$11 Million Verdict after Company Ignores Employee Sexual Harassment Claim
California law SB1343 requires all employers with five or more employees to provide sexual harassment prevention training. Even though sexual harassment training is required in California,
recent sexual harassment cases such as Meadowcroft et al. v. Silverton Partners, Inc. et al. demonstrate the need for employers to take preventative measures. In Meadowcroft, a 2018 decision out of Los Angeles County Superior Court, a jury awarded $11 million in a sexual harassment case to two plaintiffs.
Megan Meadowcroft and Amber Brown sued Keyways Vineyard & Winery, owned and managed by Silverton Partners and Essence Business Group. Plaintiffs alleged that they had been subjected to sexual harassment by their manager, Carlos Pineiro. The jury awarded $2.5 million to each woman for lost earnings and emotional distress, and an additional $3 million each in punitive damages against Silverton and Essence.
California codified protections against workplace sexual harassment in the Fair Employment and Housing Act (FEHA). Under the FEHA, California recognizes two kinds of sexual harassment claims: quid pro quo harassment and hostile work environment. Quid pro quo harassment arises when a supervisor offers workplace benefits in exchange for sexual favors. A hostile work environment is actionable when there is either severe or pervasive harassment to a point that it changes the condition of employment. Conduct need not be both severe and pervasive, merely one or the other.
The jury found that Pineiro had sexually harassed both women under FEHA definitions. At trial, Meadowcroft recounted times when Pineiro took photos of her rear, touched her sexually while she bent to get dishes, harassed her with nighttime phone calls, and pushed her against the wall while promising to make her manager if she would have sex with him. Brown recounted times when Pineiro made sexual comments, blocked her path, threatened to harm her if she complained about his behavior, and caused her to fall down the stairs.
Reporting sexual harassment is a protected act under Government Code 12940(h) of California law. Regardless of whether the reported conduct is ultimately found to be sexual harassment, an employee who reports such conduct cannot be treated negatively as a result of their complaint.
The jury found that Keyways had retaliated against both women. Following complaints about Pineiro’s conduct, Meadowcroft was taken off the schedule and Brown’s pay was reduced. Pineiro was temporarily fired following the complaints but was rehired a few weeks later when he promised higher sales and better behavior. Brown sought a restraining order against Pineiro; while the order was pending, Brown was placed on paid administrative leave and Pineiro was permitted to work normally.
The FEHA imposes a strict liability standard on an employer for sexual harassment by a managing agent. The jury deemed Pineiro a managing agent of the company under California Civil Code § 4158, meaning that he had significant ability to impact business decisions that would ultimately determine company policy. This opened the door to punitive damages against Silverton and Essence as joint owners of Keyways, and the jury awarded $3 million to each plaintiff.
On appeal, the appellate court upheld the jury’s $11 million award.
Sexual harassment fosters a negative workplace and can become costly for an employer if allowed to occur. In California, providing sexual harassment prevention training is a key part of an employer’s duty to take reasonable measures to prevent harassment from occurring in the workplace. As part of sexual harassment prevention training, a company should also instruct supervisors on both the importance of and methods to avoid retaliation against employees who report sexual harassment.