4th Circuit Rules Negligent Employer Could Be Liable Under Title VII for Customer’s Homophobic Harassment of Employee

In an unpublished opinion issued on March 3, a panel of the U.S. Court of Appeals for the 4th Circuit ruled in EEOC v. Cromer Food Services, Inc., 2011 Westlaw 733814, that U.S. District Judge Henry M. Herlong, Jr. (District of South Carolina) erred in granting summary judgment to the employer in the Equal Employment Opportunity's suit on behalf of Homer Ray Howard, the sexual harassment victim.

As detailed for the court of appeals by Judge Gregory, Cromer Food Services stocks vending machines.  Its biggest customer is Greenville Hospital.  Mr. Howard was a route driver for Cromer whose job was to stock vending machines at the hospital.  "Following an incident with a co-worker who left a note in the hospital canteen calling him gay, Howard began to be harassed on a daily basis at the hands of two hospital employees who referred to him as 'Homo Howard,'" wrote Judge Gregory.  According to Howard, these employees of the hospital were virtually stalking him, following him on his route restocking the vending machines, making lewd comments, calling him names, simulating sexual acts, etc.  His attempts to get his employer to take any sort of action to stop the harassment were unavailing.  He complained to his supervisor and other officials.  Their reaction was to laugh it off or to say they could do nothing because the harassment was coming from the hospital's employees over whom they had no control.  They apparently were not willing to take it up with the hospital. 

As the problem continued, Howard complained directly to the hospital, speaking to a person in the human resources department, but "nothing happened as a result of the report."  He also complained to the supervisor of these two men, but the result was only a brief interruption of the harassment, not its discontinuance. 

Finally, after this had been going on for many months, he decided to go to the EEOC and file a Title VII sexual harassment complaint against his employer.  The EEOC contacted Cromer for a response to the charge, and C.T. Cromer, the company's chief executive, called Howard into his office to say he "got this stupid letter from the EEOC."  And Mr. Cromer indicated he didn't want to hear about the problem, as it was not his concern.  Finally, after all the facts came out, Cromer concluded that he should not send Howard back to work at the hospital and offered him a different shift assignment that, according to Howard, would be less convenient and less well compensated, so Howard refused it, and added a retaliation claim to his charge.

The district judge accepted the company's argument that it was not responsible for harassment of its employees by customers.  This was apparently a question of first impression for the 4th Circuit.  The appellate panel decided to follow precedents from some other circuits and to hold that an employer could be held liable for sexual harassment of an employee by a customer if the employer was "negligent" upon learning of the harassment, in line with the EEOC's interpretation of the statute.

"For the purposes of the instant litigation," wrote Judge Gregory, "we adopt a negligence standard commensurate with [the precedents from other circuits].  Thus CFS is liable if it knew or should have known of the harassment and failed to take appropriate actions to halt it."  Based on the contested factual allegations (Howard and CFS management officials differed as to many of the details of what happened and what CFS knew at various times), summary judgment was improper and the case had to be remanded to the district court. 

A major part of CFS's defense was that it has a sexual harassment policy and claims that Howard failed to comply with it. The policy required employees who experienced harassment to take the matter directly to the president of the company.  Howard took the matter to his immediate supervisor and various other members of management, first speaking directly with the president when called to his office in response to the EEOC letter.  The court was unwilling to credit the company's defense, at least for purposes of the summary judgment motion, finding that there was some confusion about the appropriate person to notify, and some question about the appropriateness of requiring an employee of a reasonably large company (more than 100 employees) to bring such complaints directly to the president.  The company also claimed Howard's complaints were too "vague" to invoke the company's responsibility to take any action, but the court found this to be a contested fact issue in light of the different accounts presented in support and opposition to the s.j. motion.  In any event, the court found the case not appropriate for summary judgment in light of such factual disputes, and made a similar finding on retaliation.

The court's decision does not speak about Howard's sexual orientation, and there is nothing in the opinion to suggest anything about it one way or another, other than to relate the statement in the co-worker's note, the nature of the harassment, and that one of the problems Howard had about the alternate shift he was offered was that it would interfere with his parental responsibilities. 

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