Employment Law Matters : Employment Lawyer & Attorney : Ogletree Deakins Law Firm : Labor Law, Human Resources

The U.S. Commission on Civil Rights (USCCR) has posted a report which recommends that the Equal Employment Opportunity Commission (EEOC) modify its position that the use of “English-only” policies is a presumptive violation of Title VII of the Civil Rights Act.  See EEOC’s guideline at 29 C.F.R. § 1606.7 (2010). This report sets up an interesting dichotomy in the analysis of such policies by two governmental agencies, both of which ostensibly were formed primarily to insure civil rights.

While most individuals are aware of the existence of the EEOC, fewer have heard of the USCCR and its mission. The USCCR was established under the Civil Rights Act of 1957 (which was primarily a voting rights bill signed by President Eisenhower after the Brown v. Board of Education decision in 1955)  as an independent, bipartisan, fact-finding federal agency.  Its mission, according to its website, is “to inform the development of national civil rights policy and enhance enforcement of federal civil rights laws.”  It does so by reviewing alleged deprivations of voting rights and alleged discrimination based on race, color, religion, sex, age, disability, or national origin, or in the administration of justice.  The agency plays a vital - but widely unrecognized - role in advancing civil rights through objective and comprehensive investigation, research, and analysis on issues of fundamental concern both to the federal government and to the public.

Although the USCCR has been referred to as a civil rights “watch dog" that works to ensure that the federal government is enforcing civil rights laws fairly and evenhandedly, the original Commission was not configured to act as such.  Originally, all of its members were appointed by the President and were subject to dismissal at any time.  Also, because the Civil Rights Act first came into effect in 1964, the early USCCR had no actual civil rights laws to oversee.  However, in recent years, the agency has publishing significant studies and reports on a wide range of the civil rights, including peer-to-peer violence and bullying, race neutral enforcement of the law, and even human trafficking.

The USCCR’s recent report on English-only rules stems from a conference held in December 2008 at which the issue was discussed and analyzed at length by a number of experts in the field.  A transcript of the conference and resulting briefing - which was carried live on C-SPAN - is available on the Commission’s website, www.usccr.gov, and by request from the Publications Office, U.S. Commission on Civil Rights, 624 Ninth Street, NW, Room 600, Washington, DC 20425, (202) 376-8128.  Based on the testimony provided by panelists, and on discussion with Commissioners, the USCCP adopted findings and recommendations on various courts’ acceptance or rejection of the EEOC guidelines, the potential reasons, both good and bad, behind employer English-only policies, and actions the EEOC and Congress might take to clarify and improve the state of the law as applied to English-only policies under Title VII.

The USCCR’s primary recommendation stemming from the conference is that the EEOC’s guideline at 29 C.F.R. § 1606.7 should be withdrawn, and that instead, employers and employees should be informed that English-only policies should be prohibited only when it can be shown by a preponderance of evidence that the policy was adopted for the purpose of harassing, embarrassing, or excluding employees or applicants for employment on account of their national origin.  This view could indicate a subtle shift in the burden of proof in cases involving English-only policies.  Under the EEOC’s guideline, an English-only policy is presumed to be violative of Title VII unless the employer can show that the policy was enacted for a legitimate business reason; under the USCCR’s interpretation, an employee would have to show evidence of the purpose for which the policy was enacted, and prove that such evidence contravened Title VII.

Employers who have considered the implementation of an English-only policy should be aware that this issue has come into the limelight, and that further discussion and/or proposed legislation is possible.

