Employer Liable for Disregarding Complaints About Soiled Toilet, Porn, and Retaliation — Possible Punitive Damages

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In Davis v. Kiewit Pacific Company, Lisa Davis, a heavy machine operator and one of two female employees at a 100-employee excavation project, prevailed in her claims of gender discrimination, hostile work environment, and retaliation.

At trial, the evidence showed that Davis had difficulty accessing the portable toilets, which were often located miles away and unsanitary. She sought assistance from the foreman, two superintendents, and the safety officer, to no avail. In fact, the foreman once told her to “find a bush.” She complained to the project manager and nothing changed. Shortly after, she found the women’s toilet seat smeared with feces and a pornographic magazine on the paper dispenser. Although she immediately informed the foreman and superintendent, the company did not investigate and thereafter her crew members would not speak to her. Davis complained to the EEO officer, saying she feared retribution; again, no action was taken. Weeks later, the company conducted an unexpected layoff. When the company started rehiring crew members a week later, Davis was not recalled. She sued for discrimination, harassment, and retaliation, among other claims. A jury agreed with Davis and awarded her $270,000 in past lost earnings and non-economic damages.

The jury, however, was not allowed to consider Davis’ claim for punitive damages. Specifically, the trial court concluded that Davis failed to show that the challenged conduct was done, approved, or ratified by a “managing agent,” a condition for the imposition of punitive damages on a company based on employee conduct. Davis appealed this ruling and argued that both the project manager and EEO officer were managing agents. To be a managing agent, the employee must “exercise substantial independent authority and judgment in their corporate decisionmaking so that their decisions ultimately determine company policy.” Davis cited evidence that the project manager was the top manager in charge of a $170 million project and all other managers reported to him. She also showed that the EEO officer administered corporate policies on preventing discrimination, retaliation, and harassment for the northwest district and trained onsite EEO officers. The court of appeal agreed that such evidence, together with Davis’ punitive damages request, should have been presented to a jury, and ordered a new trial on the issue.

While it remains to be seen whether the jury will ultimately impose punitive damages against the company for its employees’ conduct, the decision reminds employers of the importance of taking employee concerns seriously and taking prompt action to correct misconduct.