West Virginia’s Supreme Court recently released an opinion that upheld the award of over two million dollars to a former employee of CSX Transportation, Inc. in an explosive hostile work environment claim that all employers can take lessons from.

In CSX Transportation, Inc. v. Smith, plaintiff Angela Smith, a managerial employee, was talking with an employee at another location, who was using a speakerphone.  The plaintiff overheard another employee in the background make a sexually offensive remark about her to the person she was talking with.  After she reported this incident to her employer, CSX promptly investigated the matter and, following its investigation (which revealed the employee had harassed at least one other female employee), demoted and suspended the offender, and placed Smith on paid administrative leave.

This wasn’t the end of the incident, however.  The offending employee was angered, and several employees reported hearing him vow revenge against Smith.  Connected or not, Smith then experienced several threatening telephone calls and knocks on her front door from an unknown male while she was on leave.  Thereafter, the employee used his union seniority to transfer to a position where Smith would be his direct supervisor.  When Smith told CSX officials that she was apprehensive about supervising this man, CSX offered to transfer her to a management position in Kentucky or Tennessee, rather than attempt to transfer the harasser.  Not wanting to move, Smith eventually accepted a lower-paying, non-managerial position that still required a move, although it allowed her to stay in West Virginia.

Smith then sued CSX, alleging a hostile work environment, constructive discharge from her managerial position, negligent retention of the harasser, and retaliation for her complaints of sexual harassment.  Within a year of filing her suit and after returning to work, Smith started using several CSX taxis to transport her around because she still feared for her safety.  While she was given approval to use these them, CSX later investigated her use of the taxis and fired her for what they said was her abuse of that privilege.  Not surprisingly, Smith then added retaliatory discharge to her claims against CSX.

Despite the fact that Smith only experienced one incident of harassment at work, the jury found CSX liable for subjecting her to a hostile work environment.  CSX was also found to have not adequately responded to the misconduct of the harassing employee, to have retaliated against Smith for filing the sexual harassment complaint and lawsuit, and to have negligently retained the offending employee.  The jury awarded Smith $1,557,600 in back pay, front pay, and emotional distress; as well as $500,000 in punitive damages because it found that CSX acted in a malicious, wanton, or willful manner.

On appeal, the Supreme Court affirmed both the finding of the jury and the award of punitive damages.  Although Smith only experienced one incident on the job and the other instances of harassing conduct occurred outside the workplace, the Court felt the evidence was sufficient to uphold the jury’s finding of a hostile work environment.  One of the main reasons why was because the harassment was severe enough to cause Smith fear.  In addition, the Court felt that CSX didn’t investigate the intimidating phone calls as well as they could have, and noted that CSX chose to relocate Smith rather than her harasser.  Furthermore, the Court found it significant that CSX’s failure to accommodate Smith’s concerns about supervising the harasser forced her to accept a lower ranking job that required a pay reduction and relocation.

Taking everything together, the Court found that enough evidence existed to allow the jury to conclude the harassment was both severe and pervasive.  The Court also held that CSX’s actions in demoting the harasser and permitting him to transfer to a position where Smith would have to supervise him was malicious enough to support the jury’s punitive damage award.

What should employers take from this case?  First, when faced with evidence of sexual harassment, you must respond adequately.  This means more than just punishment; you must ensure the harassment stops.  Here, the employer demoted the harasser, but then allowed him to transfer to a position where he would work alongside his victim.  Second, even one incident of sexual harassment at the workplace can be severe and pervasive enough to create a hostile work environment, especially if it is so severe as to cause fear of physical harm.  Finally, if a victim of harassment expresses further concern, you must attempt to accommodate the employee’s concerns.  That insensitivity could be evidence of a hostile work environment standing alone.

Needless to say, not all sexual harassment cases have facts quite as challenging as this one, but even if an employer thinks it is responding to such an allegation sufficiently, it may not be.  Always think ahead and consider how your response may look if a jury in the community is asked to evaluate it.  Was it fair?  Was it reasonable?  Or could you have done more?   Because of how explosive these claims can be, it’s always advisable to err on the side of going the extra mile.

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