In Palermo v. Luxor Staffing, Inc., No. 3:25-CV-00499, 2026 WL 300771 (M.D. Tenn. Feb. 4, 2026), the court, inter alia, denied defendant’s motion to dismiss plaintiff’s sex-based hostile work environment claim under Title VII of the Civil Rights Act of 1964.
The court summarized the following allegations from plaintiff’s complaint:
19. The harassment was both sexual and racial in nature and included both physical assault and verbal harassment.
20. Mr. Mikhail required that Ms. Palermo give him a hug every morning and tried to kiss her on her mouth multiple times.
21. When Mr. Mikhail would forcefully and unwelcomingly hug Ms. Palermo, she could feel his erect penis against her body and he would say things like, “just let me do it.”
22. Mr. Mikhail also made sexual comments to Ms. Palermo such as, “I need to fuck every day” and frequently commented on her “big ass.”
23. Additionally, Mr. Mikhail made racist comments to Ms. Palermo, including “why [she] speaks to him like a n*gger.”
24. After Ms. Palermo denied Mr. Mikhail’s sexual advancements, Mr. Mikhail reduced her wages to $25 per hour. Luxor agreed to this reduction.
25. Luxor was aware of this pay reduction and, upon information and belief, did not inquire into why her pay was reduced drastically.
26. Mr. Mikhail promised to pay Ms. Palermo, directly, “bonuses” on her work, outside of the payroll paid by Luxor. He, in fact, never paid her any bonuses.
27. Instead, he increased his scrutiny over Ms. Palermo’s work, micromanaged her, and increased his hostile comments to her. When she objected, he told her that he was decreasing her wages again to $17 per hour.
From the decision:
[To make out such a claim, Plaintiff must] show that (1) she was subject to unwelcome harassment based on her particular protected status, (2) the harassment created a hostile work environment, and (3) Defendant is liable. Importantly, although Plaintiff will eventually be required to prove all of the elements required to prevail under a hostile work environment theory, at the present (motion-to-dismiss) stage, Plaintiff need only satisfy the plausibility standard governing a motion to dismiss, i.e., show that it is plausible that these elements all exist. See Austin v. Alexander, 439 F. Supp. 3d 1019, 1024 (M.D. Tenn. 2020).
In its Memorandum, Defendant appears to focus solely on the third element (i.e., employer liability), arguing that Plaintiff failed to make “any allegations that [Defendant] had knowledge of the facts or circumstances giving rise to the hostile work environment until after Plaintiff reported it to [Defendant].” (Doc. No. 11 at ¶ 13). Importantly, aside from conclusively stating that Plaintiff’s allegations are “insufficient to establish the elements necessary for a prima facie case of sexual harassment/hostile work environment,” Defendant fails to directly address or challenge the sufficiency of Plaintiff’s allegations with respect to the first two elements. (Id. at ¶ 16). Therefore, the Court finds it appropriate to consider the first two elements undisputedly met for purposes of the Motion. However, even if Defendant had provided an actual argument justifying review of the first two elements, the Court nonetheless finds alternatively that Plaintiff has alleged factual matter plausibly suggesting the existence of these elements, and the Court also finds that Plaintiff has alleged factual matter plausibly suggesting the existence of the third element as well.
Regarding the first of the three elements of a hostile-work-environment claim, the Court finds that Plaintiff plausibly pled facts illustrating such harassment. Plaintiff alleged that she is a member of a protected class based on both her sex and race, stating that she is “a mixed race, African American and Latina, Female.” (Doc. No. 1 at ¶¶ 8 and 44). Plaintiff went on to outline the sexual and racial harassment she suffered, including but not limited to Mr. Mikhail requiring Plaintiff to hug him, pushing his erect penis against Plaintiff, making sexual remarks about Plaintiff’s body composition, and using a derogatory racial slur when speaking and referring to Plaintiff. (Doc. No. 1 at ¶¶ 18-23 and 45-47). Further, the Court is able to draw reasonable inferences based on the factual matter alleged in Plaintiff’s Complaint that the harassment was based on Plaintiff being a part of one or more protected classes22 (i.e., a female person falling within a particular racial class) because the harassment outlined was sexually and racially charged language and conduct.
After establishing harassment based on one’s protected status, “[a] plaintiff seeking to proceed on a hostile work environment theory must next prove [as the second element] that the environment at the workplace was hostile.” Smith v. Rock-Tenn Servs., 813 F.3d 298, 309 (6th Cir. 2016). A workplace is deemed hostile when “the workplace is permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.” Harris v. Forklift Sys., 510 U.S. 17, 21 (1993) (internal citations omitted). “To succeed, a plaintiff must show that the work environment was both subjectively and objectively hostile; in other words, that the plaintiff not only perceived the work environment as hostile, but that a reasonable person would have found it hostile or abusive as well.” Smith, 813 F.3d at 309. “In determining whether the alleged harassment is sufficiently severe or pervasive to constitute a hostile work environment …, it is well-established that the court must consider the totality of circumstances.”23 Williams v. GMC, 187 F.3d 553, 562 (6th Cir. 1999). So doing involves analyzing “the frequency of the discriminatory conduct; its severity; whether it [was] physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interfere[d] with an employee’s performance.” Randolph v. Ohio Dep’t of Youth Servs., 453 F.3d 724, 733 (6th Cir. 2006) (quoting Harris, 510 U.S. at 23).
Defendant does nothing to specifically dispute that the work environment at Pyramids would qualify as a hostile work environment. And the Court finds that Plaintiff plausibly pled facts showing that the work environment was both subjectively and objectively offensive.
In the present case, there is little doubt Plaintiff subjectively viewed the work environment as being hostile. Not only did Plaintiff report Mr. Mikhail’s inappropriate behavior to her manager, but Plaintiff specifically alleged in her Complaint that when she reported Mr. Mikhail’s inappropriate behavior she indicated “how uncomfortable Mr. Mikhail made her feel and how upset she was at the outrageous treatment.” (Doc. No. 1 at ¶ 28). Therefore, the inquiry turns on whether Plaintiff plausibly pled that the work environment was objectively hostile. Ultimately, drawing all reasonable inferences in favor of Plaintiff, the Court finds that Plaintiff plausibly alleged facts plausibly suggesting a hostile work environment. The actions and comments alleged cannot be classified as a “mere offensive utterance” in light of the frequency and severity of the conduct. Instead, a reasonable person could conclude that Mr. Mikhail’s comments and actions— including Mr. Mikhail’s sexual remarks about his sex drive to Plaintiff, his sexual remarks about Plaintiff’s body, his use of racial slurs when referring to Plaintiff, his requirement that Plaintiff hug him every morning, his erect penis rubbing on Plaintiff, etc.—were “sufficiently severe or pervasive to alter the conditions of [Plaintiff]’s employment and create an abusive working environment.”
(Cleaned up.)
The court proceeded to find that plaintiff plausibly alleged sufficient facts to demonstrate employer liability, under the standards applicable to the situation where the alleged harasser is a supervisor, as well as a co-worker.