Workplace Gossip May Lead to Title VII Liability, Fourth Circuit Holds

An employer’s failure to stop a false rumor that a female employee slept with her male boss in order to obtain a promotion can give rise to liability under Title VII of the Civil Rights Act of 1964, according to a recent decision by the Court of Appeals for the Fourth Circuit. Parker v. Reema Consulting Services, Inc.

Evangeline Parker was fired after complaining that male employees at Reema Consulting’s Virginia-based warehouse spread a false rumor that she was promoted because of a sexual relationship with a high-ranking male manager.  The facility’s highest-ranking manager allegedly not only knew of the gossip, but participated in spreading the rumor by discussing it at a group meeting and by blaming Parker for “bringing the rumor into the workplace.”

The District Court initially granted the employer’s motion to dismiss, ruling that although the workplace gossip was “truly offensive,” the rumor’s circulation was not based upon her gender and thus not unlawful under Title VII.  The Fourth Circuit disagreed and reversed, holding that because Parker “plausibly involved a deep rooted perception . . . that generally women, not men, use sex to achieve success” she adequately pleaded gender-based discrimination.  The Court also held that the conduct, as alleged, was sufficiently severe pervasive, as it persisted continuously for approximately two months.

Employers should be aware of their obligations to address potentially unlawful workplace rumors, and should consider training managers and human resources on how to take appropriate steps to stop such rumors without infringing on employees’ rights to discuss the terms and conditions of their employment.  For a more complete discussion of this case, please see our publication by clicking here.

Court of Appeals Rules Landlords Can Be Liable for Tenants’ Discriminatory Conduct

Just when landlords and their insurers thought that their obligations couldn’t get broader, the Second Circuit Court of Appeals ruled the federal Fair Housing Act’s anti-discrimination requirement extends to every part of the housing relationship, including discrimination by another tenant (not by the landlord) that occurs after the sale or rental transaction is completed. Francis v. Kings Park Manor, Inc., 15-cv-1823 (2d Cir. Mar. 4, 2019).

Plaintiff (an African-American male) was subjected to a hostile environment in the form of having racial and religious slurs directed toward him, photographing his apartment, and threatening to kill him. He reported the threatening and harassing conduct to the police, which eventually arrested the offending neighbor (who pleaded guilty to harassment). Because he had complained regularly to the landlord, who took no action, Plaintiff filed a lawsuit. The lower court dismissed the action, finding that the landlord had no duty to intervene in a neighbor-to-neighbor dispute. However, the Second Circuit reversed, holding the landlord liable for failing to address repeated reports of tenant-on-tenant harassment. The Court compared a landlord’s ability to stop tenant-on-tenant harassment to that of an employer taking prompt remedial action to stop employee-on-employee racial harassment. In so ruling, the Court ignored the fact that employment is presumptively terminable at will, while tenants have written leases assuring them of certain property rights.

The takeaway is clear— Landlords cannot ignore complaints of neighbor harassment or discrimination and should preserve the right to address in rental agreements. Also, while the offending tenant might be liable for its misconduct, the likelihood of collecting upon a successful cross-claim depends on the offending neighbor’s assets, a questionable proposition.

Federal Judge Reinstates Use of Revised EEO-1 Form, Effective Immediately

A U.S. District Court has immediately restored the prior directives of the Equal Employment Opportunity Commission and Office of Management and Budget requiring use of a revised EEO-1 form where employers with at least 100 employees have to report detailed information on their employees’ wages and hours, broken down by gender, race, and ethnicity.  For further information, read the full post on our Pay Equity Advisor Blog by clicking here.

Seventh Circuit Affirms Summary Judgment for Employer That Terminated Disabled Employee for Misconduct

The Seventh Circuit Court of Appeals recently upheld dismissal of failure to accommodate and disability discrimination claims where, for several years, the employer provided accommodations relating to plaintiff’s mental health (including directing co-workers not to startle plaintiff). Scheidler v. State of Indiana et al. Despite that admonition, a supervisor reached toward her with a choking motion and said, “I could just strangle you” resulting in a heated argument. When investigating the incident, the employer learned that months earlier, the plaintiff stated “It’s who you know and who you blow,” demeaning a colleague’s promotion prospects. After the investigation, the employer issued a written disciplinary notice to the supervisor and terminated the plaintiff for her role in the argument and her lewd comment.

The Seventh Circuit found, in that while the argument between the supervisor and the plaintiff could be a failure to accommodate, it was an “isolated, one-off event.” The plaintiff did not raise any other failure to accommodate issues and could not show that the overall interactive process had broken down or that other accommodations, such as time off, were not provided. In contrast, plaintiff’s involvement in the argument, coupled with her crude comment, gave the employer a basis for termination. Perhaps most significantly, the Seventh Circuit emphasized it was not holding that a single event could never support a claim for failure to accommodate.

New York State Commissioner of Labor Testifies On Combatting Sexual Harassment in the Workplace

As if the current legal environment for employers and their insurance carriers was not sufficiently challenging, state legislatures are considering bills, inter alia, to expand the definition of a hostile work environment, to expand coverage of anti-discrimination and harassment laws to independent contractors, to increase penalties for harassment and to require that employers pay for the cost of post-harassment therapy.  Expansion of legal rights and legal remedies will drive the seemingly ceaseless growth of claims, administrative proceedings and lawsuits. The testimony of the Commissioner of the New York State Department of Labor (one of the agencies charged with establishing guidelines on sexual harassment training in New York) summarizing that agency’s current thinking can be read by clicking here


Court Confirms Employer Can Be Liable For Harassment By Non-Employee

Faced with a question not yet addressed by the Third Circuit, a federal judge in Pennsylvania found an employer, as well as individual managers, may be held liable for an employee’s claim of a hostile work environment based on conduct by a non-employee who had regular contact with the employee. Hewitt v. BS Transp. of Ill., LLC, et al., No. 18-712, 2019 (E.D. Pa. Jan. 10, 2019).

