EEOC fails with novel continuing violation theory in harassment, constructive discharge claims
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Tuesday, September 26, 2017

EEOC fails with novel continuing violation theory in harassment, constructive discharge claims

By Kathleen Kapusta, J.D.

Dismissing the EEOC’s claims of sexual harassment, constructive discharge, and retaliation against three companies brought on behalf of five former male employees, a federal district court in Hawaii found the continuing violation doctrine does not, as the EEOC argued, cover individuals who did not themselves suffer any unlawful employment practice within the 300-day limitation period. Further, the complaint failed to state a constructive discharge claim on behalf of two claimants and failed to allege sufficient facts to state a sexual harassment claim as to one claimant. It also failed to allege sufficient facts to show that two of the entities were the claimants’ employers or sufficiently allege joint employer liability. The Commission was granted leave to amend, however (EEOC v. Discovering Hidden Hawaii Tours, Inc. dba Discover Hawaii Tours, September 21, 2017, Watson, D.).

When the charging party filed a discrimination claim alleging sexual harassment against his employer, Discovering Hidden Hawaii Tours (DHT), the EEOC, during its investigation, discovered additional claimants allegedly suffering similar harassment, with some experiencing retaliation and constructive discharge. The agency claimed that its investigation revealed a pattern or practice where DHT’s owner sexually harassed male employees by making sexual comments, propositioning them for sex at the office and at his home, and initiating unwelcome physical touching.

The EEOC filed this lawsuit under Section 706 of Title VII on behalf of the charging party and four additional claimants against DHT, Hawaii Tours and Transportation, Inc., and Big Kahuna Luau, Inc., alleging they operated as a single enterprise controlled by the owner. According to the complaint, the owner sexually harassed the claimants and that conduct “resulted in the constructive discharge of male employees who were forced to resign.”

Continuing violation doctrine. Moving to dismiss, the defendants first argued the complaint contained no allegations that claimants 1 and 2 were harassed, retaliated against, or constructively discharged within 300 days of the filing of the charging party’s charge. While the EEOC, relying on the continuing violation doctrine, argued that it was pursuing a pattern-or-practice claim, so the statute of limitations did not apply as to individual claimants because the hostile work environment affected all claimants, the court disagreed. Rather, the weight of authority supported the position that the continuing violation doctrine applies to include only the additional, otherwise time-barred claims of aggrieved individuals who suffered at least one unlawful employment action within 300 days of the filing of the charge. It does not permit the inclusion of employees who did not themselves suffer any unlawful employment practice within that 300-day period.

That cannot be the rule. Under the EEOC’s proposal, the court observed, “the continuing violation doctrine protects those who have slept on their rights and resurrects their otherwise expired claims, whenever a subsequent employee whom the dilatory one may never know or be aware of fortuitously appears on scene, is subject to the same type of harassing conduct, and sees fit to file a timely charge. That cannot be the rule.” While the Ninth Circuit has not addressed this precise question, the court noted that recent district court decisions agree that Section 706 limits the class of employees on whose behalf the EEOC may seek relief to those individuals who were allegedly subjected to unlawful employment practices during the 300 days before the date of the initial charge.

Claims not parties. Specifically, in EEOC v. Freedman, the court held that “the continuing violation doctrine permits the inclusion of additional, but otherwise time-barred, claims—not the inclusion of otherwise time-barred parties.” Agreeing with this reasoning, the court here found that the continuing violation doctrine should not be expanded to cover individuals who did not suffer any act of discrimination, harassment, or retaliation within the 300-day limitation period and thus it granted the defendants’ motion to the extent it sought dismissal of untimely claims brought on behalf of claimants 1 and 2.

Constructive discharge. As to the defendants’ motion to dismiss the constructive discharge claims, the court addressed only claimants 3 and 4 as it had already dismissed the allegations relating to claimant 1 as untimely. Here, it found no allegations that either claimant provided notice of the owner’s alleged conduct to anyone in order to allow the defendants the opportunity to address the harassment. Nor did the complaint sufficiently allege that they resigned specifically as a result of intolerable working conditions. Rather, the allegations were vague and in the case of claimant 4 did not even specifically allege if or when he resigned, much less why. Therefore, the court dismissed this claim with leave to amend.

Sexual harassment. Turning to the sexual harassment claim brought on behalf of claimant 4, alleging he was subjected to unwelcome sexual comments during his recruitment and that the owner continued to make comments of a sexual nature during his employment as a bartender, this was not sufficient to demonstrate the severity or pervasiveness required to show the conduct altered his employment conditions. There were no allegations regarding the dates or frequency of the comments, nor whether he found comments and questioning about what “sexual stuff” he “was into” to be subjectively offensive. Accordingly, this claim was also dismissed with leave to amend.

Claimants’ employers? Next the court granted the defendants’ motion to dismiss Big Kahuna as the complaint failed to allege plausible facts showing it could have been an employer (or joint employer) of any of the claimants or the charging party. Specifically, it did not even exist at the time of any of the alleged incidents of harassment, having been incorporated after the complained-of conduct occurred.

And to the extent that the EEOC sought to hold Hawaii Tours liable as a joint employer, the complaint did not allege facts showing that a joint employment relationship actually existed. The complaint alleged that claimant 3 (and well as the charging party and claimant 1) was employed by DHT—not Hawaii Tours—and failed to allege that anyone at Hawaii Tours, including the owner’s wife, who owned Hawaii Tours, exerted any control over claimant 3 or the operations of DHT. The complaint did not allege which entity employed claimant 4, but based upon the allegation that Hawaii Tours’ “sole function was to lease and operate vehicles used by DHT in their tours,” it did not appear to the court reasonably likely that he was employed by Hawaii Tours as a bartender. In any event, said the court, there were no allegations that Hawaii Tours acted as a joint employer with DHT—that it controlled the terms and conditions of any claimant’s employment.

Nor did the complaint allege facts that Hawaii Tours was a parent corporation or shareholder of DHT, or had any ownership interest in DHT, or that DHT was a subsidiary of Hawaii Tours, said the court finding that the EEOC did not plausibly allege that Hawaii Tours was the alter ego of DHT.

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