SCA Pharmaceuticals has filed a motion to compel arbitration in Plaintiff H. Dragon’s sexual harassment and retaliation case—and while the motion fails for several other reasons, this case is among the first to present an interesting legal question about the applicability of the Ending Forced Arbitration Act in sexual harassment cases.
In its motion, SCA claims that Plaintiff Dragon signed an acknowledgement that he had received the company’s employee handbook, and that the handbook contained language requiring that employment disputes be arbitrated. Plaintiff opposed the motion, pointing out the obvious: the handbook and acknowledgement explicitly disclaimed creating contractual obligations “of any type”—meaning that by SCA’s own choice, no agreement to arbitrate could have been created. Plaintiff also pointed out that any agreement to arbitrate based on those documents would have been illusory, if it had actually existed, since the acknowledgement retains SCA’s authority to alter the policies in its handbook—including any purported arbitration agreement—unilaterally at any time.
But even though these facts are enough to dispose of the motion, the motion also presented a separate and novel legal issue: does The Ending Forced Arbitration Act (“EFAA”) apply to a hostile work environment claim like this one, where the harassment started before the law came into effect, and continued after it was already effective?
Encompass Health runs a chain of rehabilitation hospitals across the United States. It is enjoying record revenues. However, Charges of Discrimination and Retaliation filed with the Equal Employment Opportunity Commission (EEOC) by nine current or former women employees of the Encompass Colorado Springs hospital threaten its success.
For revenue growth, Encompass depends on expansion and keeping its facilities at maximum capacity, which in turn depends on growing its referrals. Rehabilitation hospitals receive most of their referrals from discharge planners—social workers and case managers—at acute care hospitals or other health care facilities. Case Management and Social Work is a woman-dominated field. Encompass competes with other rehabilitation hospitals for referrals from these women. Encompass’s women employees rated it fifth among six major competitors according to a Comparably study done in 2022.
A North Carolina woman alleges in Charges filed with the Equal Employment Opportunity Commission that AutoZone managers ignored her requests for help to stop a customer from repeatedly sexually harassing her—and then retaliated against her when she refused to keep serving her harasser.
As explained in her EEOC Charges of Discrimination, Jade Mack worked for AutoZone store 3909 in Concord, North Carolina. Her immediate supervisor was Store Manager Charlie Seabright, and her District Manager was Kevin Murphy. As stated in her EEOC Charges, on December 7, 2021, Ms. Mack alleges that regular AutoZone commercial customer Mr. W. J. [name withheld] walked toward her, forcing her to walk backwards to escape him, while saying “tell your man you’re in love with someone else.” Finding a wall behind her, Ms. Mack tried to sidestep W.J., and said “I don’t think he would like that very much.” The customer insisted, “he will get over it,” and repeated himself. Ms. Mack, increasingly panicked, told W.J. “I don’t think he would like that very much and I don’t like it either.” W.J. was close and directly in front of her. She was finally able to sidestep and escape him. Ms. Mack immediately texted Store Manager Seabright with a complaint and a full description of what had happened:
Mack: So W[.J.]just back me into a corner in the office saying tel [sic] your man your in love with someone else I kept trying to side step him & said I don’t think he would like that he said he will get over it but he was persistent and said it again so I said I don’t like it either fucking creepy I don’t ever want to be alone with him again where I have no exit to get out around him I don’t get creeped out or scared by much but that had me scared as shit & my adrenaline going now I feel like I’m gonna puke[.]
Hunter Dragon worked as a cleaner, and later an expeditor, at SCA in Windsor, Connecticut. Not long after Dragon started working at SCA, as alleged in his Amended Complaint , his coworker F.M. (who was not identified in the Complaint by name) asked Dragon, in front of several coworkers, whether he had a girlfriend. Dragon forthrightly told F.M. that he was gay. F.M. and his friends thereafter began a campaign of near-daily harassing “jokes,” gestures and comments directed at Dragon based on his sexual orientation—for instance, frequently asking Dragon how his girlfriend was doing, who he was having sex with, or who he would “chaga-chaga” with—while thrusting their hips or making other gestures referring to sex.
Even as he publicly mocked Dragon with his friends, F.M. sent Dragon messages coming on to him sexually—telling Dragon he was cute, and saying he wanted to “hook up.” The two did hook up—but afterward, F.M.’s behavior became menacing: he threatened to kill Dragon if he told anyone about their encounter. Dragon was terrified that F.M. would follow through on his threat.
