Employer May Be Liable for Jilted Co-worker’s Actions

Taking a new approach to harassment claims, the First Circuit Court of Appeals held that an employer may be liable for a jilted co-worker’s actions resulting in an employee’s termination. Velazquez-Perez v. Developers Diversified Realty Corp. (1st Cir. 2014).

Antonio Velazquez was a general manager. He worked closely with Human Resources Manager, Rosa Martinez. Velazquez and Martinez flirted occasionally, but when Martinez pressed for a romantic relationship, Velazquez rejected her. Afterwards, while on a business trip, Velazquez testified that he had to contact hotel security because Martinez blocked his door and tried to force her way into his room. An exchange of angry emails followed including one from Martinez to Velazquez saying, “I don’t have to take revenge on anyone; if somebody knows your professional weaknesses, that person is me.” Martinez also reportedly told Velazquez if he did not engage in a romantic relationship with her, “I will manage to undercut you at work and get you fired.”

Velazquez complained to on-site managers, Rolando Albino and Francis Gonzalez. Albino allegedly encouraged Velazquez to make up with Martinez because she was “going to get you terminated.” In the meantime, Martinez began discussing Velazquez’s performance deficiencies with Albino and Gonzalez. Albino determined Velazquez should be disciplined or terminated, while Gonzalez favored putting him on a performance improvement plan. Martinez told Albino and Gonzalez that she felt she needed to report Velazquez’s performance issues to senior company officials in Ohio. Before doing so, Martinez made another advance toward Velazquez, which he again rejected. That night, Martinez emailed Ohio and the company terminated Velazquez four days later.

Velazquez sued for quid pro quo sexual harassment. Normally, to establish quid pro quo harassment an employee must show the harasser is a supervisor. The First Circuit ruled that Martinez did not meet the test for “supervisor” from the U.S. Supreme Court’s Vance v. Ball State University decision because she did not have authority to discipline him on her own. However, the court held that the company could still be liable applying the negligence test normally used for co-worker and third party harassment claims to his quid pro quo claim. Under the negligence standard, Velazquez needed to show that the company knew or should have known of Martinez’s conduct and failed to take immediate and appropriate corrective action. The court denied summary judgment and ruled Velazquez’s case could go on to a jury.

This is the first time a court has applied the negligence standard in a quid pro quo harassment case. The First Circuit covers Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island. If other circuits take similar approach, this would expand potential liability for employers. The lesson from this case is that where management has reason to know someone involved in an employment decision may be motivated by bias, it should conduct an independent investigation prior to making its ultimate decision.