Recent Hospitality Employment Lawsuits

No industry provides more interesting fact patterns in employment discrimination lawsuits than the hospitality industry.  And unfortunately, those interesting fact patterns tend to surface with some regularity.  The following are summaries of recent employment lawsuits against hospitality employers.  Such cases can be instructive to hospitality employers as they strive to minimize the risk of being subjected to similar claims. 

Breaking up is hard to do
Prior Sexual Relationship Does not Prevent Discrimination Claim

Perhaps no employment discrimination claim is more prevalent in the hospitality industry than sexual harassment and Turner v. The Saloon Ltd., 595 F.3d 679, 683 (7th Cir. 2010) is a prime example of not only that but why consensual sexual relationships are a bad idea in any workplace. 

Turner, a waiter in a Chicago restaurant, had a nine month sexual relationship with his supervisor.  After that relationship ended, Turner alleged his supervisor continued to make sexual advances, including grabbing his genitals and buttocks, pressing her chest against his, watching him change into his uniform, and telling him she missed seeing him naked.  Turner claimed he complained to management about her conduct but the restaurant’s response was insufficient. 

The trial court dismissed Turner’s claims on summary judgment but the Seventh Circuit Court of Appeals reversed, holding Turner had alleged sufficiently severe or pervasive unwelcome conduct of a sexual nature to have a jury hear his claims.  The Seventh Circuit noted that three of the instances of harassment involved inappropriate physical touching, which is typically more severe than verbal conduct.  The Seventh Circuit further noted that the mere grabbing of Turner’s penis may have been sufficiently severe but with five instances of overt sexual harassment, there was no question.

While Turner’s supervisor apparently missed the 1994 movie Disclosure, the Seventh Circuit did not.  The Seventh Circuit noted that the fact that the victim was a male and the harasser a female was irrelevant.  The Court stated it could “hypothetically transpose the sexes of the parties” and it would have reached the conclusion that a female was harassed.  Accordingly, there was no reason to reach a different result where a male was the victim. 

What’s even more important though is that the Seventh Circuit found actionable sexual harassment had been alleged despite that Turner and his supervisor previously had a consensual sexual relationship.  The prevalence of young and single employees in an industry attempting to create a warm, friendly and casual environment commonly leads to consensual sexual relationships.  The Turner decision demonstrates the necessity for hospitality employers taking certain actions to avoid being subjected to similar claims:

(1) Regularly conduct harassment training, at the inception of 
      employment and at least once annually;

(2) Prohibiting consensual relationships within the same
      reporting structure;

(3) Distribute your anti-harassment policy periodically and in
      doing so, emphasize the company’s procedure for
      complaints of harassment; and

(4) Taking all complaints of harassment seriously even if those 
      complaints are from a prior paramour. 

The Way You Look Tonight
Employee in Midst of Sex Change Properly Terminated

In Creed v. Family Express Corp., 2009 WL 35237 (N.D. Ind. 2009), a preoperative male-to-female transsexual alleged that her discharge for dress code violations was a pretext for intentional gender discrimination.   The plaintiff applied for the position as a male, presenting a masculine appearance and using the name Christopher, even though she had begun her gender transition pre-hire.  Over the course of her employment, she began to dress in a feminine manner, using nail polish, trimming eyebrows, wearing mascara, growing her hair out, and ultimately using the name Amber.  Although she continued to wear the company’s mandated unisex uniform of a polo shirt and slacks, she violated the company grooming policy, which prohibited male employees from wearing hair below the collar or earrings or other jewelry and generally required all workers to present “a conservative, socially acceptable general appearance.”  Following more than 50 customer complaints about her appearance, the employer demanded that plaintiff appear at work dressed as a man and ultimately discharged her. 

The court granted summary judgment on plaintiff’s sex stereotyping claim, finding that while non-conformance with stereotypical ideas of gender may amount to actionable discrimination based upon sex, the court relied on Jespersen v. Harrah’s, 444 F.3d 1104 (9th Cir. 2006) to find that a dress and grooming policy applicable to all workers and that favors neither males nor females will not constitute prohibited sex stereotyping.  The court found that the employer’s dress and grooming policy did not take male or female mannerisms into account, but rather applied only to physical appearance.  Therefore, it held the employer’s requirement that male and female workers adhere to grooming standards matching their gender did not constitute discrimination on the basis of sex.  “[Plaintiff] might argue that real-life experience as a member of the female gender is an inherent part of her non-conforming gender behavior, such that Family Express’ dress code and grooming policy discriminates on the basis of her transgender status, but rightly or wrongly, Title VII’s prohibition on sex discrimination doesn’t extend so far.”

