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Legal Report October 2012


HOSTILE WORK ENVIRONMENT. A federal appeals court has ruled that evidence of repeated racial slurs and inappropriate jokes over the course of a year is sufficient to support a hostile-work-environment claim.

Teresa Hernandez, who is of Mexican origin, began working at Valley View Hospital in the food services department in 2001. In November 2004, Marc Lillis began supervising Hernandez and, in March 2005, Nicholas Stillahn came on board as an additional supervisor. During the time Lillis and Stillahn supervised her, Hernandez was subjected to racially derogatory jokes and offensive comments about her heritage.

These incidents included off-color jokes as well as racially motivated comments such as: “Put ice in the cups. You’re not in Mexico anymore.” Each time Stillahn saw a Latino with a drink, he asked whether that person had paid for it. Stillahn did not ask this question of non-Latino workers. Similarly, after a person with the last name of “Hernandez” was accused of murder, Lillis repeatedly asked Hernandez if this was her son or her brother. He asked this question at least five times, in front of other workers. Hernandez repeatedly reported the incidents both to her supervisors and to human resources, but no action was taken.

On July 20, 2007, Stillahn yelled at Hernandez that her work was subpar. Screaming curses, Stillahn told her that the cafeteria looked terrible. Hernandez responded: “Well, maybe I’m not white enough.” Stillahn became even more upset and began kicking a door. Lillis asked Hernandez to repeat what she had said. After confirming her comments, Lillis told Hernandez to go home.

Later that day, Nikki Norton, a human resource coordinator at Valley View, contacted Hernandez and told her that she had been suspended for her comment. Hernandez asked Norton why she was being suspended when other employees, including Lillis and Stillahn regularly made offensive comments and racist jokes.

The same day, Norton sent an e-mail to Daniel Biggs, the hospital’s director of human resources saying that Lillis and Stillahn wanted to fire Hernandez because they “didn’t want that type of person working here.” Norton then advised Lillis that before firing Hernandez, he had to “get his ducks in a row” and find further documentation of performance issues. Norton said she would pull Hernandez’s personnel file to see what other performance issues she could find.

On July 30, 2007, Hernandez met with Lillis and Biggs to request a transfer out of food services. She said she no longer felt safe after Stillahn’s outburst. Biggs denied the request but offered her paid leave until October 15, 2007. Hernandez accepted.

Biggs met with Hernandez on October 12, 2007, to go over performance concerns that had been discussed with Hernandez but “never formally documented.” Hernandez again requested a transfer. Biggs again denied the request. When Hernandez failed to return to work, she was fired.

Hernandez filed a lawsuit against Valley View for a hostile work environment based on racial and national origin discrimination. Valley View requested summary judgment—a hearing based on the facts of a case without a trial. The district court granted Valley View’s request, finding Hernandez’s evidence insufficient and characterizing the case as “a handful of racially insensitive jokes and comments over a period of more than three years.” The court also noted that Hernandez failed to prove that many of the jokes, such as questions about paying for drinks, were directed at Hernandez personally. Such evidence, the court ruled, would not support a hostile-work-environment claim. Hernandez appealed.

The appeals court overturned the lower court’s decision, finding that Hernandez offered sufficient evidence of a hostile work environment to present to a jury.

In analyzing the case, the court clarified that the law “does not establish a general civility code for the workplace,” and that “run-of-the-mill boorish, juvenile, or annoying behavior that is not uncommon in American workplaces is not the stuff of…a hostile work environment claim.” To prevail on a hostile-work-environment claim, the plaintiff must show that “the workplace is permeated with discriminatory intimidation, ridicule, and insult that are sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.” The court found that the Hernandez case met this standard.

The appeals court found that Hernandez experienced more than a “handful” of derogatory jokes and comments. During the 14 months Hernandez was supervised by Lillis and Stillahn, she experienced at least a dozen racially insensitive and offensive comments. And though the court pointed out that “pervasive” cannot be proved or disproved by the number of incidents, the high number in this case points to a hostile work environment.

The court also addressed the defendant’s claim that many of the comments were not directed at Hernandez. The court found this argument unpersuasive, finding that “derogatory comments need not be directed at or intended to be received by the victim to be evidence of a hostile work environment.” Evidence of harassment of other minorities in the workplace can be considered in a plaintiff’s claim, noted the court. (Hernandez v. Valley View Hospital Association, U.S. Court of Appeals for the Tenth Circuit, No. 11-1244, 2012)

WHISTLEBLOWERS. A federal judge has ruled that the whistleblower provisions of the Dodd-Frank Act that prohibit retaliation against employees do not apply to workers outside of the United States.

