Sixth Circuit Breaks from Other Courts: Intent Required for Employer Liability in Third-Party Harassment Cases

By Lauren M. Drabic and Stephen S. Zashin*

Since the United States Supreme Court’s recent shift away from deference to agency interpretations, the U.S. Court of Appeals for the Sixth Circuit has wasted no time charting its own course. On August 8, 2025, it upended its evaluation of claims of harassment by customers, vendors, and other non-employees under Title VII. In Bivens v. Zep, Inc., the Sixth Circuit Court of Appeals rejected the negligence-based standard provided for under EEOC Guidelines and that most other federal circuits follow, and instead required proof that the employer intended the harassment to occur. This shift makes it more difficult for an employee to establish a claim against an employer for third-party harassment in Kentucky, Michigan, Ohio, and Tennessee.

Bivens Background and the Court’s Analysis

Dorothy Bivens worked as a sales representative for Zep, Inc., visiting customers in the Detroit area. A few months into the job, she met with a motel client whose manager locked the office door and asked her to date him. When she refused and asked to leave, the manager unlocked the door. Bivens reported the incident to her supervisor, who reassigned the account so she would not interact with the client again. Weeks later, Zep included her in a company-wide reduction in force. Bivens sued, claiming the client’s conduct created a hostile work environment under Title VII and Michigan law, and alleging retaliation and race discrimination.

In its decision, the Sixth Circuit found “no legal bridge between the client’s intent and Zep’s responsibility” because the customer was not an agent of the company. Without an agency relationship, the court concluded that the only path to liability was direct liability for Zep’s own actions—which required intent. Citing to Staub v. Proctor Hosp., the Sixth Circuit stated that intent exists when an employer “either ‘desire[d] to cause’ [the] harassment or was ‘substantially certain’ that it would ‘result from’ its actions.”

Applying that standard, the Sixth Circuit concluded that “[n]one of this would allow a jury to conclude that Zep ‘desired’ such an interaction to occur or was ‘substantially certain’ that it would,” where the incident happened only once and Zep reassigned the account immediately after learning of it. The Court rejected the EEOC’s guidelines as nonbinding and “unpersuasive,” and emphasized that the Supreme Court’s 2024 decision in Loper Bright required courts “to independently interpret the statute.”

What This Means Now for Employers

Within the confines of the Sixth Circuit, this decision raises the bar for plaintiffs and gives employers more protection from third-party harassment cases. For multi-state employers, it adds complexity because most other circuits still apply negligence-based liability. The Sixth Circuit’s reliance on Loper Bright to move away from EEOC interpretations signals a willingness to re-examine agency-driven standards more broadly—leaving open the question of what other long-standing guidance the Sixth Circuit might reject next. That uncertainty makes it even more important for employers to set policies that meet the most demanding standard, apply them consistently, and respond immediately and decisively to any report of customer or vendor misconduct.

In light of Bivens, we can review your harassment-prevention policies, train managers on handling third-party misconduct under differing standards, and ensure your complaint-handling process can withstand scrutiny in any jurisdiction. Reach out to us with your questions—we can help you prepare, respond, and stay ahead of the evolving law.

*Lauren M.Drabic has years of experience representing employers in all areas of employment and labor law. She regularly defends and advises employers against claims of harassment, discrimination, and retaliation in federal and state court and before administrative agencies. Stephen Zashin is Z&R’s Managing Partner and also has worked extensively representing clients in harassment, discrimination, and retaliation claims. For more information on matters involving harassment prevention, third-party misconduct, and compliance with evolving federal and state law, contact Lauren M. Drabic (lmd@zrlaw.com) or Stephen S. Zashin (ssz@zrlaw.com) by email or at 216.696.4441.

Supreme Court Erases Sixth Circuit’s Extra Burden on Majority-Group Plaintiffs

By David P. Frantz and Stephen S. Zashin*

Today, in another significant shift for Title VII of the Civil Rights Act of 1964, the United States Supreme Court has unanimously vacated the Sixth Circuit’s decision in Ames v. Ohio Department of Youth Services, rejecting the Sixth Circuit’s long-standing “background circumstances” requirement.

The Sixth Circuit, whose jurisdiction includes Ohio, has long required majority-group Title VII plaintiffs to clear an extra hurdle before proceeding under the familiar McDonnell Douglas framework (the burden-shifting test courts apply when discrimination is alleged only via circumstantial evidence). This “background circumstances” rule—also followed in the Seventh, Eighth, Tenth, and D.C. Circuits—required white, male, heterosexual, or other majority-group employees to show additional evidence, such as statistics indicating a pattern of bias against majority employees or proof that a minority decisionmaker made the challenged employment decision, before a court would infer discrimination. Writing the lead opinion for the Court, Justice Jackson observed that Congress “establish[ed] the same protections for every ‘individual’—without regard to that individual’s membership in a minority or majority group,” leaving “no room for courts to impose special requirements on majority-group plaintiffs.” The Court remanded for application of the ordinary prima-facie standard.

