Protect your company from liability by understanding workplace discrimination and taking these steps to prevent it.
Renaee Henry was one of only 10 women among 400 men working at the PepsiAmericas Inc. plant in Chicago a few years ago. On the weekends, she was the only female on the premises. According to charges made by Henry, she endured sexual advances, degrading remarks, and obscene graffiti. When she complained, Henry alleges that her supervisor told her to “get used to it.” But Henry refused. Instead, in 2003, she filed a sexual-harassment claim against the company with the Equal Employment Opportunity Commission (EEOC), which took it to the U.S. District Court for the Eastern District of Illinois. The parties recently agreed to an out-of-court settlement in which the company paid Henry $400,000.
In another case, in 2005, the EEOC required a manufacturing plant to pay $1.24 million to 20 Hispanic workers who were given less favorable terms of employment than non-Hispanic employees. In the case (EEOC v. Hamilton Sudstrand Corp., U.S. District Court for the District of Colorado, No. 03-Z-1663, 2005), workers were subjected to ethnic slurs, refused promotion, and physically threatened.
In a third case (EEOC v. Family Dollar Operations, Inc., U.S. District Court for the Northern District of Mississippi, 2004), a 61-year-old employee learned that he was to be fired or harassed into resigning because he was too old. He then learned that two other workers—both over 50 years old—had also been targeted by management in the same way. The employee resigned, sued the company, and won a $99,000 settlement.
These cases are but a few examples of the types of charges companies may face. In 2004 alone, nearly 79,500 total charges of discrimination were filed, according to the EEOC. Of these, the EEOC took on 415 cases.
To file a discrimination lawsuit, most individuals obtain a right-to-sue letter from the EEOC and then pursue the case with a private attorney. In some cases, the EEOC itself files suit on behalf of an individual. In 2003, the EEOC sued in 347 cases and obtained $149 million in compensation for plaintiffs, the highest monetary recovery for a single year since the EEOC was founded.
While details of the statistics for 2005 were unavailable when this article was being written, the 2004 numbers show that 266 cases (77 percent) were settled by consent decree—a judicial ruling that reflects a voluntary agreement between the two parties where a defendant agrees to cease the allegedly illegal activity, and in many cases also to pay a fine. In 44 cases (13 percent), the two parties agreed on a settlement out of court.
Plaintiffs won 19 lawsuits, slightly more than the 13 won by defendants. In nine cases, the plaintiff dropped the charges after the lawsuit had been filed.
Whatever the outcome of a case, companies must spend time and money defending themselves. Management can reduce organizational exposure to such charges and related costs by familiarizing themselves with the law and the circumstances that lead to employee claims.
Liability for workplace discrimination takes a variety of forms, all of which revolve around the classes of individuals protected under federal, state, and local fair employment practices laws. Since its enactment 42 years ago, Title VII of the Civil Rights Act of 1964 has been the basis for myriad claims of unlawful discrimination. Over the years, the body of antidiscrimination law has evolved as workplaces have become more and more diverse, and as people from all social, economic, gender, religious, ethnic, and nationality groups work side by side.
Increasing diversity and awareness of rights among workers has meant a diversification of discrimination claims. In some cases, workplace conduct influenced by world events and politics has fostered new causes of action or stirred a resurgence of more traditional claims. Examples include harassment, both sexual and nonsexual, religious discrimination, and retaliation.
To many people, workplace harassment means sexual harassment, perhaps because many of the cases receiving media attention involve the more scandalous and salacious side of unlawful harassment. But harassment claims can be based on allegations of unlawful discrimination against members of any of the protected categories, which include race, national origin, religion, sexual orientation, marital status, and disability.
In terms of unlawful harassment, since 2000 there has been a steady decline in sexual harassment charges filed with the EEOC. Actionable workplace harassment of a nonsexual nature falls into three general categories: harassment because of affiliation or association; harassment because of physical or cultural traits; and harassment because of perception.
Affiliation or association. The first category is harassment based on an individual’s affiliation with a particular religious or ethnic group. Examples include harassing a person because he or she is Arab or practices Islam, or paying an employee less because he or she is Hispanic or Asian.
