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EEOC wins over $50K in Title VII suit for sexual orientation discrimination

By Lorene D. Park, J.D.

A federal district court in Pennsylvania made clear that it would have liked to award more than Title VII’s maximum in damages against an employer that ratified sexual orientation discrimination by a manager who called an employee “faggot” and other derogatory names and otherwise harassed him to the point where he experienced severe emotional distress and resigned. However, the $5,500 in back pay and $50,000 in compensatory and punitive damages would have to do. The court also awarded injunctive relief, finding the EEOC had proven a likelihood of future Title VII violations given that the company CEO allowed the harassment to continue and the employer had not trained the employee or his harasser on its anti-discrimination policy (EEOC v. Scott Medical Health Center, P.C., November 16, 2017, Bissoon, C.).

Harassed for sexual orientation. The employee, who was hired by the health center in July 2013 to be a telemarketer, was excited to move to Pittsburgh because he believed it was a community that would accept his sexual orientation and he had started a new relationship. Before taking the position, he was consistently outgoing and active, and had just lost a significant amount of weight following lap-band surgery. Things changed at his new job, though, due to sex-based harassment by his supervisor. The employee was called “faggot” repeatedly and subjected to other anti-gay slurs, and he was asked offensive questions about his sex life and relationships. He complained but the company owner did nothing, other than stating that the employee’s supervisor was “just doing his job.” Although the employer had an anti-harassment policy that stated sexual orientation discrimination is unlawful, neither the employee nor his supervisor were ever trained on the policy.

Emotional distress. As a consequence of the harassment, the employee became irritable and depressed, stopped socializing, had trouble with his boyfriend, and started overeating (he gained as much as 15 pounds in a few weeks). The employee resigned after a month on the job, and isolated himself from family and friends. As a result of the emotional distress caused by the harassment, he went to counseling for depression and took medication for depression and to help him sleep. He found a job for lower pay about a month after leaving his job at the health center.

EEOC’s lawsuit. The EEOC filed suit on the employee’s behalf, alleging sex discrimination under Title VII. In prior proceedings, the court denied the health center’s motion for summary judgment, adopting the agency’s reasoning that Title VII’s “because of sex” provision prohibits discrimination on the basis of sexual orientation. The court also pointed out that when bringing suit on its own behalf, the EEOC has authority to expand a charge based on its reasonable investigation, which is what happened here as it initially investigated sex harassment charges by five female coworkers who worked for the same supervisor.

Back pay. The court entered a default judgment on liability against the health center in September 2017, and subsequently held a hearing on damages. After finding that the EEOC proved by a preponderance of evidence that the employee was entitled to back pay, the court awarded $5,500.

Compensatory damages. The court also found that compensatory damages were appropriate because, due to the supervisor’s harassment, the employee experienced significant emotional distress, including depression, anxiety, social isolation, insomnia, and weight gain. Although the court found that an award above $50,000 would be consistent with comparable cases, it set compensatory damages at $50,000 due to the applicable statutory limit.

Punitive damages. Also awarding punitive damages, the court explained that the uncontroverted evidence showed the employer knew federal law prohibits sex-based harassment, that the supervisor who sexually harassed the employee was the telemarketing manager, responsible for hiring as well as training the employees in his department, and that the employer ignored the employee’s harassment complaint. Indeed, through the CEO who said the harasser was “just doing his job,” the employer ratified the Title VII violation, affirmatively allowing a manager to create and perpetuate a sexually hostile working environment. Moreover, the employer failed to inform or train the employee or the supervisor of its anti-harassment policy. The court also noted that, in its answer, the employer failed to plead any “good faith efforts” defense to punitive damages and therefore waived that affirmative defense.

With all of this in mind, the court found a significant risk of future violations and believed a $75,000 punitive damages award would be appropriate and would likely serve as a substantial deterrent to the employer and to other employers with respect to similar violations of Title VII. The court also pointed out that even though the employer has filed for Chapter 11 bankruptcy, “potential insolvency or limited resources does not, by itself, immunize an employer from punitive damages.”

That said, by operation of the statutory damages cap, the aggregate amount awarded for emotional distress and punitive damages combined could not exceed $50,000.

Injunctive relief. In addition to the monetary award, the court found that the EEOC proved an injunction against the employer was warranted here. The likelihood of future violations may be inferred from past unlawful conduct, the CEO who ratified the unlawful activity is still the CEO, and there was no evidence that the employer subsequently undertook any training, policies or programs geared to preventing the violations that occurred in this case from repeating in the future.