7th Circuit Reverses Summary Judgment on Sexual Harassment Lawsuit

On August 2, 2017, the 7th Circuit reversed an order of summary judgment in a sexual harassment, sex discrimination and retaliation lawsuit that was filed in federal court under Title VII of the Civil Rights Act of 1964 ("Title VII") and the Illinois Human Rights Act ("IHRA").  Nischan v. Stratosphere Quality, LLC et al., No. 16-3464 (7th Cir. 8/2/2017).  The plaintiff alleged that she was subjected to unlawful sexual harassment in her employment, and that she was fired in retaliation for filing a complaint about it.  The 7th Circuit held that the plaintiff offered sufficient evidence to support her sexual harassment claim to survive summary judgment.  The plaintiff alleged that a co-worker relentlessly sexually harassed her, including unwelcome sexual advances and sexual propositions as well as offensive, outrageous physical touchings of private areas of her body, and sexually offensive comments and questions. She also alleged that managerial level employees knew about the sexual harassment, but failed to do anything about it.

To prevail on a sexual harassment claim, a plaintiff must plead and prove that: (1) she was subjected to unwelcome sexual harassment; (2) she was harassed because of her sex; (3) the harassment was so severe or pervasive that it altered the conditions of employment and created a hostile work environment; and (4) there is a basis for employer liability.  The issue on appeal involved the fourth element.  The defendant contended that there is no basis for employer liability because the alleged harasser was a non-managerial employee.  However, under both Title VII and the IHRA, an employer is liable for the sexual harassment of a non-employee or non-supervisory employee if it was negligent either in discovering or remedying the sexual harassment, such as where the employer became aware of the harassment but failed to take reasonable corrective measures.  To prove negligence, an employee must usually report the harassment to the employer, such as by filling an internal complaint of sexual harassment with human resources or management.  An employer could still be liable, however, even without a report of sexual harassment, if it knew or should have known of the sexual harassment, but failed to take reasonable corrective action.  An employer is charged with having constructive notice of the harassment when it has come to the attention of someone who has a duty to report the information to someone else in the company who has the power to fix it.  Once the person who has the duty to report learns of the sexual harassment, the employer is deemed to be on notice, even if the victim never reported the harassment.  In this case, the 7th Circuit concluded that the evidence supported the plaintiff's argument that the defendant had constructive notice.  A project supervisor as well as an operations manager observed incidents of the harassment, and were required to report it to the defendant under its sexual harassment policy contained in its employee handbook.  Thus, the defendant had constructive notice; and the district court's conclusion that the plaintiff failed to provide a basis for employer liability was erroneous.