No Laughing Matter: How a Comedian’s Racist and Sexist Jokes Led to a CFO’s Retaliation Claim

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I just had to write about a federal court decision from earlier in 2024 that I finally got around to reading. It serves as a critical reminder for employers: All complaints about a hostile work environment must be taken seriously—even when they involve a comedian hired to entertain at a company event.

What Happened?

At a company retreat, a comedian hired by the CEO made several offensive jokes that included racial stereotypes and sexist remarks. The company’s CFO found the performance “incredibly offensive” and “insulting” because it degraded women and minorities. She reported her concerns to the CEO, stating that the performance created a hostile environment. Another executive also voiced discomfort over the comedian’s racist remarks.

The Company’s Defense

When the CFO was later fired, she claimed it was retaliation for her complaint. The company argued that her complaint did not qualify as “protected activity” under the law. Their reasoning? Complaining about “a single performance by an outside comedian” wasn’t enough to be legally protected.

What the Court Said

The court disagreed with the company’s argument. It ruled that the CFO’s complaint did count as protected activity because employees are legally protected when they report a hostile work environment in good faith—even if the complaint is based on a single incident. The judge noted that a reasonable person in the CFO’s position could believe the comedian’s routine was racist and sexist.

The court also emphasized that employees don’t have to prove the work environment was actually hostile. They only need a reasonable belief that it was.

Key Lessons for Employers

  1. Non-Employees Can Create a Hostile Work Environment
    A hostile work environment isn’t just created by employees. Vendors, contractors, or even entertainers at company events can contribute to it. Employers must take all complaints seriously, no matter who is involved.
  2. Off-Site Events Are Still the Employer’s Responsibility
    Whether an event is held in the office, at a retreat, or during a company-sponsored outing, employers remain responsible for ensuring a professional and respectful environment. Set clear expectations for conduct and be ready to address issues that arise.
  3. Take All Complaints Seriously
    Employees don’t need to prove actual discrimination—only that they had a reasonable belief that discrimination occurred. If an employee raises concerns about inappropriate behavior, investigate thoroughly and handle it appropriately. Dismissing complaints can lead to legal trouble.

Final Thoughts

This case is a cautionary tale for business owners and HR professionals. Even a one-time incident at a company retreat by someone whose job is to tell off-color jokes can trigger legal consequences if mishandled.

“Doing What’s Right – Not Just What’s Legal”
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