Reversing the dismissal of a Section 1981 racial harassment claim by two African-American laborers against their staffing company employer and the company to which they were assigned to work, the Third Circuit acknowledged that its precedent has been inconsistent as to the proper standard to use in analyzing a hostile work environment claim. It therefore took the opportunity to clarify that plaintiffs need only plead sufficient facts showing the discrimination was “severe or pervasive,” so the lower court erred in requiring both. The laborers’ disparate treatment and retaliation claims were also revived (Castleberry v. STI Group, July 14, 2017, Ambro, T.).
Racial incidents. The laborers were hired by STI Group, a staffing-placement agency, as general laborers and were assigned to work for Chesapeake Energy, an oil and gas company. Shortly after they were assigned to a particular worksite, the only other African-American male on the crew was fired. The laborers alleged that on several occasions, someone anonymously wrote “don’t be black on the right of way” on the sign-in sheets. In addition, though they have significant experience working pipelines (more than their coworkers), they were only allowed to clean around the pipelines rather than work on them.
At one point, when the laborers were working on a fence-removal project, a supervisor told one of them and his coworkers that, if they had “ni**er-rigged” the fence, they would be fired. Seven coworkers confirmed this report. After that incident, the men reported the offensive language to a superior. They were fired two weeks later without explanation. Though they were rehired soon thereafter, they were again terminated for “lack of work.”
Lawsuit. They filed suit against both companies, alleging racial harassment, discrimination, and retaliation under Section 1981. Dismissing the suit, the district court concluded that the facts pled did not show harassment that was “pervasive and regular” and that they had not alleged sufficient facts showing their termination was racially motivated. As for the retaliation claim, the court found that the laborers did not demonstrate that an objectively reasonable person would have believed that their supervisor’s comment was unlawful.
Standard for hostile work environment clarified. Applying the same burden-shifting analysis used for Title VII cases, the Third Circuit reversed. With respect to the harassment claim, the appeals court acknowledged that its precedent has been inconsistent. However, it agreed with the plaintiffs that the district court applied the wrong legal standard by requiring them to plead discrimination that was both pervasive and regular. Though such language had been used in some prior Third Circuit cases, the appeals court now took the opportunity to clarify that plaintiffs are only required to plead that they were subjected to a hostile work environment in which discrimination was “severe or pervasive.” The court noted that the Supreme Court has held as much on several occasions.
Single use of “n-word” enough to plead harassment. Under the correct “severe or pervasive” standard, a single use of the “n-word” can suffice to state a claim depending on the context. The plaintiff must plead that the incident amounted to a “change in the terms and conditions of employment.” The appeals court rejected the defendants’ attempts to analogize this case to cases involving isolated incidents. For one thing, this case involved the use of the n-word in the same breath as a threat of termination. For another, every case the defense cited was decided on summary judgment, not a motion to dismiss.
Disparate treatment claim also survives. The appellate court also found that the complaint’s factual allegations satisfied each of the elements required for a Section 1981 discrimination claim. While the district court had surmised that there “may be perfectly neutral, nondiscriminatory reasons” for the adverse employment actions, the defendants did not provide the court with any of those potential reasons, as was their burden. Even had they done so, the plaintiffs would still have the opportunity, after discovery, to rebut the defendants’ reasons as pretextual. Thus, the lower court erred in effectively jettisoning the McDonnell Douglas burden-shifting paradigm and dismissing the race discrimination claim.
Retaliation claim remanded too. In dismissing the plaintiffs’ retaliation claim on the ground that no reasonable person would believe the supervisor’s use of the n-word on one occasion would amount to unlawful activity, the district court relied on its finding that a single discriminatory remark cannot violate Section 1981. As discussed when clarifying the “severe or pervasive” standard, a single use of the n-word may constitute unlawful activity. Accordingly, the Third Circuit also reversed the dismissal of the retaliation claim so it could proceed to discovery.
No disparate impact claim under Section 1981. The appeals court noted that the lower court did not address the plaintiff’s disparate impact theory, but that didn’t matter because a claim of disparate impact is unavailable under Section 1981. As such, that claim was not remanded.
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