On Opinions: Business owner mishandles sexual harassment complaints

A business owner must pay compensatory as well as punitive damages to two employees who were sexually harassed by the supervisor at his auto parts stores, the Missouri Court of Appeals has held.

The decision emphasized that under the Missouri Human Rights Act, the business owner could be vicariously liable for the harassment committed by a supervisor and that the owner actually had a duty under the act to prevent the sexual harassment.

The Southern District noted that the auto parts business did not have a policy on sexual harassment and that employees and managers did not receive training on appropriate workplace behavior or on the reporting of complaints.

Harassment

The plaintiffs were two young women who worked as delivery drivers and counter help for the defendant’s two auto parts stores. They brought a hostile environment claim under the Missouri Human Rights Act, alleging that they were harassed by the companies’ sales manager, who also acted as the plaintiffs’ immediate supervisor.

The defendant was the sole managing member of the limited liability companies set up to operate each store. He hired the upper-level employees and many of the lower-level employees and was involved in daily operations. The supervisor was a long time friend of the defendant’s and rented a house from him.

The plaintiffs claimed that the supervisor whispered crude comments to them, made suggestive jokes and gestures and called and visited their homes. He would pull them onto his lap, massage their shoulders, rub against them and rub their breasts.

Both plaintiffs eventually reported the supervisor’s conduct to their store managers, but the managers were reluctant to report the complaints to the defendant because of his close friendship with the supervisor.

Investigation

When the managers did report the plaintiffs’ complaints to the defendant, he decided that an investigation by an outside firm would be too expensive, so he conducted an investigation himself.

The Southern District pointed out that the defendant’s interviews with the plaintiffs were brief and biased, with the defendant suggesting that the plaintiffs were responsible for the harassment, even though a store manager had witnessed the supervisor’s crude conduct.

The defendant concluded that the plaintiffs’ complaints could not be substantiated. No action was taken against the supervisor, who later said he saw nothing wrong with his actions.

“This evidence alone tended to prove that [defendant] acted with reckless disregard for Plaintiffs’ rights,” Judge Jeffrey W. Bates wrote in upholding the punitive damages award.

MHRA

The Southern District found that the defendant’s companies met the MHRA’s definition of “employer” because each employed six or more people, and that the defendant was an employer because he “directly acted in the interest” of the business.

Judge Bates noted Missouri caselaw upholding vicarious liability against an employer for a supervisor’s sexual harassment.

The Southern District added that because the plaintiffs were harassed by a supervisor, not a co-worker, they were not required to prove that the defendant knew or should have known about the harassment and failed to take prompt and effective remedial action.

The case is Leeper v. Scorpio Supply IV, LLC, et al.