United States: A Co-Worker's Discriminatory Sabotage Of Another Employee Can Result In Employer Liability

Published in New Hampshire Business Review - July 2014

Claire complains to Amy in HR that a co-worker Dan is giving her a hard time and keeps telling others she is a terrible worker. Claire declares a year ago she turned Dan down for a date, which riled him. Amy speaks with Claire's supervisor and discovers that he is considering terminating Claire because he is unhappy with her performance. The supervisor also comments that other employees have expressed unhappiness and lack of teamwork with Claire's performance. What should Amy do?

On May 23, 2014, the First Circuit Court of Appeals held that an employer can be held liable for discrimination under Title VII when it terminates an employee who has been maligned by a jilted co-worker intent on revenge. As a matter of first impression, the Court fashioned a 3-part test and held an employer will be liable if: (1) the co-worker acted, for discriminatory reasons, with the intent to cause the employee's firing; (2) the co-worker's actions were in fact the proximate cause of the termination; and (3) the employer was negligent in allowing the co-worker to achieve the desired effect because it knew or reasonably should have known of the discriminatory motivation.

As claimed in Antonio Velázquez-Perez v. DDR, Corp., Velázquez served as the regional manager at DDR, a shopping center management company, from November 2007 until his termination on August 25, 2008. Velázquez's immediate boss was Rolando Albino and Albino's boss was Francis Xavier González. Rosa Martínez was DDR's human resources representative. In her role, she provided advice to management on HR issues. Velázquez admitted that he had a good (and sometimes flirtatious) relationship with Martínez but that ended in April 2008 when he turned down her repeated advances. Immediately, Martínez threatened to get him fired. Velázquez complained to Albino who advised Velázquez  to send her a conciliatory email or "[s]he's going to get you terminated." Later, he again complained to Albino and González about her threats.

Martínez began sending emails criticizing Velázquez's work to Albino and González. Albino was also expressing unhappiness with Velázquez's work performance and his receipt of unflattering comments by Velázquez's subordinates. Albino wanted to put Velázquez on a performance improvement plan but Martínez went to senior officials at corporate headquarters and lobbied for termination. Ultimately, Velázquez was terminated for absenteeism, failure to report, and unsatisfactory performance.

Velázquez brought claims against DDR for sex discrimination, hostile environment, and retaliation. He alleged that Martínez, though not his supervisor, sabotaged him and caused his termination because he rebuffed her sexual advances.  In vacating summary judgment for DDR on the sex discrimination claim, the Court found that a jury could reasonably decide that Martínez conveyed a threat to Velázquez. Also known as quid pro quo harassment, a jury could find she carried out her threat that if he did not engage in a romantic and sexual relationship with her, she would undercut him and get him fired.

The Court noted that if Martínez had been Velázquez's supervisor, DDR would have been liable for the termination. The issue at hand, however, concerned whether liability could be extended to the employer for conduct of a co-worker. The Court saw no basis to lessen liability for a negligent employer who allows discriminatory acts to cause harm. The Court explained its decision answered the question left open by the US Supreme Court in Staub v. Proctor Hospital decided in 2011 about "whether the employer would be liable if a co-worker, rather than a supervisor, committed a discriminatory act that influenced the ultimate employment decision."

Deciding to treat hostile workplace claims and quid pro quo claims similarly, the Court held that an employer can be liable for co-worker conduct if (1) the employee's co-worker acts to malign the employee for discriminatory reasons with the intent to cause the plaintiff's firing; (2) the co-worker's discriminatory acts proximately caused the employee to be fired: and (3) the employer terminates the employee based on acts by the co-worker it knew (or reasonably should have known) were the product of discriminatory animus. It revived Velázquez's claim, remanding the case back to the trial court for further proceedings.

Whether other federal courts will adopt this analysis is unclear. Right now, this is controlling law in the First Circuit (the states of NH, MA, ME, RI and commonwealth of Puerto Rico). As this decision expands employer liability, the message to employers is that they will need to evaluate carefully the practices they employ in making termination decisions and conducting investigations. Employers must be careful to look at the process leading up to each termination, including who provided input into the decision and what their motivation might be. Do not stop at supervisors when guarding against discriminatory animus. "Rubber-stamping" decisions rather than conducting independent inquiries into the underlying facts and motivation should be avoided.

Here, Amy needs to look into the circumstances for the supervisor's comment about terminating Claire. She should investigate whether Claire's supervisor (and any co-worker complaining to him) has been influenced by any maligning by Dan for discriminatory reasons. A company will want to show through independent verification that any adverse employment action was entirely justified even without the discriminatory actions of another.

Jennifer L. Parent is a director in the Litigation Department and Chair of the Employment Law Practice Group of McLane, Graf, Raulerson & Middleton, P.A., where she is a member of the New Hampshire Bar Association, Massachusetts Bar Association, U.S. District Court for the District of New Hampshire, and First Circuit Court of Appeals.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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