The Tricky Case of the Third Party Harassment Claims

Actually, this is not that tricky.  The 4th Circuit recently affirmed something that employment lawyers have been telling their clients for years – an employer's work environment extends throughout the span of the company’s control, and includes customers, vendors and other third parties that come onto the premises.  In this case, a female receptionist and customer service representative was subjected to a multi-year exposure to sexual and racial slurs by an independent sales representative for another company.  Plaintiff interacted with this gentleman (I use the term loosely) more than once a day over the course of the several years that he was representing his company.  The male sales representative continuously made racist and sexist comments, displayed lewd pictures, and engaged in just about ever other vile type of behavior you can imagine in the presence of the plaintiff and other women in the office.  Some of this conduct took place in front of the plaintiff’s supervisor, who also observed the immediate and stressful emotional effect that this individual’s conduct had on the plaintiff.   In addition, the plaintiff reported the offensive conduct several times to other members of her employer’s management team.

For some inexplicable reason, the company did not react immediately to this, but let it continue over a period of several years.  The plaintiff ultimately took medical leave because of the stress, and then resigned, but not before she filed a charge of race and sexual harassment with the EEOC.

The 4th Circuit had little trouble in reversing the trial court’s determination that the male sales representative's conduct did not rise to the level of harassment, and even if it did, the employer was not liable because the conduct was by a third party.  Using the standard that the employer must “know or should have known” of the third party’s action to impose liability on the employer, the court quickly determined that there was plenty of evidence that the company knew of the harassing conduct, knew it was unwelcome, and knew it was having a significant effect on the plaintiff.  The plaintiff’s supervisor herself referred to the third party sales rep as a “pig” and acknowledged to the plaintiff on several occasions that his conduct was inappropriate.  The court also noted that it was only after three years of this that the company finally woke up and determined that it needed to act against the harasser by banning him from the premises.

That late recognition was not enough to escape liability.  The message here is the same as it has always been – do not allow your employees to be subject to actionable behavior, whether it comes from co-workers, supervisors or third parties.

Some thoughts on the NFL and harassment in the workplace

It's an unfortunate truth that pro sports management often seems to operate as if athletic teams were somehow separate and apart from the rest of the American employment world.  Specifically, many professional sports management personnel, especially coaches, are blissfully unaware of the legal standards that apply to their players, other than those covered by the collective bargaining agreement. There has been some progress--many teams had no concept or even awareness that workers compensation laws applied to on-the-field football injuries for their players. Thankfully, that situation is pretty much a thing of the past, but you still encounter circumstances today in which conduct that is basically unthinkable in a normal workplace is either ignored or even encouraged in a football or basketball locker room.

Thus the Richie Incognito/Jonathan Martin situation with the Miami Dolphins. I want to first talk about the legal implications of the situation, and then a more general assessment of what reportedly happened, and what it means for professional sports in general.

Martin, an offensive tackle, left the Dolphins facility without notice to management, allegedly because he was being harassed by his teammates, and one teammate in particular, Richie Incognito, who played next to Martin on the offensive line. Prior to leaving, Martin tried to raise his concerns about harassment with team management, either personally, or through his agent. Martin apparently never talked to any of his teammates about harassment, nor did he raise it with his immediate supervisors, the coaches. Martin's attorney has produced texts and a voicemail message containing at least one racial epithet, and threatening language against Martin, and his sister.

Over the last several weeks, Incognito's version of events came out, either through statements by Incognito himself, or by statements from his teammates. These statements do not paint a picture of harassment, but rather seem to indicate that Incognito and Martin were fairly close, at least in terms of their public associations, and that the racial comments and personal threats, which Martin acknowledged to other players in the locker room and actually laughed about, were part of an ongoing joking or lighthearted taunting that permeated the locker room.

From a purely workplace law perspective, I'm guessing that Martin will have a very difficult time establishing any type of employment discrimination or employment harassment. The language used in the e-mails and voicemails is certainly awful from an objective standpoint-dropping the N-bomb on a black teammate, threatening to sexually assault his sister, or inflict bodily harm on him are not the type of activities that make the HR "Best Practices Handbook".   But all harassment cases have a subjective element as well, in that the conduct must be "unwelcome" to the victim. And that's where Martin's problems begin, because it seems readily apparent that he was at least acquiescing, if not participating in the harassment Olympics that took place in the Miami locker room.  Based on comments to date, in fact, I fully expect every black member of the Dolphins to stand up and testify that they were not offended by Incognito, and that Martin wasn't either. So much for the racial harassment claim.  Incognito may have been bullying Martin and being mean to him, but unless he was doing it because Martin was black (or because of some other protected factor we are unaware of), it simply isn't actionable.

There are some allegations that Martin or his agent complained to Dolphin management about this treatment. When that happened, and what happened after the alleged complaints, could form the basis for a viable retaliation claim, if Martin can show that club management not only knew about his complaints, but acted in response to them. Again, I think this will be a very difficult thing to prove. There is some evidence that the coaching staff wanted Martin's teammates to interact with him in a way that would draw him out, or at least get him more emotionally committed to the team. But that's a far cry from that same coaching staff being aware that Martin had complained that he was being racially harassed (if Martin even did that) and responded by having his teammates berate and humiliate him.  And if the Dolphins can show that the coaches were directing Martin's teammates to toughen Martin up before Martin complained, then this claim gets even weaker.

