In a significant ruling for employers everywhere, and particularly those in the Fourth Circuit, which includes Maryland, Virginia, West Virginia, North Carolina and South Carolina, the Fourth Circuit just held that a black female who was subjected to offensive conduct by a customer should have her Title VII harassment claims decided by a jury.
With its decision in Freeman v. Dal-Tile Corp., No. 13-1481 (4th Cir. April 29, 2014), the Fourth Circuit has for the first time issued a published decision in which it held that a negligence standard applies to Title VII third-party harassment claims. The Fourth Circuit joins several other federal appellate courts on this issue. The Supreme Court has yet to decide whether Title VII protects an employee from alleged harassment from contractors, vendors, customers and other “third-parties.”
Lori Freeman, a black female, worked as a receptionist for Dal-Tile. She had daily conduct with many folks, including Mr. Tim Koester, who was a sales rep for one of Dal-Tile’s customers. Mr. Koester subjected Ms. Freeman to persistent sexual and racially offensive remarks and conduct. Ms. Freeman protested directly to Mr. Koester and also reported his behavior to her immediate supervisor over the course of the three-year period that it occurred. Mr. Koester did not stop on his own and Ms. Freeman’s supervisor did nothing in response to the complaints.
Eventually, in 2009, Ms. Freeman brought her complaints to Dal-Tile’s Human Resources Department. Dal-Tile first banned Mr. Koester from coming on property. It later lifted the ban and ordered that Mr. Koester could never speak with Ms. Freeman. Ms. Freeman ultimately resigned under concern and fear over dealing with Mr. Koester and sued for, among other things, Title VII racial and sexual harassment.
The Fourth Circuit held that a reasonable jury could find the employer knew about the alleged harassment as early as 2006, when Ms. Freeman first advised her supervisor, disagreeing with the district court that found the company was not on notice of the harassment until Ms. Freeman complained to HR in 2009. Because Ms. Freeman had been complaining since 2006, the Fourth Circuit also concluded that a jury could find the company did not take prompt and remedial action given it did not take any action until 2009. Therefore, the complaints to the immediate supervisor were sufficient to put the company on notice of possible workplace harassment, and also, triggered the obligations that go along with that notice (including initiating an investigation and taking prompt and effective remedial action if warranted).