Employment Law Daily Eliminating voluntary overtime was tangible action by alleged harasser, putting strict liability on the table
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Friday, November 30, 2018

Eliminating voluntary overtime was tangible action by alleged harasser, putting strict liability on the table

By Lorene D. Park, J.D.

Reversing summary judgment on a Title VII sexual harassment claim by an employee who claimed her supervisor sexually harassed her for years and then took away her opportunity for voluntary overtime when he learned she reported it, the Fourth Circuit held that the lower court erred in finding that the denial of voluntary overtime was not a tangible employment action. To the contrary, it constituted a significant portion of the employee’s income, explained the appeals court, finding triable issues on whether the employer could therefore be held strictly liable for the supervisor’s harassing conduct. The analysis was not changed by the fact that the employee’s total overtime pay was higher in 2015 than in 2014. The employee’s retaliation claim was also revived (Ray v. International Paper Co., November 28, 2018, Keenan, B.).

In 2002, the employee was hired by International Paper Co. (IPC) to work as a “bundler.” In 2007, she was promoted to “operator” and in 2013 she was transferred to shipping to work as a “bander operator.” In the latter position, she reported to a new supervisor for the beginning of her shift and, when he was not present, she reported to her original supervisor. According to the employee, her original supervisor started sexually harassing her one year after she was hired. He allegedly made sexual comments, stating he wished he could “bend her over” his desk and would father a child with her. On one occasion, he grabbed her thigh.

He also allegedly asked her to show him her “cootie,” “cha-cha,” and “monkey,” which she construed to mean her genitals. He continued this conduct despite her repeated refusal of his advances and requests that he stop.

Reported harassment to other supervisors. In 2013, the employee finally reported the alleged harassment to her new supervisor and to a third supervisor, explaining her original supervisor would not leave her alone and was “ragging her” because she would not “have sex” with him. The other supervisors offered to “say something” but she refused from fear of retaliation. Nonetheless, she frequently called her new supervisor to ask to leave work or for a coworker to cover her shift because of the harassment. Company policy requires supervisors to report possible harassment to a manager, HR, or the legal department, but neither supervisor did so.

Alleged harasser cuts overtime. In early 2014, the original supervisor learned of her complaints and confronted her, she denied it and he told her that a report would “get him in a lot of trouble.” Around the same time, he told her she could no longer perform “voluntary” overtime before her shifts (she previously had arrived four hours early to do overtime). Her voluntary overtime was a significant portion of her income. Others were still allowed to work voluntary overtime.

HR investigates but does not discipline. On September 22, 2014, the employee reported the alleged harassment to HR and identified three coworkers to corroborate her allegations. HR investigated and interviewed coworkers, who reported that the supervisor had told them the employee was “looking good” and he wanted to have sex with her, and also that she complained about her supervisor’s repeated requests for sex. The supervisor denied the reports, but HR concluded he was lying.

Nonetheless, IPC did not discipline him, reasoning that the allegations were not corroborated because none of the other employees witnessed the sexual harassment. IPC told the supervisor not to communicate directly with the employee. Thereafter, the employee complained to HR that he was staring at her and was sabotaging her work, and both allegations were corroborated by others, but again IPC did not discipline him.

Sexual harassment suit. The employee filed suit under Title VII alleging sexual harassment and the court granted summary judgment against her claims, reasoning that the harassing conduct was not imputable to IPC and that she failed to make out a prima facie case of retaliation.

Denying voluntary overtime was tangible, so strict liability at issue. On appeal, the employee argued that she suffered a tangible employment action due to the supervisor’s sexual harassment, so the lower court erred in failing to hold IPC strictly liable and permitting the employer to assert the Ellerth/Faragher defense. Relying on her pay records, IPC responded that she earned more from overtime in 2015 than in 2014, so could not show she lost income as a result of her supervisor’s actions. Disagreeing, the Fourth Circuit explained that a “tangible employment action” includes a “significant change in employment status,” including a “decision causing a significant change in benefits.” Here, the record could support a jury finding that the employee suffered a tangible employment action when the supervisor eliminated her voluntary overtime, which prevented her from performing higher-paying work and negatively affected her income.

That conclusion was not altered by the fact that she earned more in overtime in 2015 because she didn’t claim her ability to earn overtime pay was entirely eliminated. Instead, she claimed she was denied her opportunity for “voluntary overtime,” which had been her regular practice.

Moreover, the court rejected IPC’s argument that there was no nexus between the supervisor’s alleged sexual harassment and the tangible employment action. The record showed he was responsible for the adverse decision and his direct involvement obviated any concern about whether his conduct could be imputed to IPC. Additionally, the employee testified that he repeatedly offered her money in exchange for sex, including after he took away her chance for voluntary overtime. On this record, the lower court erred in determining as a matter of law that the employee failed to present sufficient evidence that her supervisor’s harassment culminated in a tangible action. Summary judgment was therefore reversed on the sexual harassment claim.

Retaliation claim also revived. Also reversing summary judgment on the retaliation claim, the appeals court found it undisputed that the employee engaged in protected activity by complaining of sexual harassment. And contrary to the trial court’s conclusion, there was a triable issue on whether the loss of voluntary overtime was an “adverse employment action” based on evidence that the employee lost a significant part of her earnings. She also raised a triable issue on whether there was a causal link based on evidence that the supervisor learned of her complaints and confronted her around the same time he prevented her from engaging in her usual practice of performing voluntary overtime. Because the district court stopped its analysis at this point, the appeals court declined to address whether IPC had a legitimate reason for the adverse action of whether the employee offered proof of pretext, leaving those issues for remand.

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