Harassment based on association is similar. It includes harassing behavior or other discrimination because of an individual’s association with a person or organization of, for example, a particular religion or ethnicity. Examples would be harassing an employee whose husband is from Mexico or refusing to promote an employee because he or she attends a particular church.
An ethnic slur or other verbal or physical conduct can constitute harassment if the behavior creates an intimidating, hostile, or offensive working environment, unreasonably interferes with work performance, or negatively affects an individual’s employment opportunities.
In a fact sheet developed by the EEOC about what an employer can do to address the unique issues raised by national origin and ethnic discrimination, the problem of harassment is addressed specifically. According to the EEOC, the primary applicable law, Title VII (see sidebar), “prohibits offensive conduct, such as ethnic slurs, that creates a hostile work environment based on national origin. Employers are required to take appropriate steps to prevent and correct unlawful harassment.” The commission also has prepared a companion fact sheet to answer questions that commonly arise regarding this issue.
To illustrate the potential problem and suggested response, the EEOC poses the following hypothetical situation and appropriate response:
“Muhammad, who is Arab- American, works for XYZ Motors, a large used car business. Muhammad meets with his manager and complains that Bill, one of his coworkers, regularly calls him names like ‘camel jockey,’ ‘the local terrorist,’ and ‘the ayatollah,’ and has intentionally embarrassed him in front of customers by claiming that he is incompetent. How should the supervisor respond?”
Managers and supervisors who learn about objectionable workplace conduct based on religion or national origin are responsible for taking steps to correct the conduct of anyone under their control, according to the EEOC. In this case, Muhammad’s manager should relay Muhammad’s complaint to the appropriate manager if he does not supervise Bill. If XYZ Motors then determines that Bill has harassed Muhammad, it should take disciplinary action against Bill that is significant enough to ensure that the harassment does not continue.
Physical or cultural traits. The next category is harassment because of physical, cultural, or linguistic characteristics, such as an accent or dress associated with a particular religion, ethnicity, or country of origin. Examples of this behavior include harassing a woman for wearing a hijab (a body covering or headscarf worn by some Muslims) or not hiring a man with a dark complexion and an accent because he is believed to be Hispanic.
Although it is not explicitly included within the statutory language, at least two federal appeals courts have found a cause of action for disability-based harassment under the Americans with Disabilities Act (ADA), and a third court has found a cause of action for a disability-based hostile work environment.
In 2001, the U. S. Court of Appeals for the Fifth Circuit held for the first time that an individual may file a lawsuit against an employer for harassment on account of disability under the ADA. In Flowers v. Southern Regional Physician Services Inc. (U. S. Court of Appeals for the Fifth Circuit, 2001), the plaintiff had notified her employer of her HIV-positive status by advising her immediate supervisor, who also was her close friend. According to the claim, the supervisor would no longer speak to the plaintiff, and she intercepted her phone calls, eavesdropped on her conversations, and hovered around her desk. Further, before her HIV was discovered, the plaintiff had been required to take only one random drug test. After making her illness public, she had to take four random drug tests within a week. Also, before the discovery, the plaintiff received high marks on performance appraisals, but within a month of the discovery, she was reprimanded and placed on probation for 90 days. After that probation ended, she was placed on another 90-day probation.
Following these probationary periods, the plaintiff was repeatedly called into meetings where she was mistreated by supervisors. Finally, at one of these meetings, she was terminated.
Although a jury ruled that her disability was not a motivating factor in her termination, they found that she was subjected to disability-based harassment that created a hostile work environment. She was awarded $350,000 by the jury, which was reduced by the court to $100,000. The U.S. Court of Appeals for the Fourth Circuit became the second federal appeals court to hold that disability-based harassment may constitute a cause of action under the ADA. In Fox v. General Motors Corp. (U.S. Court of Appeals for the Fourth Circuit, 2001), the plaintiff claimed that his supervisors referred to disabled workers as “911 hospital people.” In addition, he claimed that although his immediate supervisors attempted to accommodate his restrictions, other supervisors and coworkers harassed him and ordered him to perform jobs that he was physically unable to do. The employee filed a lawsuit against his employer for harassment based on disability.
