EEOC v. Central Wholesalers, Inc.

Citations: 573 F.3d 167; 2009 U.S. App. LEXIS 15987; 92 Empl. Prac. Dec. (CCH) 43,619; 106 Fair Empl. Prac. Cas. (BNA) 1377Docket: 08-1181

Court: Court of Appeals for the Fourth Circuit; July 21, 2009; Federal Appellate Court

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The case involves the Equal Employment Opportunity Commission (EEOC) appealing a decision from the District Court for the District of Maryland concerning claims made by La Tonya Medley, an African-American female, against her former employer, Central Wholesalers, Inc. The EEOC alleges that Medley experienced a hostile work environment due to her gender and race, leading to her constructive discharge. The district court granted summary judgment in favor of Central Wholesalers but denied the company’s motion for attorneys’ fees. The appeals court reversed the summary judgment, affirmed the decision on attorneys’ fees, and remanded the case for further proceedings.

Key facts include that Central Wholesalers, located in Laurel, Maryland, employed Medley starting in 2002, and she worked in the Inside Sales department from September to November 2004, under the supervision of Lynette Wright. Medley was the only African-American female among eight Inside Sales employees. Central had an established policy against discrimination and harassment, which mandated that complaints be reported to management and ensured prompt investigations.

Medley alleges gender- and race-based discrimination and harassment during her two-month tenure in Inside Sales, primarily involving four co-workers: Tony Monaghan, Mike Monaghan, Doug Green, and locksmith Tom DaBay. These individuals used racial and gender slurs consistently, including referring to women derogatorily and using a racist term daily. Despite Medley’s direct complaints to her co-workers about their offensive language and conduct, they ignored her concerns, and their behavior worsened. 

Medley escalated her complaints to her supervisor, Wright, after witnessing Mike watching pornography at work, which she could hear from her cubicle. Initially, Wright did not take effective action; however, after another complaint on September 24, 2004, she removed Mike's pornographic screensaver and restricted his Internet access. Despite these actions, Mike resumed viewing pornography at his desk. Following the removal of his screensaver, both Mike and Tony reacted negatively towards Medley, with Mike cursing at her and Tony expressing his displeasure loudly. Although Denicoff later addressed Tony's profanity, the overall harassment and discriminatory conduct persisted without adequate resolution.

On September 24, Wright suggested that Medley interview for a position in Central’s Accounts Receivable department, which Medley perceived as retaliatory due to her complaints about inappropriate behavior in Inside Sales. Later that day, she emailed Wright and Human Resources representative Lisa Beall, expressing her concerns about a pornographic screensaver on a colleague's computer and other offensive materials in the office. Beall forwarded this email to Denicoff, who met with Medley the same day to discuss her allegations. Medley detailed instances of a colleague, Mike, watching pornography at work and having various Playboy items in his cubicle. Denicoff informed Medley that such behavior was unacceptable and also addressed the matter with Wright, emphasizing the inappropriateness of explicit screensavers. Denicoff subsequently met with Mike, who denied looking at pornography, and he did not find any offensive materials during a walkthrough of the department.

On October 5, Medley emailed Denicoff again, stating that the Playboy calendar remained on Mike's desk and that profanity was rampant in the department. Central responded by investigating these claims. Denicoff searched for the calendar but found none, although Wright acknowledged it might still be present. During a meeting with Medley later that day, she reiterated her complaints about the ongoing presence of the calendar and the use of profanity. Denicoff assured her that such calendars are not permitted and that profanity, especially racial or sexual slurs, is intolerable. After this meeting, Baxley discovered the Playboy calendar and other items on Mike's desk. Denicoff and Baxley instructed Mike to remove the calendar and warned him about the inappropriate items at work, to which he agreed to comply and to reduce his use of profanity.

Denicoff conducted a meeting on October 7 with Inside Sales employees to reiterate Central's anti-profanity policy, emphasizing that while some profanity might be unavoidable, racial and sexual slurs were unacceptable. Medley and Tony were absent due to illness but were briefed by Wright post-meeting. However, incidents of inappropriate behavior persisted. Around October 31, Mike was involved in a prank where he placed a screwdriver in a Halloween decoration, making it appear sexual; despite Wright's and Medley's attempts to remove it, Mike repeatedly reinstated it. Following this, Mike stopped attending work, which Central interpreted as a resignation.

On November 10, Medley approached DaBay regarding a lock and faced a barrage of verbal abuse, including racial slurs and threats. Medley was visibly upset and reported the incident to Wright, who confronted DaBay, only to be met with more derogatory comments about Medley. Following this confrontation, Wright and DaBay went outside to discuss Medley, leaving her distressed in Starner's office. Medley informed Starner about DaBay's language and the offensive blue-colored mop-head dolls hanging by nooses in Tony and DaBay's offices. Starner, as a supervisor, was required to report this to Central’s Equal Employment Opportunity Officer or President but failed to do so. When Wright returned, she inappropriately laughed about the situation, prompting Medley to express her discomfort and leave work, later emailing Denicoff and Wright to report a hostile work environment.

