Federal Courts Require More from Employer Harassment Investigations

EEOC v. Central Wholesalers, Inc., 573 F.3d 167 (4th Cir. 2009) – The Fourth Circuit Court of Appeals recently held that where an employer knows about harassment, it must take remedial actions reasonably calculated to end the harassment.  If an employer takes steps in response but the harassment continues or gets worse, the court ruled, a rational jury could find the employer failed to take the actions necessary to avoid liability under Title VII. 

The Fourth Circuit reversed summary judgment in favor of Central Wholesalers, Inc. (CWI), holding that the company did not do enough to end racial and sexual harassment that included racial slurs, dolls in nooses and pornographic photos and videos. La Tonya Medley complained to the offending employees, then to her direct supervisor and, eventually, to higher management. Managers held meetings with Medley, performed walk-through inspections of her work area, cut off one employee’s access to the Internet, and took other measures to curtail the harassment. Nonetheless, the court held that these measures were inadequate. The court held that an employer must take action that is “reasonably calculated to end the harassment,” and that the measures taken by CWI simply were not enough. The court, in a list that it noted was illustrative and not exhaustive, determined that CWI could have: (1) demoted the offending employees; (2) reduced the offending employees’ pay; (3) suspended the offending employees from work; or (4) issued reprimands.

Tate v. First-Citizens Bank & Trust Co., No. 5:07-CV-492-BO (E.D.N.C. Apr. 8, 2009) – A federal court in North Carolina recently held that a female former bank employee who developed post-traumatic stress disorder (PTSD) after a supervisor sexually harassed her during two different periods of her employment may proceed to trial on claims that the employer did not correct the harassment and then constructively discharged her in violation of Title VII.

Mary Tate was employed at First-Citizens Bank & Trust in the Fort Bragg area of North Carolina. Beginning in 1996, Tate’s supervisor, David Hollingsworth, allegedly began to “fondle himself,” to greet Tate into his office by “spreading his legs” and “plainly making sexually suggestive gestures,” and to take other inappropriate sexual actions toward her. Tate complained to bank management which, after a one-day investigation, determined the results were inconclusive and Hollingsworth had used “poor judgment.”  The bank asked Tate to relocate to a different location with a different supervisor and, although she did not wish to relocate, Tate agreed. 

In 2000, Tate’s new supervisor retired and the bank once again placed her under Hollingsworth’s supervision. Hollingsworth allegedly began to engage in the sexual gestures and behavior as he had before. Tate again complained to management and asked for another investigation. The results of the investigation were “inconclusive.” Notably, however, one of Tate’s co-workers who had witnessed Hollingsworth’s sexual gestures was not interviewed by the bank during the investigation. Finally, Tate was diagnosed with PTSD and took medical leave until she was informed by the bank that her leave was about to expire. The bank presented Tate with the option of returning to work (under Hollingsworth), retiring, or being fired. Tate retired in July 2006 and filed suit in November 2007 claiming that the bank failed to correct sexual harassment and constructively discharged her in violation of Title VII.

The federal court held that without regard to the bank’s “prompt” investigations and the implementation of anti-harassment policies, it had failed to provide measures sufficient to provide a “reasonable care” defense to strict liability because the bank placed Tate under Hollingsworth’s supervision less than four years after she first complained about his inappropriate behavior. Further, the court found that by giving Tate the option of returning to the harassing environment, retiring or being fired, Tate had created a genuine issue as to whether she was constructively discharged in violation of Title VII, and ordered a jury trial.

Note: This article was published in the October 2009 issue of the North Carolina eAuthority.