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The 3d U.S. Circuit Court of Appeals has held that 15 minutes was a sufficient amount of time for the plaintiff, a public school teacher, to review a separation agreement and release negotiated in connection with her resignation. Gregory v. Derry Twp. Sch. Dist., 2011 WL 944424 (3d Cir., March 21, 2011)

Rhauni Gregory, a public school teacher, sued her former employer and a number of individuals for race discrimination under 42 U.S.C. §1981. Although prior to her resignation from employment, Gregory signed a separation agreement that included a release, she subsequently claimed that the agreement was invalid and that it did not preclude her from suing the School District. Her argument was based largely on the fact that when she was asked to sign the agreement, Gregory was provided only about 15 minutes to deliberate whether to sign. However, the agreement had been reviewed and negotiated by a representative of the teachers’ union of which Gregory was a member, who assured that the agreement included continued health benefits and a positive letter of recommendation, both of which Gregory had indicated were critical to her. In addition, Gregory claimed that she signed the agreement under duress, because the school principal sat next to her as she reviewed the document. However, she was unable to point to any actual restriction on her ability to think or consider in that circumstance, or to show any specific instance of “duress.” The lower court granted the school District’s motion for summary judgment, finding that Gregory had waived her right to sue when she signed the release agreement.

The Third Circuit affirmed on appeal. Examining the facts under the applicable “totality of the circumstances” test, the Court rejected Gregory’s attempt to avoid the agreement, finding that she had sufficient time to review the agreement, and that she did not sign under coercion or duress. The Court reviewed the seven factors to be considered: 1) the clarity and specificity of the release language; 2) the plaintiff's education and business experience; 3) the amount of time the plaintiff had to deliberate about the release before signing it; 4) whether the plaintiff knew or should have known her rights upon execution of the release; 5) whether the plaintiff was encouraged to seek, or in fact received benefit of counsel; 6) whether there was an opportunity for negotiation of the terms of the agreement; and 7) whether the consideration given in exchange for the waiver and accepted by the plaintiff exceeded the benefits to which she was already entitled by contract or law.

It is important to this decision that Gregory’s representative already had approved the agreement before Gregory reviewed it, and that Gregory had negotiated certain specific benefits in exchange for resigning.  Based on those background facts, employers cannot interpret this case as providing permission to rush an employee into signing a release, and in most cases still should provide sufficient time for the employee to review an agreement and confer with an attorney or other representative.  In addition, it is important to note that releases of claims under the federal Age Discrimination in Employment Act (ADEA) must comply with the minimum review period and other specific requirements of the Older Workers Benefit Protection Act.
 

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In an unpublished opinion, the 3d U.S. Circuit Court of Appeals has upheld a lower court’s decision to dismiss an employee’s claims of discrimination, hostile work environment, and retaliation, based largely upon the “extraordinary lengths” to which the employer went to investigate the issues complained of by the employee. Wood v. University of Pittsburgh, 3d Cir., No. 09-4469, September 23, 2010.

Deborah Wood was employed as a systems analyst by the University of Pittsburgh. Upon beginning her work on a project in a Biostatistical Center at the University, Wood was provided a retention letter that informed her that the continuation of her position was contingent upon the renewal of non-university grants that funded the project. In 2007, approximately 90% of the project’s funding was provided by grants from the National Institute of Health (NIH). In June of that year, Wood was informed that she was one of 17 individuals selected for discharge during a reduction in force, after the NIH announced that it would reduce funding of the project by over two million dollars. 

On the day of her discharge, Wood served the University with a federal court complaint asserting gender and race discrimination. Her claims were based upon incidents about which she had complained during the years preceding the reduction in force. In 2005, Wood had become convinced that someone was tampering with her office computer, and reported her belief that the computer had been remotely accessed by an unknown user. She also claimed that someone was entering her office when she was not present. Her supervisor responded to these concerns by installing a lock on the office door, by purchasing and installing software to monitor the computer usage, and by asking the University’s computer services department to review activity related to the computer. After months of investigation, including over 150 hours spent by the supervisor himself, no evidence of improper tampering was found. 