The most intriguing part of the opinion perhaps stems from the concurrence by Justices Thomas and Gorsuch. They question whether McDonnell Douglas remains a useful framework. Such a dialogue signals that the Supreme Court could pursue even more far-reaching changes to Title VII down the road.

Today’s decision removes an evidentiary hurdle that existed only within the above-named Circuits and aligns majority- and minority-plaintiff claims under the same threshold test. Employers in Ohio and elsewhere should expect courts to assess termination, promotion, demotion, and hiring disputes involving majority employees without the now-defunct background circumstances prerequisite.

Ames arrives as Title VII doctrine continues to evolve rapidly. As covered in our recent alerts, a Texas federal court has just vacated key portions of the EEOC’s harassment guidance, and the Trump Administration continues to curtail DEI programs through executive orders and agency memoranda. With Title VII’s rules and enforcement in flux, employers should revisit every corner of their compliance program—policies, job postings, promotion and discipline files, RIF plans, complaint procedures, and training materials—to ensure they withstand the next challenge. Zashin & Rich can conduct a top-to-bottom review, fortify weak spots, and guide decision-makers before a new lawsuit or EEOC charge.

*David P. Frantz (an Ohio State Bar Association Certified Specialist in Labor and Employment Law) and Stephen S. Zashin (Z&R’s Managing Partner) have extensive experience representing employers in discrimination, harassment, and other workplace enforcement matters. If you have questions about the changes occurring under Title VII, please contact David P. Frantz (dpf@zrlaw.com) or Stephen S. Zashin at (ssz@zrlaw.com) via email or by phone at 216.696.4441.

Texas Court Clears Path for Rollback of EEOC Gender Identity Guidance

By Ami J. Patel and Stephen S. Zashin*

On May 15, 2025, the U.S. District Court for the Northern District of Texas vacated portions of the EEOC’s Enforcement Guidance on Harassment in the Workplace, holding that the agency exceeded its statutory authority by interpreting Title VII’s prohibition on sex discrimination to include harassment based on gender identity. The court found that the EEOC's guidance was contrary to Title VII’s plain text by expanding the definition of “sex” to include “sexual orientation and gender identity” which is according to the court, “beyond the biological binary: male and female.” Next, the court found that the EEOC guidance “contravenes Title VII by defining discriminatory‘ harassment’ to include transgender bathroom, pronouns, and dress preferences. ”Therefore, the court found that the EEOC’s guidance went beyond summarizing existing law and instead “fundamentally expands Title VII to include harassment based on gender identity,” specifically by treating the denial of access to bathrooms aligned with a person’s gender identity, enforcement of dress codes inconsistent with gender identity, and the intentional use of names or pronouns inconsistent with a person’s gender identity as unlawful harassment. The court described the EEOC’s Guidance’s reliance and interpretation of Bostock v. Clayton County as a “misreading of Bostock.” (Note: Bostock is the case which held that terminating an employee for being homosexual or transgender violates Title VII’s prohibition on sex discrimination).

Following the court’s May 15, 2025 ruling, the EEOC announced that it could not rescind or revise the Guidance due to the Commission’s lack of quorum—a procedural issue that has persisted since the start of the new administration. In the meantime, the EEOC has labeled and shaded the vacated provisions on its website and is currently reviewing other materials for consistency with the court’s decision.

Employers should take note that while the vacated provisions no longer carry legal weight, the underlying issues remain active and contested. EEOC investigators and plaintiffs may continue to explore similar theories under other frameworks, and state or local laws may impose independent obligations related to sexual orientation or gender identity. While the exact contours of Title VII continue to grow hazy, Employers should continue to handle complaints involving gender identity thoughtfully, with an emphasis on consistency, documentation, and awareness of jurisdiction-specific requirements. Zashin & Rich will continue to monitor developments in Title VII enforcement and is available to assist with any questions regarding compliance or policy updates.

*Ami J. Patel (Z&R’s Practice Leader for Trade Secrets/Non-competes) and Stephen S. Zashin (Z&R’s Managing Partner) have extensive experience representing employers in discrimination, harassment, and other workplace enforcement matters. If you have questions about the changes occurring under Title VII, please contact Ami J. Patel (ajp@zrlaw.com) or Stephen S. Zashin at (ssz@zrlaw.com) via email or by phone at 216.696.4441.

