New Jersey Prohibits Enforcement of Non-Disclosure Provisions in Settlement Agreements, Other Contracts

A sweeping amendment to the New Jersey Law Against Discrimination (LAD) bars enforcement of non-disclosure provisions in settlement agreements and employment contracts, and prohibits the waiver of substantive and procedural rights under the statute. The amendment applies to all contracts and agreements entered into, renewed, modified, or amended on or after the effective date, March 18, 2019.

Highlights

The amendment has the practical effect of prohibiting typical confidentiality provisions that accompany settlements of LAD claims. The amendment provides that non-disclosure provisions in employment contracts and settlement agreements are against public policy, and deemed to be unenforceable against a current or former employee if they have “the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment.”

Under the amendment, every settlement agreement resolving a LAD discrimination, retaliation, or harassment claim by an employee against an employer must include a bold and prominently placed notice stating that “although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.”

In addition to the practical impact of the amended LAD regarding confidentiality of settlement terms, employers should determine whether existing contracts and agreements contain waivers of procedural and substantive rights guaranteed by LAD. The amendment provides that “[a] provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.” The amendment further provides that “[n]o right or remedy under the [LAD] or any other statute or case law shall be prospectively waived.”

This language likely will lead to litigation over the effectiveness of jury-waiver provisions and agreements to arbitrate LAD claims against an employer on or after the effective date of the amendment. While what impact the amendment will have on arbitration is unclear, legal challenge is expected as the amendment appears to conflict with the Federal Arbitration Act, which preempts state law that prohibits the use of arbitration agreements. See AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341 (2011) (“When state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.”).

In addition, if an employer seeks to enforce a provision prohibited by the new law, aggrieved employees may file suit in New Jersey state court to recover common law tort remedies, in addition to reasonable attorneys’ fees and costs associated with the filing.

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Given the broad language in the amendment and its effect on all types of agreements relating to employment (even severance agreements after assertion of LAD claims), it is important that employers seek guidance regarding modifying settlement agreements when resolving LAD claims with current or former employees, and reviewing employment contracts and other agreements that may conflict with the new law.

The Legislature introduced the amendment at the height of the #MeToo movement, after news reports revealed that settlement agreements of high-profile cases involving well-known entertainment and media personalities accused of sexual harassment included non-disclosure provisions. The amendment’s supporters in the Legislature have praised the amendment for allowing purported victims of unlawful conduct to discuss their claims publicly. Critics note that the promise of confidentiality that incentivized many employers and employees to resolve discrimination, harassment, or retaliation claims through settlement has largely been eliminated by this amendment.

Jackson Lewis attorneys are available to answer questions regarding the LAD and to assist employers in achieving compliance with its requirements.

The Rules of the Closing Argument

The evidence is in, the jury instructions are done, final trial motions have been made (and appeal points dutifully preserved), and it is time for the final argument, the holy grail of the trial lawyer. After months (if not years) of preparation, it is finally time to just argue, to tell the jurors what you think about the evidence and convince them to agree with your view of what is just and proper, right? Wrong.

Although trial lawyers are allowed significant latitude during the closing arguments, there are rules that must be followed. If you break these rules, your opponent will have the right – if not obligation – to object and disrupt your closing argument, as well as establish to the jury (during your time in the spotlight, no less) that he or she knows the law and the facts better than you. Unfortunately, there is no official list of rules, but here are a few established restrictions:

