$202,200 Settlement in Sex Discrimination Based on Sexual Orientation Lawsuit

Thursday, June 30, 2016

Pallet Companies, doing business as IFCO Systems, will pay $202,200 and provide significant equitable relief to settle one of EEOC's first lawsuits alleging sex discrimination based on sexual orientation.

EEOC charged that a lesbian employee at IFCO's Baltimore facility was repeatedly 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. EEOC charged that the supervisor also made sexually suggestive gestures to her. IFCO retaliated against the female employee by firing her just days after she complained to management and called the employee hotline to report the harassment, according to the suit.

Title VII of the Civil Rights Act of 1964 prohibits discrimination because of sex and retaliation. As the federal law enforcement agency charged with interpreting and enforcing Title VII, EEOC has concluded that harassment and other discrimination because of sexual orientation is prohibited sex discrimination. EEOC filed suit in U.S. Court for the District of Maryland, Baltimore Division (EEOC v. Pallet Companies, d/b/a IFCO, Civil Action No. Case 1:16-cv-00595-CCB). On the same day, EEOC also filed an unrelated suit against Scott Medical Health Center in U.S. District Court for the Western District of Pennsylvania (Case 2:16-cv-00225-CB), alleging discrimination based on sexual orientation. EEOC filed both lawsuits after first attempting to reach a voluntary pre-litigation settlement through its conciliation process.

The two-year consent decree requires IFCO to pay $182,200 in monetary relief to the female employee and donate $20,000 to the Human Rights Campaign Foundation to support the Human Rights Campaign's Workplace Equality Program. The decree enjoins IFCO from engaging in sex discrimination or retaliation in the future. The company will retain an expert on sexual orientation, gender identity, and transgender training to assist in developing a training program for IFCO's top managers, supervisors and employees on LGBT workplace issues. IFCO will also distribute its equal employment opportunity policies and toll-free employee hotline number and Web address to all employees in its north region. The company will provide the female employee with a letter of reference. Finally, IFCO will also post a notice about the settlement and report to EEOC on its compliance with the decree, including how it handled any complaints of sexual orientation discrimination.

Addressing emerging and developing issues, especially coverage of lesbian, gay, bisexual and transgender individuals under Title VII's sex discrimination provisions, is one of six national priorities identified by EEOC's Strategic Enforcement Plan.

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