Wood was not satisfied, and contacted the University’s HR department to express that dissatisfaction. The HR department then initiated its own investigation through the summer of 2006, providing a new computer to Wood, reformatting her hard drive, and reviewing additional event logs. In November 2006, Wood alleged that someone had broken into her locked office. That report led to an investigation by campus police, along with additional forensic work by the computer department, again without evidence of inappropriate or unlawful activity. Wood considered these efforts to be “inadequate,” and filed a charge of gender discrimination with the EEOC in December 2006.

In 2007, after learning of the NIH decrease in funding and the impending layoffs, the project director offered to Wood an opportunity to interview for a new position in another section of the same project group. Wood declined the offer, and was discharged on July 12, 2007. She served her lawsuit upon the University on that same date.

The lower court dismissed Wood’s race claim prior to discovery because Wood had failed to assert that specific claim in her EEOC charge. After a period of discovery, the court also granted summary judgment in favor of the University on the remaining claims, and Wood appealed that decision. The Third Circuit upheld the dismissal of Wood’s gender discrimination claim, based upon Wood’s failure to demonstrate that the University had retained similarly situated employees who were outside of the protected class (which would have raised an inference of discriminatory animus). Dismissal of her retaliation claim was upheld because the University proffered evidence of a legitimate non-discriminatory reason for Wood’s discharge – undisputed evidence that the project’s budget was reduced when NIH funding was withdrawn, thereby necessitating layoffs. 

Most interesting was the Court’s response to Wood’s hostile environment claim, in which she argued that she suffered persistent harassment which “must have been” the result of gender bias. Upholding dismissal of the claim, the Court pointed out that the University “went to extraordinary lengths” to investigate Wood’s allegations; the Court found no evidence to suggest that any aspect of that investigation was influenced by gender bias. 

The fact that the Court was able to review and remark upon that evidence in such detail indicates that the University thoroughly investigated the incidents reported by Wood and fully documented its efforts. Employer must recognize that such investigation and documentation are the cornerstones of an effective defense against claims of unlawful discrimination and hostile environment.

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The 8th U.S. Circuit Court of Appeals has determined that a company’s unwritten policy against hiring applicants with theft-related convictions was sufficient basis to exclude a minority applicant from a position with the company. EEOC v. Con-Way Freight, Inc., 8th Circ., No. 09-2926/2930, Sept. 22, 2010.

Roberta Hollins, an African-American female, was interviewed by Kenneth Gaffney, a branch manager for Con-Way Freight, for a part-time customer service position in Poplar Bluff, Missouri. During the interview, Hollins completed an application, on which she disclosed two misdemeanor shoplifting convictions.

Gaffney was impressed by Hollins, and was interested in hiring her. He discussed that plan with Kevin Beer, the vice-president of operations and Gaffney’s supervisor. Upon learning that Hollins was Black, Beer stated that Gaffney would be “opening up a can of worms” by hiring her. Gaffney continued the interview process and during a second interview with Hollins told her that his boss “told me not to hire you because if I hired you that I was just asking for the NAACP.” After completing the interview process, Gaffney told Hollins and one other candidate, Patterson – a Caucasian female – that they each had the job, and sent them both for a pre-employment drug test. However, this was in direct contravention to Con-Way’s hiring policy, which requires that prior to making an offer of employment or requiring a drug test, the personnel department must run a background check and approve the chosen candidate. Neither was done in this instance.

When Hollins did not hear from Gaffney after her drug test, she called Con-Way and was informed by Kevin Beer that Gaffney was no longer with the company. Subsequently, Gaffney’s replacement, Gary Sellers, was contacted by Anthony Godwin, a third person to whom Gaffney had offered the position. At that point, Sellers was unaware of Hollins’ discussions with Gaffney, and hired Godwin for the position. Hollins then filed a complaint with the EEOC, claiming violation of Title VII, Section 1981, and Missouri state law. The EEOC filed suit on her behalf, echoing those claims. The lower court dismissed the claims, and the EEOC (with Hollins) appealed to the Eighth Circuit.

