Laying it on the table: Linestat Corporation.

Jenkins, Keith ; Stretcher, Robert

CASE DESCRIPTION

The primary issue in this case involves the managerial response to an unusual exchange between two managers of Linestat Corporation. The case is appropriate for undergraduate management, human resources management, and business law courses. The case is designed to introduce students to the concepts of sexual harassment and be taught/discussed in a 45-minute time frame, and should require about an hour of outside preparation by students.

CASE SYNOPSIS

Marinda Vasquez, a senior branch officer for Linestat Corporation, and her boss, Ron Farrington, are faced with an unusual situation. Another of the branch's night managers, Derek Randle, a night technical services operator, has been observed in an inappropriate act after-hours in the company's boardroom. Statutes and precedents are presented relating to the incident, and the reader is tasked with determining a solution to the situation, deciding on appropriate managerial actions.

LAYING IT ON THE TABLE

Ron Farrington, CEO of Linestat Corporation, sat at his desk, trying to finish the task that had to be done before he could justify going home. His concentration was interrupted by the ringing telephone. Ron wondered for a moment why someone would be calling at midnight, but he decided to answer anyway.

"Ron Farrington" Ron said.

"Hi, Mr. Farrington, this is Marinda Vasquez." Marinda was Vice President of Operations for the Newark branch, essentially the highest level manager at the branch. "I figured you would still be in the office. I have.... an issue here. Can we talk?"

Ron was perplexed. "Sure, Marinda. What's up?"

"Well ... I came back in to the office to get my briefcase, which I had left in the conference room earlier today. I just needed some information to finish something I was working on. When I walked into the conference room, I saw Derek, the night technical services operator for the evening, lying on the table."

"What, sleeping?" Ron asked.

"No, naked," Marinda replied. There was a lengthy pause.

"OK, you have my attention," Ron said. "And why was Mr. Randle in the conference room at midnight, naked on the conference table? Are you OK?"

"Oh, I'm a little shaken. It was kind of scary. He jumped up very quickly, and I didn't know what he was going to do." Marinda was petite in stature, and Derek was a big, powerfully built man. "I snatched my briefcase and left quickly. He was apologizing as I left, but he didn't try to follow me. He said he was expecting his girlfriend."

"Is he still there?" Ron asked.

"I don't know. I just came to my office," Marinda replied.

"Lock your office door, Marinda. I'll hold." Marinda locked her office and returned to the phone.

"Oh--I see him and someone else walking in the parking lot now," Marinda said. "What do you suggest I do?"

"Well, I would just tell you what we've done in the past, but as you might guess, this is a first for us. First, be very careful getting home. I'll be in about 7:00 tomorrow morning--later this morning, rather. I'll call our HR people and see what they say, and then I'll call you. If Derek comes in, try not to have any contact until after we talk. I'm sorry this happened to you," Ron said.

"It's not like you could have foreseen it, Mr. Farrington," Marinda replied. "I'll be fine, and I'll wait for your call."

"OK, Marinda, good night" Ron replied.

HUMAN RESOURCE STATUTES

The primary statute that regulates the employment relationship is the Civil Rights Act of 1964. This statute was passed in response to perceived racial discrimination that was prevalent at the time. The debate that occurred expanded the original intent to include other groups that also felt the effects of discrimination. The statute addressed discrimination in several activities including, voting rights, education, public accommodations, and employment. The section relating to employment is referred to as Title VII. The prohibition against discrimination has led the courts to allow employers to be held liable for actions based on sexual discrimination and sexual harassment.

The Statute prohibits discrimination in employment stating as follows:

It shall be an unlawful employment practice for an employer (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or

(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin. (USCA 20000e-2) .

The statute prevents discrimination based on persons being in a protected class. Persons not in a protected class are not given this protection. The individual is allowed to be compensated for loss suffered by discrimination and to be reinstated to positions lost due to the discrimination. The statute has been interpreted and explained by the court as employees have asserted the violation of their rights by employers in these protected classes.

CASE PRECEDENTS

The Courts have interpreted the sexual discrimination provision of the Civil Rights Act as allowing two types of causes of action, quid quo pro and hostile environment. Quid quo pro harassment occurs where a person who can influence an employee's job requires conduct of a sexual nature in exchange for either benefits to the employee or to prevent punitive action against the employee. "The gravamen of a quid pro quo sexual harassment claim is that tangible job benefits are conditioned on an employee's submission to conduct of a sexual nature and that adverse job consequences result from the employee's refusal to submit to the conduct." (Hicks V Gates Rubber Co. 833F.2d 1406. ) The quid quo pro claim is basically a person being threatened with loss of job, pay, promotion, for failure to engage in a sexual act with a supervisor or other employee who could cause the threaten loss. The other type of sexual harassment, the hostile environment, has greater difficulty in being defined. The Court has defined five elements that must be met for a claim of sexual harassment to be successful. "Five elements which comprise claim of sexual discrimination based on existence of hostile work environment are that plaintiff belongs to protected category; plaintiff was subject to unwelcome sexual harassment; harassment complained of was based upon sex; harassment complained of affected term, condition or privilege of employment; and respondeat superior, that is, defendants knew or should have known of harassment and failed to take prompt, effective remedial action." (Robinson v. Jacksonville Shipyards, Inc. 760 F.Supp. 1486) One of the major questions arising in the hostile environment claim is whether the actions rise to the level of creating a hostile environment. One sexual comment may not be enough to give rise to a claim that an employee has been subjected to a hostile environment, but could one act? The question of what type and level of conduct or comments has been the focus of many cases with varying results. The Supreme Court eventually addressed the issue in Harris v Forklift Sys. "But we can say that whether an environment is "hostile" or "abusive" can be determined only by looking at all the circumstances. These may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance." (510 U.S. 17).

The fact that Derek was found naked waiting for his girl friend creates an awkward situation. The first thought that jumps into Ron's consciousness is related to sex in the work place. Sexual harassment and sexual discrimination have been major issues that companies have had to deal with since the enactment of the Civil Rights Act. Ron knew he must respond the next day before there would be time to consult with attorneys. What action should be taken with reference to Derek? What would you want to know about him and his work activities? Does Derek's act constitute a hostile environment?

What recommendation should Ron give to Marinda? Could Ron's response or lack of response constitute sexual harassment of Marinda? What steps should the company take to provide for the company's interest?

REFERENCES

Chamberlin v. 101 Realty, Inc. 915 F.2d 777,C.A.1 (N.H.),1990. Robinson v. Jacksonville Shipyards, Inc. 760 F.Supp. 1486.

TERESA HARRIS, PETITIONER v. FORKLIFT SYSTEMS, INC. 510 U.S. 17 1993.

Keith Jenkins, Sam Houston State University

Robert Stretcher, Sam Houston State University