Employer liability for non-employee sexual harassment.

Hoft, John ; Thomson, Neal F.

CASE DESCRIPTION

The primary subject matter of this case sexual harassment. This case has a difficulty level of three to four, and is appropriate for an upper division, undergraduate level. This case is designed to be taught in one class hour, and is expected to require two to three hours of outside preparation by students.

CASE SYNOPSIS

This case examines the limits of employer responsibility for sexual harassment of their employees. Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex or national origin. Sexual harassment is considered sex discrimination, and is prohibited under this act (Meritor Savings Bank v. Vinson, 1986). A majority of employers are well aware that sex harassment by supervisors and co-workers is an unlawful employment practice that will subject the employer to vicarious liability (Harris v. Forklift Systems, Inc., 1993). Not so well known is the fact that sex harassment by non-employees such as independent contractors, customers, clients, and suppliers will also subject the employer to exposure for discrimination liability (Lockard v. Pizza Hut, Inc., 1998). The following case presents basic information about non-employee sexual harassment law, followed by several vignettes. In each case, students are to evaluate the vignette, determine whether sexual harassment has taken place, and whether the employer can be held liable for the discriminatory acts of non-employees.

INTRODUCTION

Title VII of the Civil Rights act of 1964 prohibits discrimination based on race, color, religion, sex or national origin. This law provides the foundation upon which much of our anti-discrimination law and policy is built. Section 703 of Title VII states that:

 It shall be an unlawful employment practice for an employer ... 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. (Title VII, 1964)

In 1980, the EEOC issued the Guidelines on Discrimination Because of Sex, 29 C.F.R. Section 1604.11 which stated that sexual harassment violated this portion of section 703. This document provides guidance on the types of behaviors that constitute sexual harassment, and the events that must occur for an employer to be liable. According to the EEOC, the following constitute sexual harassment:

 Unwelcome sexual advances, requests for sexual favors, and other
 verbal or physical conduct of a sexual nature constitute sexual
 harassment when this conduct explicitly or implicitly affects an
 individual's employment, unreasonably interferes with an
 individual's work performance, or creates an intimidating, hostile,
 or offensive work environment (Sexual Harassment, 2006).

In addition, the EEOC stipulates the several circumstances, which must be met for sexual harassment to occur. The harasser, and the victim, may be either male or female. Additionally the harasser may be a supervisor (either the victim's or another supervisor), co-worker, agent of the firm, or a third-party non-employee. The victim does not have to be the person harassed, it may be another worker, who finds the behavior offensive. However, the behavior does have to be unwelcome, in order to be unlawful harassment. If both parties welcome the behavior, then it does not constitute harassment. (Sexual Harassment, 2006).

Sexual harassment is generally subdivided into two types. The first, which involves explicit demands for sexual behavior in exchange for favorable treatment in some work aspect, is often called Quid Pro Quo sexual harassment. This type of sexual harassment can only be perpetrated by a company employee in a supervisory position capable of taking a tangible employment action for or against the victim of discrimination (Mendoza v. Borden, Inc., 1999). The employer is strictly liable if a tangible employment action resulted from the supervisory harassment (Johnson v. Booker T. Washington Broadcasting Service, Inc., 2000). The second type of sex discrimination is often referred to as environmental sexual harassment. The criterion for environmental sexual harassment is somewhat less clear. Environmental sexual harassment is described as hostile work environment discrimination and can be perpetrated by supervisors, co-workers and non-employees. Any sexually offensive behavior, which is so severe or pervasive that it interferes with the employee's ability to do her job and creates an abusive working environment, may be the basis for environmental sexual harassment (Meritor Savings Bank v. Vinson, 1986). The key element is whether the hostile work environment is sufficiently severe or pervasive that it alters the conditions of the victim's employment and unreasonably interferes with her job performance (Allen v. Tyson Foods, 1997). It is difficult to conclusively define what actions create a hostile work environment. Everything from sex oriented jokes, to bikini calendars, to stories told at the water cooler, have been alleged to be harassment, at one time or another, but the courts are vigilant about assuring that Title VII does not become a mere "general civility code" (Faragher v. City of Boca Raton, 1998). Title VII does not prohibit all verbal or physical harassment in the workplace (Oncale v. Sundowner Offshore Servs. Inc. 1998). However, an employer is liable for environmental discrimination when the harassment is sufficiently severe or pervasive and causes an abusive working environment and the employer knew or should have known of the harassment and failed to take remedial action (Breda v. Wolf Camera & Video, 2000). Confounding the issue of employer liability for sex discrimination even further is the fact that not only can employers be vicariously liable for discrimination perpetrated by its employees and supervisors, employers can also be held liable for the actions of third party non-employees (Folkerson v. Circus Circus Enterprises, Inc., 1997).

As part of its Guidelines on Discrimination Because of Sex the EEOC has addressed employer liability for the acts of third-party non-employees in Section 1604.11(e) which provides: An employer may also be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases the Commission will consider the extent of the employer's control and any other legal responsibility which the employer may have with respect to the conduct of such non-employee.

THE CASES

You have recently been hired as a member of an HR department, at a large multinational corporation. Among your duties is dealing with EEOC compliance. After a recent training program, dealing with the issue of environmental sexual harassment, your office has received several new complaints. Your job is to review each complaint, and decide how to deal with it.

Complaint 1--The employee sales rep and a customer.

Susan is a sales representative for the wholesale beer and wine portion of your company's operations. It is her job to meet with the owners/managers of stores, restaurants, bars, liquor stores and other retailers who sell the company's products. Many of these businesses are run by people with little formal management training, and varying degrees of professionalism. In this instance, Susan has filed a complaint, alleging that one of the customers she serves, the owner of a local tavern, has made inappropriate advances, has repeatedly made vulgar sexual comments, and ogled her mercilessly when in the same room. She has repeatedly responded by turning down his advances, while trying not to be too harsh, as he is a long-term customer, and the company would not want to lose his business.

