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Reminder to Employers: Mishandling Complaints of Discrimination Can Be As Costly As Discrimination Itself

Posted: September 27, 2009 Filed under: Case Law, Employment Law

A divided panel of the United States Court of Appeals for the Ninth Circuit recently affirmed a jury verdict in favor of Muslim man of Moroccan national origin who accused his employer, internet company Go Daddy Software, Inc., of discrimination and retaliation. The jury concluded Go Daddy did not discriminate against the man but that it did retaliate against him after he complained of activity he reasonably believed was discriminatory.

The decision affirmed a trial court ruling upholding the verdict, even though the trial court reduced the amount of the verdict and declined to order that the employee be reinstated to a job at Go Daddy. The Ninth Circuit’s decision provides an opportunity to remind employers that mishandling employee complaints of discrimination can be as costly as discrimination itself.

The outcome in EEOC v. Go Daddy Software, Inc. can largely be attributed to technical legal rules that prevent parties from raising arguments for the first time on appeal and that prohibit appellate judges from making credibility determinations and weighing evidence.

The Ninth Circuit recognized the general rule that offhand comments, and isolated incidents, “unless extremely serious,” do not constitute discrimination, and it further recognized that a complaint about an isolated incident is not protected under anti-retaliation laws unless a “reasonable person” would believe that the isolated incident violated anti-discrimination laws. Determining what a reasonable person would believe requires “[l]ooking at all the circumstances, including the frequency of the discriminatory conduct[] [and] its severity.”

“All the circumstances,” the Ninth Circuit said, includes consideration of all hostile comments, including comments an employee may not have reported.

[I]f a person has been subjected to more than one comment, and if those comments, taken together, would be considered by a reasonable person to violate Title VII, that person need not complain specifically about all of the comments to which he or she has been subjected. Unreported comments, in other words, are relevant to the inquiry concerning the reasonableness of the belief that a violation has occurred. In such circumstances, a complaint about one or more of these comments is protected behavior.

Because the terminated employee had complained about discriminatory conduct only days before his termination, a “jury reasonably could have found that both Mr. Franklin and Ms. Slezak were aware of the protected activity [the complaint] and that their termination of Mr. Bouamama was in response to that activity.” Thus, Go Daddy ended up paying more than $200,000 to the former employee, as well as the substantial attorneys’ fees it incurred in defending the lawsuit. The trial court also has the authority to order Go Daddy to pay the attorneys’ fees of its former employee.

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