The Complaint alleges that F.M’s harassment only intensified after these events. The very next day at work, F.M. asked Dragon if he was pregnant in front of several coworkers in the locker room where employees were required to gown up for their work. Over the following months, he repeatedly called Dragon homophobic slurs, including “fag,” “queer,” and “gay,” for example, “here comes the fag.” F.M. and his friends regularly asked Dragon if he was pregnant, and mocked his mannerisms by imitating him in an exaggerated, gay-stereotyped way. F.M.’s ongoing harassment of Dragon also became explicitly sexual—for instance, on more than one occasion F.M. rubbed his genitalia over his pants while staring at Dragon, including through a workstation window. He often stared at Dragon while Dragon was changing clothes in the locker room, even though F.M.’s own locker was on the other side of the locker room, away from Dragon’s. On one occasion, F.M. approached Dragon’s workstation and told him, “look down,” gesturing to his groin. Dragon couldn’t avoid seeing that F.M. was pointing to F.M.’s erect genitals in his pants. Dragon told him “no, please go away.” F.M. continued to tell Dragon to “look at it.”
Passed 50 years ago in June, Title IX has had a profound and widely-recognized impact on girls’ and women’s sports. But Title IX did not only offer parity in sports. It has been instrumental in compensating victims of discrimination and harassment by teachers, coaches, professors and other students. Until now. The Supreme Court quietly eviscerated this right just before Title IX’s anniversary, with little fanfare or public outrage. In a decision superficially limited to the Rehabilitation Act and the Affordable Care Act, the Court eliminated damages under Title IX – and Title VI — for emotional distress.
Victims of sex and gender-based discrimination and harassment have successfully used Title IX to obtain relief when recipients of federal funds have failed to enforce the law. In Hawaii, for example, a jury awarded $810,000 after a ninth-grade girl with the intellectual ability of a second grader was raped by an older boy from her class. The girl’s mother previously had expressed concerns to the school about this student. In California, a male student was alleged to have pressured a middle school girl into sending nude pictures and used those pictures to blackmail her into performing oral sex; students then posted pictures on social media of the female student performing oral sex. She obtained a $2 million dollar settlement. In Florida, a jury awarded a single plaintiff $6 million dollars after a teacher sexually abused her during her junior and senior years in school. The abuse included child pornography and forcible kissing and touching. The school had previously received reports of sexual abuse but failed to investigate. In Colorado, a school district settled a claim for $5 million dollars. A teacher was alleged to have sexually abused a student when she was nine years old. The school knew the teacher had a history of inappropriate conduct but failed to act to prevent the abuse. Based on the Supreme Court’s recent ruling in Cummings v. Keller Premier Rehab, were claims like those brought today under Title IX, there could be no award for their depression, their suicide attempts, their eating disorders, their missed classes, their trauma.
In 1972, Congress enacted Title IX so that federal funds would not support discriminatory practices. The law bars educational programs or activities that accept federal funds from engaging in discrimination on the basis of sex. In other words, schools must take action to prevent and address sexual harassment and discrimination. Failing to do so could lead to the loss of important federal dollars (although in reality, that rarely if ever happens). Title IX was patterned after Title VI of the Civil Rights Act of 1964, which prohibits discrimination by funding recipients with respect to race, color and national origin. Although neither statute expressly provides victims of discrimination with the right to sue in court, in 1979, after a female student alleged she was denied admission to medical school because of her sex, the Supreme Court held in Cannon v. University of Chicago, that Title IX (and Title VI) allowed her to sue in court. Over a decade later, in 1992, when a high school student sued alleging her teacher had sexually harassed and abused her, the Court confirmed that the right to bring suit included the ability to obtain money damages. This apparent expansion of rights may have peaked in the mid-90s: soon after, in its 1998 decision Gebser v. Lago Vista Independent School District,, the Court restricted when schools could be held liable for harassment.
A federal judge in the Western District of Oklahoma has denied Northeastern State University’s motion to dismiss a former employee’s claims of sexual harassment and retaliation under both Title VII and Title IX, after a coworker allegedly put his hands down her pants.
Deanie Hensley, the plaintiff in the action, worked for NSU in Tahlequah, Oklahoma for approximately 13 years. She alleged in her First Amended Complaint that multiple supervisors and co-workers engaged in sexually inappropriate behavior over that time, including sharing sexual cartoons and remarking on women’s bodies, but Hensley’s complaints resulted in no changes. After her complaint about a particular supervisor resulted in retaliation including stripping Hensley of job duties, she decided to take a position with a contract company that provided the university’s mail services. The joint employment with NSU and this company allowed her to continue working at NSU and using her expertise and familiarity with the NSU campus and personnel. However, Hensley alleges that one of the coworkers who had a habit of making offensive remarks sought her out on the job, then: “reached across the counter and put his hands down her jeans, with the backs of his hands against her stomach. He reached down to her panty line. He then pulled her belt buckle and shook it, commenting on how she had been ‘losing weight.'”