Complaint 2--The employee maintenance personnel and an independent contractor.

Sam is a full time employee and a member of your clean-up and maintenance department. Your facilities include a lunchroom with vending machines that are serviced by an independent food vendor, Aramark. Aramark is a separate and distinct entity from your employer. Aramark employee, Mertisse Wilson, is assigned to service the vending machines in your company lunchroom. Aramark employees are supervised, disciplined and paid by Aramark and your company does not have the right to fire an Aramark employee. Part of Sam's duties includes keeping the lunchroom clean and sanitary. Sam and Wilson frequently come into contact with one another in the company lunchroom while each performs their respective duties. Ms. Wilson repeatedly directed sexual language and offensive conduct toward Sam in the workplace. During the past two months approximately every two weeks Ms. Wilson would very explicitly invite Sam to engage in several different types of sexual behavior, while she would touch herself inappropriately in Sam's presence. Sam promptly made complaints about Ms. Wilson's conduct totaling 20 verbal complaints and more than seven written complaints. Sam's immediate supervisors laughed at him and made no attempt to correct Wilson's behavior.

Complaint 3--Employee receptionist encounters a supplier.

Mary is the receptionist for your employer and works at a desk in the reception area of your facility. Two male employees of a supplier with whom your company has not done business visit your facility on a cold call and encounter Mary at the reception desk. The men are rowdy and one made sexually offensive comments to her such as "I would like to get into your pants" and the other touched her breast. Mary ran away and the two men left. Mary has threatened to file a complaint with the EEOC for hostile work environment sexual harassment because your company failed to take corrective action after this incident.

Complaint 4--Public Relations Employee Raped by Client

Jane is employed by your employer as a public relations specialist in a position that required her "to develop an ongoing business relationship and contacts with potential clients in order to obtain and retain corporate business". One of your corporate clients is Starbucks Corporation and its Director of Human Resources, Mr. Guerrero, informed Jane that he was contemplating sending more business to your employer. Jane had two business lunches with Mr. Guerrero in the spirit of fostering good will. This month, Jane accepted Guerrero's invitation to discuss the account at a restaurant. After eating dinner with Guerrero and having a couple of drinks, Jane suddenly became ill and passed out. She awoke to find herself being raped by Guerrero in his car. She fought him off and jumped out of the car, but again she became violently ill. Guerrero put her back in the car and took her to his apartment where he raped her again. Afterward, he showered and drove her to her car. Jane was initially afraid to report the rape because she was concerned that the episode might impair your company's efforts to obtaining the exclusive Starbucks account. However, nine days after the incident Jane reported the rape to Ms. Jones, a vice-president, and your company's harassment complaint-receiving manager. Ms. Jones commiserated with Jane but told her that it would be best for Jane to "put it behind her", to receive therapy, and discontinue working the Starbucks account. Despite being removed from the Starbucks account your company's president continued to inquire of Jane about progress on the account. Finally, Jane told your president about the rape. Your company president told Jane he did not want to hear about it and then told her that her salary was being reduced effective immediately.

QUESTIONS- ANSWER THESE FOR EACH CASE

1) Do the actions detailed in this complaint constitute environmental sexual harassment, that is, is this scenario sufficiently severe or pervasive to alter the terms and conditions of your employee's employment and create an abusive working environment?

2) Does your employee express a basis upon which your company can be held liable for the harassment?

3) What could your employer do, if anything, to reduce its exposure for liability for discrimination?

REFERENCES

Allen v. Tyson Foods, 121 f.3d 642 (11th Cir. 1997).

Breda v. Wolf Camera & Video, 222 F.3d 886 (11th Cir. 2000).

Berry v. Delta Airlines, 260 F.3d 803 (7th Cir. 2001).

Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998).

EEOC Sexual Harassment Guidelines (2006). Retrieved June 28, 2006, from www.eeoc.gov/ types/sexual_harassment.html

EEOC Policy Guidance on Current Issues of Sexual Harassment (1990). Retrieved July 3, 2006, www.eeoc.gov/ policy/docs/currentissues.html

Faragher v. City of Boca Raton, 524 U.S. 775 (1998).

Folkerson v. Circus Circus Enterprises, Inc., 107 F.3d 754 (9th Cir. 1997).

Fulmore v. Home Depot, 2006 U.S. Dist. Lexis 22906 (S.D. Ind, 2006).

Galdamez v. Potter, 415 F.3d 1015 (9th Cir. 2005).

Guidelines on Discrimination Because of Sex, 29 C.F.R. Section 1604.11(a).

Guidelines on Discrimination Because of Sex, 29 C.F.R. Section 1604.11(e).

Harris v. Forklift Systems, Inc., 510 U.S. 17 (1993).

Hicks v. Sheahan, 2004 U.S. Dist. Lexis 26791 (N.D. Ill. 2004).

Johnson v. Booker T. Washington Broadcasting Service, Inc., 234 F.3d 501 (11th Cir. 2000).

Little v. Windermere Relocation, 301 F.3d 958 (9th Cir. 2001).

Lockard v. Pizza Hut, Inc., 162 F.3d 1062 (10th Cir. 1998).

Mendoza v. Borden, Inc., 195 F.3d 1238 (11th Cir. 1999).

Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986).

Oncale v. Sundowner Offshore Servs. Inc., 523 U.S. 75 (1998).

Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2 (1964).

John Hoft, Columbus State University

Neal F. Thomson, Columbus State University