The Eighth Circuit upheld summary judgment in Con-Way’s favor, finding that Hollins was unable to show a specific link between the alleged discriminatory animus and Con-Way’s failure to hire her. The Court pointed out that Con-Way’s policy of automatically disqualifying applicants with theft-related convictions would have resulted in Hollins’ application being rejected and, therefore, Hollins would not have been hired regardless of any discriminatory animus. While the EEOC argued that Con-Way’s policy was not in writing and was therefore not valid, the Court cited evidence produced by Con-Way that within a span of 18 months, the company had disqualified 28 applicants solely because of theft-related convictions, and that no employees at the Poplar Bluffs service center had prior criminal convictions. In addition, the Court pointed out that Hollins could not establish that she was qualified for the open position because her theft-related convictions rendered her unqualified for any position within the company.

The Eighth Circuit upheld the summary judgment in favor of Con-Way, dismissing all claims. However, it while it dismissed the federal claims “with prejudice,” meaning that Hollins cannot bring another action based upon those claims, it dismissed the Missouri state-law claims “without prejudice,” meaning that Hollins can take those claims to a Missouri state court for decision.

Employers should take note of this case for a number of reasons. First, Gaffney’s actions in going outside the established hiring protocol by offering a position to two people prior to formal background checks and an okay from the personnel department created litigation that may continue for some time into the future. Second, and just as noteworthy, is the fact that a single racially insensitive remark (that Hollins hiring would “open a can of worms”) by the vice president of operations actually triggered the chain of events that resulted in the litigation. Both of these facts indicate a critical need to train supervisors and managers to fully understand the ramifications of their actions, and to assure coordination in the hiring process to help avoid legal actions of this nature.
 

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It is generally understood that employees can bring claims for hostile environment, wrongful termination, or even “constructive discharge” – where an employee claims that an employer made working conditions so intolerable that a reasonable employee would feel compelled to resign. What is less clearly understood is the extent of the economic damages for which a hospital or health care system may be liable in an employment-related lawsuit. Because a successful litigant in an employment case often is entitled to compensatory damages, lost wages and, in some instances, front pay, a lawsuit by a physician-employee can create the potential for large monetary damage awards. In a clear example of this fact, a Texas jury recently awarded more than $3.6 Million to an Egyptian-born physician who claimed that he was forced to resign after race-based comments from another employed physician. Nassar v. Univ. of Texas Southwestern Medical Center at Dallas, N.D. Tex., No. 08-1337, jury verdict, 5/26/10.

Naiel Nassar, a U.S. citizen since 1990, was born in Egypt and attended medical school there. He then did a medical residency and a fellowship in infectious diseases at the University of California, Davis. In 2001, Nassar was hired by the University of Texas Southwestern Medical Center (UTSW) as an Assistant Professor of infectious disease medicine. Part of Nassar’s duties required that he provide patient care at the Amelia Court clinic, an outpatient HIV/AIDS clinic affiliated with UTSW.

In 2004, UTSW hired Dr. Beth Levine as the chief of its infectious disease program. In that role, Levine directed that Nassar begin billing for the services he provided to the HIV clinic. Nassar objected to the directive, arguing that his salary for clinical services was fully funded by a federal grant, and stating that billing the patients therefore would be “double dipping.” Nassar claimed that Levine also began to “harass” him, making derogatory statement about his race and his Muslim religion, including one comment that “middle easterners were lazy.” His allegations were supported by a clinical supervisor, whose affidavit described a “disconnect between Dr. Levine’s statements and the reality of Dr. Nassar’s work.” Based on his concerns about Levine, Nassar ultimately applied for employment at Parkland Health & Hospital System in 2006. Parkland made preparations to hire Nassar, even drafting a job offer letter, but never formally hired Nassar. Nassar contended that UTSW retaliated against him by blocking the offer from Parkland. Nassar ultimately filed a lawsuit in federal court alleging discrimination and retaliation. Levine strongly disputed Nassar’s allegations, as did UTSW.

