On October 19, 2012, the Second Circuit declined to put its stamp of approval on the EEOC’s attempt to impose lengthy and severe reporting and remedial requirements on a grocery store owner where one nefarious employee — who happened to serve in the dual role of store manager and owner’s fiancée — repeatedly sexually harassed a class of ten teenage female employees. In EEOC v. KarenKim, Inc., No. 11-3309, 2012 U.S. App. LEXIS 21908 (Oct. 19, 2012), the Second Circuit reported the lurid facts at great length, yet cut to the chase in reaching its legal conclusion that the district court erred in shutting the EEOC’s proposed consent decree proposal down entirely.
At trial, the jury awarded the class members a total of $10,080 in compensatory damages and $1,250,000 in punitive damages in light of testimony of crude physical and verbal abuse against them by the store manager that continued even after they complained to his fiancée. Id. at *3-6, 8-12. There was no formal complaint procedure for employees to use if concerns arose about their working conditions at the store. Several employees testified that their complaints had not been investigated and no action was taken to remove him from the work environment. According to the Second Circuit, the owner responded to the complaints of crude verbal and physical harassment against her young workers (at the hands of her fiancé, no less), by crying and then doing nothing to stop the harassment. Id. at *8. In other ways, she attempted to prevent them from pursuing their legal remedies in light of the harassment.
The EEOC’s proposed consent decree contained strict and severe reporting and inspection requirements, among other things, for a term of ten years. It even contained a provision that required the harasser’s photograph to be given to employees along with warnings about his behavior, in case he violated the order by setting foot into the store for any reason other than to sell it produce (under the rubric of his new post-trial job). Id. at *14-15. The district court declined to enter the range of injunctive relief proposed by the EEOC.
The Second Circuit reversed and remanded. Even under a deferential standard of review, it the panel wrote in a per curiam opinion: “we conclude that the district court abused its discretion insofar as it denied the EEOC’s request for injunctive relief specifically directed toward ensuring that [the harasser] is no longer in a position to sexually harass KarenKim employees.” Id. at *21. The Second Circuit recognized that given the personal relationship between the owner and the harasser, it is likely that he would return to the store, absent a court order forbidding him from doing so. Id. at *22. Interestingly, it then offered its opinions as to what might constitute an appropriate injunction on remand even while noting “it is not our role to fashion the specific measures necessary to prevent the recurrence” of the harassment. Id. Simple enough, according to the panel: don’t hire the guy back, and don’t let him enter the store.
Of course that was far short of what the EEOC had requested. No doubt the egregious facts of these incidents and the failure to respond by the company led to the punitive damages award by this jury. Nonetheless, the Second Circuit found a way to cut at the joint of the EEOC’s requested injunction to tailor its scope to direct the behavior only to the specific causes of the misconduct in this case: the harasser and his fiancée. As such, the ruling in EEOC v. KarenKin, Inc. is a good case study of the range of permissible injunctive relief in EEOC lawsuits, and how overreaching by the Commission undercuts its ability to secure the types of remedies it often tries to negotiate for in settlement contexts.
Readers can also find this post on our Workplace Class Action blog here.