Fourth Circuit Court of Appeals: Employer May be Liable for Harassment by Customer
In an unpublished decision, the Fourth Circuit Court Appeals recently held that an employer may be liable for third-party harassment by a customer if the employer knew or should have known of the harassment and failed to take appropriate actions to halt it. The evidence of repeated complaints to supervisors and managers by the employee created a triable issue as to whether the employer had notice of the harassment, and thus, the Appeals Court allowed this claim to go forward to trial.
In EEOC v. Cromer Food Services, Incorporated, a route driver for a southeastern vending machine company alleged he suffered daily sexual harassment at the hands of two housekeeper employees of one of the company’s largest customers – a hospital. According to the driver, the harassment began after a co-worker left a note in the hospital cafeteria calling him gay. Following this incident, the two male hospital employees allegedly began harassing him with unwanted sexual comments.
The driver claims he complained to numerous people at CFS, including his supervisor, his direct supervisor, another supervisor, a manager of the company, and the chairman of the Board. As the harassment continued, he took more drastic measures by reporting the harassment directly to a human resources professional at the hospital and to the supervisor of the two hospital employees. But, the hospital employees were unrelenting.
In response to this lawsuit, the company asserted that it did not have actual or constructive knowledge of the harassment because the complaints by the driver were vague and insufficiently detailed for action to be taken. In addition, the company pointed out that the employee failed to report the harassment to its President in accordance with the company’s written sexual harassment protocol.
The Fourth Circuit reversed the trial court’s dismissal of the claim. In doing so, it noted that the District Court focused on only one snippet of the driver’s deposition testimony which stated that he did not provide details of the harassment to the company. The Appeals Court acknowledged that although anti-harassment law requires notice to the employer – it should not require it to be pellucid.
The Fourth Circuit also pointed out the flaws in the employer’s approach in this matter. The Court stated that harassment claims could not be avoided by utilizing a “see no evil, hear no evil” strategy, and it criticized the protocol requiring reports to be made to the President by recognizing that such requirement may likely intimate an employee. Moreover, the Court drew attention to the fact that management failed to report the harassment up the chain of command as required by company policy.
This case illustrates to employers within the Fourth Circuit (which includes Virginia, Maryland, North Carolina, West Virginia and South Carolina) that a company’s written policy for reporting harassment may not provide insulation from liability under Title VII. Virginia businesses must ensure that they have a reasonable process in place to address allegations of harassment by its employees and third parties.
Proposed EEOC Rule on ADEA Defenses
A proposed rule introduced by the Equal Employment Opportunity Commission (EEOC) on February 18, 2010, if adopted, will provide guidance and meaning to the “reasonable factors other than age” defense in the federal Age Discrimination in Employment Act (ADEA).
The ADEA, unlike Title VII, states that it is not unlawful for an employer to take an action “otherwise prohibited” by the statute against an employee where “the differentiation is based on reasonable factors other than age” (RFOA). The Supreme Court interpreted this provision in Smith v. City of Jackson and Meacham v. Knolls Atomic Power Laboratory, which involved disparate impact discrimination claims.
The Supreme Court in Smith held that employees bringing claims under the ADEA can rely on the disparate impact theory, and thus, proof of age-motivation is not required. The Smith decision also stated that employers can defend such a case based on a reasonable factor other than age; however, the Court did not provide which party had the burden of persuasion on this issue. Subsequently, in Meacham, the Supreme Court held that the employer - not the employee - has the burden of proving the RFOA defense.
The EEOC’s proposed rule seeks to provide guidance on what constitutes “reasonable factors other than age” consistent with the decisions in Smith and Meacham. It’s non-exhaustive list of relevant factors to be considered in determining whether an employment practice is reasonable are as follows:
-- Whether the employment practice and the manner of its implementation are common business practices;
-- The extent to which the factor is related to the employer’s stated business goal;
-- The extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
-- The extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
-- The severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
-- Whether other options were available and the reasons the employer selected the option it did.
It is important to note that this standard is lower than Title VII’s business-necessity test but higher than the Equal Pay Act’s “any other factor” test.
The EEOC is accepting public comment on the proposed rule until April 19, 2010.
The Genetic Information Nondiscrimination Act Requires New Employment Posters for Businesses
As of No
vember 21, 2009, businesses are required to display a new federal poster in the workplace which reflects the requirements of the Genetic Information Nondiscrimination Act (“GINA”). GINA was signed into law in May 2008 to address concerns over the use of genetic information in the health insurance industry and the acquisition and use of such information by employers. Proponents of the law urged that this legislation will allow Americans to freely undergo genetic testing for diseases, such as cancer, heart disease, and mental health conditions without fear of losing their job.
GINA regulations apply to all private, state, and local government employers with 15 or more employees. Some states already have genetic information nondiscrimination laws, but the terms and application of those laws vary greatly. Pursuant to GINA, businesses may not intentionally acquire genetic information from applicants, employees or even former employers (with very limited exceptions). In addition, the law prohibits employers from using this type of information for any decision regarding the terms of employment, including hiring, firing, and promotion decisions.
The new “Equal Opportunity is the Law” poster is available on the EEOC website in English, Spanish, Arabic and Chinese. This poster also reflects the 2008 amendments to the Americans with Disabilities Act. To obtain free copies of other federal required posters, you should contact the U.S. Department of Labor at (202) 693-0200 or visit DOL’s website.
While GINA seeks to encourage increased genetic testing, which will make it more likely for researchers to come up with lifesaving therapy for disease, its application may catch businesses by surprise. Most companies assume that the law doesn’t apply to it because they don’t actively collect genetic information on their employees or applicants. However, the law defines genetic information broadly and includes information on illnesses obtained through family histories. Thus, it could be problematic to the company that has such information and inadvertently uses it.
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