On June 28, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it had settled one of its first lawsuits alleging sexual orientation discrimination. The settlement—in the form of a consent decree—requires Pallet Companies, doing business as IFCO Systems (IFCO), to pay $202,200 in addition to a number of nonmonetary requirements. This landmark decree comes less than a year after the EEOC first concluded that discrimination on the basis of an employee’s sexual orientation amounted to sex discrimination.
The facts as alleged in the complaint are straightforward: IFCO hired Yolanda Boone, a lesbian, as a forklift operator at its Baltimore, Maryland, plant. For 3 months, Boone proved herself to be an excellent employee. At that point, Boone began working the night shift under the supervision of Charles Lowry. Lowry began harassing Boone on a weekly basis because of her sexual orientation, making comments such as, “I want to turn you back into a man,” “You would look good in a dress,” and “Are you a girl or a man?” Lowry accompanied his comments with lewd gestures.
After several weeks of enduring Lowry’s behavior, Boone complained to her supervisor, but no action was taken. Lowry continued to harass Boone and she again complained to her supervisor as well as meeting with the general manager. Boone also contacted the human resources department after that meeting. When Lowry resumed his harassment of Boone that same day, Boone informed her supervisor that she was leaving early.
The following day, Boone was asked to resign by her supervisor, the regional director, and a human resources representative. Boone refused. She was again requested to resign later that day and continued to refuse. Boone was then fired.
After her termination, Boone filed a charge of discrimination with the EEOC. The EEOC issued a letter of determination to IFCO finding reasonable cause to believe that IFCO had violated Title VII. The EEOC invited IFCO to participate in conciliation, but the EEOC was unable to secure an acceptable conciliation agreement.
After issuing IFCO a notice of failure to conciliate, the EEOC filed a lawsuit in the United States District Court for the District of Maryland. The consent decree was entered a little over 3 months later.
For 2 years, the consent decree requires IFCO to do the following:
- Pay Boone a total of $182,200 ($7,200 in back pay plus interest and $175,000 in nonpecuniary compensatory damages).
- Pay a total of $20,000 to the Human Rights Campaign Fund.
- Provide Boone with a positive letter of reference.
- Avoid engaging in sex discrimination or harassment.
- Avoid retaliating against employees for complaining of discrimination or harassment.
- Distribute anti-discrimination and harassment policies to all of its employees at seven plants in Maryland, New Jersey, Maine, Virginia, and Massachusetts.
- Retain a consultant who is a subject matter expert on sexual orientation, gender identity, and transgender training to develop an EEOC-approved training course on workplace issues involving lesbian, gay, bisexual, and transgendered (LGBT) employees.
- Provide the EEOC-approved LGBT training to its nationwide management as well as all employees at the seven plants in Maryland, New Jersey, Maine, Virginia, and Massachusetts.
- Provide followup training during the second year of the decree period.
- Post EEOC-required posters at all of its locations nationwide.
- Post a notice about the consent decree at its Baltimore plant.
The consent decree also provides the EEOC with the authority to monitor IFCO’s compliance with the decree which may include onsite inspections and document requests. IFCO is also required to create and maintain records plus provide documentation to the EEOC of its continued compliance with the consent decree.
What does this mean for employers?
As this case illustrates, the EEOC is moving forward with its theory that discrimination or harassment on the basis of sexual orientation is a form of sex discrimination. And an employer’s failure to prevent or correct such harassment and discrimination can be costly. Not only is IFCO on the hook for over $200,000, but its compliance with the nonmonetary relief required by the consent decree will also be expensive in time and money. A proactive, comprehensive, and—most important—consistently enforced anti-discrimination and harassment policy will help employers avoid violating Title VII and other federal employment laws. When combined with a trained and knowledgeable management team, this is the best way to prevent discrimination and harassment—and the costly consequences that follow.
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