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Fourth Circuit Holds Employer Liable for Third Party Harassment

file0001329734681Have you ever had to deal with an unpleasant person at work? When does the inappropriate conduct of someone at work rise to a civil rights violation by your employer? A recent decision by the Fourth Circuit may help answer these questions. The Fourth Circuit upheld racial and sexual hostile work environment claims in Freeman v. Dal-Tile Corporation on April 29, 2014.

Lori Freeman, former employee of Dal-Tile, sued her former employer after enduring months of mistreatment from a sales representative from one of the company’s main clients.

In June 2008, Dal-Tile bought a stone yard called Marble Point in Raleigh, North Carolina, formerly owned by Marco Izzi. The yard was incorporated into Dal-Tile as a sale-service organization, and Izzi purchased ownership in VoStone, Inc., a Raleigh kitchen/bath remodeling center that became a significant client of Dal-Tile and major source of revenue.

Freeman had worked for Marble Point as a receptionist and became a Dal-Tile employee after the acquisition. During her employment, right up until she quit after taking medical leave for anxiety and depression, an independent sales representative for VoStone named Timothy Koester made unwelcome sexist and racist comments toward Freeman.

Specifically, according to the record in this case, Koester referred to women as “black bitches,” used the word “nigger” on more than one occasion, shared unwelcome details of his sexual exploits, and made jokes that disparaged African Americans.

From the first incident onward, Freeman made several attempts to notify Dal-Tile of the harassment and requested that it deal with the misconduct. She frequently informed her supervisor about the behavior, and although it sometimes was acknowledged and frowned upon, the conduct was allowed to persist.

With such egregious conduct before the Court, it is may not come as surprising that the Fourth Circuit upheld Freeman’s claims of a racial and sexist hostile work environment against a motion for summary judgment.

Dal-Tile’s strongest defense was that it could not be held liable for the conduct of Koester because it did not know about nor should it have known about the discrimination. Even though both parties agreed that Freeman notified a supervisor about Koester’s behavior, Dal-Tile argued that she had never complained about the behavior – through either formal or informal channels.

The Fourth Circuit did not accept this argument. In doing so, it formally adopted a negligence standard for holding employers liable in race- and/or sex-based discrimination cases, meaning that employers will be found liable for their employees’ harassment if those employers knew or should have known about the harassment and failed to take prompt remedial measures.

Turning to the facts of the case, the Fourth Circuit found this requirement satisfied because Freeman notified her supervisor about Koester’s behavior several times; because that same manager was even present at some of the instances of his improper behavior; because Freeman complained to human resources; and because Freemen protested the behavior to Koester himself. In the Court’s own words:

 Not only did Dal–Tile fail to take any serious action for three years in spite of the long list of ongoing harassment by Koester, but particularly shocking to us is the fact Dal–Tile took absolutely no action when Koester passed gas on Freeman’s phone and made Freeman cry in Wrenn’s presence, nor when Freeman promptly complained to Wrenn that Koester had used the word “n****r” on the phone with her. Although the harassment eventually stopped after the communication ban was put into place, the harassment had continued unabated for three years prior to that. While a communication ban may have been an adequate response had it been put into place sooner, Dal–Tile’s failure was in not responding promptly to the harassment. Based on this evidence, we believe a reasonable jury could conclude that Dal–Tile failed to take “prompt remedial action reasonably calculated to end the harassment.”

How does this apply to you? You are protected from discrimination in the workplace that is based on race, color, gender, national origin, religion, age, disability, and genetic information. As the Fourth Circuit recognized in this case, unlawful workplace discrimination can come from a coworker or even a third party not employed within your company if your employer is negligent in allowing this behavior to continue.

We can advise you on how to deal with this type of situation. Contact the Erlich Law Office for a free consultation.