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Update on EEOC's Sexual Harassment Lawsuit Against Costco


In 2016, we discussed a sexual harassment case the EEOC filed on behalf of an employee against wholesale giant Costco. The case was somewhat unique in that the harassment claims were not being made against a co-worker but against a customer. The Northern District of Illinois allowed the case to go to trial and the jury returned a verdict in favor of the EEOC and the Costco employee. Costco appealed the decision and the EEOC moved for backpay following the employee’s termination. The Seventh Circuit Court of appeals recently published its opinion on the appellate issues that were raised.

Recap of the Sexual Harassment Claims

It was established at trial that the employee, Dawn Suppo, was being stalked and harassed at work by a frequent customer of Costco, Thad Thompson. Despite her repeated requests to Thompson to leave her alone and her continued complaints to her employer, Thompson continued to harass her and make her feel extremely uncomfortable. The stalking and harassment became so unbearable that Suppo took leave under the Family and Medical Leave Act (FMLA) because of her distress and in an effort to avoid him.
While she was on FMLA leave, Costco investigated her claims and subsequently told Thompson to stop shopping at that location. When Suppo later ran into Thompson at another Costco and began screaming at her, his membership to the store was canceled. Suppo was unable to return to work after her FMLA leave ended and she was terminated

Sexual Harassment Need Not be Overtly Sexual in Nature

Costco moved for judgment as a matter of law (to have the case dismissed) arguing that the comments and actions of the customer were not overtly sexual and, therefore, did not constitute actionable sexual harassment. The appellate court disagreed with the store’s position that harassment must be overtly sexual to be actionable under Title VII. Instead, the court pointed out that the harassment need only be because of the plaintiff’s sex to be actionable. In this case, Costco did not dispute that Thompson preyed on Suppo because she is female, which is sufficient. As the court stated in its opinion, “Actionable discrimination can take other forms, such as demeaning, ostracizing, or even terrorizing the victim because of her sex.”

Backpay Claim Needs to Be Decided on Remand

The EEOC filed a cross-appeal on the issue of backpay, claiming that Suppo should be entitled to backpay from the time she went on unpaid FMLA leave until two years later. The trial court denied the EEOC’s initial motion for backpay holding that the remedy is only available following discriminatory discharge. In particular, the trial court explained that Suppo was not entitled to backpay for the time she was on unpaid FMLA leave because she was still employed by Costco during that time. The trial court also held that she did not quit and was not constructively discharged, but instead was terminated because she had exhausted her FMLA leave.
The appellate court, however, reviewed the issue and determined that Suppo could potentially be entitled to backpay for the time she was on unpaid FMLA leave if it could be shown that the sexual harassment of which she complained made her working conditions so intolerable (when
viewed objectively) that she was forced to change her employment status. In her case, that would be a change from regular employment to unpaid leave. As such, the appellate court remanded the case back to the trial court to make a determination of whether “a reasonable person in Suppo’s shoes would have felt forced by unbearable working conditions to take an unpaid medical leave.”
If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Michel | King . You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!

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