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EEOC v. Costco Warehouse Corp., No. 17-2432 (7th Cir. Sept. 10, 2018)

Title VII requires that employers exercise due care to prevent sexual harassment of their employees by customers. The EEOC prevailed at trial on just such a claim, winning a $250,000 verdict for a woman shelver who - a jury found - was stalked for over a year by a male customer, while Costco took inadequate measures to protect her. The Seventh Circuit upholds the verdict, and even remands the case back to the district court for award of more back-pay relief.

EEOC v. Costco Warehouse Corp., No. 17-2432 (7th Cir. Sept. 10, 2018): The charging party, Suppo, had the job of "doing 'go-backs'-re-shelving items that members decided not to purchase. Go-backs required Suppo to circulate around the large warehouse with a shopping cart, returning items to the sections where they belonged."

In mid-2010, Suppo was approached by a customer named Thompson, who asked her invasive questions, such as where she lived. She put him off, and - a couple of months after the encounters started - she reported it to her direct manager, named Currier. He told her to report future encounters. When Thompson returned once again, he was escorted off the floor and told (by Currier and a security officer) not to go near Suppo again. As a precaution, Suppo also called the police.

Despite the warning, Thompson continued to appear at the store to follow and talk to Suppo. Though there was a dispute about how often these encounters occurred, the jury could have found that Thompson entered the store far more than the 20 times that he recorded making a purchase over 13 months. He asked Suppo intimate questions (such as whether she had a boyfriend), tried to offer her his phone number and card, talked about her looks, videorecorded her at least once, and occasionally made physical contact.

Attempts to involve store management did not end the unwanted contacts. Over a year later, Suppo won a court order on her own to keep Thompson away from her, and then went on medical leave of absence. The company investigated Suppo's complaints. "On November 23rd, the General Manager of the Glenview store sent an investigation closure letter to Suppo, informing her that although the company could notconfirm a violation of its harassment policy, it had instructed Thompson not to shop at the Glenview warehouse." Suppo did not return to work from her leave and was fired "because her unpaid medical leave of absence had extended beyond twelve months."

The EEOC prevailed at trial, obtaining a $250,000 compensatory damages verdict. The district court upheld the verdict over post-trial motions, but did not award Suppo back pay.

The Seventh Circuit affirms the verdict and remands for the award of back pay.

The defendant argued that Suppo's encounters with Thompson were too mild, as a matter of law, to constitute severe or pervasive harassment. "Costco insists that they were 'tepid' compared to those that we have held insufficiently severe or pervasive to create a hostile work environment."

Yet the panel, while agreeing that the comments and physical contact were not excessively "vulgar" in isolation, holds that harassment need not be "overtly sexual to be actionable under Title VII" (i.e., "consist of pressure for sex, intimate touching, or a barrage of deeply offensive sexual comments").

What pushed the conduct into the extreme range was the stalking. "A reasonable juror could conclude that being hounded for over a year by a customer despite intervention by management, involvement of the police, and knowledge that he was scaring her would be pervasively intimidating or frightening to a person 'of average steadfastness.'"

While Costco attempted to paint Suppo as unreasonably sensitive to Thompson's conduct, the jury could have found that the conduct was severe enough to support a state-court order, issued on the ground that Suppo legitimately feared for her safety. And the jury could also have held that Costco's investigation and corrective measures were "unreasonably weak."

On the EEOC's cross-appeal, the panel upholds the denial of back pay for the post-employment period. The EEOC tried arguing that Suppo was constructively discharged when Costco failed to protect her at work, but the panel holds that this argument fails conceptually: Suppo was fired (for being absent) rather than forced to resign, so no claim for constructive discharge could lie. On the other hand, the panel does hold that Suppo may be entitled to compensation for the period when she was on unpaid medical leave before her termination. "If a reasonable person in Suppo's shoes would have felt forced by unbearable working conditions to take an unpaid medical leave in September of 2011, then Suppo is entitled to recover backpay for some period of time following the involuntary leave."

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