In the case, Khaled Asadi worked for General Electric in Iraq. Asadi’s job was to negotiate with the Iraqi government to obtain energy service contracts. Asadi became worried when he learned that GE had hired a local woman with ties to the Iraqi electricity minister to broker deals as well. Asadi, concerned that GE was violating U.S. law, both under Dodd-Frank and under the Foreign Corrupt Practices Act, reported his suspicions to his supervisor and to the company ombudsperson.

Shortly after reporting his concerns, Asadi received a review that he called “surprisingly negative.” Asadi was then transferred to a lesser position with little responsibility. GE then began severance negotiations with Asadi before “abruptly” firing him. GE notified Asadi that as a U.S. company, it was allowed to fire Asadi as an at-will employee, and he was told that he would be terminated in the United States. Asadi filed a lawsuit against GE, claiming that he was fired illegally, as retaliation for his complaints of corruption under the Dodd-Frank Act.

The U.S. District Court for the Southern District of Texas ruled that Asadi was not employed in the United States. Therefore, determined the court, he could not pursue a lawsuit for retaliation under U.S. law. (Asadi v. General Electric, U.S. District Court for the Southern District of Texas, No. 4:12-345, 2012)


ECONOMIC ESPIONAGE. A bill (H.R. 6029) that would increase penalties for economic espionage has been approved by the House Judiciary Committee. To proceed, the bill must now be taken up by the full House of Representatives.

The bill would also require that the U.S Sentencing Commission consider a tiered system to address different types of espionage. The sentencing commission would determine whether to apply a tiered system to cases where a person steals a trade secret and transmits or attempts to transmit the trade secret outside of the United States. Under this system, a further sentencing enhancement would apply to those who succeed in providing secrets to a foreign government.

BACKGROUND SCREENING. A bill (H.R. 6220) introduced by Rep. Hansen Clarke (D-MI) would prohibit employers from asking about or checking an applicant’s criminal record until a conditional offer of employment has been made. The “Ban the Box” bill is so-named because it would even prohibit the employer from asking the applicant to mark a box on the application form indicating whether he
or she has a criminal record.

Employers may check an applicant’s criminal record only if the job duties in question “may involve an unreasonable risk to the safety of specific individuals or to the general public.” The jobs that fit into this category, as well as what factors constitute an “unreasonable risk,” would be determined via the rulemaking process.

Opponents of the bill point out that employers are often found liable when employees commit crimes. This bill would hamper an employer’s ability to assess whether a prospective employee poses a danger.

In explaining why the bill is necessary, Rep. Clarke argued: “Current conviction record screening practices for employment… lead to many applicants being rejected in the first round of the hiring process even if they have only committed a misdemeanor unrelated to the job.”

TRANSPORTATION. A bill (H.R. 3173) that would alter the application and distribution process for the Transportation Worker Identification Credential (TWIC) has been approved by the House of Representatives and is now pending in the Senate Commerce, Science, and Transportation Committee.

Currently, transportation workers must make at least two trips to a TWIC enrollment center every five years to apply for and then pick up and activate their cards. Sometimes workers travel hundreds of miles to the nearest enrollment center.
Under H.R. 3173, the Department of Homeland Security (DHS) would be required to revise the application process to require that transportation workers make only one trip to an enrollment center to obtain their cards.


MEDICAL MARIJUANA. A new law (formerly H.B. 5389) makes medical marijuana legal in Connecticut. The law requires that qualified users register with the state and have a written certification from a physician.

Under the law, employers may not refuse to hire a person or discharge, penalize, or threaten them because of their medical marijuana status. However, employers may prohibit the use of medical marijuana during work hours and may discipline employees for being under the influence of marijuana at work.

BACKGROUND SCREENING. A new Indiana law (formerly H.B. 1033) restricts the type of information an employer may receive when conducting a background check on an employee. An employer may not ask a prospective employee about restricted or sealed criminal records. Courts will be barred from disclosing a person’s record if the case was not prosecuted or the action against the person was dismissed; if a guilty verdict is subsequently vacated, or if the person was convicted and any penalty or sentence was completed more than five years prior to the check.

Similarly, companies providing criminal history checks may no longer include certain information in their reports to clients. They may not report on an infraction, arrest, or charge that did not result in conviction; a record that has been expunged; or a record that the criminal background provider knows is inaccurate. The law provides for fines of up to

$1,000 against employers who ask about sealed records. Criminal-history-check providers who report information unlawfully may face civil lawsuits from wronged individuals that could result in penalties of $1,000 for a first violation and $5,000 for subsequent violations.

This column should not be construed as legal or legislative advice.