Employment Law Daily ‘Salacious’ hostile environment harassment allegations against CEO, other execs won’t be stricken
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Wednesday, January 10, 2018

‘Salacious’ hostile environment harassment allegations against CEO, other execs won’t be stricken

By Lorene D. Park, J.D.

Allegations that a managing partner required, as part of an employee’s duties, that she arrange marketing events such that he could “pimp out” his wife and her “scantily clad” friends to wealthy clients were directly related to the employee’s Title VII and state-law hostile work environment claims, concluded a federal district court in Hawaii, denying the individual defendants’ motion to strike the “salacious” allegations. The court also refused to dismiss the aiding and abetting claims against the partner, the HR director, and the company CEO, finding them sufficiently supported by allegations that her repeated complaints of a sex-based hostile work environment were ignored and she was fired soon after complaining to the CEO (Sirois v. East West Partners, Inc., January 5, 2018, Watson, D.).

Alleged harassment. The employee worked in a small, two-person Hawaii office for a company that sells and manages luxury real estate developments. As an assistant project manager, she answered calls, processed paperwork, prepared marketing materials, and coordinated events. According to her complaint, the managing partner who was her direct supervisor harassed her and mistreated her based on her sex and sexual orientation. Among other allegations, he: required the employee to organize marketing events so he could “pimp out” his own wife and her “scantily clad friends” to wealthy customers (including one who was married and who she named in the complaint); required her to participate in a scheme to keep the extramarital activities secret from the customer’s wife; ridiculed and mocked the employee, telling her that her attire was not feminine enough; taunted her by making offensive comments about women, including her mother; and followed her around taking videos of her despite her pleas that he stop. She also claimed that he directed hostility toward her because she is an “openly gay female.”

Termination and lawsuit. The employee complained to the female HR director about the hostile work environment but HR failed to investigate and took no remedial action. She also spoke to the CEO, who allegedly gave no credence to her complaints and, instead, “abruptly terminated” her, stating that it was clear she “could no longer work together with [the managing partner].”

Filing suit, the employee alleged retaliation and a hostile work environment under both Title VII and Hawaii law against the employer, and aiding and abetting by the CEO, managing partner, and HR director. She also filed a claim for overtime compensation under the FLSA.

Motion to strike salacious material. The individual defendants filed a Rule 12(f) motion requesting that the court strike “immaterial, impertinent, and scandalous” matters from the complaint, including that the managing partner “pimped out” his wife; that she had an “illicit affair” with clients; and that her friends were “scantily clad,” among other allegations. They also asked the court to strike a paragraph labeling the CEO a “misogynist.”

Denying the motion, the court explained that, while the “allegations are, in some ways, sensational and salacious, and it is understandable that Defendants wish to keep the details hidden, the challenged paragraphs are directly related to Sirois’ claims for hostile work environment and retaliation.” For example, her principal claim was that her direct supervisor ordered her, as part of her regular job duties, to set up client parties with a sexual overtone to promote his spouse’s carousing with firm clients. The implication was that he used his spouse in this manner as part of his business development plan. Moreover, the employee stated that her involvement in the events became common knowledge in the real estate community, and this created a problematic sexual environment in the small two-person Hawaii office.

Sexual conduct need not be directed at plaintiff. Based on the foregoing, the court found unconvincing the defendants’ argument that the “scandalous allegations” could not “plausibly be necessary and material to the issues” in this case. It noted that sexual harassment includes “[u]nwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature,” but “there is no requirement that such conduct be directed at the plaintiff” and an employee can claim a hostile environment merely for being exposed to an atmosphere where an employer’s sexual comments, advances, and actions demonstrate favoritism.

Aiding and abetting claims under HRS § 378-2. The court also denied the defendants’ Rule 12(b)(6) motion to dismiss the state-law aiding abetting claims, finding no merit to their argument that the CEO’s and HR director’s mere inaction or joint participation in a termination that was alleged to be unlawful was insufficient to impose liability. To plead a valid claim under HRS § 378-2(a), a plaintiff need only identify: (1) the allegedly aiding-and-abetting individual as “the person who incited, compelled, or coerced the discriminatory actions” and (2) another defendant or employee “as the person who was incited, compelled, or coerced into taking discriminatory actions” against him. That test would be satisfied by allegations involving “any communication by any of the individual defendants” that led anyone else to discriminate or retaliate, and that was the case here. The employee claimed each defendant aided and abetted the company and each other by subjecting her to a sexually hostile work environment and that the HR director and CEO ignored her repeated complaints about her supervisor’s abusive conduct.

Personal jurisdiction over HR director. Also denying the defendants’ Rule 12(b)(2) challenge to the court’s personal jurisdiction over the HR director, who does not work or live in Hawaii, the court explained that the HR director clearly knew the employee was a Hawaii resident, that she communicated with the employee multiple times regarding alleged wrongful conduct occurring in Hawaii, and she did not deny that she failed to investigate or take remedial action. In the court’s view, this was enough to allege that the claims arose out of the HR director’s forum-related activities, and the exercise of personal jurisdiction was reasonable here.

Service of process. That said, it was not evident to the court that personal service was properly accomplished on any of the three individual defendants so it directed the employee to serve the summons and complaint as required under Rule 4 or to file proof that she had already done so.

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