Originally published for HR California
A recent Ninth Circuit Court of Appeals decision handed an employer a partial win — for discrimination, but not harassment. In this case, plaintiff Vincent Fried, a manicurist in a salon at the Wynn Las Vegas hotel, alleged he was fired while female manicurists involved in the same incident that led to his termination were not fired, so he sued his former employer for sex discrimination, harassment, and retaliation (Fried v. Wynn Las Vegas, LLC, 18 F.4th 643 (9th Cir. 2021)).
Fried specifically alleged he was subjected to a hostile work environment because he was:
- Told to wear a wig to look like a female if he wanted more appointments;
- Ordered to continue serving a client who requested sexual contact with him and was then teased about it; and
- Told in response to his complaints about unfair distribution of appointments that he was in a female-related job and should consider a job in cooking if he didn’t like it.
Wynn argued there was no evidence that Fried was terminated based on gender, but that he was fired because he allowed an underage client to drink alcohol during a pedicure — and a female salon employee was fired for the same conduct during the same incident.
Alcohol to Underage Customer
On the date in question, hotel staff served champagne while multiple customers were receiving pedicures. Unlike the other manicurists, Fried followed Wynn’s policy and asked his client, who appeared to be under the age of 30, whether she was of legal age to drink. His client admitted she was not, so he intercepted the hotel staff who was bringing the champagne, told her that his client was underage, and took his client’s champagne away.
But soon thereafter, the attendant served a second round of drinks and gave champagne to Fried’s client. Fried contends he never noticed his client had been served champagne because he was focused on his work.
After the pedicures were completed, customers mentioned to a barber in the salon that the underage individuals received champagne and the barber reported this to his manager. The hotel’s Employee Relations department initiated an investigation, which recommended that both Fried and the employee who served the drinks, a female employee, be terminated, as they were the only two employees who knowingly allowed an underage client to obtain an alcoholic beverage.
Fried alleged that Wynn’s decision to terminate was illogical because he initially took her drink away, so it would make no sense that he would later knowingly allow his client to have alcohol. He further asserted the fact that other female manicurists were not fired showed pretext because they knew their customers had champagne and didn’t ask if they were of age.
The True Reason for Termination
An employer’s true reason for termination need not be wise or correct, as long as it is not discriminatory.
And for a plaintiff to establish a prima facie case of discrimination, the individual must prove that:
- He belongs to a class of persons protected by Title VII;
- He performed his job satisfactorily;
- He suffered an adverse employment action; and
- His employer treated him differently than a similarly situated employee who doesn’t belong to the same protected class as him.
The Ninth Circuit panel held that Fried established a prima facie case because he showed that he belongs to a protected class as a male employee, he was performing according to his employer’s expectations up until the terminating event, he was terminated, and female manicurists involved in the terminating event were not terminated.
Once a plaintiff establishes a prima facie case of discrimination, the burden then shifts to the employer to articulate some legitimate, nondiscriminatory reason for the challenged action. Here, the panel found that Wynn offered a legitimate, non-discriminatory reason for termination: that the employee knowingly allowed an underage client to consume an alcoholic beverage, a clear violation of company policy and the law.
Since the employer met this burden, the plaintiff then had to show that the articulated reason is pretextual — either directly, by persuading the court that a discriminatory reason more likely motivated the employer, or indirectly, by showing that the employer’s proffered explanation is unworthy of credence.
“In judging whether [an employer’s] proffered justifications [are] ‘false,’ it is not important whether they were objectively false,” the opinion states. “[C]ourts only require that an employer honestly believed its reasons for its actions, even if its reason is foolish or trivial or even baseless.”
The panel recognized that Wynn’s termination decisions may have been unwise and even unfair, but the employer was allowed to draw the line between those who knowingly served alcohol to an underage client and those who did not — so long as it didn’t draw the line based on gender. Citing prior case law, the panel noted “an employer’s true reasons need not necessarily have been wise or correct, as long as they are not discriminatory.” Moreover, the panel reasoned that no reasonable jury could find Wynn’s decision was pretext for gender discrimination because it fired a female salon employee for the same conduct in the same incident as Fried.
Harassment is Held to a Different Standard
In a separate, but concurrently filed opinion, the Ninth Circuit overturned the lower court’s ruling that Fried couldn’t proceed with his hostile work environment harassment claims. The panel reinstated those claims following several other circuits’ holdings that such a claim can stem from an employer’s response to a third party’s unwanted sexual advances toward an employee.
The panel affirmed the district court’s ruling that the comments allegedly made by his manager and female coworkers on two separate occasions — joking that he should wear a wig to look like a female if he wanted to book more appointments and that he was in a female-related job — did not meet the standards to support a hostile work environment claim. However, the inappropriate remarks from a customer — asking Fried to give him a massage in his hotel room and propositioning the manicurist with sex — ultimately established the hostile work environment. While Fried complained to his manager and threatened to report the incident to HR, he never filed a formal complaint.
To establish a prima facie hostile-work environment claim, an employee must allege facts showing:
- He was subjected to verbal or physical conduct because of his protected status;
- The conduct was unwelcome; and
- The conduct was sufficiently severe or pervasive to alter the conditions of his employment and create an abusive working environment.
California courts have adopted the same standard for hostile work environment claims under the Fair Employment and Housing Act as federal courts under Title VII (See Freeman v. Flowers Baking Co. of Henderson, LLC, (S.D. Cal. June 25, 2021).)
It’s well established, the panel noted, that an employer can create a hostile work environment by failing to take immediate and corrective action in response to a coworker’s or third party’s sexual harassment or racial discrimination claim that the employer knew or should have known about.
In this case, the manager here not only failed to take immediate, corrective action, but also directed Fried to return to the customer and complete his pedicure — and the panel recognized that how an employer responds to a third party’s unwelcome sexual advances toward an employee can independently create a hostile work environment. As such, the panel determined this claim must be sent back to the lower court to be decided by a jury. The proper focus for the hostile work environment claim was the employer’s response to the coworker’s conduct.
Key Takeaways for Employers
The Wynn Las Vegas decision has some lessons to help employers avoid similar claims by employees.
Investigate Before Making Adverse Employment Decisions
It’s imperative that decision-makers have all the facts before making determinations that can lead to discrimination or retaliation claims — as investigating the underage drinking incident protected Wynn from a gender discrimination and retaliation claim. Investigation doesn’t always require a long process; it often simply entails documenting the facts surrounding the event in question. Involving in-house HR professionals to guide this process is recommended, but in cases of more serious allegations or potential conflict of interest, retaining an outside investigator may be beneficial. Ultimately, the key is to ensure you have clear documentation detailing what transpired.
Take Prompt Remedial Action Following Investigation
An employer’s prompt corrective response can insulate an employer from liability for an employee’s hostile work environment claim. This has become increasingly important as it relates to harassment claims by customers and other non-employees. An employer’s response to a customer’s offensive conduct can create a hostile work environment where the response subjects an employee to further abuse. Had Fried’s manager taken his concerns about the customer’s unwanted sexual advances seriously and interceded, the company likely would not be defending a hostile work environment claim now.
Follow Company Rules Consistently
The easiest way to avoid a claim of discrimination on the basis of any protected class is to simply treat all employees equally. To ensure this happens, it’s important that all levels of management are knowledgeable about company rules and practices so the rules can be enforced consistently.