But this case has some wider implications for all pro sports, depending on how the NFL and other sports teams react to it.  Locker rooms are not your typical workplaces, and there are some rules that work just fine in a white collar /office environment that simply don't in a locker room.  This isn't surprising, or even that unusual.  Courts have routinely recognized that all-male working environments, or even jobs requiring difficult physical labor, are normally associated with bad language, obscene rituals, and general juvenile conduct.  It was not coincidental that the Supreme Court said that Title VII is not a civility code in reference to a case involving people working on an oil rig.

But being merely legal is not enough.  These teams are involved in the entertainment business, and the public perception of their organizations is a key element in their profitability.  Public sentiment for organizations perceived as being full of bullies and bad guys is hard to sustain.  So some teams have immediately reacted by banning any conduct that might be considered hazing, and I think more will follow suit.  But I also think that no matter what clubs try to do, there's going to be some type of harassment of new players, and low level taunting/torment of teammates, just because that's been part of sports and elite organizations since the Greeks organized the Olympics two thousand years ago.  Moreover, it's hard to isolate the intimidation that is part of football (it's part of all sports, actually) to just the opponent on the playing field.

Will the public understand?  I suspect it will, although I think this case has been badly reported by the mainstream sports media, who, after all, labor in environments where this type of conduct is relatively foreign, and certainly actionable.  As far as I can tell, the only really accurate discussions of what happens in a typical locker room are coming from former players, and, to a certain extent, some of the coaches who now work in the broadcast booth.  I think as both sides of the story get out into the press, we will see that what happened with Martin was not an isolated issue of bullying/racism, but rather conduct that is typical in locker rooms from high school forward, and that Martin at least seemed to go along with what was happening to him.  That might be enough to work an organizational change for some teams with respect to player conduct, but I doubt that it will sustain any type of legal challenge.

A Bright Line Retaliation Test, High Ranking Harassers, and Judgment Offers, All in One Case!

Every so often you read a case that has important concepts littered through it like those unpopped kernels at the bottom of the popcorn bag (I love those things).  Here's an example from the Second Circuit, involving harassment, retaliation, and some litigation strategy advice.

Retaliation claims in employment discrimination law are based on the concept of "protected activity."  This is not exactly the kind of protected activity discussed below under the NLRA  social media cases ("protected, concerted activity"), but rather activity in which an employee either complains about discrimination to management (because he experienced discrimination or observed it), or participates in some type of investigation or litigation activity in a way that undercuts or damages his employer's interest.

One of the issues that arises in "participation" retaliation cases is determining when the protected activity starts.  Generally, any employee participation in an EEOC or state fair employment practice agency investigation is protected.  But what about a situation where there is no EEOC charge or other formal claim of discrimination filed, yet?  Where the employer starts its own investigation of alleged discrimination, is participation in that process protected?

This case (and a number of others that it cites) says "no".  An HR director was terminated shortly after she commenced investigating a claim of sexual harassment against the company president's husband.  She claimed that she was fired because of her investigation, which was running before any EEOC or other process had been invoked by the harassment victim.

The Second Circuit Court of Appeals held that there was no liability here, because an employer investigation is not protected activity under the terms of Title VII.  An employee must be participating in a formal investigative process prescribed by statute before his conduct in that investigation becomes protected.

There are several other important points in the case.  Sexual harassment claims involving a supervisor of the victim are generally subject to the Faragher defense.  The defense is a doctrine that allows an employer to escape liability from a harassing supervisor if it can show that there was a systematic effort to prevent such harassment, complete with an adequate reporting system for victims, and that the victim unreasonably failed to avail herself of the opportunity to report the conduct.

But, as the Second Circuit, held, the Faragher defense is not available when the harasser is of such a high rank that he is effectively the alter ego of the corporate entity itself.  There is an excellent discussion of how much business authority gets you tagged as the equivalent of the company, but the short answer is that high level managers, especially those who report directly to the company president and who happened to be married to the president, are particularly bad defendants in harassment cases.  Their stature severely limits the ability of the company to defend itself.

Finally, there is an unusually clear discussion of the requirements and ultimate effect of an offer of judgement, a litigation tool seldom used by defendants, but that ought to be considered more often.  A offer of judgement under federal litigation rules allows a defendant to essentially place a bet on the amount the plaintiff will recover.  The defendant offers a specific amount of money at a pretrial stage; if the plaintiff rejects the offer, and doesn't recover at least as much as the offer (and the attorneys fees expended at the time of the offer) at trial, then the defendant can recover its costs (attorneys fees, for example) from the time the offer is made.

As noted above, the offer must account for the plaintiff's attorneys fees that have accrued at the time of the offer is made.  Here, the defendants made an offer that they thought would catch everything, and they would have been right, except that the trial court did not base its fee calculation on the rates charged in plaintiff's retainer agreement.  Instead, the court used (properly, the Second Circuit held) the prevailing fee rates in the community.  Those rates were higher than the contract rates, and pushed the award past the offer's value.  Thus, no recovery for the defendants.

So the lesson here is that offers of judgement must be calculated carefully--use the prevailing counsel rate, and be a little generous.

This is a highly highly instructive opinion.