Customer's Stalking of Costco Employee Severe & Pervasive Enough to Create a Hostile Work Environment In Violation of Title VII

EEOC v. Costco - Seventh Circuit Court of Appeals

Facts:  Dawn Suppo ("Suppo") worked at Costco and during the course of her employment there, was stalked by Thad Thompson ("Thompson"), a customer.  Suppo encountered Thompson for the first time in May or June of 2010.  Thompson asked her personal questions such as where she lived.  After several encounters over the course of a couple months, Suppo related them to her direct manager, Don Currier ("Currier").  Currier instructed Suppo to notify him if she saw Thompson again.  Subsequent to this conversation, Suppo saw Thompson in the store watching her.  Currier, an assistant manager, and a loss prevention officer brought Thompson into a Costco office and told him to avoid talking to Suppo.  Thompson agreed to stay away from Suppo and Suppo contacted the police to report his behavior.  After finding out about her police report, the assistant general manger yelled at Suppo and told her to "be friendly to" Thompson.  Although Thompson was interviewed by the police, he was not charged or arrested.

Over the next 13 months, Thompson continued to encounter Suppo at work.  The interactions included: Thompson watching Suppo which made her uncomfortable; Thompson expressing questions "in a sexual way"; Thompson asking Suppo where she lived, where else she worked, which male employees she spoke to; Thompson telling Suppo she was pretty, beautiful, and exotic; Thompson asking her out on dates at least six times; Thompson commenting on her physical appearance; Thompson touching her face and wrist; and Thompson attempting unsuccessfully to hug Suppo at least twice; among other interactions.

After Suppo requested to park closer to the store entrance so she would not have to walk in the parking lot alone, her request was denied.  Suppo's father began picking her up from work thereafter.  Suppo subsequently obtained a Stalking No Contact Order against Thompson and went on a medical leave of absence.  Thompson was instructed not to shop at Suppo's Costco location anymore.  Suppo then obtained a No Contact Order against Thompson for a full year.  Costco proceeded to send Suppo an investigation closure letter and informed her that although a violation of the company's harassment policy could not be confirmed, it had instructed Thompson to shop elsewhere.

In November of 2012, Costco terminated Suppo because her unpaid medical leave of absence had extended beyond twelve months.  The Equal Employment Opportunity Commission ("EEOC") filed suit on Suppo's behalf and alleged Costco discriminated against Suppo because of her sex (by creating and tolerating a sexually hostile work environment) and constructively discharged Suppo.  The district court granted summary judgment in favor of Costco as to the constructive discharge claim, but a jury found in favor of Suppo as to the hostile work environment claim.  After awarding Suppo $250,000.00 in compensatory damages, Costco moved for judgment as a matter of law.  After the district court denied the motion, this appeal followed.

Holding:  Title VII of the Civil Rights Act of 1964 bars an employer from discriminating against an employee on the basis of sex.  An employer will be found to have violated Title VII when "discrimination based on sex...create[s] a hostile or abusive work environment.  Note, an employer can be liable for a hostile work environment that results from the acts of non-employees, including customers.  A hostile work environment claim requires a plaintiff prove that she was "(1) subjected to unwelcome sexual conduct, advances, or requests; (2) because of her sex; (3) that were severe or pervasive enough to create a hostile work environment; and (4) that there is a basis for employer liability."  In this case, Costco only contends the third prong could not be established.  

For a plaintiff to establish the validity of the third prong, it must be shown that the unwelcome conduct was severe or pervasive from both a subjective and objective point of view.  To be severe or pervasive enough to create a hostile work environment, conduct must be "extreme".  However, determining whether behavior crosses that threshold is not subject to "a mathematically precise test".  Instead, it depends upon "all the circumstances", including "the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating; or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance."

The Court acknowledged Costco's argument that prior Seventh Circuit cases had found other conduct severe or pervasive to create a hostile work environment, in comparison to the "tepid" comments and actions of Thompson.  However, the Court pointed out that actionable discrimination can take other forms, besides sexual harassment, including demeaning, ostracizing, or even terrorizing a victim because of her sex.  As a result, rather than carving up each incident of harassment, the Court established it would determine whether Suppo's work environment was hostile based on "all the circumstances".  Based upon the incidents identified above, the Court held that a reasonable juror could conclude that being hounded over the course of a year despite intervention by management, involvement by the police, and knowledge that he was scaring Suppo, would be pervasively intimidating or frightening to a person "of average steadfastness".

The Court was careful to note that an employer is not vicariously liable for the sexual harassment of its employee by a customer.  As a result, there must be "a basis for employer liability" and an employer will be responsible for its own negligence if it is "reckless in permitting, or failing to prevent, negligent or other tortious conduct by persons, whether or not his servants or agents, upon premises...under his control."  Therefore, Costco's liability depended not only on what Thompson did, but how Costco responded.  However, as Costco did not contest the jury's conclusion that its response to Thompson's conduct was unreasonably weak, the Court's finding (above) that Thompson severely or pervasively harassed Suppo foreclosed further argument by Costco on this point.

Judgment:  The Seventh Circuit Court of Appeals affirmed the district court's denial of Costco's motion for judgment as a matter of law on the grounds that the customer's harassing conduct of the Costco employee, when viewed both subjectively and objectively, was sufficiently severe and pervasive enough to create a hostile work environment in violation of Title VII of the Civil Rights Act of 1964.

The Takeaway:  Although the Court did address the EEOC's appeal of backpay for Suppo, I wanted to focus this case brief solely on the issues raised by Costco as to the hostile work environment claim.  Employers and employees alike should take note of the Court's parsing of the facts in regard to Thompson's conduct.  Taken as a whole, rather than carving up and isolating each incident, I think the Court was correct to find that Costco unreasonably allowed a hostile work environment to exist.  It was interesting to see the Court acknowledge more extreme cases in which sexual harassment and hostile work environments had been found to exist.  Nevertheless, when looking at all the circumstances surrounding Thompson's conduct, I believe the Court was correct to hold that a reasonable juror would find this conduct both severe and pervasive, and consequently in violation of Title VII of the Civil Rights Act of 1964.

Majority Opinion Judge:  Judge Barrett

Date:  September 10, 2018

Opinion:  http://hr.cch.com/eld/EEOCCostco091018.pdf