At trial, the jury was presented with only two questions: (1) Whether Nassar was constructively discharged because of his race, national origin, or religious preference; and (2) Whether UTSW retaliated against Nassar by blocking or objecting to his employment by Parkland after Nassar complained about his treatment at UTSW. After one hour of deliberations, the jury answered “Yes” to both questions. Two days after the May 24, 2010 verdict, the same jury awarded $3.2 Million in compensatory damages and $438,000 in lost back pay to Nassar. The court now will determine whether Nassar’s claim for lost front pay – which could range from $200,000 to $4 Million – should be paid as part of the award. In addition, Nassar has made a claim for attorney fees, which also will be heard by the court. UTSW has already stated that it will be appealing the verdict and the resulting judgment.

Hospital and healthcare entities that are contemplating direct hiring of physicians should take the time to read the jury instructions and verdict sheet on which the decision in the jury’s decision was based. (Find a copy on my blog at www.employmentlawmatters.net.) Most notable is the court’s instruction in which it defines “constructive discharge” as a resignation from working conditions “so intolerable that a reasonable employee would feel compelled to resign.” The court goes on to point out that to prove constructive discharge, Nassar “need not show that his race, national origin, or religions preference was the sole or even the primary motivation for [UTSW’s] conduct.” He simply had to prove that his protected characteristics “played a motivating part in [UTSW’s] conduct, even though other factors may also have motivated [UTSW].

Employers, including health care entities, should ensure that supervisors and managers are trained to recognize and remedy discriminatory conduct, to assure that such conduct does not become viewed as a “motivating part” of any adverse employment action taken by the employer.
 

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Under certain circumstances, 42 U.S.C. §1981 (Section 1981) creates a federal cause of action for individuals claiming intentional racial discrimination. To support such a claim, a plaintiff must allege that he is a member of a racial minority, and that he was discriminated against within a particular group of activities set forth in the statute. Those activities include the right to “make and enforce contracts . . . as is enjoyed by white citizens.” The 11th U.S. Circuit Court of Appeal recently dismissed the claims of a physician who claimed that the suspension of his medical staff privileges violated rights protected by Section 1981, holding that such privileges did not constitute contractual rights as defined by the statute. Jimenez v. Wellstar Health System, 11th Cir., No. 09-10917, February 18, 2010.

Dr. Omar F. Jimenez, an African-American physician with a specialty in neurosurgery, held medical staff privileges at Wellstar Health System in the state of Georgia. In January 2006, Jimenez was asked to appear before Wellstar Surgery Department’s Medical Care Evaluation Committee to address a number of complaints received by the Committee regarding Jimenez’ medical performance. The complaints included allegations that Jimenez had failed to respond promptly to emergency room calls, had failed to make patient rounds in a timely manner, and had failed to manage certain surgeries appropriately. Based on those allegations, Wellstar suspended Jimenez’ medical staff privileges, which meant that Jimenez was precluded from treating patients at Wellstar’s hospitals. Although Jimenez initially requested a hearing on the suspension, a year went by within which no hearing was held, for reasons for reasons not explained in the Court’s opinion. At that point, Jimenez withdrew his request.

Jimenez ultimately filed a federal law suit, including a claim under Section 1981 alleging race discrimination based upon contractual rights. He claimed that Wellstar discriminated against him when it suspended his privileges and when it delayed a hearing on that suspension, and that those privileges established a contract between Jimenez and Wellstar. The district court dismissed the lawsuit for Jimenez’ “failure to state a claim,” and the case was appealed. The Eleventh Circuit upheld the dismissal, finding that the suspension of Jimenez’ medical staff privileges did not violate rights protected under Section 1981.