  • The “Golden Rule.” That one should treat others as they wish to be treated is a truth rooted in most religions and cultures. But this lesson is prohibited in the courtroom. Variations of this argument include asking jurors to “put themselves in the shoes of the [plaintiff/defendant]” or “imagine how it must have felt to be wrongfully terminated that way.” These arguments are improper as they encourage the jury to depart from neutrality and to decide the case on the basis of personal interest and bias, rather than on the evidence. See Caudle v. District of Columbia, 707 F.3d 354, 359, 404 U.S. App. D.C. 56 (D.C. Cir. 2013).
  • Personal opinions on culpability, witness credibility, or justness of a cause. Rule 3.4(e) of the Model Rules of Professional Conduct prohibits the introduction of the trial lawyer’s personal opinions. Atticus Finch famously violated this rule (among others) in To Kill a Mockingbird, arguing during closing statements that “I have nothing but pity in my heart for the Chief Witness for the State …. But, my pity does not extend so far as to her putting a man’s life at stake.” Then again, Atticus lost.
  • “Send a Message.” The jury can’t be asked to “send a message” with regard to awarding or determining compensatory damages. Courts have concluded that this “us-against-them” plea has “no appeal other than to prejudice by pitting ‘the community’ against a nonresident corporation [and] is an improper distraction from the jury’s sworn duty to reach a fair, honest and just verdict.” Westbrook v. General Tire & Rubber Co., 754 F.2d 1233, 1238 (5th Cir. 1985). The “Send a Message” argument is allowed, however, where it is directed to an award of punitive damages or toward a non-damage issue, such as a finding of negligence. See Koger v. Norfolk S. Ry., No. 1:08-0909, 2010 U.S. Dist. LEXIS 26209, at *13 (S.D. W. Va. Feb. 26, 2010) (citing cases).
  • Facts not in the record. You can’t argue facts not in the record or suggest inferences from facts not before the jury; to do so mocks and insults the trial process. Crum v. Ward, 146 W. Va. 421, 434, 122 S.E.2d 18, 26 (1961). Trial lawyers are allowed, however, to include in the final argument facts of “common knowledge or illustrations drawn from common experience, history or literature.” People v. Hill, 17 Cal. 4th 800, 819, 72 Cal. Rptr. 2d 656, 664, 952 P.2d 673, 681 (1998); see Smith v. State, 388 Md. 468, 487, 880 A.2d 288, 299 (2005).
  • Inflaming the passions or prejudices of the jury. You can’t “excite and inflame the minds of the jury against one of the litigants [or] appeal to their passions and prejudices.” 2A M.J. ARGUMENT AND CONDUCT OF COUNSEL § 17 (2018). Likewise, counsel in closing argument must not appeal to the jury’s economic fears and passions. Velocity Express Mid-Atlantic v. Hugen, 266 Va. 188, 585 S.E.2d 557 (2003).
  • “Opposing Counsel is an idiot.” You must remain objective and not take personal shots at opposing counsel or his/her case. Not only will the court rebuke you for it, but this type of conduct legitimately invites a counterattack that might be more damaging than your initial jab.

A final note on objections: The timeliness of an objection during closing argument is critical, and waiting until the judge has charged the jury (perhaps even out of politeness) is generally viewed as too late. For example, in D’Auria v. Allstate Ins. Co., defense counsel violated nearly every one of the above rules, engaging in character assassinations of the plaintiff, plaintiff’s counsel, and plaintiff’s witnesses, injecting his personal opinions as to the credibility of the witnesses, belittling the plaintiff, appealing to the conscience of the jurors to send a message to the community, and even apologizing to the jury for the plaintiff’s case. 673 So. 2d 147 (Fla Dist. Ct. App. 1996). But because plaintiff’s counsel did not timely object to these arguments, the court refused to order a new trial or take away the jury verdict.

A Cautionary Tale: The Importance of Implementing Proper Policies

Employers have little control over employees’ bad, impulsive decisions. However, employers have full control over how they respond to a complaint of harassment. Any employer can ensure it investigates an allegation of harassment. Failure to do so can be costly.

On December 19, 2018, a Florida federal jury rendered a verdict awarding $850,000 in compensatory and punitive damages to Elulalia Salazar-Santiago, a female worker working at Favorite Farms.

The evidence at trial showed that Santiago was hired by the company in September 2015 as a seasonal worker at its Florida location. Sometime after she began this role, Hector Cruz (“Cruz”), Santiago’s supervisor, demanded that Santiago have sex with him or lose her job. The company provided housing on its premises for employees and their family members. On November 13, 2015, Cruz entered into Santiago’s housing unit claiming that he needed to fill two empty bedrooms. Instead, he pushed Santiago into a room and raped her. Cruz threatened Santiago’s job if she reported the sexual assault. Santiago reported the assault to the company and the local legal authorities on the same day. The evidence showed that the company lacked a policy for handling sexual harassment complaints, and it failed to investigate Santiago’s complaint; and that the company retaliated against Santiago for reporting the assault by terminating her employment.

This case underscores the importance of implementing equal employment opportunity (EEO) policies – including a non-retaliation policy. Without EEO policies, employees simply do not know how to respond to complaints – even if they feel they should. Implementing and following the policies allows an employer to show that it reacted and investigated a complaint promptly and thoroughly. Employers must document the efforts they undertake when investigating a complaint – including any discipline it takes against employees or reasons why disciplinary actions were not taken. Employers must also be prepared to show that any action it takes against an employee was not in retaliation for reporting protected activity. Lastly, complaints by subordinates about their supervisors should be handled with extreme care because of the power and leverage supervisors have over a subordinate.

