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Second Circuit Finds Declining Boss's Advances Does Not Constitute Actionable Sexual Harassment

April 18, 2004

On April 6, 2004, the United States Court of Appeals for the Second Circuit in New York affirmed summary judgment in favor of Costco Wholesale Corporation ("Costco"), dismissing the claims of a bakery worker, Jessica Mormol, who alleged that she was sexually harassed by her department manager. Mormol v. Costco Wholesale Corp., No. 03-7409, 2004 WL 728222 (2d Cir. Apr. 6, 2004 ). The Mormol decision is significant because it found that a supervisor's sexual advances did not rise to the level of a hostile work environment under Title VII where the advances were rejected by the employee, unaccompanied by reprisal against the employee, and properly addressed by the employer in response to the employee's internal complaint.

Costco is an international chain of membership warehouse stores. Jessica Mormol worked at one of the New York warehouses as a part-time employee in the Bakery Department under the supervision of department manager John Ziermann. Mormol alleged that on December 27, 1999 she requested a vacation. In response, Ziermann told her that he would not approve a vacation request unless she had sex with him. Ziermann also told Mormol that if she had sex with him, he would punch her time card so that she would be paid for time not worked. Mormol refused and took a month-long unpaid vacation. During her vacation, she received a threatening voicemail message from Ziermann instructing her to return to work earlier than expected and that her failure to do so could lead her to lose her job or be transferred to another department. Mormol cut her vacation short. On January 22, 2000, her first day back at work, Ziermann handed her a note saying that if Mormol would have sex with him, he would give her money, put her on the payroll as a full-time employee but permit her to work part-time, and would take her on vacations and to a fitness club. Mormol again declined Ziermann's proposition. Thereafter, Ziermann reduced her workdays for the coming week from seven to three. The next day, Ziermann issued an "employee corrective consultation" to Mormol for returning five minutes late from a break. On January 24, 2000 , Mormol reported Ziermann's conduct to Costco's Assistant General Manager and then to the General Manager. Costco immediately initiated an investigation, suspended Ziermann from working on his next scheduled workday, January 26, 2000 , and fired him the following week.

Mormol brought suit alleging violations of Title VII and the New York State Human Rights law for sexual harassment based on quid pro quo and hostile work environment theories. In granting summary judgment to Costco, the district court concluded that Mormol did not suffer any "tangible employment action" because she experienced no change in her terms of employment as a result of the alleged harassment and noting that, notwithstanding her claims of reduced workdays, Mormol had not alleged that she actually lost any wages.

Affirming summary judgment in favor of Costco, the Second Circuit agreed that Mormol failed to establish quid pro quo harassment because she did not demonstrate a tangible employment action in the form of a "significant change in employment status." Mormol, 2004 WL 728222, at * 3 (citing Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 753 (1998)). The Court of Appeals also found that Costco did not alter the terms and conditions of Mormol's employment by causing her to be subjected to a hostile work environment. The Court noted that conduct of a sexual nature only creates an actionable hostile work environment if a "reasonable person would have found it to be so and if the plaintiff subjectively so perceived it." Id . , at * 4 (citing Brennan v. Metropolitan Opera Ass'n, 192 F.3d 310 (2d Cir. 1999). Mormol's allegations of two communications with Ziermann on December 27, 1999 and January 22, 2000 , even when coupled with the "corrective consultation" she received, were not "sufficiently severe to overcome [the] lack of pervasiveness." Id . at 5. As such, Mormol failed to set forth facts establishing any type of actionable harassment.

While this decision is notable because the Court determined that a supervisor's multiple highly inappropriate sexual advances did not amount to actionable harassment, it should not be read to suggest that actions like those of Costco's department manager will ordinarily be tolerated by the courts. To the contrary, the decision should be viewed as the latest reminder to employers of the importance of maintaining comprehensive harassment-free workplace policies, training employees and managers on the content of those policies, and responding promptly and decisively to complaints of inappropriate workplace conduct.