Shaken and traumatized by the assault, Hensley alleges that she complained to NSU campus police. Following even more complaints that the harasser was following Ms. Hensley and approaching near her in violation of a protective order, Hensley alleges in her Complaint that Steven Turner, NSU’s President, threatened the contract company with the loss of its contract if it did not remove Ms. Hensley from the NSU campus. Ms. Hensley alleges the inevitable result of this threat would be that she would lose her job–and that in fact, she did lose her job as a consequence.
A class of women working as truck drivers for CRST are waiting on a decision from the Eighth Circuit Court of Appeals that could revive claims that CRST retaliated against them by placing them on the equivalent of unpaid leave for complaining about sexual harassment. The Complaint in Sellars, et al. v. CRST Expedited, Inc., No. 1:15-cv-117 (N.D. Iowa), was filed in October 2015. The women who brought this case were team truck drivers who were paired up with one co-driver to run long haul routes across the country. The drivers earned pay by the mile, switching off driving duties and sleeping in an onboard berth area so that the truck rarely needed to stop. The plaintiffs alleged that they were sexually harassed by male co-drivers and driving trainers, who they claimed subjected them to sexual come-ons, requests for sexual favors in exchange for good driver training feedback, offensive sexual touching–including waking up in the sleeper berth with a male co-driver on top of them, and even threats of violence if they would not comply with sexual demands. They alleged that even after CRST claimed it had banned any particular alleged harasser from driving with women, the women went on to be sexually harassed by subsequent male co-drivers. For some women, this was enough to push them out of the industry altogether.
Plaintiffs also alleged, on behalf of a class of women drivers, that when a woman on a truck complained she was being sexually harassed by her co-driver, CRST’s standard response was to remove her from the truck, with the effect of immediately stopping her pay, and letting the alleged harasser continue driving and earning money. Plaintiffs argued that this discouraged women from making complaints. The district court initially granted both a hostile work environment and a retaliation class, allowing the Plaintiffs named in the Complaint to represent other women with similar alleged experiences. However, following discovery, the district court granted CRST’s motion to de-certify the hostile work environment class, and to dismiss both the retaliation class and individual claims.
This was not the end: the three named plaintiffs decided to appeal the dismissal of the class retaliation claim and their individual hostile work environment claims to the Eighth Circuit Court of Appeals (No. 19-2708, Sellars et al. v. CRST Expedited, Inc.). There, they argued that under very unusual circumstances such as these, where a woman may be harassed by multiple co-drivers sequentially, even if any particular alleged harasser might be banned from driving with women in the future, it can be sufficiently clear that harassment in the workplace is endemic that the employer is put on notice of the need to do more to address the problem. They also reiterated their argument that a pay cut inevitably deters women from complaining about sexual harassment, so taking women off their trucks as a response to their complaints is retaliatory. The Eighth Circuit heard oral argument on September 22, 2020, [available here: http://media-oa.ca8.uscourts.gov/OAaudio/2020/9/192708.MP3], and since then the women have been awaiting a decision. They hope to not only secure justice for themselves and other women at CRST, but to make clear once and for all that women should be free to come forward about sexual harassment in the workplace without fearing a pay cut.
This verdict of $910,000 is a reminder that employers are required to take prompt action when they become aware an employee is being sexually harassed. Autozone’s failure to take action when it knew of the sexual harassment resulted in the highest sexual harassment verdict in North and South Carolina in 2018. The jury awarded $100,000 for emotional distress damages for Defendant’s violation of Title VII based on sexual harassment. It awarded $600,000 in punitive damages for the Title VII violation. In addition, the jury determined that the company was liable for intentionally inflicting emotional distress on the Plaintiff, awarding $150,000 in damages for severe emotional distress, and an additional $60,000 in punitive damages. Because Title VII caps allowable damages, the verdict was initially reduced to a total of $510,000.
AutoZoners, LLC appealed the verdict, asking for a new trial, and alternatively asking the Court to throw out $150,000 in emotional distress damages, along with $260,000 in punitive damages. The Court of Appeals for the Fourth Circuit found there was no basis for a new trial, and that the jury’s award of damages for emotional distress under Title VII and “severe” emotional distress for Intentional Infliction of Emotional Distress was not duplicative. Thus, the Court upheld Plaintiff’s emotional distress damages award totaling $250,000, for violating Title VII and for intentionally inflicting emotional distress, only vacating the punitive damages award, because of the standards for holding a company legally responsible for such damages.
Friedman & Houlding LLP has a multi-disciplinary approach to civil rights advocacy. We believe civil rights have never been won solely or even primarily in court. Public struggle is protected activity under civil rights statutes and the First Amendment, and the press coverage of employer discrimination may serve as the modern-day equivalent of the sit-in or other demonstration.
Employers often view the threat of a jury verdict, or the cost of a settlement, as a cost of doing business (often covered by insurance), and fail to correct the problem that caused the lawsuit. That is why our firm always issues a press release when we file a case, which usually results in newspaper and/or television coverage.