The court ruled in favor of the plaintiff. In its decision, the appeals court observed the similarity in the language of the ADA and Title VII, which prohibits discrimination in “terms, conditions, or privileges of employment,” and in the remedial purposes of the two statutes.
The judge noted, “we have little difficulty in concluding that the ADA, like Title VII, creates a cause of action for hostile work environment harassment.” The court affirmed a jury’s compensatory award of $200,000 and further affirmed the plaintiff’s request for medical expenses of $3,000.
Perception. Another area of discrimination litigation that has developed is bullying behavior, which can be the basis for unlawful harassment based on perception. In a July 2004 study, the National Institute for Occupational Safety and Health found that most incidents of workplace bullying are between employees. Of the 516 private and public organizations surveyed, 24.5 percent reported instances of bullying in the workplace during the previous year. The survey defined bullying as “repeated intimidation, slandering, social isolation, or humiliation by one or more persons against another.”
In Dick v. Phone Directories Company (U.S. Court of Appeals for the Tenth Circuit, 2005), the federal appeals court ruled that a female employee could proceed with a same-sex harassment claim. However, the case was based on the treatment the employee received at the hands of other workers. She was repeatedly bullied by her co-workers because of sexual orientation.
Lawsuits based on discrimination due to gender are well established. Much of the current litigation on this issue is based on same-sex harassment and stems from the 1998 U.S. Supreme Court case, Oncale v. Sundowner Offshore Services. In the case, the U. S. Supreme Court held that although Title VII does not include homosexuality as a protected category, it does protect members of each sex from being discriminated against or bullied for not fitting into an expected gender role or stereotype.
The case arose when a male employee brought a lawsuit for violation of his Title VII rights against his former employer, a male supervisor, and two male coworkers, alleging that he had been sexually harassed. Specifically, the plaintiff alleged that he had been sexually assaulted by his supervisor and coworkers and threatened with rape.
Although the plaintiff had reported numerous incidents of harassment to supervisory personnel, no remedial action had been taken. The Supreme Court, in a unanimous opinion, held that sex discrimination consisting of same-sex sexual harassment is prohibited. The Court cautioned that careful consideration of the social context in which particular behavior occurs is always required before determining whether same-sex harassment has occurred. The same “severe and pervasive” standard should apply as in traditional hostile work environment cases, it said.
Prior to the Oncale decision, the federal appeals courts disagreed as to whether a plaintiff must show the harasser was homosexual. However, the Oncale decision cleared the way for same-sex harassment actions regardless of the harasser’s sexual orientation.
Gender-nonconformity. In the years since Oncale, employees have been advancing a new theory when bringing lawsuits—that of “gender nonconformity bias.” Essentially, employees have argued that they were subjected to bias because their behavior or appearance did not conform to stereotypes for their biological sex.
In 2001, the U.S. Court of Appeals for the Ninth Circuit held that harassment based on the perception that an employee is effeminate is a form of gender bias and thus discriminatory. In the case, Nichols v. Azteca Restaurant Enterprises, Inc. (U.S. Court of Appeals for the Ninth Circuit, 2001), the plaintiff was a restaurant host and server and who was subjected to a campaign of bullying, including insults, name-calling, and vulgarities. The court found that both an objective and subjective hostile work environment has been created, and that the plaintiff could pursue a harassment claim.
Similarly, in Smith v. City of Salem (U.S. Court of Appeals for the Sixth Circuit, 2004), the federal appeals court ruled that a transsexual firefighter could sue his employer and the city after he was frequently tormented by coworkers, who told him his feminine appearance and mannerisms did not conform to the stereotypes of how a man should look and behave. The court found that the harassment was in fact discriminatory, had resulted in the adverse employment actions taken against the plaintiff, and were the basis for a lawsuit.
