Fourth Circuit Rules for Plaintiff in Sexual Harassment Case

In Whitten v. Fred's, Inc., the Fourth Circuit issued an important ruling in a sexual harassment case. The Court concluded that the company-defendant could held liable for sexual harassment by its manager, even if the manager did not have the authority to fire the harassed worker. Although the Court was addressing state law claims, South Carolina anti-discrimination law mirrors federal law, and the Court based its decision on federal case law. So, it seems that its decision would apply to federal Title VII claims as well.

The plaintiff Clara Whitten was an assistant manager at Fred's, a department store. Matt Green worked with Whitten as the store’s manager. After being transferred to Green's store, Whitten only worked two days at the store before she felt compelled to quit because of sexual harassment from Green. Whitten alleged that Green rubbed his genitals against Whitten on two separate occasions, that Green punished her by changing her schedule and giving her undesirable tasks because Whitten did not want to spend any time alone with Green, and that Green was verbally abusive.

Whitten contacted the district manager, who was Green’s supervisor, and told the district manager of Green’s actions. The district manager responded by telling Whitten that she was over-reacting. Believing that the district manager would not rectify the situation, Whitten felt no choice but to quit. After Whitten quit, she filed a sexual harassment complaint with the EEOC, which forwarded the complaint to the the South Carolina Human Affairs Commission.

As an initial matter, the Court considered whether Whitten's sexual harassment claims were filed in time. The Court held that the EEOC forwarding of Whitten's complaint was sufficient to have it filed there, and that her state law claim was timely filed within one year of the discrimination. Whitten also sufficiently disclosed the existence of her sexual harassment claim in her bankruptcy case. (This is another important reason why bankruptcy law is important for employment lawyers to be aware of.)

In a sexual harassment case, a key issue is whether the company can held responsible for the harasser's actions. Key to that determination is whether the harasser is the plaintiff's manager, or just a co-worker. Fred’s argued that Green was not Whitten’s supervisor because Green did not have the power to hire, fire, or alter the terms of Whitten’s employment. The Court rejected this bright line rule as to what constitutes a supervisor. Examining the entire relationship between Green and Whitten, the Court noted that Green had the power to assign tasks to Whitten, had the power to alter Whitten’s schedule, and that their relationship was described as manager and assistant manager. The Court noted that the issue was not even close and, as a matter of law, Green was Whitten’s supervisor.

The Court then remanded the case for trial. Because there was no tangible employment action and no official act precipitating the asserted constructive discharge, Fred’s will be entitled to assert the affirmative defense to liability and damages as set forth by the Supreme Court in Faragher and Ellerth.