Thursday, March 10, 2011

Employer Can Face Trial For Customer's Harassment of Worker

Even in "routine" cases, sexual harassment can present some pretty dicey issues for a company to manage.  When the harassment is coming from your biggest customer, however, the issues can take on a whole new character.

The U. S. Court of Appeals for the 4th Circuit has never decided whether an employer can be liable for the harassment of its employees by outsiders, but at least three judges on the court apparently believe liability might be possible.  They ruled last week that a South Carolina snack distributor could not turn a blind eye to complaints of harassment out of fear of losing its largest customer.

The facts are pretty straightforward.  A male delivery route driver regularly stocked the vending machines at a hospital that happened to be his employer's largest and best customer.  Two male hospital employees began harassing the driver almost daily.  They called him "homo" and other derogatory names, made unwanted sexual comments, groped themselves in front of him, graphically discussed oral sex, and engaged in a variety of other conduct. 

The driver complained to his supervisor, who told him that the hospital employees were "only joking."  Complaints to a second supervisor were met with the reassurance that "faggots are ignorant, retarded people, and . . . I know you're not retarded."  A third supervisor told the driver that it was "unfortunate" that the situation was being handled as it was, but that the first supervisor had already dealt with it.

The driver took his complaint up the ladder to a manager who was also the son of the chairman of the board of directors.  The response was almost immediate.  The manager told his father about the complaint and the chairman met with the driver that very night.  Much to the driver's surprise, however, the first words out of the chairman's mouth were "[d]o you not realize this could cost me everything?"  The conversation went downhill from there.

Further complaints by the driver to both the company and the hospital fell on deaf ears.  He was told to "quit whining" and that the company was not responsible for hospital employees' conduct.  Ultimately, the driver was terminated.  The EEOC took up the cause and sued on the driver's behalf.  The trial court granted summary judgment in favor of the company, reasoning that the driver's complaints were vague and insufficiently detailed to allow the company to take action.

The Fourth Circuit, however, saw it differently.  A unanimous three-judge panel said it was clear that the driver tried to communicate the nature and extent of the harassment but was effectively ignored by all levels of management.  Recognizing that employers have a legal obligation to provide a work environment free from unlawful harassment, it said that the company had a duty to investigate or take other measures to combat the harassment, even though it was perpetrated by employees of the customer.  Finally, it was unimpressed with the company's defense that it did not have sufficient notice of the harassment due to the driver's vague and undetailed allegations.  Any reasonable person would have known about the harassment, it said, given the driver's "vocal and vociferous complaints to practically anyone who would listen."

Thus, the panel ruled that the lower court should have allowed the case to go to a jury trial because there was sufficient evidence for a jury to find the company liable for failing to properly address the customer's harassment of the driver.

The case is EEOC v. Cromer Food Services, Inc.

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