By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo
Duane Morris Takeaways: On May 9, 2024, a Seventh Circuit panel held that the Equal Employment Opportunity Commission (“EEOC”) failed to prove the existence of a hostile work environment based on racial discrimination in EEOC v. Village At Hamilton Pointe LLC, No. 22-2806, 2024 WL 2074326 (7th Cir. May 9, 2024). While the EEOC is likely to continue to bring such claims, especially since such cases constitute one of its prime areas of focus, the decision in EEOC v. Village At Hamilton Pointe LLC further illuminates the high burden to prevailing on a hostile work environment claim.
Case Background
The EEOC brought claims on behalf of fifty-two African-American employees who were employed by the Village at Hamilton Pointe, LLC (“Hamilton Pointe”) and an affiliated entity. Both entities operate a “long-term care facility” that provides “nursing, rehabilitation, and assisted living services.” Id. at *1. Although specific allegations differed as to each claimant, the EEOC generally alleged the existence of a pervasive or severe hostile work environment at Hamilton Pointe.
In support of its claims, the EEOC argued that Hamilton Pointe had instituted a racial preference policy. The EEOC introduced evidence that African-American employees were called “racial slurs on multiple occasions” by residents. The EEOC alleged that rather than discouraging such conduct, Hamilton Pointe took steps to facilitate the discrimination. For example, the EEOC introduced evidence into the record that certain shifts would contain instructions, such as “no blacks allowed,” when scheduling employees.
On September 20, 2020, the district court entered a partial grant of summary judgment in favor of Hamilton Pointe on fifteen employees’ claims, and held as a matter of law that there was no “severe or pervasive harassment because of [the employees’] race.” Id.. The EEOC then took another class of plaintiffs’ claims to trial, did not prevail as to the majority of this group of claimants, and only one was awarded damages by the jury. Id. at *1. The EEOC’s appeal of the partial summary judgment grant ensued and led to this decision by the Seventh Circuit.
Seventh Circuit Ruling
In an opinion of 82 pages, Judge Kenneth Ripple, writing for the Seventh Circuit panel, summarized the state of hostile work environment law and concluded that the EEOC “must show that the alleged harassment was so severe or pervasive that it altered the conditions of his employment.” Id. at *3. And, under the circumstances presented by the case, the Seventh Circuit concluded that “the evidence of record does not support, under established principles of law, a case of racial harassment that was so severe or pervasive as to alter the conditions of employment for any of these claimants.” Id. at *28.
To reach its conclusion, the Seventh Circuit needed to distinguish its previous decision in Chaney v. Plainfield from claimant’s allegations. 612 F. 3d 908,915 (7th Cir. 2010). In Chaney, it held that an employer’s policy of honoring residents’ racial preferences in assigning caregivers was grounds for a hostile work environment claim. Notably, however, the employer in Chaney “did not deny that it maintained a policy of fulfilling patients’ racial preferences.” Id. at *7. The Seventh Circuit then concluded that this case “therefore must be distinguished from Chaney,” for a variety of fact-specific reasons each unique to each claimant.
Although the Seventh Circuit did not explicitly overrule Chaney, it took stock of three decisions from another federal circuit reaching the opposite conclusion. 246 F. 3d 758, 759 (5th Cir. 2001). Specifically, it noted the Fifth Circuit’s decision in Cain v. Blackwell that affirmed a grant of summary judgment on a hostile work environment claims based on sexual harassment directed at a home caregiver by a patient. Similar rulings were reached in EEOC v. Nexion Health at Broadway, Inc., 199 F. App’x 351, 352 (5th Cir. 2006), and Gardner v. CLC of Pascagoula, LLC, 915 F. 3d 320, 326 (5th Cir. 2019).
The Seventh Circuit explained that the Fifth Circuit case law does not create a categorical bar on hostile work environment claims arising from harassment by patients, but rather, “whether a reasonable health care worker in such an environment would consider the patient’s behavior to have made the work hostile or abrasive, taking into consideration the special circumstances necessarily involved with caring for patients with these afflictions.” Village At Hamilton Pointe LLC, 2024 WL 2074326, at *7-8. Although not explicitly stated, the Seventh Circuit seemed to favorably endorse the Fifth Circuit’s reasoning going forward. In light of these background principles, the Seventh Circuit did not find that the claims here (such as the use of racial epithets and racial preferences by patients) rose to the level of severe or pervasive conduct to warrant hostile work environment liability. Accordingly, it affirmed the district court’s grant of summary judgment.
Implications For Employers
All charges of racial discrimination are matters that employers should take seriously.
Moreover, the EEOC can be a relentless opponent and we do not expect this opinion to deter the agency from pursuing similar claims in the future. Indeed, this case is only one example of the EEOC pushing for favorable results in federal circuit courts across the country. In this case, for example, the agency litigated its claims for seven years prior to the Seventh Circuit’s affirmance.
For today, however, the EEOC’s efforts in the Seventh Circuit were stalled. Corporate counsel should take note of these developments and continue to monitor EEOC activity in this space for future updates.