If you have not done so in the last year:

  1. Revisit your company’s anti-harassment policy (if you do not have this policy, have your counsel draft one for you);
  2. Make sure there is a clear procedure for how to report harassment; and
  3. Provide refresher training to managers and supervisors about how to report complaints.

Please contact Jackson Lewis with any questions.

Former Winery Employees Awarded $11 million

Plaintiffs Megan Meadowcroft and Amanda Brown, two winery employees, alleged that they had been harassed on numerous occasions by their supervisor, General Manager Pinero. Specifically, Brown alleged that Pinero attempted to flirt with her, and physically made contact with her. Meadowcroft alleged that Pinero made sexually explicit gestures, sexually explicit comments, put his hands on her waist and under her buttocks as she was serving customers, and on at least one occasion told her that she could be a manager if she would have sex with him. Along with a claim of harassment, they filed claims of retaliation, failure to prevent harassment/retaliation, and negligent supervision, retention, and hiring.

After Meadowcroft complained to Silverton Partners and Essence Business Group, the owners and managers of the winery, about Pinero’s conduct, he was fired. However, Meadowcroft was not put on future work schedules.

After he was fired, Pinero reached out to Silverton and Essence and asked to be re-hired. After he promised additional sales, and better behavior, he was re-hired as General Manager.

Upon his return, Brown complained to Silverton and Essence about Pinero’s presence when he began his re-employment, and even obtained a temporary restraining order. However, Brown was placed on leave while Pinero was allowed to continue to work pending the final restraining order hearing. Even after the restraining order was granted, Brown was never put back on the schedule despite following up with the defendants multiple times asking to be placed back on the schedule.

A jury found in favor of Meadowcroft and Brown on all counts, awarding each plaintiff $1,500,000 in future emotional distress damages, $1,000,000 in past emotional distress damages, and $3,000,000 in punitive damages.

Lesson for employers: it is crucial for employers to understand and realize that after employees raise protected concerns about their employment, especially ones as egregious as those complained of in this case, that they avoid treating them differently in any way after complaining. Clearly the winery’s conduct of taking both employees off the schedule within weeks of their complaints gave the jury the impression that the change in hours was directly because of their complaints.

The case is: Meadowcroft and Brown v. Silverton Partners, Inc. and Essence Business Group, Inc., Los Angeles County Superior Court, Case No. BC 633239.

 

A $6M Misunderstanding? Pennsylvania Jury Finds Age and National Origin Discrimination

Following a five-day trial, and nine hours of deliberation, a federal jury in Pennsylvania has awarded more than $6 million to a former Teva Pharmaceuticals employee. Middlebrooks v. Teva Pharmaceuticals USA, Inc., No. 2:17-cv-00412 (E.D. Pa. Nov. 19, 2018). The employee claimed that the company discriminated against him on the basis of his age in violation of the Age Discrimination in Employment Act (ADEA) and on the basis of his national origin in violation of Title VII of the Civil Rights Act and retaliated against him for lodging internal complaints.

Stephen Middlebrooks, who was 58-years-old at the time of his termination and a United States national, alleged that his younger, Israeli manager, Nir Aharoni, told him the company intended to make certain employment decisions based on age – a practice which, Aharoni purportedly said, was commonplace in Israel, where Teva is headquartered. Middlebrooks further alleged that Aharoni demonstrated bias against American employees. He claimed, for example, that Aharoni remarked that Americans had “narrow-minded perceptions of Israelis.”

Middlebrooks alleged that, after he complained about the foregoing conduct, Aharoni (a) gave him the worst performance rating he had received in his 15-year tenure, and (b) denied him an equity award on grounds that Teva only gave such awards to employees with long-term futures at the company.

According to Middlebrooks, HR investigated his complaints and concluded that Aharoni had not engaged in discriminatory conduct. HR, however, recommended that members of Aharoni’s team – against whom Mr. Middlebrooks had also made complaints – receive “cultural sensitivity training.” Middlebrooks alleged that he was never advised whether this recommendation was implemented and that, shortly after HR concluded its investigation, he was placed on a performance improvement plan (PIP) for the first time during his career at Teva. Soon thereafter, Middlebrooks alleged, he filed a Charge with the Equal Employment Opportunity Commission. In response, Aharoni allegedly extended the duration of the PIP and, when that extended period concluded, terminated Middlebrooks’ employment.

