The Case Of EEOC V. Management Hospitality Of Rancine

In the case of EEOC v. Management Hospitality of Rancine, Katrina Shisler and Michelle Powell, who were servants at an International House of Pancakes restaurant franchise in Rancine, Wisconsin, alleged that they were sexually harassed by an assistant manager Rosalio Gutierrez. The restaurant franchise was owned by Management Hospitality of Rancine, Inc. (MHR). During the servants’ time of employment, both women made claims that they were subjected to frequent sexually explicit comments, gestures and innuendos on the job. Shisler reported the behavior to another assistant manager, Nadia Del Rio; however, she blew off the claims. Shisler and Powell then reported Gutierrez’s behavior to general manager, Michelle Dahl, who also dismissed their claims. On behalf of Shisler and Powell, the Equal Employment Opportunity Commission (EEOC) sued MHR alleging that Gutierrez created a hostile work environment; therefore, they were liable under Title VII of the Civil Rights Act of 1964. A jury ruled in favor of the two women; however, MHR appealed the ruling with the argument that it was not liable, because it had taken acceptable corrective and preventative measurements with regards to the harassment.

The main issue in this case was the fact that there was evidence that supported sexual harassment of two employees of IHOP.

This harassment occurred in the form of comments, physical touching and verbal propositions that were considered severe and pervasive. As an outcome, the appeals court upheld the jury’s verdict that the employer allowed employees to be sexually harassed in violation of Title VII. MHR was required to adopt a new anti-harassment policy and punitive damages were mandated and reduced from the original amount of $100,000 to the amount of $50,000 because the employer had less than 100

employees.
In this case, the court agrees that the employer failed to exercise reasonable care to prevent harassment primarily because the anti-harassment policy did not encourage complaints, but instead discouraged complaints by warning employees of the severity of knowingly making false accusations of harassment and/or discrimination. With regard to MHR’s defense under Faragher/Ellerth that it allegedly had an effective anti-harassment policy, the policy itself along with the complaint policy were not reasonably effective in practice. The harassment policy was not sufficient for a few reasons. For instance, the employer directed employees to report their concerns to their managers and/or company representatives, but did not ensure that those individuals knew how to respond to those complaints. The employer implemented a training program; however, did not ensure that all managers attended, and employees were also required to sign an acknowledgement of the policy, but did not have access to copies.
The court also agreed that the employer failed to exercise reasonable care to correct harassment. The reason for this is because managers did not properly carry out their duties as an obligation under their harassment policy. Examples of this would include violating the policy by:
• Engaging in sexual harassment,
• Ignoring employee complaints,
• Delaying investigations, and
• Ineffective or no training.