Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 8

May v. Chrysler Group, LLC
United States Court of Appeals, Seventh Circuit, 716 F.3d 963 (2013).
FACTS Between 2002 and 2005, Otto May, Jr., a pipefitter at a Chrysler plant in Illinois, was the target of more than fifty racist, homophobic, and anti-Semitic messages and graffiti. He received death threats, his bike and car tires were punctured, and someone poured sugar into the gas tank of his car. In one incident, a dead bird wrapped in toilet paper to look like a member of the Ku Klux Klan was placed at his workstation. May complained to Chrysler. The employer documented the complaints and began an investigation. Records were checked to determine who was in the building when the incidents occurred, and the graffiti handwriting was examined. The company reminded its workers that employee harassment was not acceptable. The harassers were never caught, but the incidents became fewer and eventually stopped. May filed a suit against Chrysler in a federal district court for hostile-environment harassment. A jury awarded May $709,000 in compensatory damages and $3.5 million in punitive damages. When the judge overturned the punitive damages award, May appealed.
ISSUE Were the steps Chrysler took to stop and prevent the harassment against its employee sufficient to protect the company from an assessment of punitive damages?
DECISION Yes. The U.S. Court of Appeals for the Seventh Circuit affirmed the lower court's judgment.
REASON In a case involving charges of hostile-environment harassment in a workplace, an employer must act with malice or reckless indifference to an employee's federally protected rights to support an award of punitive damages.
Here, Chrysler did not act with malice or reckless indifference to May's federally protected rights. The company used several strategies to stop and prevent the harassment. These steps included an increased security presence and anti-harassment training for its employees. Supervisors met with their workers to review Chrysler's anti-harassment policy. A protocol was implemented to document the incidents, take photos, clean up graffiti, and interview witnesses. Management also increased its presence with area walk-throughs. Graffiti handwriting was analyzed. Chrysler's actions had a positive effect-the harassment gradually decreased in frequency and finally ceased completely. In short, Chrysler could have done more to prevent the harassment against May, but the company did not act with malice or reckless indifference.
FOR CRITICAL ANALYSIS-Ethical Consideration Does an organization have an ethical obligation to secure a safe and harassment-free workplace for its employees? Why or why not?