A Possible Shift in Establishing a Hostile Work Environment

By Karen Federman Henry

In many respects, the en banc decision of the U.S. Court of Appeals for the Fourth Circuit in Boyer-Liberto v. Fontainebleau Corp., No. 13-1473 (May 7, 2015), presents a series of unfortunate events.* The Court used a relaxed standard for an employee to assert a claim for hostile work environment that could have a significant impact on employers.

Ms. Liberto worked for the Clarion Hotel in Ocean City, Md., as a cocktail waitress at the time of the events leading to her lawsuit. Twice within two days, another worker threatened to “make [her] sorry” and to “get” her. Each time, the other worker shouted and behaved in an abusive manner while referring to Ms. Liberto as a “porch monkey” — an undisputedly offensive racial epithet. Ms. Liberto complained to her supervisor, and the other worker was reprimanded.

Meanwhile, the owner of the hotel asked Ms. Liberto’s supervisor for an explanation of what had happened. The supervisor explained the encounter and also shared that Ms. Liberto had served in several positions at the hotel and had performed poorly in all of them. When the hotel terminated Ms. Liberto, she filed suit alleging a hostile work environment and retaliation.

The district court decided the case on a motion for summary judgment, concluding that the facts reflected an isolated incident that did not create a hostile work environment and that the employer did not retaliate against her when it terminated her for her poor performance. A unanimous panel of the Fourth Circuit affirmed the district court’s decision regarding the hostile‑work‑environment claim, but was split regarding her retaliation claim. Ms. Liberto sought en banc review, and the Court granted her request.

In a seeming departure from the traditional view, the majority vacated the district court’s decision and remanded the case for further proceedings. In doing so, it held that an employee may assert a hostile-work-environment claim based on one incident when the facts suggest what could be the beginning of a path toward a hostile work environment. While recognizing the Supreme Court’s rulings that a single offhand comment “generally will not create a hostile environment without significant repetition or an escalation in the harassment’s severity,” the Court focused on the corollary rule that “an isolated incident that is physically threatening or humiliating will be closer – even if not equal – to the type of conduct actionable on its own because it is ‘extremely serious.’” Although other cases have decided that one or two racial epithets do not, by themselves, create a hostile environment, the Court opined that a retaliation claim could arise from one incident when the employee believes that a hostile work environment is in progress, even if it is not. Citing the usual precedents from other circuits and the Supreme Court that explain the nature of a hostile work environment, and claiming to act consistently with those holdings, the Court instead set the stage for a much different approach to ensuring nondiscriminatory practices in the workplace.

A further indication that the Court has altered its analysis of hostile-work-environment and retaliation claims is its declaration that its holding in Jordan v. Alternative Res. Corp., 458 F.3d 332 (4th Cir. 2006), is overruled to the extent it is inconsistent with Boyer-Liberto. In Jordan, the Court adhered to the need for a pattern of conduct to establish a hostile work environment, rejecting the claimant’s retaliation claim because an isolated incident of harassment did not show that a plan was in motion to create a hostile work environment, nor that one was likely to occur.

Prior to the Boyer-Liberto decision, and consistent with Jordan, a hostile-work-environment claim required a pattern of discriminatory behavior that interfered with or hindered work performance. The appellate courts often recognized that a particular situation could be so severe as to create the hostile work environment, but usually required an ongoing pattern or practice to withstand summary judgment. From a pragmatic standpoint, this made sense — the goal is for the workplace to treat all employees with respect and to cultivate practices that do not discriminate against any of them. If an employer handles complaints when received and, therefore, prevents the creation of a hostile work environment, then no liability would ensue. Absent an ongoing pattern of discrimination, the claim would not suffice to show retaliation, especially if the discipline or termination was based on factors separate from the alleged discriminatory conduct.

The dissenting opinions took issue with the majority’s view that Ms. Liberto had shown sufficient physical threat and humiliation to satisfy the standard for alleging a hostile work environment. Both dissents also noted the need to provide an opportunity for an employer to correct inappropriate behavior, rather than become liable for every individual act of its employees. One of the opinions dissented in part and concurred in part: It supported allowing Ms. Liberto’s retaliation claim to proceed, noting that perhaps the employee who used the racial epithet should have been dismissed instead of Ms. Liberto, but declined to hold the employer vicariously liable for the hostile‑work‑environment claim. The other dissent completely disagreed with the more lenient view of a hostile-work-environment claim enunciated by the majority, citing case law that repeatedly required a pattern of behavior suggesting repeated conduct for a long duration of time, and arguing the single-incident concept should be reserved for only the most egregious conduct.

The majority view could make sense if it had simply said that the conduct of Ms. Liberto’s coworker amounted to a discriminatory act worthy of review. Similar to workers’-compensation principles that provide relief both for a one-time accidental injury and for an occupational disease that accrues during a period of time, there are differing ways to challenge discrimination in the workplace. But the recrafting of the hostile-work-environment claim so that an altercation with a coworker twice within 24 hours amounts to a hostile work environment — not just a disciplinary matter for the employer to address — could have an adverse impact on workplaces by escalating every incident to actionable discrimination instead of giving employers an opportunity to take corrective action.

The question remains — is this decision because of the change in the Court’s composition (i.e. the appointments that have been made during President Obama’s administration), or is it a natural progression of the underlying legal principles? An article in the University of Virginia Journal of Law and Politics revealed a significant increase in reversals of summary judgment in employment law cases since 2008 by the Fourth Circuit (which has seen many new judges in that time period), while no change occurred during the same period in the Eighth Circuit, where the court’s composition was unchanged. Time will tell how the Fourth Circuit will apply this new approach to all cases, and also whether the Supreme Court will review the case and provide more guidance. For employers, this intervening period of uncertainty could pose challenges in how to address situations that formerly could be corrected but now can be viewed as the beginning of a hostile work environment with the liability that accompanies it.

*A children’s book series authored by Lemony Snicket bears the title “A Series of Unfortunate Events” and follows the travails of three young orphans.