Teva has submitted post trial motions. The company likely will challenge the jury’s award of $5 million in punitive damages. (The jury also awarded $1.16 million in compensatory damages.) Under Title VII, punitive damages are capped at $300,000 for employers with more than 500 employees. According to reporting, Middlebrooks’ counsel is taking the position that, notwithstanding the Title VII cap, the full punitive damage award is recoverable on Middlebrooks’ ADEA claim. The Third Circuit Court of Appeals has not yet weighed in on the issue, but a number of district courts in that circuit have held that punitive damages are not recoverable in any amount under the ADEA.

The jury verdict provides an important lesson for employers with operations in multiple countries – or just in multiple states or cities. Employment laws vary from country to country, from state to state, and at the local level. Managers supervising employees in more than one location should be trained on compliance with the pertinent employment laws in each such location.

 

No Liability for School in $4-Million Gender Discrimination Suit, Jury Finds

A federal jury concluded that the former Superintendent of the East Greenbush Central School District failed meet her burden of proving she was terminated based on her gender and pregnancy status. Accordingly, the District was not liable for the more than $4 million in damages sought.

Angela Nagle became Superintendent of the District in 2008. Nagle and the District amended her employment agreement several times, and the last amendment provided that she was to remain an employee through June 2016. Nagle went on maternity leave in December 2014 and returned to work in March 2015. Shortly after returning, the Board of Education for the District informed Nagle that the District would not renew her contract.

Nagle commenced an action against the District, the Board, and individual Board members. In her Complaint, Nagle asserted a number of claims against them, including claims under Title VII and the Pregnancy Discrimination Act (PDA), 42 U.S.C. § 1983, Title IX, the Americans with Disabilities Act, and the Family and Medical Leave Act.

Central to these claims were allegations that the District terminated Nagle for exercising her right to take maternity leave, and that stereotypes regarding working mothers of young children motivated the Board’s decision and behavior toward Nagle. Among other things, Nagle based her claims on alleged Board member comments questioning Nagle’s ability to work following her pregnancy.

The Board responded that it had legitimate, nondiscriminatory reasons not to renew Nagle’s employment, including Nagle’s communication problems with the Board, opposition to Board directives, and difficult relationships with staff.

The Honorable Brenda K. Sannes, U.S. District Judge for the Northern District of New York, significantly pared down Nagle’s claims on summary judgment. Judge Sannes’s order left only two claims for trial before the jury: Title VII and PDA discrimination claim against the District and the Board, and the 42 U.S.C. § 1983 claim against the individual defendants.

Deliberating after presentation of the evidence at trial, the jury did not get beyond the first question on the special verdict form. It concluded Nagle did not establish by a preponderance of the evidence that her gender was a motivating factor in the District’s decision not to extend her employment. The jury thus concluded the defendants were not liable for gender discrimination, much less for a damages award of $4+ million that Nagle was seeking.

Lesson for employers: Even if remarks of concern made by management and other decision-makers are well-intentioned, employees may construe them as evidence of discrimination. Nagle’s case brings to mind the importance of workplace training.

Scientist Awarded $3M by Pennsylvania Jury in Gender Discrimination Suit

A federal jury recently awarded a female scientist $3 million for her gender discrimination claims against PPG Industries, Inc., headquartered in Pittsburgh, Pennsylvania. Half of the award was for emotional distress damages.

In the case, Carol Knox worked for PPG for 23 years and was a Project Manager in the research and development group, where she was the only female, at the time of her termination in 2013. Knox brought suit in 2015 alleging gender and age discrimination.

Knox alleged that her supervisor had fired her because he did not want to work with a woman. Knox asserted that her supervisor falsely accused her and conducted a sham investigation as an excuse to terminate her. She alleged that her supervisor for the last three years with the company, who was a decision-maker in her termination, directed sexist remarks at her, demonstrating a bias against women, and treated her differently than her male counterparts by assigning her to administrative teams rather than technical teams. Knox further claimed that she reported her concerns regarding some of this behavior to PPG’s Human Resources department. Finally, Knox asserted that shortly prior to her termination, her supervisor attempted to drive her out of his group by encouraging her to take a different position within PPG, and then became “irate” and “menacing” when she decided not to transfer.

