After a three-day bench trial in Nashville, Tennessee, U.S. District Court Judge John T. Nixon found in favor of a female African-American plaintiff on her race and sex harassment claims and entered a judgment of $1,073,261.00 against her former employer, Whirlpool Corporation.  EEOC v. Freeman, Case No. 3:06-0593, 2009 U.S. Dist. LEXIS 118624 (M.D. Tenn. Dec. 21, 2009).   This case is a useful reminder that Title VII plaintiffs may be entitled to not only back pay but substantial front pay awards as well.  

In this case, Judge Nixon determined that as a result of the ongoing harassment, Plaintiff “suffer[ed] from chronic posttraumatic stress disorder rendering her unable to work.” Plaintiff’s expert witness, Dr. Mark Cohen, testified that, adjusted for present day value, Plaintiff experienced a range of wage loss between $415,772.00 (through age 57.6) and $623,541.00 (through social security retirement age).  In all, Dr. Cohen calculated Plaintiff’s net loss in earning capacity to be $773,261.00 to age 67.  Dr. Cohen’s testimony proved persuasive because this was the exact amount of Judge Nixon’s back pay and front pay award.  The remaining $300,000.00 of the award was for Plaintiff’s non-pecuniary losses, i.e., emotional injuries.   This amount was the statutory maximum that any Title VII plaintiff could recover for their compensatory and/or punitive damages.  See 42 U.S.C. § 1981(b)(3). 

Interestingly, the last sentence of Plaintiff’s post-trial brief read as follows: “Defendant’s Fourth-Quarter 2008 net earnings were $44 million dollars, and Defendant expects to generate free cash flow between $300 and $400 million in 2009.”  While the facts of the case were certainly egregious, Whirlpool’s size and financial earnings may also have played a role in the judge’s decision to generously compensate the Plaintiff with a high front pay award.

Could an employer find a noose hanging in the workplace, receive a complaint from its only African American employee that a coworker has threatened him and his family, conduct an investigation without uncovering the identity of the perpetrators of either incident and still avoid Title VII liability?  The answer is YES so long as the employer takes prompt and reasonable action to prevent the coworker harassment from recurring.   See Porter v. Erie Foods Int’l Inc., 7th Cir., Case No. 08-1996 (Aug. 7, 2009).

The Porter decision demonstrates that in order to avoid Title VII liability for coworker harassment, the employer’s managers/human resources personnel should at least take the following steps:  (1) inform their own supervisors of the harassment allegations; (2) conduct a prompt and diligent investigation to find out who is responsible; (3) remind all employees of the company’s anti-discrimination policies; (4) follow up with the complainant on a regular basis in efforts to obtain additional information and attempt to shield the complainant from any future harassment (e.g., by offering him/her to work a different shift).  In reaching its decision, the Seventh Circuit Court of Appeals emphasized that “a prompt investigation is the hallmark of a reasonable corrective action,” which based on the facts of this case translated into a 24-hour rule.  

Furthermore, the Court noted that in assessing the reasonableness of the employer’s corrective action, “the focus is not on whether the perpetrators were punished by the employer, but whether the employer took reasonable steps to prevent future harm.”  Needless to say, those “reasonable steps” will vary based on the specific facts of the situation being addressed.

The Court’s decision also illustrates that in determining whether a plaintiff is constructively discharged on the basis of one of the protected categories under Title VII, the courts not only consider the egregiousness of the harasser’s conduct but also the reasonableness of the employer’s response.  In Porter, the Court indicated that the plaintiff’s allegations of repeated use of a noose combined with implied threats of physical violence were egregious but that because the employer had “a means in place for remedying complaints of workplace harassment” and conducted a diligent investigation, the employer was able to defend itself successfully against the plaintiff’s constructive discharge claim.

I wrote in my last blog that the US Supreme Court had confirmed its polarity in a bickering 5-4 decision in which the majority refused to extend a Title VII rule to an ADEA claim. The same appears to have occurred in the more recent 5-4 Title VII decision involving the New Haven firefighters.  A closer reading of the devil in the details of the dissent, however, reveals more agreement than one might expect from its tone.

Most interesting is that footnotes 9 and 10 and the surrounding text of the dissent reveal a de facto 9-0 reversal, despite the actual 5-4 decision. The dissent buried in these footnotes its agreement that summary judgment for the City was improper, which supported reversal with remand to the trial court for further proceedings. But the dissent chose to affirm the lower courts anyway simply because the majority insisted on going too far the other way by entering summary judgment against the City. Only a very close reading of the dissent reveals these truths.