>Although the applicable federal law, Title VII, does not prohibit harassment or discrimination based on a worker’s sexual orientation, an increasing number of state and local jurisdictions do. Employers must be aware of all applicable laws in the jurisdictions where they do business to ensure that they are in compliance when making employment decisions and responding to claims of harassment.
Since 2000, claims alleging religious discrimination have risen by 30 percent. These include claims stemming from workplace proselytizing.
For example, in Colorado, a federal district court jury awarded two plaintiffs $750,000 in mostly punitive damages (later reduced by the federal statutory caps) because the employer, an evangelical Catholic, required employees to sign a company prayer (Millazzo v. Universal Traffic Service, Inc., U.S. District Court for the District of Colorado, 2003).
In the case, the two employees, a Lutheran and an atheist, signed the prayer under protest, and subsequently sued the company for a religiously hostile environment, disparate treatment, and constructive discharge. In addition to damages, the employer also had to pay the plaintiffs’ attorneys’ fees of nearly $150,000, plus $11,000 in costs.
Similarly, in Louisiana, a state court jury awarded $40,000 to a Baptist woman for religious discrimination when company management expected her to attend the Apostolic Tabernacle to which they belonged (Robinson v. Healthworks Int’l LLC, Louisiana Court of Appeals, 2003). While she was attending the service in a short-sleeved dress, the woman was singled out by the tabernacle preacher who labeled her a “Jezebel.” Management also played religious tapes at the work site, and employees told her there was an evil spirit in the factory to be cast out, leading her to believe it was she who would be the target. The appeals court confirmed the award.
In addition to charges of discrimination, companies often face charges of retaliation for how they subsequently treat the person who filed the discrimination or harassment complaint.
Retaliation charges have climbed steadily over the past decade: they accounted for nearly 23,000 of the 79,500 charges filed in 2004. Retaliation claims can be part of a discrimination suit that includes other charges, such as a person who sues his company for age discrimination and is then fired for filing the claim.
They can also stand alone. For example, in one case (EEOC v. Bank of Oklahoma, U.S. District Court for the Northern District of Oklahoma, 2005), a woman was fired without explanation after testifying against the company in the sexual harassment lawsuit of a colleague. She filed a retaliation lawsuit, and the company was required to pay her $159,000 in damages.
What Companies Can Do
The definition of employment discrimination will continue to evolve as courts interpret the law and establish guidance in this complex area. In the meantime, companies should make clear their commitment to preventing discrimination and harassment and to treating all employees respectfully. They should make sure that this commitment is formalized through written policies prohibiting discrimination. Management should periodically evaluate and review these policies and procedures to ensure that they are effective.
There should also be an awareness campaign to encourage victims and witnesses to come forward. In addition, companies must have confidential complaint mechanisms that make it easy for victims or witnesses to promptly report harassment. Once it is reported, the focus should be on taking action to end the harassment and to correct its effects on the victimized employee.
Effective policies can make a difference in the courtroom. For example, a large computer company successfully defended itself in a lawsuit charging discriminatory practices in Peterson v. Hewlett-Packard Co. (U.S. Court of Appeals for the Ninth Circuit, 2004). The company had a diversity program emphasizing respect for all employees regardless of their differences. Management put up posters to promote the program, one of which was placed next to the workstation of an employee who believed that his faith compelled him to confront and denounce homosexuality. He, in turn, posted visible antigay messages in his workstation. Management demanded that the employee remove the messages, and offered him several less offensive options to express his views.
The employee refused to compromise and was terminated. The company had gone so far as to let him post his beliefs on a bumper sticker on his car in the company lot. So when the employee sued for religious discrimination, the court ruled that the company had provided the employee with ample outlets to air his religious beliefs without interfering with its diversity program.
As these cases show, companies must make clear their policies towards the unlawfulness and inappropriateness of bullying, taunting, ridiculing, and other forms of harassment or discriminatory behavior, and the consequences involved. Companies can thereby reduce the chances that they will be hit with charges of discrimination.
Margaret Bryant, Esq., is the editor-in-chief for Jackson Lewis Communications in the firm’s Pittsburgh, Pennsylvania office.