The company argued that it had a legitimate basis for firing Knox. Shortly prior to her termination, Knox was involved in investigating whether an extramarital affair between a male manager and his female subordinate violated company policies. Later, Knox and other employees received an email from an unknown address attaching photos of the subjects of the affair that suggested a romantic relationship between the two. PPG investigated the origin of the email and questioned Knox about a similar email she had received six months earlier, of which Knox denied all knowledge. PPG then terminated Knox for making inconsistent statements and failing to cooperate fully into PPG’s investigation. Knox argued that the investigation was a “sham” and an excuse to terminate her.

After a four-day trial in the U.S. District Court in Pittsburgh, the jury ruled in favor of Knox on her gender discrimination claims, awarding her $993,495 in front pay, $478,585 in back pay, and $1.5 million in emotional distress damages.

This case is an example of the way jury trials may play out in the era of the #MeToo movement. Plaintiffs now have more support than ever to bring their claims. For example, the TIME’S UP Legal Defense Fund offers help with legal fees and costs, as well as connections to the media, to individuals claiming sexual harassment and retaliation. Employers should make sure to respond to all complaints with a thorough and objective investigation, and all subsequent employment actions or investigations involving the complainant should be strictly job-related and well-documented.

 

Florida Jury Awards Former University Registrar $310,500 In Retaliation Suit

A jury recently returned a $310,500 verdict in favor of a former University of South Florida employee on her retaliation claim against the University. DeBose v. USF Board of Trustees, et al, No. 8:15-cv-02787 (M.D. Fla. Sept. 26, 2018).   The former employee, Angela DeBose, claimed she was retaliated against because she had filed internal race bias complaints with the University and a U.S. Equal Employment Opportunity Commission charge of discrimination.

DeBose was hired by the University in 1988, and by 1996, had become the registrar for the university system. She claimed she had received exemplary performance reviews from 1988 to 2013. Beginning in 2013, and continuing through 2015, DeBose claimed she was subjected to racial harassment and a deliberate campaign to undermine and fire her. This campaign included being overlooked for promotions, bullying, and degrading epithets.

DeBose filed an internal ethics complaint against another administrator, charges of discrimination internally with the University, and eventually a charge of discrimination with the EEOC in December 2014.  She unsuccessfully sought a temporary restraining order and preliminary injunction preventing retaliation or termination during her EEOC proceedings. DeBose was given a notice of separation/termination and told to immediately leave campus on May 19. She was eventually terminated effective August 19, 2015. Following the initial notice, DeBose applied for and received a job offer from another university. That offer, however, was rescinded after the prospective employer called the University for a reference.

DeBose filed her lawsuit, pro se, in December 2015. At trial, the jury found the University had retaliated against DeBose, they did not find that she was discriminated upon because of her race. The jury found a preponderance of the evidence showing that her race was a factor in the decision to end her employment, but it also found that she would have been discharged regardless of her race.  The jury had considered DeBose’s internal complaints, the EEOC charge, the prior court action, and the bad job reference. In addition to $310,500 in damages for lost wages and benefits found by the jury, DeBose, who is an attorney licensed outside of Florida, has also moved for $712,500 in attorneys’ fees, $102,520 in litigation expenses, as well as front pay. The University has indicated it will appeal.

This case is yet another example of how a retaliation claim can prevail even in the absence of a finding of discrimination. Employers should respond to all complaints involving possible discrimination with thorough and objective investigations. Further, any employment actions taken against an employee after they have filed a complaint — either internally or externally — should be related solely to their job and meticulously documented.

 

Pennsylvania Jury Finds Female Professor’s Retaliation Claims Pass the Test

A federal jury has awarded a female professor lost earnings and punitive damages on two counts of employment retaliation, despite rejecting her claim of sex discrimination in a university’s distribution of coveted teaching assignments. Baugh v. Robert Morris University, No. 2016-cv-430 (W.D. Pa. Sept. 11, 2018).

Jeanne Baugh, a computer programming professor at Robert Morris University (RMU), filed a lawsuit against RMU in the Western District of Pennsylvania in 2016 alleging sex discrimination, retaliation, and a hostile work environment in violation of Title VII, Title IX, and the Pennsylvania Human Relations Act (PHRA). According to the complaint, RMU retaliated against Baugh for filing a union grievance in 2013 when a Java class she had taught for nine years was taken away from her and assigned to a less qualified male professor.

