Chrysler Liable for Punitive Damages for Ongoing Harassment of Plant Employee, Seventh Circuit Decides

A case this week out of the U.S. Court of Appeals for the Seventh Circuit illustrates that an employer’s initial response to a hostile work environment may not get it off the hook for damages if the harassment continues and the employer doesn’t ratchet up the response.

Chrysler Corp. didn’t do enough to prevent continuing harassment of a Cuban-American Jewish employee, and therefore, it is liable for punitive damages, the appeals court held this week.

The court summarized that between 2002 and 2005, Otto May, a pipefitter at Chrysler’s Belvedere Assembly Plant, was the target of racist, xenophobic, homophobic, and anti-Semitic graffiti that appeared in and around the plant’s paint department.

In reponse to May’s complaint, the head of human resources at the subject plant met with two groups of skilled tradesmen (like May) and reminded them that harassment was unacceptable. In addition, a procedure was implemented to document the harassment, efforts were made to discover who was at the plant during the periods when the incidents likely occurred, and a handwriting analyst was retained and used.

Despite these efforts, the harasser or harassers were never caught.

A jury concluded that May carried his burden and awarded him $709,000 in compensatory damages and $3.5 million in punitive damages.

In reviewing the case, the appeals court noted that it does not “sit as a super-personnel department.” However, it must assess the response of the actual human relations department.

That response was inadequate, the court concluded.

Speaking to the issue of punitive damages, the court said this:

 “If it was negligent to respond to weeks and months of death threats with a pair of meetings and documentation, what happens when that inadequate response does not improve over the course of a year? Two years? Three years? At some point the response sinks from negligent to reckless, at some point it is obvious that an increased effort is necessary, and if that does not happen, punitive damages become a possibility. The facts in this case do not force us to hazard a precise rule about when sticking with the same inadequate strategy becomes reckless. May’s harassment continued for years, the threats were extremely serious, and there was scant evidence of an increased effort over time.

And that was enough to warrant punitive damages, the appeals court concluded.

Read the case here.

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