No fantasyland for employee: sexual harassment at the porno store

A lower court judge found a pornographic video store failed to deal appropriately with a sexually hostile work environment and retaliated against an employee who complained about the situation. The Oregon Court of Appeals' subsequent decision in the case reminds employers it's hard to reverse a loss at trial unless there's been a legal mistake and clarifies the rules for recovering attorneys' fees.

Facts

Wilford Bearden, who is openly gay, worked as a clerk at a pornographic video store that does business as Fantasyland II. Over the course of a few months, another clerk brought in copies of Busted, a magazine that prints mug shots of arrestees. The clerks wrote offensive sexual remarks in the magazines, leading the clerk who brought the magazines to the store to complain to "Frank," a clerk who worked the day shift and had trained Bearden. However, another person, "Mansur" was the actual manager of the store.

Frank responded to the clerk's complaint by stating, " Yeah, they're idiots." When Bearden reiterated his coworker's complaints, Frank responded, "Boys will be boys." Eventually, the magazines were removed from the store.

Busted to other clerks' "teams." They assigned a man who had been arrested for murder and sexual abuse of a corpse to Bearden's team. He told them not to use his name in that way and let them know that he was offended and assumed the assignment had a sexual connotation.

After the magazines were removed, another clerk drew a very offensive cartoon about Bearden. When Bearden found the cartoon, he showed it to Frank and told her, "You know, this is sexual harassment. Something's got to be done about it." He felt the cartoon targeted him because he is gay. Frank told Bearden to talk to Mansur.

The next morning, Mansur contacted the offending employee and "read [him] the riot act," remarking that if Bearden pursued legal action for sexual harassment, the clerk could lose his job. Bearden hadn't yet spoken with Mansur. A few days later, the clerk who had drawn the cartoon delivered a letter of apology to Bearden and told him what Mansur had said in the call. Bearden thanked the employee for the apology, and they shook hands and agreed to start fresh.

When Bearden went to work the next Monday, he was told that someone else would work his shift, and he was sent home. He tried to contact Mansur but was unsuccessful. On Tuesday, Mansur sent him a message asking him to come to the store, where she terminated him. He was immediately replaced with a new clerk.

Lawsuit and appeal

Bearden sued Fantasyland, alleging he was subjected to sexual harassment based on his sex and sexual orientation and retaliation for his complaints about the harassment. The case was tried before a judge rather than a jury. The judge ruled in favor of Bearden on all claims. Fantasyland appealed to the Oregon Court of Appeals, arguing the case should have been dismissed when it asked the court to find there was insufficient evidence to support any of the claims.

It's important to note that once a case is tried, the appeals court's standard of review for insufficient evidence is very narrow. It needs to find only that there was some evidence supporting the verdict in favor of the party that prevailed at trial. In doing so, the court views all the evidence and any inferences that can reasonably be drawn from it in favor of the prevailing party.

The appeals court first reviewed Fantasyland's contention that there was no evidence Mansur knew Bearden had engaged in protected activity when she terminated his employment. That argument failed because the evidence indicated that shortly after Bearden complained about sexual harassment to Frank, Mansur called the offending employee and told him he could lose his job. Accordingly, the trial judge could infer that Frank had informed Mansur that Bearden had complained about harassment before she terminated his employment.

Fantasyland also argued the trial judge's verdict should be reversed because there was no evidence the harassment was based on Bearden's sexual orientation, the evidence didn't support a finding that the clerks' conduct would be objectively sexually offensive to a gay man, the sexual harassment wasn't severe or pervasive enough to create a legal claim, and there was no evidence it knew or should have known of the harassment. The court of appeals rejected all four claims, in large part because of the narrow standard of review.

First, the court found it certainly was possible for the trial judge to find the conduct was sexual in nature and objectively offensive to a gay man. The court next determined the evidence was sufficient to allow the trial judge to determine the sexual harassment was severe and pervasive. The inappropriate conduct with the magazine occurred numerous times despite the complaints to Frank and continued unabated over three months. And at least some of the conduct was directed at Bearden.

Further, the conduct involving Busted provided a backdrop for the later cartoon, which the court of appeals described as "an explicit humiliating depiction of [Bearden's] body and bodily functions that carried an extremely offensive and personal sexual implication." The court found that based on the evidence, it could not reverse the trial judge's decision that the conduct had altered the conditions of Bearden's employment and created an abusive working environment.

The court also rejected Fantasyland's argument that the sexual harassment claim failed because it didn't know about the harassment since Bearden and the other clerk complained to Frank, who wasn't a manager. The evidence was clear, however, that Frank had informed Mansur, who was a manager, about the harassment. That should have led to an investigation and appropriate remedial action, which didn't occur.

Attorneys' fees and costs

The court then turned to Bearden's contention that his award of attorneys' fees and costs was too low. Typically, in most discrimination cases, a prevailing employee is entitled to an award of attorneys' fees and costs. Bearden claimed the trial judge had improperly reduced the fees he was awarded for working with the Bureau of Labor and Industries (BOLI) before the lawsuit was filed.

The appeals court noted that in cases in which fees may be awarded, time spent working on other matters related to the claims is recoverable. The trial judge simply rejected all the fees related to the BOLI proceeding. Because the judge hadn't evaluated how much of those fees were reasonably incurred to achieve ultimate success in the lawsuit, the matter was sent back to the lower court for review.

Similarly, Bearden complained that he received only half the fees spent by his attorneys in connection with an unsuccessful motion that the trial court grant judgment in his favor before trial. The appeals court also sent this issue back to the trial judge for a complete explanation of why the amount he requested was excessive.

Finally, Bearden complained about certain costs he wasn't awarded, such as for photocopying, telephone charges, and postage. Unfortunately for him, he asked that those amounts be awarded as "costs" under the statute when they're actually recoverable as a portion of attorneys' fees. Because he never asked the trial judge to consider them as attorneys' fees, he couldn't later ask the appeals court to do so.

Bottom line

There are a number of practical and legal lessons to be learned from this case. First, it's a good reminder that you need to have a clear policy addressing how employees should deal with harassment in the workplace.Bearden and his coworker didn't know to whom they should complain about the offensive conduct. Without a clear line of responsibility, Fantasyland failed to adequately respond to the sexual harassment claims. A clear policy also would have reminded supervisors and employees that it's unlawful to retaliate against someone who complains about harassment or discrimination.

On the legal side, this case is a reminder that once you lose at trial, it's difficult to mount a successful challenge to the sufficiency of the evidence. And although employers can infrequently recover attorneys' fees when they prevail in discrimination cases, employees can almost always recover attorneys' fees. You should keep in mind that the attorneys' fees clock is ticking throughout the process, including when the employee is working on the claim with BOLI at the agency level.

The author can be reached at ckeith@perkinscoie.com.

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