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Employer Who Failed to Protect Employee From Racist Customer to Face Trial

An employer’s duty to protect its employees from racial or sexual harassment on the job isn’t limited to harassment committed by supervisors or co-workers.  In some circumstances, an employer can be liable for harassment committed by customers, vendors, or other people an employee might encounter in the workplace, if the employer exercises sufficient control over them.

The case of Creacy v. BCBG Max Mara Group is one example.  Beranbaum Menken LLP represents the plaintiff, Danielle Creacy, who worked as a Floor Supervisor for defendant BCBG Max Azria (“BCBG”), a retailer of women’s clothes. The BCBG store where Creacy worked was located in a Lord & Taylor (“L&T”) department store in Scarsdale NY. (The plaintiff settled with L&T before the summary judgment motion).

Creacy, an African-American, was physically and verbally assaulted by a customer, who among other things, referred to her as “you people” and “your kind.” Creacy reported the harassment to her employer, BCBG, but BCBG failed to protect her from the customer. In all, the customer came to the store three times. The last time, following BCBG’s orders, Creacy removed herself to a stock room at the back of the  store while the customer was allowed to shop. Creacy felt her exclusion from the store’s shopping area to be a form of racial segregation. After Creacy’s attempts to have the customer banned from the store be allowed to transfer to another store proved futile, Creacy quit, claiming she was constructively discharged.

The court’s decision rejected BCBG’s argument that the harassment was not “severe or pervasive,” and, therefore, not actionable. In particular, the court found significant that the customer’s behavior was physically threatening. The court also held that given the context of the harassment, a reasonable jury could find that the customer, in referring to Creacy as “you people” and “your kind,” was motivated by racial bias.

The court also found that a genuine factual dispute existed as to whether BCBG failed to adequately protect Creacy from the harassing customer. BCBG, the court found, effectively relied on L&T, the building owner, to protect Creacy. The court held that even if L&T was responsible for the safety of all store employees, including BCBG employees, BCBG, upon notice that L&T’s corrective actions were inadequate, had a duty to protect its employee by raising the issue with L&T’s corporate officials – something it did not do. Thus, the court found that BCBG’s measures to protect Creacy were inadequate, and liability for the customer’s racial harassment could be imputed to the employer, BCBG.

As to plaintiff’s claim that BCBG constructively discharged her by allowing intolerable working conditions to exist, the Court rejected plaintiff’s argument that a recent U.S. Supreme Court decision held that conditions in establishing constructive discharge, an employee needn’t prove that the employer intentionally created the intolerable conditions. The district court held that while a showing of intent, or deliberate action, is required, specific intent (i.e. the employer acted with the intention of forcing the employee out) is not. Intent, as interpreted by the district court, is a fairly easy thing to prove: the plaintiff need only show that the employer acted deliberately. The court found that Creacy showed “intent” – even if the deliberate action was BCBG’s deliberately not taking appropriate action.

Finally, the court allowed Creacy’s punitive damages claim to proceed to trial, finding that BCBG failed to provide adequate protective measures for Creacy in the face of a perceived risk that it was violating the discrimination laws. The court noted that BCBG was a sophisticated employer with 651 stores worldwide –  effectively saying that it should have known better.

The Decision is a clear statement that an employer has primary responsibility to protect its employees from third-party racial harassment, whether that third-party is a discriminatory customer at a retail store, an independent contractor performing work on the employer’s premises, or an Uber driver directed to pick up a customer known to have engaged in sexist/racist behavior. With employment relationships becoming increasingly fluid, and with more and more workers no longer in a traditional employee-employer relationship, claims of third-party harassment will likely increase in number and importance.