The case involved a conflict under Title VII between taking action to avoid disparate impact liability to minorities and thus incurring disparate treatment liability to whites. The New Haven firefighters took promotion exams, the results of which rendered eligible only whites (and one Hispanic) but no black firefighters. The latter threatened suit for disparate impact if the City certified the test results, noting a minority pass rate that was half that of whites, and showing evidence that the testing might have been outdated and not adequately job-related or consistent with business necessity. Fearing disparate impact liability, the City discarded the test results and the white and Hispanic firefighters who would have been promoted sued for disparate treatment. The trial court entered summary judgment that the City could not be liable and the Second Circuit, then including our newest Supreme Court Justice, Sonia Sotomayor, affirmed in a 1-page en banc (i.e., by the entire court) opinion that merely adopted the trial court’s findings.

Taking this as a case of first impression (i.e., without directly-controlling precedent), the majority reversed the lower courts and announced a new standard: an employer may discard such test results and avoid disparate treatment liability to whites only if it can show a “strong-basis-in-evidence” that it would have been liable to minorities for disparate impact had it kept the results. But rather than remand to the trial court so the case could proceed under this new standard, the majority ignored myriad questions of fact in the record that had to be resolved by a jury and entered summary judgment that the City could not avoid liability under the new standard.

Despite disagreeing on the new standard to apply, the majority and the dissent were right to support reversal. But the majority was as wrong to deprive the City any chance to satisfy the new standard and assert defenses (including reliance on EEOC opinions and guidelines) as the dissent was wrong to affirm the lower courts (particularly for its “tit-for-tat” reasoning) and thus deprive the plaintiffs any chance to prove their case. The dissent should have transcended the majority’s activism by supporting reversal and dissenting only as to the new standard to apply and as to remand to the trial court to proceed under the new standard. Tellingly, the majority and the dissent chided each other for ignoring important facts in the record, yet both did exactly that.

It is often said that hard cases make bad law. And the devil that is in the details of this opinion, most notably the dissent, reveals that this case is no exception.

The US Supreme Court exhibited its polarity in another 5-4 decision, this time refusing to extend a Title VII rule to an ADEA claim. See  Gross v. FBL Financial Servs., Inc., 2009 U.S. LEXIS 4535. The majority noted that Congress used terms in Title VII that impose liability if race, sex, etc. was “a motivating factor” in the employment action. A prior Court decision thus held that if a Title VII plaintiff shows race, sex, etc. played any part in the employment action, the burden of proof shifts so the employer can avoid liability only if it shows the action would have been the same despite the plaintiff’s race, sex, etc. The terms Congress chose in the ADEA, however, impose liability only if the action was taken “because of” (which the majority equated with “not taken ‘but for’”) the employee’s age. The majority held that by amending Title VII to codify the case that created “burden-shifting”, while concurrently amending the ADEA but in different ways, Congress intended burden-shifting only in certain Title VII cases. An ADEA plaintiff’s burden thus never can shift onto the employer, precluding such a jury instruction.

The dissenters claimed the majority: improperly decided a question different from the one certified for review (i.e., whether an ADEA plaintiff can obtain a burden-shifting jury instruction with certain evidence); simply ignored some of the Court’s prior decisions; and incorrectly found “because of” to equate with the exclusivity of “but for.” The majority reasoned that: the question it decided (i.e., whether an ADEA plaintiff’s burden ever can shift onto the employer) was unavoidable and “subsidiary” for deciding the certified question, which the Court often must do; that actions by Congress negated the applicability of any prior cases; and that the instructive nature of Title VII decisions for ADEA cases is inherently limited because Title VII protects all races and both sexes while the ADEA does not protect all ages, only those 40 and over.

The dissenters decried the majority as “activist” for reviving a “but for” test that the Court’s prior cases had vitiated. Yet the dissenters focused more on the prior cases and the result they felt was “not unfair or impractical” than on Congress’ intent in concurrently but differently amending Title VII and the ADEA. Ironically, while the dissenters’ reasoning itself might be a hallmark of judicial activism, their tone confirms that it could become the law with just one future pro-employee judicial appointment. The Democratic Congress also now might amend the ADEA to mirror Title VII. This victory for employers thus could be very short-lived indeed.