Why it matters

Providing a valuable lesson for employers about liability for the actions of third parties, the U.S. Court of Appeals, Seventh Circuit affirmed a verdict against Costco on behalf of an employee who was stalked by a customer. Dawn Suppo began encountering the customer in 2010 when he repeatedly came up to her and asked personal questions. When she saw him hiding behind displays, wearing a hat and sunglasses and watching her, she reported the customer to management and said she was scared. Management spoke to the customer and told him to stay away from Suppo, but the customer continued to appear in the store, trying to speak to Suppo and touch her. She reported the customer to the police and obtained a no-contact order, but only after she took an unpaid medical leave because she was so traumatized. The Equal Employment Opportunity Commission (EEOC) filed suit on Suppo’s behalf, alleging that the conduct constituted a hostile work environment. A jury agreed, awarding Suppo $250,000 in compensatory damages but denying the EEOC’s request for back pay. Both parties appealed. The Seventh Circuit affirmed the verdict, ruling that a reasonable jury could find the customer’s behavior rose to the level of “severe or pervasive.” The court also remanded the case on the denial of back pay, instructing the district court to reconsider whether the plaintiff was owed for her period of medical leave resulting from her emotional distress.

Detailed discussion

Dawn Suppo began working at Costco’s store in Glenview, Illinois, in 2009. Her duties included doing “go-backs,” or reshelving items that Costco members had removed from their original locations but then decided not to purchase. Go-backs required Suppo to circulate around the large warehouse with a shopping cart to return the items to their various locations.

Suppo first encountered Thad Thompson in May or June of 2010. Referring to Suppo by her first name (which appeared on her nametag), Thompson began asking her personal questions. A few days later, they had a similar encounter. Unnerved, Suppo told a manager about the incidents.

She then observed Thompson watching her in different aisles and hiding behind displays while wearing a hat and sunglasses. Suppo reported him to her supervisor, and members of the management spoke with Thompson, asking him to avoid Suppo and not to talk to her. He agreed but continued to stalk Suppo, appearing at Costco multiple times and attempting to engage her.

Thompson tried to give Suppo his phone number, asked her out on dates, and repeatedly asked her age, where she lived, what else she did and whether she had a boyfriend; he also told her she was “pretty,” “beautiful” and “exotic,” and would bump into her with his shopping cart. On multiple occasions he tried to touch and hug her.

Suppo filed a complaint with the police (which resulted in one of her managers yelling at her and telling her to “be friendly to” Thompson). In September 2011, Suppo noticed Thompson with his phone over his head, video-recording her. She was then able to secure a Stalking No Contact Order against Thompson, which forbade him from approaching Suppo at her residence or place of employment.

Thompson was banned from the Glenview Costco and directed to shop at a different store. However, Suppo—who went on an unpaid medical leave after the video-recording incident—encountered him at a different Costco store while shopping with her father. Thompson screamed profanity at them.

Suppo was subsequently terminated when her unpaid medical leave of absence extended beyond 12 months. She filed a charge with the Equal Employment Opportunity Commission (EEOC), and the agency filed suit on her behalf. The EEOC alleged Costco discriminated against Suppo because of her sex by creating and tolerating a sexually hostile work environment.

A jury sided with Suppo and awarded her $250,000 in compensatory damages. The district court denied the EEOC’s request for back pay. Both parties appealed to the U.S. Court of Appeals, Seventh Circuit.

While Costco conceded that Suppo subjectively perceived Thompson’s conduct to be severe or pervasive, it argued that it could not be seen that way from an objective point of view.

The federal appellate panel agreed that Thompson’s attempts to solicit information from Suppo, compliments on her appearance, requests for dates and physical contact were less sexually suggestive or lewd than conduct found in other Title VII cases.

“Yet Costco’s argument implies a position inconsistent with our case law: that harassment must be overtly sexual to be actionable under Title VII,” the court said. “Actionable discrimination can take other forms, such as demeaning, ostracizing, or even terrorizing the victim because of her sex.”

A reasonable juror could find Thompson’s conduct objectively intimidating or frightening, the panel concluded.

“Suppo testified that Thompson’s presence at the Glenview Costco was ‘constant.’ He followed Suppo around the store, watching her from around corners. He stared at her from behind clothes racks, disguised in sunglasses and a hat. He monitored her movements and asked her to account for her conversations with men. He made trips to the warehouse to see Suppo rather than shop. He ‘constantly’ asked her out and ‘constantly’ tried to give her his phone number. And Thompson continued this dogged pursuit of Suppo even after [the manager] told him to stay away from her, even after he knew that Suppo had gone to the police, even after he had assured both the police and [the manager] that he would avoid her, and even though he knew that his attention scared her. … A reasonable juror could conclude that being hounded for over a year by a customer despite intervention by management, involvement of the police and knowledge that he was scaring her would be pervasively intimidating or frightening to a person ‘of average steadfastness,’” stated the panel.

The court was not persuaded by Costco’s efforts to paint Thompson as friendly but overeager or Suppo as an eggshell plaintiff. “That position is exceeding[ly] difficult to maintain in light of the state court’s conclusion that Thompson violated the Illinois Stalking No Contact Order Act,” the panel noted.

After an adversarial hearing, the state court found that Thompson had violated the statute, and it issued a no-contact order prohibiting him from coming within 200 feet of Suppo’s place of employment for a year.

“Given the state court’s judgment that Thompson engaged in a course of conduct that would ‘cause a reasonable person to fear for his or her safety … or suffer emotional distress,’ it would be quite something for us to say that a jury acted unreasonably by reaching the same conclusion,” the Seventh Circuit pointed out.

Having affirmed the verdict, the court considered the EEOC’s request for back pay. While the district court was correct that Suppo was not entitled to back pay after Costco terminated her, the remedy was available for wages lost during an unpaid leave.

The federal appellate panel remanded to the district court. If the EEOC can show that Suppo’s work environment was so hostile that she was forced to take unpaid leave, then she was entitled to back pay for that time period, the court said.

To read the opinion in Equal Employment Opportunity Commission v. Costco Wholesale Corp., click here.