Carl Hewitt worked as a freight driver for BS Transportation hauling NASCAR fuel in conjunction with a contract between BS Transportation and a third-party. Hewitt alleged that in early-2014, an employee of a company that BS Transportation did business with began to make sexual advances toward Hewitt when he traveled to the third-party’s plant to pick up fuel. He alleged that the advances were consistent, about once or twice a week, and other third-party employees and supervisors knew of the behavior. Hewitt alleged that, in early-August 2016, the third-party’s employee inappropriately grabbed him and pushed him into a trailer, asking Hewitt: “do you like that?” Hewitt claimed he reported to the third-party employee’s manager that he had been sexually harassed and now assaulted by the employee. The manager said he would take care of it. Later that day, Hewitt’s supervisor informed Hewitt that he spoke with the third-party employee’s manager and that the situation would be handled, and asked Hewitt not to say any more about it. The alleged harassment ceased until late-September, when inappropriate sexual comments and gestures restarted, which Hewitt reported to his manager. The lawsuit alleged that Hewitt’s manager did not address Hewitt’s complaint with the third-party’s management and, as consequence, Hewitt was constructively discharged.

Hewitt asserted various causes of action, including: (1) sex discrimination and retaliation under Title VII; (2) discrimination on the basis of race, color, and national origin under Title VII; (3) sex discrimination under the Pennsylvania Human relations Act (PHRA); (4) retaliation under the PHRA; and (5) aiding and abetting under the PHRA. The defendants included BS Transportation, the third-party vendor, an employee/supervisor of the third-party, and the BS Transportation owner – all of whom filed motions to dismiss.

The court dismissed all claims except the claims of: (1) hostile work environment against BS Transportation under Title VII and the PHRA; and (2) aiding and abetting against the owner of BS Transportation.

With regard to the hostile work environment claims, the court found that an employer may be held liable “where the employer (or its agents or supervisory employees) know or should have known of the conduct and fails to take immediate and appropriate corrective action.” Hewitt’s allegations that his manager failed to investigate his complaint of sexual harassment by the third-party employee or notify third-party management of his continued complaints, at this stage of the litigation, was sufficient to withstand a motion to dismiss.

Similarly, with regard to the aiding and abetting claim, the court found that the BS Transportation manager’s failure to notify the third-party’s management of Hewitt’s continued complaints allowed the court to make a reasonable inference that the manager failed to take prompt remedial action against the discrimination.

Lesson for employers: Even if the harassment is coming from a non-employee of the company, complaints of a hostile work environment (or any type of discrimination) must be addressed immediately and, if warranted, appropriate corrective action taken. Where an employer knows or should have known about the existence of a hostile work environment and fails to address it, both the company and individual managers may be liable.


Federal District Court: Location of Employment Governs Applicable Law

Where an employee works outside the jurisdiction where the decision-maker is located, which location’s law applies?  A recent decision by a New York federal court in Amaya v. Ballyshear LLC confirms that a key factor is the location of the impact of the alleged discriminatory conduct.  In Amaya, plaintiff worked outside the City of New York, but sought to assert claims under the far more protective New York City Human Rights Law (CHRL).  Nevertheless, she claimed to have four significant connections that would allow her to sue under the CHRL:  (1) the decisions to hire and fire her took place at the employer’s City office; (2) she attended meetings in the City office; (3) she interacted frequently via telephone with supervisors in the City, who monitored her; and, (4) she “could have” been asked to work at a City location as a requirement of her job.  The Court rejected all of these arguments, holding that one must look to the location where the impact on the terms and conditions of employment is felt, not where the discriminatory acts were decided or took place.

Court Grants Summary Judgment Where Decision-Maker Was Unaware of Plaintiff’s Medical History

Employers often are reluctant to take adverse actions against poorly performing employees with a history of medical conditions due to the cost and risk involved in litigation (even though no federal, state or local law is intended to protect deficient job performance).   In an instance where an employer decided to discharge a worker whose job performance was not satisfactory, that decision was upheld in Corbin v. Jackson Hospital & Clinic, Inc. Plaintiff was a “team leader” in the Hospital’s IT department. The Plaintiff’s manager and co-workers were well-aware of diagnosed conditions that caused sleepiness and memory loss. Concerned about failing performance of the IT Department, the Hospital engaged an outside consultant to perform a review. When the review revealed significant shortcomings and deficiencies, the Hospital terminated Plaintiff’s employment and eliminated his position. His disability discrimination claims ultimately were rejected because Plaintiff was unable to demonstrate that the executives who made the termination decision had actual knowledge of his medical conditions (simply held, “a decision-maker who lacks actual knowledge of the employee’s disability cannot fire the employee ‘because of’ that disability.”). Further, the Hospital established that performance issues solely formed the basis for the termination decision.

Employers should not lose sight of the “Cat’s Paw” theory of imputed knowledge, i.e., even though a decision-maker does not know of an employee’s protected characteristic, like disabilities in this case, the decision-maker relies on someone’s opinion who was aware. Thus, as a best practice, the safest course remains acting upon documented, job-related factual findings.