Very Helpful Guidance on Harassment Claims from the Seventh Circuit!


A recent opinion from the U.S. Court of Appeals for the Seventh Circuit provides much useful guidance for employers on unlawful harassment under Title VII, including third-party harassment. In doing so, the Seventh Circuit noted, Title VII “does not ensure that the worker will have wise and skilled superiors with a sharply honed sense of social justice and a mastery of personnel management.”

Background of the Case. In EEOC v. Village at Hamilton Pointe LLC, the EEOC sued a long-term care facility on behalf of 52 current and former black employees, alleging that they had been subjected to a hostile work environment because of their race. Specifically, employees variously claimed racial preferences in scheduling, racial comments by residents (including the N-word), and harassment by white co-workers.

The federal district court dismissed the claims of most of the employees, finding that they failed to establish a hostile work environment. As to the racial scheduling claims, the federal district court determined that they were not directly applicable to the plaintiffs or were not based on race. Comments and conduct were not sufficiently severe or pervasive to support a harassment claim, or were not directed at the plaintiffs. Some employees failed to report the harassing conduct. An appeal followed.

 Hostile Work Environment Harassment Under Title VII. In affirming the federal district court’s decision, the Seventh Circuit provided an excellent summary of the legal standards applicable to harassment claims under Title VII, which prohibits discrimination and harassment in employment on the basis of race, as well as color, sex, religion, and national origin. In order to establish a claim of hostile work environment harassment under Title VII, an employee must show that: (1) they were subject to unwelcome harassment; (2) the harassment was based on the employee’s protected characteristic; (3) “the harassment was so severe or pervasive as to alter the conditions of employment and create a hostile or abusive working environment”; and (4) there is a basis for employer liability.

Race-based conduct is required. To establish race-based harassment, the employee does not need to show that the complained-of conduct was explicitly racial, but they must show it had a racial character or purpose. Conduct that may seem neutral can support a hostile work environment claim if there is other evidence that ties the conduct to the employee’s race. But there must be some connection – “not every perceived unfairness in the workplace may be ascribed to discriminatory motivation merely because the complaining employee belongs to a racial minority.”

Both a subjective and objective test. With regard to the third element of a hostile work environment harassment claim (i.e. whether the harassment was so severe or pervasive as to alter the conditions of employment), courts apply both a subjective (from the employee’s point of view) and objective (from a “reasonable person’s” point of view) test. An employee’s subjective beliefs “are not sufficient alone” to establish a hostile work environment. The Seventh Circuit (as well as most other Circuits) consider the “totality of the circumstances” in determining if the conduct was objectively hostile, including the frequency of the conduct, the severity, whether the conduct is physically threatening or humiliating, and whether it unreasonably interferes with the employee’s work performance. Notably, “[o]ffhand comments, isolated incidents, and simple teasing do not rise to the level of conduct that alters the terms and conditions of employment.”

The relationship between the parties matters. “A supervisor’s use of racially toxic language in the workplace [is] much more serious than a co-worker’s.” Additionally, the conduct of a direct supervisor weighs more heavily than that of an indirect supervisor, which is heavier than that of a co-worker.

Whether the employee experienced first-hand harassment matters. Although relevant, “when harassment is directed at someone other than the plaintiff, the impact of [such] second-hand harassment is obviously not as great as the impact of harassment directed at the plaintiff.” Specifically, according to the Seventh Circuit, racial comments made directly to the plaintiff carries the most weight. Comments made to non-plaintiffs carried less weight, but showed that the same supervisors made racial comments to other employees in the same positions, and therefore discrimination was likely pervasive. Comments the plaintiffs were told that the supervisor made were weakest, and could be excluded by the court. “Rumors” alone are not evidence of harassment, but may be relevant when coupled with other evidence.

 Third parties can create a hostile work environment. This includes customers, vendors, and (specific to healthcare) patients or facility residents. The Seventh Circuit states that, “[i]n such a situation, we do not consider the employer’s control over the third party, but only the impact of the third-party harassment on the employee’s working environment.”

 The status of the harasser matters. If the harasser is a co-worker or third party, the employer is liable only if they were negligent in failing to discover or to remedy the harassment. If the harasser is a supervisor, the employer is automatically liable unless it can show that (1) it exercised reasonable care to prevent and correct any harassing behavior and (2) that the employee unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided. A supervisor is an individual “with the power to directly affect the terms and conditions of employment. This power includes the authority to hire, fire, promote, demote, discipline or transfer a plaintiff.”

The employer must have notice. The employee must show that the employer had enough information to be reasonably aware of the probability of harassment. If the employer established a channel for complaints of harassment, the employee is expected to use that channel, unless it is inadequate. If the channel provides for multiple reporting options, the employee need only use one of the options to put the employer on notice.

But compliance with the employer’s reporting channel is not necessarily required if the employer is adequately put on notice. Where the channel is unclear or inaccessible, an employee’s complaints to a non-manager will put the employer on notice if the employee reasonably believed that individual had the power to bring the complaint to the attention of someone with the authority to remedy them.

An employer has constructive notice (i.e. notice as a practical matter) if the harassment is sufficiently pervasive and obvious. Where the harassment is public, the employer will be deemed to have knowledge of the harassment. But knowledge of an incident harassing behavior will not create liability unless the behavior is sufficient to support a hostile work environment.

Prompt and effective corrective action. An employer will not be liable for co-worker harassment if they take “prompt and appropriate corrective action reasonably likely to prevent the harassment from recurring.” In some instances, “creating physical separation and minimizing time worked together” may be enough.

But race-based assignments are unlawful, even where such assignments are made to avoid racially hostile residents. The existence of a racial preference policy in scheduling can support a racially hostile workplace, particularly when taken in conjunction with other co-worker conduct.

Context matters. There may be “unique circumstances” relevant to the work environment, such as caring for elderly individuals with mental impairments who are unable to control their offensive sexual or racial comments. Such behaviors will not automatically create a hostile work environment – that will depend on the totality of the circumstances.

Protecting employees from third-party harassment. But employers must also protect employees from third-party harassment, where the conduct is so severe or pervasive as to create a hostile work environment. The Seventh Circuit suggested some “reasonable” options short of discharging racially hostile residents, including: warn residents of the facility’s non-discrimination policy and obtain the resident’s acknowledgement in writing; attempt to reform the resident’s behavior after admission; and assign staff based on race-neutral criteria that minimize the risk of conflict, such as by advising employees that they can ask for protection from racially harassing residents.

Lessons for Employers. The Seventh Circuit’s opinion provides much instructive guidance for employers. Critically, employers must issue a policy that explains and prohibits harassment, with multiple avenues of complaint. They must train supervisors and managers to address harassment and inform management/HR of any potential harassment situations. They must act promptly and effectively to address any harassment complaints and prevent future harassment – including by third parties.