A company’s potential monetary liability for workplace discrimination can be crippling. A jury in the U.S. District for the Northern District of Illinois had awarded a male grocery store butcher $2.4 million in compensatory and punitive damages on his claim of sexual harassment against a small grocery store located in the south side of Chicago. The lower court ultimately reduced the award to $477,500, because of Title VII’s statutory damage caps and the excessiveness of the award. The U.S. Court of Appeals for the Seventh Circuit has affirmed the award. Smith v. Rosebud Farm, Inc., No. 17-2626, 2018 U.S. App. LEXIS 21481 (7th Cir. Aug. 2, 2018).

Robert Smith sued his former employer, Rosebud Farm, Inc., for sex discrimination, alleging his male colleagues sexually groped and insulted him for more than four years. Smith claimed that his male, meat-counter colleagues would grab his genitals and buttocks. They would also repeatedly mime oral and anal sex, along with other comments and gestures. Smith colleagues also allegedly made inappropriate, racially charged comments. Smith’s supervisor ignored his complaints. In fact, Smith’s supervisor sometimes participated in the sexually inappropriate behavior as well.

After Smith filed a charge alleging sex and racial discrimination with the Equal Employment Opportunity Commission, his supervisor told his colleagues to stop goofing around. Smith subsequently found his car with the tires slashed and windows broken while parked in an employee-only lot.

The Seventh Circuit rejected Rosebud’s argument on appeal that the district court should have awarded judgment as a matter of law with regard to Smith’s sex discrimination claim, as well as a new trial. Title VII prohibits discrimination against an individual because of that individual’s sex and unwanted sexual conduct such as the kind in this case would not be automatically deemed sex discrimination. Rosebud employed 6 to 7 females and 15 to 16 males who interacted daily. Rosebud argued that Smith’s colleagues engaged in “sexual horseplay,” not sex discrimination. The Court found, however, that despite the store being a mixed-sex workplace, only males were groped and taunted. Even though there were only males working behind the meat counter, the Court said the store was small and there were enough females working to qualify as a mixed-sex workplace. Accordingly, the Court found a reasonable inference that Smith’s male colleagues harassed him because of his sex.

Rosebud also claimed that the district court should have granted summary judgement for his retaliation claims because Smith did not present evidence that his colleagues knew he filed a charge with EEOC. It further claimed that a new trial is appropriate because Smith’s attorney’s comments during his closing argument associated Rosebud’s conduct with terrorism in the Middle East. The Seventh Circuit rejected these claims as well, because these claims were not raised before the lower court.

Supervisor training and immediate investigation following complaints of discrimination or harassment are important to minimizing an employer’s potential liability. Employers should be cognizant of workplace horseplay and jokes to ensure that the behavior does not constitute unlawful discrimination.