EEOC reaches historic $200K settlement on its first sexual orientation bias lawsuit

In early March, the U.S. Equal Employment Opportunity Commission filed its first lawsuits, in which it alleged that employer had violated Title VII by discriminating based on sexual orientation.

Late last week, one of those lawsuits settled.

Dani Kass from Law360 reports here that the EEOC and Pallet Cos., which does business as IFCO Systems NA, entered into a Consent Decree (here) to end the lawsuit.

Here’s more on the lawsuit from the EEOC press release:

In its suit against IFCO Systems, EEOC charged that a lesbian employee was harassed by her supervisor because of her sexual orientation. Her supervisor made numerous comments to her regarding her sexual orientation and appearance, such as “I want to turn you back into a woman” and “You would look good in a dress,” according to the suit. At one point, the supervisor blew a kiss at her and circled his tongue at her in a suggestive manner, EEOC alleged. The employee complained to management and called the employee hotline about the harassment. IFCO fired the female employee just a few days later in retaliation for making the complaints, EEOC charged.

As part of the Consent Decree, the employer did not admit liability and contended that discrimination or harassment based on sexual orientation is against both its values and its written employment policies. However, the employer will pay  $7,200 in back pay with interest, $175,000 in nonpecuniary compensatory damages, and make two $10,000 contributions to the Human Rights Campaign Foundation to support, specifically, the Human Rights Campaign Workplace Equality Program.

Takeaways for employers:

Does sexual-orientation discrimination equal sex discrimination under federal law? We’ll see. This case resolved before the court could weigh in. However, the EEOC remains vigilant. Lawsuits like these are just the first wave of EEOC actions against employers whom the EEOC believes has discriminated against employees based on LGBT status.


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