Band-Aid Not Enough in Sexual Harassment Case

NOTE:  On 1/23/13, a federal judge  denied a request from a lawyer for Paul’s Big M Grocer to reduce the $467,269 punitive damages portion of the jury verdict against the store, former manager Allen Manwaring and the store’s owner, Karen Connors.

A federal appellate court panel has issued an important ruling that it is not enough for employers to pay off victims of sexual harassment. They also must fix the underlying problem that led to the harassment.

The U.S. Court of Appeals for the Second Circuit in New York ruled on Oct. 19, 2012 that a lower court abused its discretion in denying any injunctive relief in a sexual harassment case brought by the U.S. Equal Employment Opportunity Commission.

Injunctive relief is essentially a court order that requires the employer to stop the practices that led to the discriminatory conditions.

“At minimum, the district court was obliged to craft injunctive relief sufficient to prevent further violations of Title VII by the individual who directly perpetrated the egregious sexual harassment at issue in this case,” ruled a three-judge panel of the appeal courts.

The case, EEOC v. Karenkim, Inc., 11-3309 (2nd Cir. 2012), involved  Paul’s Big M Grocer, which is owned by Karenkim, Inc.,  in Oswego, New York. Karenkim  was found liable for sexual harassment and fostering a sexually hostile work environment in violation of Title VII of the Civil Rights Act of 1964.  The jury awarded the ten members of the class of defendants a total of $10,080 in compensatory damages and $1,250,000 in punitive damages. The  award was subsequently reduced pursuant to a statutory cap to a total of $467,269.

The store is owned and managed by Karen Connors, who hired the store manager, Allen Manwaring, in 2001.  Connors and Manwaring almost immediately began a romantic relationship and now are engaged and have a son together. Women who worked at the store, some as young as 16, complained to no avail that they were being sexually harassed by Manwaring. Some were  terminated after filing a complaint.

At one point, Manwaring was actually arrested and pled guilty to second degree harassment after he approached an employee, a  high school student, who was talking on the phone, stuck his tongue in her mouth as she was talking and then walked away “with a smirk on his face.”    In deposition testimony, Connors said she did not believe Manwaring had done anything wrong and accepted his explanation that he had “falleninto” the girl.

The store had no anti-harassment policy until 2007 and no formal complaint procedure until after the trial.

 The EEOC asked the court for an injunction because the store had “not adopted adequate measures to ensure that harassment of the kind at issue in this action does not recur.”  Specifically, the EEOC noted that Connors and Manwaring remained in a romantic relationship, that Manwaring still worked at the store as a produce contractor, and that following the verdict Manwaring continued to deny he had engaged in sexual harassment.

The district court denied the EEOC’s request for injunctive relief, ruling it was unnecessary and overly burdensome in that it would require the defendant to “alter drastically its employment practices …”

The appeals court said that ordinarily terminating a lone sexual harasser might be sufficient to eliminate the danger that the employer will engage in subsequent violations of Title VII. In this case, however, the Appeals Court noted that Manwaring,  the store manager, engaged in harassing conduct that was “unchecked for years” because he was involved in a romantic relationship with the owner – a relationship that continues.

The appeals court panel said the EEOC’s requested ten-year proposed injunction was overly broad but that the lower court at least should have prohibited the store  from directly employing Manwaring in the future and from entering the store premises. In addition to those provisions the EEOC had asked the court to order KarenKim to hire an independent monitor for the store.

The appeals court concluded that under Title VII, “[i]f the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate. … Once a violation of Title VII has been established, the district court has broad, albeit not unlimited, power to fashion the relief it believes appropriate.”

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