The “Alter Ego” Sexual Harasser: A Company Owner Engages In Sexual Harassment
A recent case brought by the U.S. Equal Employment Opportunity Commission (“EEOC”) in the U.S. District Court, Southern District Court of Florida on behalf of three female employees of McWhite’s Funeral Home, Inc. (“McWhite’s Funeral Home”) illuminates the legal consequences which arise when the person engaging in the sexual harassment is a company owner. In the case of Equal Employment Opportunity Commission v. McWhite’s Funeral Home, Inc., the EEOC asserted claims for hostile work environment sexual harassment, retaliation, and constructive discharge in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”) based on the alleged behavior of the owner and manager of McWhite’s Funeral Home, Albert McWhite, Sr. (“McWhite”), against three female employees.
The alleged sexually harassing behavior by McWhite towards one female employee included sexual propositions, sexual remarks, telling her he took Viagra at work, remarks about her buttocks, touching her breasts and buttocks, demanding that she have sex with him in order to receive unpaid wages, and showing her pictures of naked women on a cell phone. The alleged sexually harassing behavior by McWhite towards another female employee included telling her to lift up her skirt, making sexual comments about customers’ bodies, and taking pictures of female customers’ buttocks. The three female employees also asserted that they heard McWhite sexually harass other female employees, including offering them money for sex, demanding sex from them, touching their breasts and buttocks, and making remarks about how he could be their boyfriend and pay their bills.
In the lawsuit, the EEOC also contended that McWhite retaliated against one of the female employees after she refused to state in a letter to the EEOC that she had not seen any sexual harassment. After the female employee refused to comply with McWhite’s instruction, McWhite purportedly stopped assigning her work and cut hours to zero. The EEOC claimed that by cutting her hours to zero, McWhite Funeral Home had constructively discharged the female employee. The EEOC also asserted that McWhite’s retaliation did not end with her constructive discharge. After the female employee filed an administrative charge of discrimination with the EEOC, McWhite allegedly contacted her federal probation officer for the purpose of harming her in retaliation for filing the charge of discrimination. The probation officer reportedly told the female employee that filing false charges could be an offense. The EEOC further alleged that McWhite retaliated against another one of the female employees after she filed an administrative charge of discrimination with the EEOC. McWhite reportedly told the female employee’s prospective employers that she was trouble, had tried to sue McWhite, and they should not to hire her.
On May 20, 2016, the parties entered into a Consent Decree settling the lawsuit. In the Consent Decree, McWhite Funeral Home agreed to pay the three female employees $85,000 to resolve their case. McWhite Funeral Home also agreed to provide training to all of its managers and supervisors on Title VII’s prohibition against sexual harassment and to provide employees with a complaint procedure for reporting incidents of sexual harassment. McWhite Funeral Home was also required to provide neutral job references for the three female employees, and was prohibited from providing any negative information about them or referencing their lawsuit.
The McWhite Funeral Home is an illustrative example of the unique status of a company owner under sexual harassment law. In order to hold a company liable for sexual harassment, a victim must generally show that the company knew or should have known about the harassment but failed to take prompt and effective corrective action to prevent the harassment from recurring. Under this standard, the company’s negligence with respect to the harassment is a basis for liability. However, when the harasser is a company owner, the company is strictly liable for the hostile work environment sexual harassment. Because the company is strictly liable, the company’s negligence is irrelevant to the issue of liability. The company is always liable for the sexually harassing conduct by its owner because the actions of the owner are deemed the actions of the company. In other words, the owner is the “alter ego” of the company whose actions “spoke” for the company.
The company is also strictly liable for an owner’s sexually harassing behavior even if the company did not have notice of the harassment. This means that the victim does not have to show that the company knew or should have known of the sexual harassment in order to impose liability against the company. Thus, the victim does not have to complain about the owner’s sexual harassment in hold the company liable. The law does not require the victim to provide the company with notice about an owner’s sexual harassing behavior, such as by making a complaint in compliance with the company’s complaint procedure for reporting harassment, because other company employees generally do not have the authority to control the owner’s workplace conduct. For example, a company employee usually cannot tell the owner that he or she will be terminated if the harassment continues.
Moreover, if notice was required in order to hold a company liable for its owner’s harassing conduct, an owner could simply designate himself or herself as the person to whom sexual harassment complaints must be made. In fact, the complaint procedure maintained by McWhite Funeral Home required employees to report complaints of sexual harassment to McWhite. Thus, McWhite, the alleged sexual harasser, was the person who was responsible for investigating and taking corrective action on behalf of McWhite Funeral Home regarding allegations about his own sexually harassing behavior. Under such circumstances, requiring an employee to use the company’s complaint procedure for reporting sexual harassment as a perquisite for imposing liability would immunize the company from liability for the sexual behavior of its “alter ego” and undermine Title VII’s goal of eradicating sexual harassment in the workplace.
The McWhite Funeral Home case demonstrates that Florida and federal law can be used to fight back against company owners who abuse their power by sexually harassing employees and retaliating against their victims. Florida and federal law prohibit retaliation against employees who oppose sexually harassing behavior in the workplace, including complaining about sexual harassment, rejecting sexual advances, and filing an administrative charge of discrimination with the EEOC. As McWhite Funeral Home shows, prohibited acts of retaliation are not limited to ultimate employment decisions such as demotion, reduction in hours, or termination. Rather, subjecting an employee to any action that might dissuade a reasonable worker from making or supporting a charge of discrimination constitutes a prohibited retaliatory act. Using an employee’s probation officer to coerce the employee to drop an administrative charge of discrimination with the EEOC and making defamatory statements to the employee’s prospective employers are prohibited retaliatory acts because they might dissuade a reasonable worker from making or supporting a charge of discrimination. The McWhite Funeral Home case further illustrates that when an employer retaliates against employees who oppose sexual harassment by making defamatory statements to their prospective employers, employment discrimination litigation can be used as means for obtaining a legally enforceable neutral job reference against the employer.
We have extensive experience representing employees who have been the victims of sexual harassment and retaliation. If you have been the victim of sexual harassment, or you have been retaliated against for complaining about sexual harassment at work, please contact our office for a free consultation.