While Family Express was successful in its defense of this case, many commentators suggest courts are not properly taking into account sex-stereotyping as was done by the U.S. Supreme Court in Price Waterhouse, 490 U.S. 228 (1989).  Accordingly, there may some day be a shift in that paradigm.  For now, hospitality employers should review their dress and grooming policies to ensure they reflect physical standards for males and females alike.  Those policies should be motivated by a legitimate business reason and not favor one gender over another.   Finally, consideration should be given not only to how those policies may impact transgendered employees but also those employees whose dress or grooming may be because of religious beliefs or preference.

Hi!  We’re from the EEOC and we’re here to help.
EEOC Investigation leads to Tough Consent Decree

In EEOC v. Landwin Mgmt., Inc., d/b/a San Gabriel Hilton, CV-07-06169-SJO and CV-07-05916-PA. (C.D. Cal. Jan. 29, 2010), the EEOC sued a California hotel management company claiming it discriminated against non-Chinese food servers in hiring banquet staff and permitted sexual harassment of female housekeepers.  The hotel management company settled, entering into a three-year consent decree, which decree resembles a veritable omnibus of the EEOC’s regulations and effectively makes the EEOC a hiring manager by requiring the company to hire approved consultants to aid in recruitment functions.  

In addition to a $500,000 settlement payment for damages, the hotel management company agreed to (1) implement hiring and recruiting goals for Hispanic employees; (2) revise its written policies on discrimination, sexual harassment and recruitment and hiring; (3) provide annual training regarding discrimination, including national origin discrimination and sexual harassment; (4) retain an EEO monitor/consultant named by the EEOC to assist with recruiting, hiring, training, revision of policies and record-keeping procedures; and (5) provide annual reports to the EEOC regarding its employment practices.

The EEOC’s Los Angeles District Director stated, “Employers must take appropriate corrective action when they receive harassment complaints. We hope that other employers take the lead of the San Gabriel Hilton and take proactive action to ensure EEO compliance.  Businesses should take advantage of EEOC trainings that are available to encourage compliance and proactive prevention.”

The hotel’s “proactive efforts” certainly were not voluntary as they risked having to defend a protracted and expensive suit by the EEOC.  While the hotel was able to resolve the case short of a trial, all hospitality employers should note how aggressive the EEOC can be in its enforcement and take truly proactive measures, such as making efforts to ensure their workforce is representative of the demographics of their applicant pool, reviewing and revising EEO policies at least annually, and conducting harassment training on an annual basis. 

MySpace is Your Space . . . and not your employer’s.
Accessing Employee Web Account Leads to Employer Liability

The District Court of New Jersey recently upheld a jury verdict in which a restaurant was found liable for violating the federal Stored Communications Act (SCA).  The violation occurred when the company’s managers intentionally accessed a “chat group” on an employee’s MySpace account without having received authorization from the MySpace member.  Further, the court upheld the jury’s finding of malicious conduct, which supported an award of punitive damages.  Pietrylo v. Hillstone Restaurant Group d/b/a Houston’s, 06-5754, (D.N.J. Sept. 25, 2009).

In Pietrylo, two restaurant servers sued Hillstone Restaurant Group, after two of the company’s managers accessed a MySpace chat group maintained by one of the servers during his non-work hours, and thereafter terminated his and another participant’s employment.  The site included language that indicated that the group was private, and that it was a place in which Hillstone employees could talk about the “crap/drama/and gossip” related to their workplace.

One employee/chat group member made a restaurant’s manager aware of the site and later provided her password to another manager, who shared the information with his supervisor.  After determining that the content of the postings in the chat group were “offensive,” the plaintiffs were fired.

A jury found in favor of the employees under their federal and state claims, finding the managers accessed the chat group “knowingly, intentionally, or purposefully,” and without authorization.  Although the restaurant argued the employee willingly volunteered her password to management, the court’s decision turned partly on the fact that there was no documentary evidence concerning the authorization, and so the jury had to rely on the testimony and demeanor of the witnesses.  The court held that the jury could have inferred from the employee’s testimony – specifically, her statement that she felt that she “would have gotten in trouble” if she hadn’t provided her password – that the purported authorization was coerced.  In addition, the court noted the restaurant’s managers viewed the site on several different occasions, even though the site specifically contained warnings that it was “private” and accessible to “members only.”

The Pietrylo case is one about which hospitality employers should be aware.  The lack of documentation regarding how the company obtained the password, the use of a self-designated “private” chat room by individuals without an actual invitation, and the continued use of the site with specific knowledge of its invitation-only status all provided a basis for the court to support the jury’s findings against the company.  While employers have certain rights and obligations with respect to company-related computer equipment and electronic sites, this case points out the pitfalls of an attempt to extend that authority to non-work-related equipment and sites.  This area of the law is developing quickly, and employers should be attuned to the ways in which courts are addressing the issues that arise in that area.