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Castleberry v. STI Group, No. 16-3131 (3d Cir. July 14, 2017)

The Third Circuit holds that a manager's single use of a racial slur, combined with a threat to fire a Black employee, may be enough all by itself to constitute a hostile work environment under Section 1981.

Castleberry v. STI Group, No. 16-3131 (3d Cir. July 14, 2017):  This case was brought by two laborers against their staffing agency (STI) and the client company where they worked (Chesapeake). The opinion summarized the allegations.

"Plaintiffs allege that, when they arrived at work on several occasions, someone had anonymously written 'don't be black on the right of way' on the sign-in sheets. They also assert that although they have significant experience working on pipelines (and more so than their non-African-American coworkers), they were only permitted to clean around the pipelines rather than work on them. They claim that, when working on a fence-removal project, a supervisor told Castleberry and his coworkers that if they had 'n[****]r-rigged' the fence, they would be fired. Seven coworkers confirmed that occurred. Following this last incident, Plaintiffs reported the offensive language to a superior and were fired two weeks later without explanation. They were rehired shortly thereafter, but then terminated again for 'lack of work.'"

The plaintiffs filed complaints alleging discriminatory termination, retaliation, and racial harassment. The district court dismissed the complaint, holding that there were insufficient allegations of a racial or retaliatory motive to terminate the plaintiffs, and also that "the facts pled did not support a finding that the alleged harassment was 'pervasive and regular.'"

The Third Circuit substantially reverses.

On the harassment claim, the panel concedes that the Third Circuit had not spoken with one voice about the correct standard for harassment, having articulated at least three standards: severe or pervasive, severe and pervasive, and pervasive and regular. The panel holds that the only correct standard, per the Supreme Court's authority, is "severe or pervasive." See Pa. State Police v. Suders, 542 U.S. 129, 133 (2004); Harris v. Forklift Sys., Inc., 510 U.S. 17, 22 (1993).

The panel then considers whether the "n[****]r-rigged" incident described above was enough to state a claim for harassment. Although the defendants argued that "single isolated incident [cannot] constitute a hostile work environment," the Third Circuit holds that it is not necessarily so.

"The Supreme Court's decision to adopt the 'severe or pervasive' standard-thereby abandoning a 'regular' requirement - lends support that an isolated incident of discrimination (if severe) can suffice to state a claim for harassment ... Otherwise, why create a disjunctive standard where alleged "severe" conduct - even if not at all 'pervasive' - can establish a plaintiff's harassment claim? Defendants would have us read that alternative element out of the standard. We may not do so."

The panel cites several out-of-circuit authorities holding that even a single use of the racial slur, in aggrvated circumstances, can be severe enough to state a claim for harassment. See, e.g., Boyer-Liberto v. Fontainbleau Corp., 786 F.3d 264, 268 (4th Cir. 2015) (en banc); Adams v. Austal, U.S.A., LLC, 754 F.3d 1240, 1254 (11th Cir. 2014); Ayissi-Etoh v. Fannie Mae, 712 F.3d 572, 577 (D.C. Cir. 2013); Rodgers v. Western-Southern Life Ins. Co., 12 F.3d 668, 675 (7th Cir. 1993).

The panel holds that "Plaintiffs alleged that their supervisor used a racially charged slur in front of them and their non-African-American coworkers. Within the same breath, the use of this word was accompanied by threats of termination (which ultimately occurred). This constitutes severe conduct that could create a hostile work environment."

The panel holds that the same allegations stated claims for discriminatory discharge and retaliation, though it affirms dismissal of the disparate-impact claim because "§ 1981 provide[s] a private cause of action for intentional discrimination only."

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