Award Over Racism Upheld
A federal appeals court in San Francisco on Wednesday upheld a $1-million punitive damage verdict awarded to a black man subjected to repeated harassment on the job, including numerous racial slurs by co-workers.
“This case should serve as a reminder to employers of their obligation to keep their workplaces free of discriminatory harassment,” Judge Margaret McKeown wrote for a unanimous panel of three judges of the U.S. 9th Circuit Court of Appeals.
“Although much of what happened here was characterized [by management] as ‘jokes,’ neither the discrimination nor the jury verdict is a laughing matter,” added McKeown.
She said Troy Swinton, the only black person in a work force of 140 people at Potomac Corp., a cardboard company 30 miles north of Seattle, “was subject to repeated ‘jokes’ by co-workers featuring the use of the word ‘nigger’ and a continuing stream of racial slurs.”
McKeown cited several other offensive remarks made in Swinton’s presence while his supervisor stood by listening without intervening.
Among those quoted by McKeown was the following: “Why don’t black people like aspirin? Because they’re white and they work.”
McKeown noted that on several occasions co-workers referred to Swinton as a “Zulu warrior” and made comments based on racial stereotypes. In one example, McKeown wrote that while Swinton was waiting in line at a food vending truck, a co-worker said, “They don’t sell watermelons on that truck, you know; how about a 40-ouncer?”
McKeown said testimony presented at a trial in U.S. District Court in Seattle “underscored the ubiquity of the racist atmosphere” at the company.
“One co-worker said that there were jokes about a wide variety of ethnic groups, including whites, Asians, Polish people, gays, Jews and Hispanics. Another testified that the majority of the people at [the company] had actually witnessed the use of racially offensive language.”
The jury awarded Swinton, who worked in Potomac’s shipping department for seven months, $5,612 in back pay, $30,000 for emotional distress and $1 million in punitive damages.
The award is one of the largest ever in a racial harassment case based solely on offensive language, according to several labor law experts.
The ruling was hailed by William B. Gould IV, a labor law professor at Stanford University who served as chairman of the National Labor Relations Board during the Clinton administration.
“It strikes me that the practices [described in the opinion] are the kind of evil” that the 1991 Civil Rights Act was designed to remedy, Gould said.
Clifford Palefsky, a San Francisco attorney who represents employees in workplace disputes, said a verdict this substantial could have a significant “deterrent effect.”
David Kadue, a Los Angeles attorney who represents management in labor relations matters, also said the 9th Circuit ruling was “very significant.”
In particular, Kadue cited the court’s ruling rejecting the company’s argument that it should not be held responsible for the failure of Swinton’s supervisor to intervene.
Kadue said he believed the ruling was the “most extreme” he had seen involving a company’s responsibility for the conduct of a supervisor who is not a top-line manager.
In 1999, the U.S. Supreme Court ruled that when a company has made “good faith efforts” to comply with the Civil Rights Act of 1991, it cannot be required to pay punitive damages for the discriminatory actions of managers who violate company policy.
In this instance, Potomac asserted that it was entitled to invoke the “good faith defense” because it had written policies forbidding harassment in the workplace.
But the 9th Circuit, which has jurisdiction over nine Western states including California, rejected that contention. The judges cited earlier decisions from other federal appeals courts that have ruled that a company can be held liable for punitive damages through the inaction of even low-level supervisors, when those supervisors are responsible for receiving and acting on harassment complaints.
“Despite testimony that offensive racial language was ubiquitous, there is nothing to indicate that anyone in the company did anything to combat this problem until officially informed by a state agency that Swinton was charging racial harassment,” McKeown wrote.
Her opinion was joined by Circuit Judges William A. Fletcher and Johnnie B. Rawlinson.
The appeals court specifically held that the remarks addressed to Swinton were not merely “tasteless, objectively offensive joking,” as the company asserted, but rather were “undesirable and offensive” conduct.
The appellate judges also rejected the company’s contention that the punitive award violated due process of law because it was “grossly excessive.”
The judges said: “But for Swinton’s decision that he couldn’t take it any longer and thus had to quit, nothing in the record suggests that [the company] would have done anything to address a workplace replete with racial and ethnic slurs.
“The fact that the harm from unchecked racial harassment occurring day after day cannot be calculated with any precision does not deflate its magnitude,” they said.
Richard Winter, a lawyer who represented Potomac, said he was disappointed with the decision. He said the company has not decided whether to ask for a rehearing before a larger 9th Circuit panel.
In its appeal, the company contended that U.S. District Judge Jack E. Tanner of Seattle had manifested bias for the plaintiff when he questioned one of the plant managers. But the 9th Circuit rejected that challenge too, saying an examination of Tanner’s questions to the manager revealed little of consequence.
Still, Winter said it was “difficult to try the case” before an “80-year-old black judge,” referring to Tanner. “He was visibly distressed by the evidence of the ‘N-word.’ ”
