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The Business Judgment Rule & Sexual Harassment Claims


Sharp v. Best Buy - United States District Court, Western District of Kentucky, Bowling Green Division


Facts:  Robert Sharp ("Sharp") was employed by Best Buy as an auto technician.  Since Sharp was diagnosed as having narcolepsy and cataplexy, Best Buy accommodated his conditions by excusing him from shift work.  However, complaints were made against Sharp that he made several sexually harassing comments toward a co-worker.  The co-worker subsequently reported this conduct to Best Buy's Human Resources Hotline.  

After Best Buy investigated the sexual harassment complaints, Sharp was fired.  Sharp then responded by suing Best Buy for disability discrimination and retaliation.  Best Buy moved for summary judgment on Sharp's claims.

Holding:  The District Court granted Best Buy's motion for summary judgment based upon the fact that the "business judgment rule" provided that the Court would not second guess Best Buy's personnel decision so long as it was supported by an honest belief of a non-discriminatory reason for the employment action.  Even though attempts were made to accommodate Sharp's disability, the Court held that his disability was not the reason for his termination.  In this instance, Best Buy had a non-discriminatory reason for firing Sharp as his complained of conduct violated a zero-tolerance sexual harassment policy. 

As well, the Court acknowledged that while Sharp claimed that the co-worker fabricated her sexual harassment complaints, this suspicion was insufficient to defeat the business judgment rule. 

Judgment:  The District Court granted Best Buy's motion for summary judgment on the grounds that the "business judgment rule" allowed Best Buy to make personnel decisions, and not have the Court second guess those actions, as Best Buy's decision to fire Sharp was based upon an honest belief of a non-discriminatory reason. 

The Takeaway:  Employers should note that the business judgment rule is not a get out of jail card in all situations!  Instead, the rule allows employers to make personnel decisions based upon an objection and thorough investigation.  The employer only needs to show that it had an honest, well founded belief to support its employment actions.  If an employer can do that, under the business judgment rule, the court will not substitute its judgment for that of management. 

Majority Opinion Judge:  Judge Stivers

Date:  April 13, 2015

Opinion:  http://leagle.com/decision/In%20FDCO%2020150414913/SHARP%20v.%20BEST%20BUY%20CO.,%20INC.

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