Although Baugh settled her initial 2013 grievance with the school, she asserted that the Associate Dean called Baugh a liar at the grievance meeting and told her that her sex discrimination claim was “laughable” and he was “insulted by this,” despite admitting the process for assigning the course was “irregular.”

Baugh claimed that in the spring of 2014, the school again assigned the same Java class to the male professor. Baugh also claimed the school changed her teaching schedule from Tuesday/Thursday to Monday/Wednesday/Friday because of the grievance. The school argued that Baugh did not suffer an adverse employment action because she taught an advanced Java course, even if it was not at the graduate level, and that the school changed the schedules of all members of the department, not just Baugh’s.

On September 11, 2018, the jury rejected Baugh’s claim that the school awarded the spring 2014 graduate Java class to her male colleague because of her gender. However, the jury found for Baugh on her Title VII and PHRA retaliation claims, awarding her $2,627.49 in lost earnings and $10,000 in punitive damages, but declining to award damages for emotional distress.

This case provides yet another example of an employer exonerated on claims of sex discrimination, but unable to escape liability for retaliation due to a flawed response to the initial complaint. Employers should respond to a complaint of sex discrimination with a thorough and objective investigation and all subsequent employment actions impacting the complainant should be strictly job-related and well-documented.

Policies and practices should be reviewed regularly with employment counsel to ensure they effectively address organizational needs. Please contact a Jackson Lewis attorney if you have any questions and want assistance.

No Horseplay Here: Jury Awards Employee $2.4 Million in Damages for Sex Discrimination

A company’s potential monetary liability for workplace discrimination can be crippling. A jury in the U.S. District for the Northern District of Illinois had awarded a male grocery store butcher $2.4 million in compensatory and punitive damages on his claim of sexual harassment against a small grocery store located in the south side of Chicago. The lower court ultimately reduced the award to $477,500, because of Title VII’s statutory damage caps and the excessiveness of the award. The U.S. Court of Appeals for the Seventh Circuit has affirmed the award. Smith v. Rosebud Farm, Inc., No. 17-2626, 2018 U.S. App. LEXIS 21481 (7th Cir. Aug. 2, 2018).

Robert Smith sued his former employer, Rosebud Farm, Inc., for sex discrimination, alleging his male colleagues sexually groped and insulted him for more than four years. Smith claimed that his male, meat-counter colleagues would grab his genitals and buttocks. They would also repeatedly mime oral and anal sex, along with other comments and gestures. Smith colleagues also allegedly made inappropriate, racially charged comments. Smith’s supervisor ignored his complaints. In fact, Smith’s supervisor sometimes participated in the sexually inappropriate behavior as well.

After Smith filed a charge alleging sex and racial discrimination with the Equal Employment Opportunity Commission, his supervisor told his colleagues to stop goofing around. Smith subsequently found his car with the tires slashed and windows broken while parked in an employee-only lot.

The Seventh Circuit rejected Rosebud’s argument on appeal that the district court should have awarded judgment as a matter of law with regard to Smith’s sex discrimination claim, as well as a new trial. Title VII prohibits discrimination against an individual because of that individual’s sex and unwanted sexual conduct such as the kind in this case would not be automatically deemed sex discrimination. Rosebud employed 6 to 7 females and 15 to 16 males who interacted daily. Rosebud argued that Smith’s colleagues engaged in “sexual horseplay,” not sex discrimination. The Court found, however, that despite the store being a mixed-sex workplace, only males were groped and taunted. Even though there were only males working behind the meat counter, the Court said the store was small and there were enough females working to qualify as a mixed-sex workplace. Accordingly, the Court found a reasonable inference that Smith’s male colleagues harassed him because of his sex.

Rosebud also claimed that the district court should have granted summary judgement for his retaliation claims because Smith did not present evidence that his colleagues knew he filed a charge with EEOC. It further claimed that a new trial is appropriate because Smith’s attorney’s comments during his closing argument associated Rosebud’s conduct with terrorism in the Middle East. The Seventh Circuit rejected these claims as well, because these claims were not raised before the lower court.

Supervisor training and immediate investigation following complaints of discrimination or harassment are important to minimizing an employer’s potential liability. Employers should be cognizant of workplace horseplay and jokes to ensure that the behavior does not constitute unlawful discrimination.

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