Wellstar’s policies include specific language that membership on the system’s medical staff “does not create a contractual relationship between Wellstar or any Medical Staff and the Medical Staff Member.” In addition, medical staff members at Wellstar must meet certain minimum objective criteria, and failure to do so can result in automatic termination of medical staff privileges, which runs counter to a typical contractual relationship. Importantly, under Georgia state law, medical staff bylaws do not create a per se contractual right to the continuation of medical staff privileges. According to the Court, interpreting the bylaws as a contract in Jimenez’ case would run counter to the state’s policy of allowing a hospital to suspend or withhold privileges from doctors that it believes are unqualified to serve on its medical staff. Therefore, Jimenez did not the possess the contractual relationship necessary to support his Section 1981 claim.

It is noteworthy that because Jimenez was not an employee of Wellstar, he was unable to base his claim for racial discrimination on Title VII of the Civil Rights Act, the federal “anti-discrimination” statute which prohibits race and national origin discrimination (as well as gender and religious discrimination) by employers against employees. Had Jimenez been a direct employee of the hospital system, the fact that his medical staff privileges did not constitute a contract would not have precluded a federal claim by Jimenez, because Title VII would have been available to him. Health care providers that are moving toward an employment model with physician staff members should take this issue into consideration and should assure that managers and supervisors are trained to recognize and resolve complaints of discrimination when they arise, in order to avoid legal liability under Title VII, regardless of whether Section 1981 applies.
 

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In an unpublished opinion, the 3d U.S. Circuit Court of Appeals has reminded employers of the importance of acting consistently with written policies, and of documenting that action. Coleman v. Blockbuster, Inc., 3d Circ., No. 08-4056, November 17, 2009. In that case, the Court upheld summary judgment in favor of an employer on the basis of the company’s ability to support its proffered “legitimate business reason” for the termination of a company manager for closing a store early and leaving the premises for a family emergency.

Tyra Coleman, an African American female, was hired by Blockbuster in September 2003 and was promoted to the position of store manager a few months later. However, after a series of disciplinary actions, Coleman was fired on June 22, 2004. In April 2004, Coleman had received two written “Corrective Action Reports” (CARs) for her store’s poor operational performance. On June 11, she received a third CAR when she missed a mandatory team meeting, and brought her two-year-old grandson to work with her. The third CAR was treated as a last chance agreement and read, in part, “Failure to improve will result in termination of employment.” On June 15, 2004, Coleman closed the store early and left the premises, ostensibly because of a medical emergency involving her minor son. Her employment was terminated the following week.

Coleman ultimately filed a lawsuit, claiming that the actual reason for her termination was race discrimination. The district court granted summary judgment in favor of Blockbuster; that decision was upheld on appeal.

Employment discrimination claims typically are analyzed under a “burden shifting” framework which requires an employer to offer a legitimate business reason for its action. In this case, Blockbuster argued that it acted pursuant to its written policy of progressive discipline. Coleman countered that the company acted “too harshly” when it fired her for her son’s emergency, and asserted that such harshness was an indication that the firing was racially motivated.

The Third Circuit pointed to the fact that whether or not Coleman believed her termination to have been “harsh,” she was unable to demonstrate that Blockbuster treated her less favorably than other, non-minority employees. To the contrary, the Court found that “Blockbuster came forward with solid evidence to demonstrate that the reason for Coleman’s termination was her dereliction of duty.” The Court pointed out that the company’s operating procedures allow the company certain discretion in its disciplinary measures, including the application of “more stringent penalties” for an employee – like Coleman - who already is in the progressive disciplinary system at the time of an additional infraction. While Coleman disputed certain factual evidence, she was unable to show any evidence that even suggested that her termination was motivated by her race, and not by her “dereliction of duty,” as stated by the company.

There is no doubt that Blockbuster’s documentation of its disciplinary actions, and its compliance with its progressive disciplinary policy (which gave it broad discretion to accelerate disciplinary measures when deemed appropriate) were the keys to its success against Coleman’s claims of discrimination in this case.
 

