decisions to rule on this issue, click here.

New York State Further Expands Anti-Discrimination Laws

In addition to the laws expanding sexual harassment liability, the New York State Legislature also passed last week three laws that will bar employers from inquiring about applicants’ salary history, prohibit wage differentials based on protected class status, and ban race discrimination based on hairstyle.  For a complete review, see our article by clicking here.

Washington Supreme Court Confirms Higher Standard for Harassment at a “Place of Public Accommodation”

Under the Washington State Law Against Discrimination (“WLAD”), the statute prohibits “places of public accommodation” discriminating against individuals on the basis of sex, race, national origin, and sexual orientation. RCW 49.60.215. “Places of public accommodation” is broadly defined and includes all facilities or businesses used by or open to the public. Sexual harassment is a form of sex discrimination prohibited under the WLAD.

On January 31, 2019, the Washington Supreme Court confirmed there is a higher standard for acts of sexual harassment committed in places of public accommodation. In Floeting v. Group Health, Inc., 192 Wn.2d 848, 434 P.3d 39 (Wash. Sup. Ct. 2019), the Court held that employers are strictly liable for the actions of even non-management employees who harass customers or members of the public in places of public accommodation.

The test for showing sexual harassment in a place of public accommodation requires that the:

  1. The member of the public is a member of a protected class;
  2. Employer’s establishment is a place of public accommodation;
  3. Employer discriminated against the customer or member of the public when it did not treat him/her in a manner comparable to the treatment it provides to persons outside of that class; and
  4. Person’s protected status was a substantial factor that caused the discrimination.

To be actionable, the Court held that the discriminatory conduct “must be of a type, or to a degree, that a reasonable person who is a member of the plaintiff’s protected class, under the same circumstances, would feel discriminated against. This is an objective standard.” Id. at 858 (emphasis in original). Under this “reasonable person” standard, it seems that a single incident could result in liability.

In contrast, employers have several opportunities to show they were not at fault in cases of employee workplace harassment under the WLAD. For example, employer can show that:

  1. The conduct did not affect the terms or conditions of employment;
  2. The harassment was not severe or pervasive;
  3. That the employer did not authorize, know of, or have the ability to know of the harassment or, if it did,
  4. The employer took reasonable prompt and corrective action.

The majority opinion stated the strict liability standard should motivate employers in public accommodations to implement quality training and supervision as well as effective procedures for reporting harassment and/or discrimination.

In this zero-tolerance context, employers should obtain counsel to re-evaluate anti-harassment and anti-discrimination policies to highlight public accommodation issues.

New Jersey Hotels Must Provide “Panic Buttons”

New Jersey Governor Murphy signed Bill S-2986 into law on June 11, 2019 mandating that “larger” hotels protect workers from sexual violence, assault, and other acts of harassment and violence that can occur on hotel premises by co-workers and/or guests. A copy of the law can be seen by clicking here. The law notes that “[d]ue to the unique nature of hotel work, hotel employees are particularly vulnerable to unsafe working conditions because they often work alone in hotel guest rooms, which sometimes may be occupied. This solitary work places them at risk of assault, including sexual assault, and sexual harassment.” Qualifying hotels include “any hotel, inn, boarding house, motel or other establishment” with at least twenty-five (25) guest rooms. A covered hotel must provide a “panic button” (and training in its use) to summon help if an employee reasonably believes “there is an ongoing crime, harassment, or other emergency….” An employee is legally authorized to leave any area where there is a perceived danger; retaliation is prohibited.

Although New Jersey is the first state to mandate these protections, the idea is not unique. In October 2017, the Chicago City Council passed a “panic-button” ordinance. In August 2018, California introduced its own “panic button” bill, but it stalled at the Senate’s Appropriations Committee. In California, though, Sacramento and Long Beach enacted similar ordinances.

Second Circuit: ADA Allows Hostile Work Environment Claims

The Second Circuit recently held that the Americans with Disabilities Act (“ADA”) encompasses claims for hostile work environment harassment (“HWE”). Fox v. Costco Wholesale Corporation. While this plaintiff-friendly ruling may be disappointing to employers, the decision also contains some helpful analysis for defense of those claims.

In Fox, Plaintiff brought ADA claims alleging discrimination, failure to accommodate, and hostile work environment. Dismissing the discrimination claim, the Court held, among other things, that the four verbal reprimands received by Plaintiff did not rise to the level of adverse employment actions because none “resulted in disciplinary action or a reduction in salary, benefits or other responsibilities.” As to the failure to accommodate claim, the Court refused to impute knowledge of the need for an accommodation to the employer because Plaintiff never asked for an accommodation. Moreover, there was no proof that the employer should have offered an accommodation due to its unquestionable need. (It should be noted that state or local laws may be more employee-protective and could support a failure to accommodate claim merely because the employer was on notice of the medical condition).

With respect to HWE, the Court joined four other Circuit Courts in ruling that HWE claims can be asserted under the ADA, but noted that “[l]egitimate reprimands by an employer are not abuse.” Moreover, the Court noted that “teasing in the workplace is not uncommon, and in most instances probably not actionable.” Thus, the mere fact that Plaintiff was teased about his condition was not necessarily actionable harassment. But, since it might be, a trial was ordered as to the HWE claim.

Employers in the Second Circuit must be aware of the possibility of HWE claims under the ADA. As such, employers should update supervisor training to account for ADA hostile work environment claims.

LexBlog