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Employer May Be Liable for Discharge Resulting from Report of Jilted HR Manager

By David C. Henderson  6/13/2014
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A shopping center management company may be liable to a former regional general manager for firing him for alleged performance deficiencies pointed out by a human resources manager whose sexual advances he repeatedly resisted, the 1st U.S. Circuit Court of Appeals ruled.

The employer fired the employee based largely on negative information provided by a human resources representative whose responsibilities included advising higher-level managers on employee discipline. In response, the employee sued the employer in federal district court for, among other things, sex discrimination in violation of Title VII of the Civil Rights Act of 1964. One of his arguments was that the discharge was unlawful because the employer wrongfully based it on the sexually discriminatory reports and advice that the human resources representative had provided to the general manager’s higher-level managers.

There was no evidence that the higher-level managers who made the discharge decision acted with any type of unlawful motive, much less a motive tied to the general manager’s sex. However, there was evidence showing that, prior to the general manager’s discharge: 1) the human resources representative expressed to the general manager her romantic interest in him; 2) after a brief flirtatious period, the general manager rebuffed that romantic interest; 3) the human resources representative thereafter conveyed the threat that she would undercut the general manager at work and ultimately get him fired if he would not engage in a romantic and sexual relationship with her; and 4) the human resources representative actually did convey negative information and advice about the general manager to the higher-level managers who ultimately decided to discharge him.

The federal district court ruled for the defense and against the general manager/plaintiff by awarding summary judgment to the employer. The Court of Appeals, however, disagreed with its lower court, vacated the summary judgment award, and remanded the case for trial. The appellate court engaged in a four-part analysis. First, the court found that the necessary causation was present. Just as the general manager/plaintiff had argued, a reasonable jury could find that the human resources representative’s sexually discriminatory efforts were the proximate cause of his firing.

Second, the court found that, as the employer/defendant had argued, a reasonable jury would not be able to conclude from the evidence that the human resources representative was the general manager’s supervisor. That initially seemed to be a significant victory for the defense. According to a U.S. Supreme Court decision, an employer is vicariously liable for damages to an employee whenever they are caused by the unlawful discrimination of a supervisor. But, in this case, the human resources representative was not a supervisor because she was not “empowered . . . to take tangible employment actions against a victim, i.e., to effect a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly difference responsibilities, or a decision causing a significant change in benefits.”

The appellate court, however, determined that the nonsupervisory status of the human resources representative was not fatal to the general manager’s wrongful discharge claim. According to the court, even though the human resources representative was not a supervisor, a plaintiff/employee in the general manager’s situation “nevertheless [could] prevail under Title VII on a claim for discriminatory termination under a so-called quid pro quo theory” because his termination resulted from rejecting the sexual advances of the human resources representative. Quid pro quo sexual discrimination usually involves a supervisory relationship.

Finally, the court ruled that, even though the human resources representative was not a supervisor, the employer nevertheless could be liable under Title VII for negligently allowing the human resources representative’s discriminatory acts to cause the wrongful discharge of the general manager. As the court noted, the Supreme Court has not yet ruled on the issue of whether an employer can be liable for a discriminatory termination under Title VII because of its negligence. And while the Supreme Court did hold, in somewhat analogous circumstances, that a violation of the Uniformed Services Employment and Reemployment Rights Act occurred when an employee’s military status unlawfully served as a motivating factor in the decision to discharge him, the case was not a Title VII case, and involved unlawful animus by supervisors, not discriminatory animus or misconduct by a mere co-worker.

Velazquez-Perez v. Developers Diversified Realty Corp., 1st Cir., No. 12-2226  (May 23, 2014).     

Professional Pointer: This case expands the potential for employer liability in Title VII sexual harassment cases in at least two ways. It allows an employee to advance a quid pro quo sexual harassment claim for wrongful discharge based on the actions of a co-worker rather than a supervisor, and it allows an employer to be found liable for wrongful discharge because of its negligent, as opposed to intentional, conduct.

David C. Henderson is an attorney in the Boston office of Nutter McClennen & Fish.


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