March 22, 2015

How you Respond is Key to Hostile Work Environment or Sexual Harassment Claim: Lessons Learned from EEOC v. Whirlpool.

A recent string of cases reminded me of how easily employers can be exposed to employment discrimination claims. I thought there might be some benefit in reviewing some hard lessons learned by management in EEOC v. Whirlpool, a December 2009 case arising in the Sixth Circuit (MI, OH, KY, and TN) which adopted a new standard making it clear that “the conduct underlying a sexual harassment claim need not be overtly sexual in nature. Any unequal treatment of an employee that would not occur but for the employee’s gender may, if sufficiently severe or pervasive under…constitute a hostile environment in violation of Title VII.” (Emphasis added).

This new wrinkle apparently applies without regard to the severity of the conduct and therein lays the danger for medical and dental practices which are more often than not staffed predominantly with female employees under the supervision of male professionals in what can sometimes be a sexually charged atmosphere. The following are lessons we should learn from this case. First, having a formal anti-discrimination policy will not insulate you from a charge of discrimination if you know of the underlying facts, and don’t do anything to rectify the situation. Second, you cannot train your staff enough in how to conduct themselves in the workplace and how important is to document and report all allegations of discrimination, no matter how small or seemingly innocuous. Third, when confronted with charges of discrimination, where there is smoke, there is usually fire and it is usually better and less expensive to settle at the earliest opportunity.

The Facts of the Whirlpool Case

The victim in Whirlpool, a female African American production line worker was confronted with lewd and racially provocative comments by a white male who had been recently transferred to the same line she worked. Although she rejected his importunities, he persisted, and over the next two months made remarkably stupid comments comparing the anatomies and skills of black versus white men, and suggested that once she had sex with him, she would change her mind about black men. Of course, this is way over the line and prima facie evidence of sexual harassment! When his lewd comments continued, the victim complained to their supervisor, also, a white male, who said her tormentor would stop if she would just ignore him. The supervisor did nothing, no report, no investigation...obviously the first mistake and lesson…without proper training, supervisors are going to make bad decisions like ignoring the complaint in hope it will just go away.

Not surprisingly, the tormentor continued to harass the woman, and when the victim again reported the harassment, the supervisor stupidly said “why don’t you just go ahead and f… him and get it over with. Then maybe he will leave you alone.” Huh? This incredibly obtuse and insensitive comment just enhanced the hostile environment and got management involved in the discrimination. Huge mistake! Once a supervisor is involved in the harassing, the damages rise exponentially. The harassment continued over the next week and eventually, the victim was assaulted by her tormentor. No sexual or racial comments accompanied the attack, but management finally took action and terminated the tormentor.

The victim, though not badly injured, became an emotional wreck. On the advice of her physicians, (and likely, her lawyers looking to set up a constructive discharge claim) she resigned from Whirlpool even though the company offered her time off and other incentives to stay. She declined because she reportedly suffered from Post Traumatic Stress Disorder that was so severe she was unable to work again. This is a prime example of doing too little, too late.

In due course, she filed an EEOC charge of discrimination. When conciliation efforts failed, the EEOC brought legal action against the company, alleging sexual harassment, racial discrimination and a hostile work environment. Given the clear evidence of discriminatory conduct, and evidence of the victim’s injuries, it is hard to conceive why Whirlpool’s lawyers did not recommend they settle at the EEOC Conciliation conference when it is most likely they could have bought their peace for significantly less than the eventual judgment. I know a top management side employment lawyer who advises his clients with few exceptions to settle at the earliest possible opportunity. This is good advice because it will almost always be cheaper considering the legal fees and costs of interruption in the workplace.

At trial, the Court, relying on the new standard that bad conduct need not be “overtly” sexual, awarded the victim back pay, front pay and compensatory damages totaling almost $1.1 million. In so ruling, the Court also observed that the victim’s emotional damages were caused by Whirlpool’s ineffective response to her allegations of sexual and racial harassment and it did not matter that Whirlpool had in place an anti-harassment policy. Nor did it matter that the victim did not avail herself of steps set forth in company policy because Whirlpool supervisors had actual or constructive knowledge of the continual harassment and did nothing.

Lessons to Be Learned

An important lesson to be gleaned from Whirlpool is that Management must not only have the policy and procedures in place, to thwart discrimination and avoid costly litigation, they must stay abreast of changes in the law and constantly train their employees in what constitutes discriminatory conduct in the workplace. When evidence is brought forward suggesting a violation, the employer must react immediately with an investigation and a response appropriate to the severity of the purported conduct. Even where the conduct is far less “overt” than happened here, the real damage was done in the failure to respond appropriately.

Take-Away: What You Do with What you Know Makes All the Difference in Workplace Discrimination

  • Pay attention to any claim of hostile work environment – no matter how seemingly small or innocuous.
  • Once the employer or management knows of the discrimination or harassment, you have to respond promptly and reasonably.
  • Train your staff and supervisors about sexual harassment, discrimination and how to respond to complaints
  • Once confronted with a lawsuit, often better to settle early for less, than to be “right” at a huge cost

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