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Courts typically have dismissed discrimination claims under Title VII if those claims were made by an independent contractor, rather than by an “employee” of the company. However, 42 U.S.C. §1981 (“Section 1981”), which prohibits racial discrimination in the formation of contracts, states that “all persons” shall have the same right “to make and enforce contracts as is enjoyed by white citizens.” In a case of first impression for the 3d U.S. Circuit Court of Appeals, that court has followed prior decisions of three sister-appellate courts in holding that an independent contractor may sue for race discrimination under Section 1981. Brown v. J. Kaz, Inc. d/b/a Craftmatic of Pittsburgh, 3d Circ., No. 08-2713, Sept. 11, 2009.

Craftmatic is a distributor of adjustable beds that sells its product through sales representatives. Those representatives schedule their own appointments to visit potential customers’ homes, provide their own equipment and means of transportation for those sales calls, and are paid on commission. Each sales person signs an “independent contractor” agreement with Craftmatic.

In 2006, Kimberly Brown, an African-American female, responded to an ad in which Craftmatic was seeking sales representatives, and then registered for a three-day training and an interview session in Pittsburgh with the company. Brown traveled by bus to Pittsburgh from her home in Cleveland for the session – she testified that the reason was that she preferred not to drive in unfamiliar places. She attended the training with two male applicants, neither of whom was African-American. Regarding his initial meeting with Brown, Craftmatic’s recruiting manager, Jay Morris, later stated that he knew that she was “going to be a headache” because she “asks a lot of questions.”

On the final day of training, Morris approached the applicants, and extended his hand to all three. He shook hands with the two men and exchanged pleasantries with them. For unexplained reasons, Brown refused to shake Morris’ hand. Morris responded with a remark, the content of which is disputed. Brown states that the remark was a racial slur, while Morris says that he was expressing his disappointment that Brown refused to shake hands, equating it to a racial rebuff. This exchange was followed by some heated words, during which Morris stated that if he had any voice in the decision, Brown would not work for Craftmatic. With input from Morris, the company ultimately decided not to use Brown as a sales representative.

Brown ultimately sued Craftmatic, claiming race discrimination under Title VII, the Pennsylvania Human Relations Act, and Section 1981. The district court dismissed the Title VII and PHRA claims on the basis that Brown was not an employee. That court also ruled that while Brown’s independent contractor status did not preclude her from bringing claims under Section 1981, Brown did not provide evidence sufficient to support her claims under that statute. The Third Circuit disagreed, taking issue with the lower court’s conclusion that Craftmatic would have been equally concerned with Brown’s behavior, even if no racial slurs were made. The appeals court said that instead, the real question was whether the same decision would have been made if Brown’s race was “taken out of the equation” altogether. The Third Circuit then reversed the summary judgment on the Section 1981 claim, allowing that claim to go forward.

The Third Circuit’s decision does not mean that Brown has proven her case of discrimination. What it means, however, is that there are disputed issues of fact, and that those issues should be decided by a jury. The primary take-away from this case is that an independent contractor can bring a racial discrimination claim under Section 1981 against a company that allegedly discriminates in the formation of its contracts, even without an actual employee/employer relationship. Companies that regularly rely on such contractors should be sure that hiring, training, and terminations are done consistently and in a non-discriminatory manner, in order to avoid the issues presented in this case.
 

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When an individual claims to have been racially harassed by co-workers, he or she must show that the employer was negligent either in discovering or remedying the harassment. An employer can avoid liability for co-worker harassment if it takes prompt and appropriate remedial action that is likely to prevent the harassment from recurring. Recently, the 7th U.S. Circuit Court of Appeals analyzed specific actions taken by a company after a noose was found hanging in a workplace, and found those actions to have been sufficient to uphold summary judgment in the company’s favor. Porter v. Erie Foods International, Inc., 7th Cir. No 08-1996, August 7, 2009.

