Tuesday, January 19, 2016

Federal Court Allows Hostile Work Environment Claim Based on Customer's Harassment of Employee to Proceed to Trial Against Costco

The Equal Employment Opportunity Commission ("EEOC") filed suit on behalf of Dawn Suppo alleging that Costco subjected Suppo to a hostile work environment by permitting a customer, Thad Thompson, to harass and stalk her while she was at work.  The EEOC further alleged that Costco constructively discharged Suppo because she was forced to leave work due to the harassment.  Costco filed a motion for summary judgment and for additional discovery, and Chief Judge Ruben Castillo of the Northern District of Illinois granted in part and denied in part both motions.  The EEOC's hostile work environment claim is allowed to proceed to trial, but not their constructive discharge claim as Suppo was terminated and did not resign her employment.


Suppo worked at Costco for ~15 months beginning in 2009, when she was hired as a seasonal employee.  In May 2010, she was hired as a regular, part-time employee and worked as a Front End Assistant until September 6, 20111, when she began a leave of absence from which she never returned.

Costo maintains anti-harassment and reporting policies, which prohibits all forms of harassment and require employees to report any conduct that they consider to be harassing and this policy covers conduct by customers as well as employees, and harassment or stalking by a customer is treated the same as harassment or stalking by an employee.  Costco had a "zero tolerance" stance regarding harassment and retaliation in the workplace along with an open door policy for reporting such.

Suppo's first interaction with Thompson occurred around the end of May or early June 2010.  According to Suppo, Thompson told her that he had not seen her before and that he did not know she worked at Costco; he asked her who the man was he had seen her shopping with at Costco, which was her father Marty Suppo.  Thompson joked that Suppo was stalking him by being in the store at the same time as him.  Over the next few months, Thompson and Suppo continued to have interactions when Thompson was shopping at the store.

Over the next several months, until September 2011, there were numerous more occasions whereby Thompson allegedly harassed Suppo and engaged in awkward and inappropriate interactions, which Suppo and her father both complained.  It all came to a head on September 1, 2011 when Suppo claims she caught Thompson videotaping her in the store, which he denied and store cameras did not catch.  Suppo then began taking off work, claiming she was afraid to report to work and she then filed a second police report against Thompson.

Costco claims that they called Suppo to offer ways for her to return to work and feel safe, but this was disputed by Suppo.  Suppo then obtained an order of protection against Thompson from Circuit Court of Cook County and then requested and was placed on an extended medical leave pursuant to Costco's employment agreement, which permits employees to take at least one year of personal medical leave.  Costco completed an investigation and determined that Suppo's allegations were inconclusive, but notified Thompson, by letter, that they decided it was best that he no longer shopped at the Glenview warehouse.  Sometime later, Suppo was shopping at a neighboring Costco and happened to run into Thompson who confronted Suppo and began yelling at her, which prompted Costco to cancel his membership.

On September 20, 2012, Costco advised Suppo that her 1-year leave of absence was expiring and offered to discuss with her whether she could return to work or if she needed some additional accommodation, including leave.  In response, Suppo provided documentation from her health care provider who stated that she would be unable to return to work for an additional one to two years.  Suppo was then informed that Costco did not provide indefinite leave as an accommodation and that it was likely Costco would have to terminate her employment, which was done on November 19, 2012.

On August 25, 2014, the EEOC filed this action on behalf of Suppo, asserting that Costco subjected her to a hostile work environment based on Thompson's harassment and that Suppo was constructively discharged because she was forced to leave her job due to the harassment.  Costco then moved for summary judgment on both of those claims.


A.  Hostile Work Environment

Title VII prohibits employers from discriminating against employees because of their "race, color, religion, sex, or national origin."  To prevail on a hostile work environment claim, the plaintiff must establish that she was subjected to conditions that were either "severe or pervasive" and that were "both objectively and subjectively offensive."  The Court should consider the totality of 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 must also find a basis to impose liability on the employer as they are held strictly liable for harassment inflicted by supervisors, but if the harassment is committed by someone other than a supervisor--whether it be "an employee, independent contractor, or even a customer"-- a negligence standard applies.

To meet this standard, the plaintiff must show that the employer was "negligent either in discovering or remedying the harassment."  An employer is not considered to be on notice of the harassment "unless the employee makes a concerted effort to inform the employer that a problem exists."  If the employer took "prompt and appropriate corrective action reasonably likely to prevent the harassment from recurring," the employer cannot be held liable.  The court noted that this case presented the proverbial "swearing contest," that Suppo's account is to be accepted at the summary judgment stage and weighing the evidence and determining the credibility of witnesses are functions of the jury, not the Court.

Because the Court was not able to conclude as a matte of law that Costco took reasonable steps to end the alleged harassment, their request for summary judgment on the hostile work environment claim was denied.

B.  Constructive Discharge

To prevail on a claim for constructive discharge, the plaintiff must show "that he was forced to resign because his working conditions, from the standpoint of the reasonable employee, had become unbearable."  The 7th Circuit sets a high bar to establish a constructive discharge claim, because "employees are generally expected to remain employed while seeking redress."  Thus, the alleged working conditions must be "even more egregious than that required for a hostile work environment claim."  The 7th Circuit recognizes two forms of constructive discharge:  where the employee resigns due to alleged discriminatory harassment and when the employee resigns in the face of an imminent termination by the employer (i.e., the "handwriting was on the wall and the plaintiff quit just ahead of the fall of the axe.").  Both of these have one thing in common:  the involve the employee resigning.  Suppo never resigned in this case.  The EEOC attempted to argue, without any support, that Suppo stopped working and this was tantamount to constructive discharge.  Because Suppo never resigned, summary judgment was granted to Costco on the constructive discharge claim.

The remaining parts of the opinion dealt with discovery issues pertaining to Costco's seeking to delve further into Suppo's medical history as it pertained to the allegations she made about the hostile work environment and damages.  The Court granted in part and denied in part some of what Costco was seeking in discovery, which is a significant victory for Costco as this type of motion is usually denied in this territory.

The case is Equal Employment Opportunity Commission v. Costco Wholesale Corp., Case No 14 C 6553 (N.D. Ill.)

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