EEOC Settles First Sexual Orientation Discrimination Lawsuit

By: Melanie Dunajeski

Back in our March 21, 2016 blog post, Shelbie Byers discussed a pair of landmark complaints filed by the EEOC on behalf of a gay male employee and a lesbian employee who were allegedly subjected to hostile work environments because of their sexual orientation. (“EEOC Takes Aim at Workplace LGBT Discrimination”, The two test cases, U.S. Equal Employment Opportunity Commission v. Scott Medical Health Center, PC (W.D. Pa., March 2016) and U.S. Equal Employment Opportunity Commission v. Pallet Companies d/b/a IFCO Systems, NA Inc. (D. Md. March 2016) were filed by the EEOC to assert their position that although Title VII of the Civil Rights Act of 1964 as amended does not explicitly grant protection from discrimination to LGBT employees, Title VII’s prohibition of discrimination “on the basis of sex”. The second of these cases, Pallet Companies, is now the subject of a high profile settlement reached between the employer and the EEOC. In Pallet Companies, a lesbian employee was subjected to numerous comments about her sexual orientation and appearance, as well as comments by a supervisor to the effect that he would “turn [her] back into a woman”, and when she reported the behaviors to the company harassment tip line, she was promptly fired. In the settlement reached by the EEOC, the employer has agreed to pay the former employee $7,200 in back wages, $175,000 in nonpecuniary compensatory damages, and to donate $20,000 to the Human Rights Campaign Workplace Equality Program. The company also agreed to create a new training program on sexual orientation and gender identity in the workplace. While the company made no admission of liability, perhaps the most significant portion of the settlement was contained in a Consent Decree that the employer agreed to enter into that contains some significant obligations on the part of the employer. By its terms, the Consent Decree is for a term of two years subject to extension at the request of the EEOC if the material terms have not been complied with by the employer. The decree memorializes the monetary undertakings made by the employer, but also enters injunctive relief against the employer for any further discrimination on the basis of sex “including the use of offensive or derogatory comments, or other verbal or physical conduct based on an individual’s sex”, as well as enjoining any retaliatory measures taken against a person asserting rights under Title VII. Under the decree, the employer will create and present two types of training programs; one for management, and the other for rank and file to be presented at every location of the employer throughout the nation, and will post a notice at the affected plant indicating that the consent decree was in place. The decree also gave the EEOC the right to monitor the employer’s compliance through inspections of the employer’s records and premises, as well as interviews on-site with employees.

Does this sound like something your company would prefer to avoid? No doubt, it is. There is a reason this settlement is so highly publicized and the terms of the Consent Decree made widely available. It is very high on the EEOC agenda, and they WANT employers to notice and take steps now to eliminate discrimination on this basis. As we work through this extraordinary year of changes associated with LGBT employees and rights, it is good to keep in mind that we have addressed discrimination, hostile environment and harassment issues in the past (race, gender, disability, age). It is time to give a good look at policies establishing non-discrimination and anti-harassment for your workplaces, as well as to consider if your periodic training needs to be tweaked. Most importantly, if your workplace is one where these issues may have been treated as “fair game” in the past, it is time to make sure that everyone is aware that those days are gone, and that using frankly homophobic language or terms is now in the same playbook as the well-known racial epithets of the past. Contact us for help in bringing your policies up-to-date. We also understand that issues of employee sexual orientation may present unforeseen problems in the workplace—contact us to help you work out non-discriminatory solutions to these issues as they arise.