Central did not respond to Medley's email regarding her workplace concerns. Two days later, Medley’s attorney informed Denicoff that she would not return to work, citing a hostile work environment, including incidents involving DaBay and inappropriate items displayed in the workplace. Medley claimed these incidents caused her emotional distress. Central conducted an investigation into the November 10 incident but found no evidence of racial or sexual slurs from DaBay, despite interviewing multiple individuals, including an African-American assistant. Denicoff and Baxley addressed the issue with DaBay, advising him to refrain from yelling or cursing and to remove offensive items from his office. DaBay received a verbal reprimand and was sent for anger management training. Denicoff concluded that no further action was necessary since Medley did not return to work.

After Medley filed a discrimination charge with the EEOC, the agency sued Central under Title VII for creating a hostile work environment based on gender and race, and for constructively discharging Medley. Central sought summary judgment on all claims, which the district court granted. The court ruled that the alleged conduct was not gender-specific and insufficiently severe to constitute a sexually hostile work environment. Regarding the race-based claim, the court found Medley did not give Central a chance to address the issues since she did not return to work after the incident and deemed Central’s investigation adequate. Following the ruling, Central requested attorneys’ fees, which the district court denied, but it awarded costs for depositions. Both parties subsequently appealed aspects of the district court's decisions, with the EEOC appealing the summary judgment and Central appealing the denial of attorneys' fees. The summary judgment review will consider whether the evidence supports a reasonable jury's finding on the four criteria of harassment under Title VII: unwelcome behavior, a basis in gender or race, severity or pervasiveness that alters employment conditions, and imputability to Central.

The EEOC must demonstrate that a reasonable jury could conclude that Medley experienced unwelcome gender- or race-based harassment. Evidence indicates Medley reported harassment to co-workers, supervisors, and Central’s President, suggesting it was unwelcome. The EEOC also needs to establish that the harassment was based on Medley’s gender or race. Evidence includes co-workers frequently using derogatory terms, displaying pornographic materials, and specific instances of racial slurs directed at Medley. Additionally, the presence of blue mop-head dolls hanging from nooses further supports claims of racial harassment.

Furthermore, the EEOC needs to show that the harassment was severe or pervasive enough to create a hostile work environment. This assessment involves subjective and objective components. Subjectively, Medley perceived the harassment as abusive, evidenced by her complaints and emotional distress. Objectively, the EEOC must demonstrate that the discriminatory conduct was sufficiently severe or pervasive by considering factors like frequency, severity, and its impact on Medley’s work performance. The determination of whether the environment was abusive requires an analysis of the overall context rather than a strict checklist, recognizing that the interplay of various circumstances influences the social impact of workplace behavior. Ultimately, the EEOC has established a triable issue regarding the severity or pervasiveness of the harassment.

A reasonable jury could determine that the gender-based harassment Medley experienced was objectively severe or pervasive, as evidenced by derogatory language used by co-workers and the presence of sexually explicit materials in the workplace. Specific incidents included repeated use of offensive terms like 'b. h' and the display of a Playboy calendar and magazines by a co-worker. Similarly, the race-based harassment was also deemed objectively severe, highlighted by the frequent use of racial slurs and derogatory terms directed at Medley, along with racially insensitive decorations in the workplace.

To establish liability for Central, the EEOC must demonstrate that the company was aware of the harassment and failed to take adequate remedial action. Evidence indicates that Medley reported her harassment complaints to both her supervisor and the company president multiple times. Central did take some steps to address these complaints, including walking through the department to check for offensive materials and holding meetings to discuss the issues. However, Central's efforts were insufficient, as there were delays and failures to respond to several of Medley’s complaints, contrary to its own anti-harassment policy, which mandated prompt investigation and action.

Mike's pornographic screensaver remained in place for over a week after Medley first complained, and management, including Wright and Denicoff, did not adequately address Medley’s complaints about co-workers’ use of the term 'n. r.' Denicoff only offered a general statement against racial slurs during a meeting without specific actions taken. Central ignored Medley’s report regarding a racially insensitive mop-head doll displayed by a co-worker. Denicoff's attempts to locate the reported pornographic material were unsuccessful, and despite Central removing Mike’s Internet access, he continued to view pornography at work. The pattern of complaints from Medley was met with insufficient responses from Central, which failed to effectively end the harassment. Notably, after Medley voiced her concerns, the harassment intensified, with co-workers increasing the use of racial jokes. Additionally, an incident involving DaBay occurred after Medley began reporting the harassment. A rational jury could conclude that Central did not take appropriate steps to address the harassment, as they could have implemented more serious measures like demotions or suspensions for the offenders. The court clarified that it does not intend to provide a comprehensive list of possible remedial actions but highlighted the types of actions not taken that could have been effective. The court then addressed Central's motion for attorneys’ fees, determining that since Central was not a “prevailing party” after the reversal of summary judgment, the denial of fees was justified. The court reversed the summary judgment in favor of Central, affirmed the denial of attorneys’ fees, and remanded for further proceedings.