Customer-Caused Race Discrimination/Hostile Work Environment Claims Survive Summary Judgment

In Creacy v. BCBG Max Azria Grp., LLC, No. 14 CIV. 10008 (ER), 2017 WL 1216580 (S.D.N.Y. Mar. 31, 2017), the court denied defendant’s motion for summary judgment as to her hostile work environment and constructive discharge claims. In sum, plaintiff asserts that defendant subjected her to a racially hostile work environment, retaliated against her, and compelled her to quie.

What makes this case interesting is that the harasser was not plaintiff’s boss or even a co-worker, but rather a customer.

First the court addressed plaintiff’s hostile work environment claim.

In considering whether the customer’s comments – which included the phrase “you people” – were racially motivated, the court held:

Courts in [the Second] Circuit have held that a jury can reasonably interpret “you people” or “your kind” as having a racial meaning. See Hill v. City of N.Y., 136 F. Supp. 3d 304, 337 (E.D.N.Y. 2015) (listing cases). The Court finds that there is enough evidence that a jury may construe the comments Peng made to Creacy, including references to “you people” as referring to her race, as opposed to her role as a salesperson. See, e.g., Winston v. Verizon Servs. Corp., 633 F. Supp. 2d 42, 53 (S.D.N.Y. 2009) (where Defendant argued that the use of the phrase “you people” is ambiguous and not necessarily evidence of discrimination, the court held that questions as to the state of mind and discriminatory intent are for the jury); Battle v. Carroll, No. 11 Civ. 624S (WMS), 2014 WL 1679422, at *4 (W.D.N.Y. Apr. 28, 2014) (where defendants posited that “you people” referred to the housekeeping staff, not black people, the court held that the question of whether the term reflected racial bias was a matter for the jury). It is the fact-finder’s prerogative to reach its own conclusion whether these statements reflected racial bias.

Next, as to the issue of whether the customer’s conduct was sufficiently “severe” or “pervasive” to make out a hostile work environment claim, the court explained:

The Court does not reiterate all the factual circumstances giving rise to Creacy’s hostile work environment claim, but the allegations can be summarized as follows: on two occasions, within approximately two weeks, Peng verbally assaulted—and on one occasion physically assaulted—Creacy while she was working. Peng repeatedly referred to Creacy by language such as “you people” and “your kind.” Peng’s comments also included language that was physically threatening, such as “Oh you’re afraid? You feel scared? You should be.” There is no factual dispute that Peng’s conduct interfered with Creacy’s work—causing her, among other things, to retreat to a stockroom while the customer finished shopping. BCBG argues that these circumstances are not severe or pervasive enough because it only happened twice. Creacy argues that, when viewed collectively, the quantity and severity of the conduct and comments are sufficient to be deemed pervasive and damaging to her work environment.

Examining the circumstances in their totality, and weighing the nature, severity, and frequency of the conduct Creacy encountered, the Court finds that “[r]easonable jurors may well disagree about whether these incidents would negatively alter the working conditions of a reasonable employee” and therefore “the potential for such disagreement renders summary judgment inappropriate.” …

Drawing inferences in favor of Creacy, while it is true that she only interacted with Peng on two occasions, the encounters were severe and included physically threatening language. Indeed, Creacy even thought it was necessary to file a police report regarding the incidents. Thus, a reasonable jury may find that the severity of the conduct at issue, if proven, would be sufficient to establish a hostile work environment. Therefore, the Court DENIES Defendant’s motion for summary judgment on the hostile work environment claims.

As to the issue of imputing liability to defendant, the court rejected defendant’s argument “that its lack of control over Peng and over L&T’s response to the alleged incident precludes liability against BCBG as an employer.”

The court cited its recent endorsement of the EEOC’s rule for imputing employer liability for harassment by non-employees:

As is true for co-worker, non-supervisory harassment claims, in third-party harassment cases, the employer will be held liable only for its own negligence, and the plaintiff must demonstrate that the employer failed to provide a reasonable avenue for complaint or that it knew, or in the exercise of reasonable care should have known, about the harassment yet failed to take appropriate remedial action.

The evidence “raises a triable issue of fact as to whether BCBG took proper corrective action and acquiesced in creating a hostile work environment for Creacy.”

As to plaintiff’s constructive discharge claim, the court stated the law as follows:

Generally, to assert a constructive discharge claim, a plaintiff must show that “rather than discharging him directly, [his employer] intentionally create[d] a work atmosphere so intolerable that he [was] forced to quit involuntarily.” Pryor v. Jaffe & Asher, LLP, 992 F. Supp. 2d 252, 261 (S.D.N.Y. 2014) (quoting Terry, 336 F.3d at 151–152). Work conditions are “intolerable” if they are so difficult or unpleasant that a reasonable person in the employee’s shoes would have felt compelled to resign.

In denying defendant’s motion for summary judgment on this claim, plaintiff’s constructive discharge claim, noting that the existence of “evidence that BCBG deliberately failed to take actions calculated to remediate the workplace conditions to which Creacy was subjected, including failing to ban Peng from the store and failing to investigate the incidents as required by its policy.”

The court also denied defendant’s motion for summary judgment on plaintiff’s public accommodation discrimination claim, as well as her request for punitive damages.

As to the latter, the court noted that there was “sufficient evidence for the jury to consider whether BCBG acted in the face of a perceived risk that its failure to investigate Creacy’s complaints of racial harassment violated federal law” and that if defendant – which has hundreds of stores worldwide – “fail to properly investigate Creacy’s complaints, it was a sophisticated corporation with anti-harassment and discrimination policies in place such that it understood that its actions could run the risk of violating federal law.”