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.

Employer’s Misleading Statements Allow FMLA Claim to Survive Motion to Dismiss

The U.S. District Court in Wisconsin recently held in Reif v. Assisted Living by Hillcrest LLC d/b/a Brillion West Haven, that misleading statements by an employer regarding the Family and Medical Leave Act (“FMLA”) can give rise to an FMLA interference claim, even before an employee is eligible for leave.

In January 2018, the Plaintiff notified the Company’s Human Resources department that she scheduled a required surgery one week after she became eligible for FMLA so as to be entitled to FMLA protection. However, an HR Coordinator told Plaintiff that she needed to schedule surgery as soon as possible (before she was FMLA eligible) and that “she would work with her so that her FMLA would be approved.”

Based on these representations, Plaintiff scheduled an earlier surgery and submitted an FMLA request. Her FMLA request was denied because she was not yet eligible and later was terminated. Plaintiff then filed suit alleging, among other claims, FMLA interference The Defendant moved to dismiss asserting Plaintiff was not eligible for FMLA leave. The Court denied Defendant’s motion stating “it would be fundamentally unfair to allow an employer to force an employee to begin a non-emergency medical leave less than two weeks before she would become eligible under FMLA, assure her that she would receive leave and her job would be waiting for her when she returned, and then fire her for taking an unauthorized leave.”

Employers should train management, including human resources team members, to ensure consistent policy application, communication and to avoid false or mistaken representations that can give rise to liability.

Pre-Employment Examinations Without Disparate Impact May Still Serve As Basis For Disparate Treatment Claims

In EEOC v. Upstate Niagara Coop., Inc., the U.S. District Court for the Western District of New York denied Defendant’s motion to dismiss finding that the EEOC stated claims for discrimination based on sex in violation of Title VII.

The EEOC filed suit against Defendant alleging that it discriminated against female applicants by hiring less qualified male applicants for production-related positions despite a pool of qualified female candidates. A female applicant who was not hired, despite passing the physical exam upon which her offer was contingent, filed a charge with the EEOC in 2010 alleging the pre-employment physical examination had a disparate impact on female applicants. Although evidence suggested that the physical examination did not have a disparate impact on women, the EEOC nonetheless alleged the company engaged in a pattern or practice of disparate treatment in hiring on the basis of sex.

Defendant disputed the that the alleged failure to hire qualified female applicants gave rise to an inference of discrimination, a requirement in order to establish a prima facie case of sex discrimination under Title VII. The Court held, however, that because the company hired someone outside the aggrieved employees’ protected class, the Complaint supports a minimal inference of discrimination. The Court also cited statistics regarding the disparity between male and female employees and that qualified female applicants were passed over for employment in favor of male applicants, some with no relevant past work experience.

Employers should continuously monitor their hiring practices to ensure that they are hiring qualified applicants and that their hiring practices do not – even unintentionally – result in a disparate impact on a protected class.

Another Circuit Prompts the Supreme Court to Resolve Title VII Sexual Orientation Claims

As the Circuits become further divided on issues of civil rights, the scope of legally protected characteristics under Title VII become harder to predict. After a recent loss in the 11th Circuit, a claimant petitioned the Supreme Court to review the 11th Circuit’s decision that “discharge for homosexuality is not prohibited by Title VII.” Bostock v. Clayton Cty. Bd. of Comm’rs, 894 F.3d 1335, 1337 (11th Cir. 2018). In its ruling, the 11th Circuit expressly rejected the argument set forth by the Supreme Court in Oncale v. Sundowner Offshore Servs., 523 U.S. 75 (1998), that same-sex sexual harassment is actionable under Title VII if a person of the opposite sex would have been treated differently.

The 11th Circuit’s holding seemingly follows the Department of Justice’s brief last summer arguing that Title VII as enacted does not cover sexual orientation, and changes to the statute are left to Congress. In contrast with the federal government’s current interpretation and the 11th Circuit’s decision are rulings in other Circuits. For example, the 2nd Circuit has held that Title VII applies because it is necessary to consider claimant’s sex as a factor in considering discrimination on the basis of sexual orientation. See Zarda v. Altitude Express, Inc., 883 F.3d 100, 132 (2d Cir. 2018). Accord Hively v. Ivy Tech Cmty. College of Ind., 853 F.3d 339, 358-59 (7th Cir. 2017).

If certiorari is granted, argument will focus, in part, upon the breadth of the ruling in Oncale. Regardless, for many employers, state and local laws and court rulings have expanded legal protections beyond those enumerated in Title VII. The best rule remains – make decisions based on documented, easily explained business reasons.

Guidance Issued on New York City Mandatory Sexual Harassment Training

The New York City Commission on Human Rights has released Frequently Asked Questions (FAQs) as guidance on the “Stop Sexual Harassment in NYC Act.”  New York City employers with at least 15 employees are required to conduct annual anti-sexual harassment training for all employees starting April 1, 2019.  For complete details click here.

EEOC Reports Increase in Sexual Harassment Claims

This past year has been filled with disturbing reports of alleged sexual assault and sexual harassment by prominent figures in business, politics, and even the judiciary.  Not surprisingly, the number of EEOC sexual harassment filings has increased. In data published in October, the EEOC reported, that in 2018, it filed 50% more lawsuits regarding harassment than it did in 2017.  Additionally, the EEOC reported that charges alleging sexual harassment increased in 2018 by 12% when compared to 2017.  Along with these statistics, the EEOC reported that it recovered nearly $70 million for victims of sexual harassment in 2018, compared to only $47.5 million in 2017.

In response to the great many reports of sexual harassment, State and local governments have enacted laws requiring comprehensive anti-harassment training, posting of informational posters, and specific language in personnel policies — all aimed at reducing incidents of sexual harassment and increasing awareness of the reporting and remediation alternatives (from internal complaints to contacting governmental agencies).   It is likely that, at least in the near future, this all will result in a greater number of claims and perhaps greater difficulty resolving lawsuits and administrative charges.

Human Resources Employee Permitted to Pursue Discharge Claim

Rather than conduct in breach of an inherent duty of loyalty to the employer, the Eleventh Circuit Court of Appeals has ruled that a human resources representative engaged in protected activity under Title VII of the Civil Rights Act of 1964 when she referred a coworker who complained of discrimination to a plaintiff’s attorney.  Gogel v. Kia Motors Manufacturing of Georgia, Inc.  The ruling is more surprising in light of the fact that, as a Team Relations Manager, the HR representative was responsible for, among other things, investigating and resolving internal complaints of discrimination.  However, the Court focused upon the allegations that the employer “forbade” Gogel – the HR representative – from investigating a complaint made by an employee, Diana Ledbetter, and generally ignored other complaints of discrimination made by Ledbetter, other Kia employees, and Gogel herself.  The employer allegedly discharged Gogel after discovering that the same attorney represented both Gogel and Ledbetter, as it believed that Gogel had “encouraged or even solicited [Ledbetter’s] filing of the charge” and thus “at the very least, there [was] an appearance of a conflict of interest.”  Gogel subsequently sued, alleging, among other things, that she was fired for engaging in protected activity. 

The Court held that Gogel’s actions were reasonable (and thus protected) considering she tried to resolve complaints internally but failed due to the inadequacy of her employer’s procedures.  Further, the Court held the ruling advanced the “purpose of the statute and the need to protect individuals asserting their rights” by going outside the employer’s internal procedures.

This decision serves as an important reminder of the importance for companies to effectively implement and follow their investigation and complaint resolution procedures.