Tremeyne Porter was the only African-American working on the third shift in Erie Foods’ Rochelle, Illinois facility. During his work shift on August 12, 2004, Porter saw a noose, made out of white nylon rope, hanging from a piece of machinery. An on-site supervisor, Santos, directed another employee to take down the noose, and then discussed the matter with Porter. She asked Porter if he knew who was responsible, but he denied knowing who the perpetrator was. Santos then tacked the noose to a bulletin board in her office, which was within sight of individuals passing that office. She later testified that she did so to remind her to follow up on the issue.

Early the next morning, Santos followed up with the first shift supervisor – asking if he had any information about the noose – and then informed her own supervisor (Jacobs) and a member of the human resources department (Goffinet) about the matter. Concerned, Goffinet immediately spoke to his own supervisor about the matter. That evening, Goffinet held a group meeting with Santos, Porter, and the entire third shift, stating that workplace harassment would not be tolerated, and reiterating the company’s anti-discrimination policy. Subsequently, Goffinet spoke privately with nine of the 15 third-shift workers, and held an extensive discussion with Porter. Porter told Goffinet that he “would not say” who made the noose, because he didn’t want anyone to be fired.

Around this same time, another co-worker, Alverez, showed a noose to Porter and to some other employees; Alverez then stated to Porter that if Porter showed the noose to anyone, he would “look for him,” which Porter interpreted as a threat to him and to his family. Shortly after, Goffinet followed up with Porter, asking for additional information on the reported harassment. During that meeting, Porter mentioned that he had been threatened by another employee, but would not identify that person. Goffinet then asked whether Porter wanted to change shifts. Porter declined the offer. Santos also continued to follow up with Porter during subsequent shifts, asking whether he knew who hung the noose, and asking first and second shift supervisors if they had obtained any further information.

On August 14, Porter filed a police report about the nooses, including co-worker names, but stated that he did not want the police to visit the workplace or the individuals – he simply wanted the harassment to stop. On August 16, a locker fell on Porter while he was changing into his work clothes. Porter was hit by the falling locker, but suffered no injury. After Porter reported the incident to Santos, Goffinet had the lockers bolted to the wall within a day.

On August 19, Porter quit his job. He ultimately filed a lawsuit alleging race-based harassment, constructive discharge, and retaliation. The district court granted summary judgment in Erie’s favor. That decision was upheld on appeal by the Seventh Circuit, based largely on the actions taken by Erie during the brief period of Porter’s employment.

Because Title VII is not a “strict liability” statute, an employer can defend against allegations of co-worker harassment by showing prompt and effective response to reports of such harassment. In this case, the Court determined that the steps taken by Santos and Goffinet show that they took the issue seriously and made a reasonable effort to bring the harassment to an end. (However, the Court also labeled Santos’ unfortunate placing of the noose on her bulletin board as “ill advised,” and found that it may have indicated a “lack of recognition of the powerful message of racial hatred that a noose evokes.”) The facts that both of these managers informed their own supervisors of the incident, made attempts to find out who was responsible, reminded employees of company anti-discrimination policies, and followed up with Porter, formed the basis of prompt and effective remedial action sufficient to defend against Porter’s claims of co-worker harassment. Further, because an employee has a duty to reasonably “avail [himself] of the employer’s preventive or remedial apparatus,” Porter’s failure to fully report or cooperate in the investigation of the harassing incidents undermined his claims. According to the Court, an employee’s subjective fears of confrontation or retaliation does not alleviate the duty to alert an employer to alleged harassment.

The important point for employers in this case is the Court’s statement that “In assessing corrective action, our focus is not whether the perpetrators were punished by the employer, but whether the employer took reasonable steps to prevent future harm.” Those “reasonable steps” will differ, depending on the specific facts of the situation being addressed. However, the actions taken by the company in this case should stand as a minimum checklist of a “prompt and effective” reaction to incidents of co-worker harassment.
 

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