Date: September 2010
Hostile Work Environments . . .
Where the Customer isn't Always Right!
Federal and California law require that you maintain a harassment-free, retaliation-free work environment. But, did you know that your organization can be liable for the harassment of your workers by non-employees, when you knew or reasonably should have known about the harassment and failed to take corrective action? Two brand new cases underscore the importance of consistently enforcing your harassment prevention policies and internal investigation procedures.
Love’s Travel Stops and Country Stores, Inc.Last month, Love’s paid $70,000 to settle a sexual harassment lawsuit in which the Equal Employment Opportunity Commission (EEOC) charged that two young female cashiers were subjected to repetitive and serious sex-based abuse by customers. The harassing behavior from truck drivers, some of whom were regular customers, included unwanted sexual touching; crude and obscene remarks; sexual demands and innuendos; handing one victim an obscene card; and demands for personal information. Some of this abusive behavior occurred in front of other customers.
There was extensive evidence that Love’s knew about and tolerated this sexually hostile work environment caused by its customers, and that despite this knowledge, the company failed to take reasonable steps to stop it. Even worse, at least one manager laughed about it, and another manager said the harassment was to be expected because it is a truck stop. Managers also told the victims to “deal with it” and in particular to tolerate the misconduct of one repeat offending customer because “he’s always like that.” In addition to the cash settlement, Love’s also must investigate complaints of sexual harassment, provide training for managers and supervisors on conducting sexual harassment investigations, and post a warning for customers and vendors that harassment of Love’s employees will not be tolerated.
The risks aren’t limited to sexual harassment or to pesky truck drivers who come and go along the Interstate. Employers in every industry are at risk when they cater to the discriminatory attitudes of their customers to the detriment of an employee’s right to a non-discriminatory workplace. Policies that stigmatize, isolate, or disparage employees based on race, religion, or national origin are flatly illegal in California and under federal law. A Federal appeals court recently concluded that a nursing home’s reliance on a patient’s right to choose a health care provider did not override its obligations to provide a discrimination free environment.
Plainfield Healthcare Center. A nursing home facility in Indiana had a rule forbidding black Certified Nursing Assistants from providing services to residents who specifically requested “white-only care.” A new assistant was offended when she was instructed that “no blacks” should enter a particular resident’s room or provide care. The employee reported racially charged statements from co-workers who supported the policy. She complained to a unit supervisor and the co-worker harassment slowly stopped. But the rule forbidding black nursing assistants from treating certain residents remained in place. She was fired after only three months and she sued alleging that the policy of acquiescence to the racial preferences of residents (who as “customers” were third parties to the employment relationship) created a hostile work environment toward its black employees.
A judge threw the case out of court finding that the policy was based on a good-faith belief that not permitting residents to choose their health care provider was a violation of state and federal law. The Appeals Court disagreed, ruling that the race-specific care policy engendered and promoted a hostile environment, providing a daily reminder of limitations placed on its black employees. The court expressly stated that catering to the racial preferences of residents is an insufficient justification to discriminate.
Lessons to consider: Promptly respond to harassment or discrimination that your leaders observe. Investigate every complaint by an employee and where substantiated take immediate and appropriate corrective action. Ensure that all policies, whatever their motivation, comply with federal and state anti-discrimination laws.
Brian Reid was 52 when Google hired him. Reid's first year's performance review was very positive, but contained the following language: Adapting to Google culture is the primary task for the first year here. Right or wrong, Google is simply different: Younger contributors, inexperienced first line managers, and the super fast pace are just a few examples of the environment. According to Reid, one of his bosses was a 38-year-old vice president who called Reid’s opinions "obsolete" and "too old to matter" and labeled Reid "slow," "fuzzy," "sluggish," and "lethargic.” Co-workers regularly addressed Reid as “old guy” and called him an “old fuddy duddy.” One colleague teased that Reid’s CD jewel case office placard should be an “LP” instead of a CD.
Within a year Reid was relieved of most of his duties and told to focus on developing in-house graduate degree and college recruitment programs (but without a budget or staff support). A few months later, Google terminated him claiming job elimination. Reid was only told there was no “cultural fit.” Reid sued for age discrimination under the California Fair Employment & Housing Act (FEHA). A judge dismissed the case without a trial but a state appeals court reversed finding there was a factual dispute about why Reid was fired.
The case turned solidly against all California employers when Google appealed to the Supreme Court. Google urged the court to adopt the “stray remarks” doctrine used by federal courts, which disregards discriminatory statements by non decision makers or comments unrelated to the specific employment decision. With such remarks excluded from evidence, employers can often get an early dismissal and avoid an expensive jury trial. But, this is California. The Supreme Court refused to sanction this standard in FEHA lawsuits, ruling that “stray remarks” can’t be viewed in isolation and a jury should consider them with all other evidence.
To get a claim for age discrimination to trial, an applicant or employee must show that he or she is age 40 or older, is qualified for the position (not necessarily the “best” qualified), and that age was a basis for an adverse employment decision. The employer may still avoid trial by identifying a legitimate and nondiscriminatory reason for the action. But the claim will survive if there is substantial evidence of a pretext for discrimination. And now, with the Google precedent, stray remarks can change the complexion of the evidence – and the result.
But, the news isn’t all bad. Employers who consistently use objective standards for hiring and evaluating performance, and who effectively document the basis for their decisions can still win these cases. Take the example of Reeves v. MV Transportation, a recent California Court of Appeals case in which the employer established a legitimate reason for hiring a younger applicant who was more qualified for the job. Reeves was 56 when he applied for a position as a staff attorney. He and the 40-year-old woman ultimately hired for the job, were among about 60 applicants. Reeves wasn’t interviewed. The successful candidate was offered the job after an interview. Reeves sued for age discrimination under FEHA. The trial court dismissed the case before trial, and Reeves appealed to the California Court of Appeals. A job applicant might be able to show a discriminatory motive (e.g., a pretext) for passing him over when his qualifications are substantially superior to those of the person hired. Here, the Court of Appeals found that the two applicants' qualifications were essentially equal but that the company had objective and well documented conclusions that she had several advantages over Reeves including a New York license and relevant litigation experience. And there were apparently no unfortunate stray marks that could have undermined their objective decision and careful documentation.
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