The Ninth Circuit Court of Appeals, which covers California, has upheld a $1 million punitive damages award to an employee who was subjected to repeated racial slurs and jokes with his supervisor’s knowledge. The new ruling, one of the largest of its kind, serves as a reminder that it’s imperative to take steps to prevent—and stop—workplace harassment.
Supervisors And Co-Workers Tell Racial Jokes
Troy Swinton worked in the shipping department at U.S. Mat, a cardboard manufacturer near Seattle. He was the only African American among the plant’s 140 workers. Jon Fosdick, a supervisor in another department and also the uncle of Swinton’s fiancee, regularly stopped by the shipping department and told racially offensive jokes in Swinton’s presence. For example, he cracked, “Why don’t black people like aspirin? Because they’re white and they work,” and referred to “Pontiac” as an acronym for “Poor old nigger thinks it’s a Cadillac.”
Swinton’s immediate supervisor, Pat Stewart, laughed at Fosdick’s jokes and told racial jokes himself on several occasions. Swinton’s shipping department co-workers also told racially insulting jokes and made offensive comments. Supervisor Stewart never reported the misconduct or told anyone to stop. After six months at U.S. Mat, during which Swinton said he heard the term “nigger” used more than 50 times, Swinton became fed up with the harassment and quit.
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Employee Sues For Harassment
Swinton sued, charging that management was aware of the harassment and didn’t stop it. He said he didn’t report the harassment, as company policy required, because he believed management already knew about it, including his direct supervisor, who laughed at the jokes. And although the company harassment policy stated that employees could bypass their supervisor and report harassment to “the President,” Swinton claimed he didn’t know who the president was.
U.S. Mat claimed it was only liable for co-worker harassment if it knew or should have known of the harassment, and that Swinton’s failure to file an internal complaint absolved the company of liability. And although an employer generally is automatically liable for harassment by supervisors, U.S. Mat wasn’t automatically liable for Fosdick’s behavior because he wasn’t Swinton’s immediate supervisor, the company asserted.
Court Says Employer Liable For Slurs
A jury awarded Swinton more than $35,000 plus $1 million in punitive damages. And now the Ninth Circuit has upheld the award, which is believed to be one of the largest ever based solely on racially offensive language.
The court agreed that Fosdick’s behavior fell into the category of co-worker harassment because he wasn’t Swinton’s direct supervisor. However, because Stewart, Swinton’s supervisor, witnessed the racial slurs and even participated in the misconduct, his knowledge of the problems could be imputed to the company. The court also explained that Swinton’s failure to report the harassment was irrelevant to the company’s liability for co-worker harassment. That management actually knew or should have known about the racial slurs and failed to take corrective action was sufficient to hold U.S. Mat liable for the misconduct.
Punitive Damages Appropriate
The court also affirmed the whopping punitive damages verdict. The court rejected U.S. Mat’s argument that remedial action it took after Swinton filed the lawsuit—requiring supervisors and managers to attend anti-harassment training—showed good faith. The court pointed out that neither Stewart, Fosdick nor any other employees who were involved in the harassment were ever disciplined.
Get Prepared
Here are some key steps to take to avoid harassment lawsuits:
- Don’t let your harassment policy gather dust on a shelf. The policy needs to be regularly distributed and communicated. Have employees sign a form acknowledging they received and read the policy each time. And periodically conduct training sessions for employees on your zero-tolerance policy for harassment.
- Train supervisors. Provide periodic refresher training to both high- and low-level managers and supervisors about the serious consequences of harassment. And inform them that they can be personally sued for violating the law. Require supervisors to report all harassment complaints to a designated person trained to handle them, regardless of whether the supervisor believes the charge has merit.
- Make it easy to complain. Your policy needs to lay out a simple and reliable way for employees to report incidents of sexual or other harassment. Some employers have special hotline numbers for reporting problems. At a minimum, identify by name and position one or two individuals who investigate harassment charges, and make it clear that employees can bypass a harassing supervisor to make a complaint.