Court Rejects Employer’s Claim That It Lacked Notice Of The Alleged Misconduct

A federal appellate court recently reinstated a lawsuit brought by an employee who claimed that he was subjected to unlawful harassment based on his sexual orientation and fired in retaliation for reporting the misconduct. According to the Ninth Circuit Court of Appeals, the company had adequate knowledge of the alleged harassment before it terminated the employee. Furthermore, the court found that the “temporal proximity” between the worker’s complaints and his discharge justified allowing the worker to proceed on his retaliation claim. Dawson v. Entek International, No. 09-35844, Ninth Circuit Court of Appeals (January 10, 2011).

Factual Background

Shane Dawson was hired by Entek International as a temporary production line worker. He was responsible for operating a production line at the company’s Lebanon, Oregon plant. Dawson worked with 24 other employees, all of whom were male. He had two acquaintances who already worked at Entek, Josh Dobbs and Travis Ethering-ton, who were aware that he was gay.

Dawson’s direct trainer on the production line was Troy Guzon. Dawson considered Guzon not only his trainer but his supervisor. According to Dawson, Guzon was the only supervisor that he dealt with on a daily basis.

Soon after he began working at Entek, Dawson claimed, his co-workers began making derogatory comments about his sexual orientation. According to Dawson, he spoke with Guzon about the behavior. Although Guzon reportedly agreed to speak with the workers, Dawson claimed, Guzon himself began using the word “homo” when referring to Dawson.

On May 19, 2007, Dawson took a day off from work due to the stress caused by his work environment. He called Entek’s general number and notified the person who answered the phone that he would be absent. The company recorded Dawson’s day off as a “no-show/no-call day.” Under company policy, employees are required to call one hour before their shift to report an absence to a supervisor.

The next day, Dawson told Susan Morch, an Entek HR employee, that he had a problem and needed to file a complaint. He told Morch that Dobbs, Guzon and another employee had called him derogatory names.

Two days later, Entek terminated Dawson’s employment citing his failure to call in properly before missing work. Dawson sued his former employer alleging retaliatory discharge and a hostile work environment. The trial judge dismissed the suit, and Dawson appealed to the Ninth Circuit Court of Appeals.

Legal Analysis

The Ninth Circuit first addressed Dawson’s retaliation claim. Dawson alleged that the timing of his discharge in relation to his report to Morch and his complaint to Guzon was sufficient to raise “indirect evidence that undermines the credibility of [Entek’s] articulated reasons.” The court agreed with Dawson, finding that the temporal proximity between Dawson’s complaints to Guzon and Morch about the alleged harassment and his termination less than two days later raises a triable issue. “The gravity of [these] complaints,” the court continued, “coupled with the time frame are such that a reasonable trier of fact could find in favor of Dawson on his retaliation claim.”

The Ninth Circuit then turned to the hostile work environment claim. Although the state of Oregon did not formally amend its anti-discrimination statute to include sexual orientation until January 1, 2008, the Ninth Circuit held, state courts previously recognized a cause of action for sexual orientation discrimination. As a result, the court found that Entek could not argue that state law permitted such conduct while Dawson was employed in 2007.

The Ninth Circuit further held that Entek could not assert that it lacked notice of the alleged harassment. According to the court, the company officially was put on notice of the hostile work environment when Dawson went to Morch and asked about filing a complaint. Likewise, the court found that “there is circumstantial evidence that Entek was put on notice when Dawson talked to Guzon about the treatment and Guzon not only ignored the complaint but joined in the derogatory name calling.”

The Ninth Circuit also found that a jury should decide whether Guzon was a supervisor for whom Entek may be held vicariously liable and whether Entek can prove the Ellerth/Faragher defense to liability for harassment by a supervisor. In reinstating Dawson’s hostile work environment claim, the court concluded “[t]he district court should reconsider whether Entek has made out the affirmative defense after resolving the disputed facts in this case. If, for example, Entek fired Dawson in retaliation for his protected complaint, it would be difficult to say that Entek had adequately addressed the problem of harassment of homosexual employees.”

Practical Impact

According to a shareholder in Ogletree Deakins’ Portland office: “Dawson reinforces several key principles: (1) temporal proximity alone may be enough to show pretext and defeat an employer’s motion for summary judgment; and (2) a co-worker may be considered a `supervisor’ for purposes of imposing vicarious liability on an employer based upon the co-worker’s ability to `demand obedience’ from the employee. These holdings reiterate the importance of consistent documentation and treatment of employee performance problems, as well as the need to ensure that certain hourly employees are not expected to (and do not in fact) supervise other hourly employees through discipline or direction.”

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