June 13, 2012

In CSX v. Smith,  the West Virginia Supreme Court affirmed a seven figure verdict in a sexual harassment hostile work environment and retaliatory discharge case.  Plaintiff, Smith, claimed that a co-worker, Knick, made disparaging comments regarding her sexual orientation.  Mr. Knick was disciplined and removed from management, but was not fired.  After his demotion, he was transferred and, due to his union seniority, he was under Smith’s supervision.  Smith advised CSX that she was frightened of Knick because of violent and retaliatory comments.   Due to apparent concern for Plaintiff’s safety, CSX placed Plaintiff on administrative and then medical leave. While on leave, Plaintiff alleged that an unidentified male came to her house and made threats. She also experienced threatening phone calls, and car tampering.

CSX offered to transfer Plaintiff to Tennessee or Kentucky where she would not have to supervise Mr. Knick.  She refused these proposed transfers and when she returned to work, she accepted a position at a prior work location with a $35,000 cut in pay.   She filed a complaint in the Circuit Court of Boone County alleging sexual harassment, hostile work environment, constructive discharge, retaliation for her complaints of sexual harassment, and negligent retention of Mr. Knick.    Thereafter, CSX terminated Plaintiff for using work taxis improperly, for which Plaintiff claimed she had express permission.  As a result, she added a claim against CSX for retaliatory discharge.

As to the liability phase of the trial, the jury concluded:  (1) Plaintiff was subjected to a hostile work environment; (2) CSX did not investigate and adequately respond to the misconduct alleged by Plaintiff; (3) CSX retaliated against Plaintiff as a result of her complaints of sexual harassment and/or her filing of a lawsuit against it; and (4) CSX negligently retained Mr. Knick as an employee and that such negligence proximately caused the damages suffered by Plaintiff. The jury awarded $1,557,600 in compensatory damages, and also awarded Plaintiff $500,000 in punitive damages.

While this case is instructive in many ways, the critical point is that if an employer finds merit to a claim of discrimination, it is unwise to transfer the complaining employee. In this case, the employer placed the complaining employee in a position where she either had to deal with her harasser on a daily basis or accept a transfer. This proposed solution did not meet the employer’s obligation to provide prompt, effective remedial action to make sure the conduct does not continue. Rather, placing the harasser in a subordinate position to the complaining party was viewed by the jury as retaliation.