Breaking News from the U.S. Supreme Court: Title VII Prohibits Discrimination Based on Sexual Orientation and Transgender Status

By David R. Vance*

On June 15, 2020, in a landmark decision, the U.S. Supreme Court held that an employer who fires an individual merely for being gay or transgender violates Title VII of the Civil Rights Act of 1964. The decision in Bostock v. Clayton County, Georgia, one of three consolidated cases before the Supreme Court, resolves a circuit split over the scope of Title VII’s protections for homosexual and transgender persons.

Title VII makes it “unlawful … for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual … because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e-2(a)(1). In Bostock, the Supreme Court ruled that an employer violates Title VII if it intentionally fires an employee based, in part, on sex, which includes an employee’s sexual orientation and gender identity.

In reaching this conclusion, the Supreme Court reasoned that discrimination on the basis of an individual’s sexuality or gender identity necessarily “requires an employer to intentionally treat individual employees differently because of their sex.” The Supreme Court further stated that an "individual’s homosexuality or transgender status is not relevant to employment decisions … because it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex."

In light of the Supreme Court’s decision, employers should:

• Review and, if necessary, update their policies to specifically prohibit discrimination and harassment based on sexual orientation and gender identity; and
• Train employees, particularly those in management and human resources, that Title VII prohibits discrimination based on sexual orientation and gender identity.

It is imperative that employers address the Supreme Court’s decision quickly and thoroughly.

*David R. Vance, an OSBA Certified Specialist in Employment & Labor Law, regularly advises clients on labor and employment matters, including equal employment opportunity policies, employer handbooks, and employment decisions. If you have questions about the Supreme Court’s recent decision, please contact David at drv@zrlaw.com or (216)696-4441.

The “Tax” of Silence – Tax Reform’s Impact on Settling Sexual Harassment Claims

By Stephen S. Zashin*

On December 22, 2017, President Trump signed the “Tax Cuts and Jobs Act,” which is a sweeping tax reform law the size of which the United States has not seen in decades. As a significant part of this new law, employers can no longer deduct sexual harassment settlements and associated legal fees as a business expense, when the settlement is contingent upon a nondisclosure agreement. In this context, a nondisclosure agreement typically would prohibit the parties from disclosing the terms of the settlement or the alleged facts supporting the sexual harassment claim. The recent barrage of sexual misconduct allegations against celebrities, such as Harvey Weinstein, Matt Lauer, Bill O’Reilly, and Al Franken — and confidential settlements arising from these types of accusations — prompted this change to the tax law.

The “Harvey Weinstein Tax,” as some are calling it, is not a tax. Rather, the provision prohibits tax deductions. Prior to this law, sexual harassment settlements and related attorneys’ fees were deductible business expenses. However, the new law prohibits such deductions for amounts paid or incurred pursuant to a confidential settlement. To illustrate, under the new law, if a company paid a $1 million sexual harassment settlement, it is prohibited from deducting that amount if the settlement contained a nondisclosure agreement. However, in the absence of a nondisclosure agreement, and assuming a 21% corporate tax rate, the company may deduct the $1 million settlement for a tax savings of $210,000.

In the example above, the company would need to determine whether a tax savings of $210,000 is worth a nondisclosure agreement (i.e., prohibiting the employee from discussing the terms of the settlement and the underlying circumstances and allegations). This tax provision has both legal and tax consequences. Employers settling sexual harassment claims should discuss with counsel, chief financial officers and potentially their tax consultants, this new tax provision and its implications on settling any sexual harassment claim.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment law and the head of the firm’s Labor, Employment and Sports Law Groups, has extensive experience litigating and resolving sexual harassment claims. For more information about settling sexual harassment claims, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.

Power Trip: How Much Supervisory Power is Enough Under Title VII?

*By Emily A. Smith

The United States Supreme Court held today that an employee is a “supervisor” for purposes of creating liability under Title VII only if the employer empowers the supervisor to take tangible employment actions against the victim.

In Vance v. Ball State University, et al., No. 11-556 (June 24, 2013), Maetta Vance (“Vance”) worked for the University Dining Services at Ball State University (“Ball State”). Vance was the only African-American working in her department.  She complained to Ball State that Saundra Davis (“Davis”), a coworker, directed racial slurs at her and struck her in the head.  Vance also filed charges with the Equal Employment Opportunity Commission (“EEOC”) alleging racial harassment and discrimination.  She complained that Davis “gave her a hard time at work by glaring at her, slamming pots and pans around her, and intimidating her.” Vance also claimed that another employee bragged about her Ku Klux Klan membership and used racial slurs.  Ball State investigated each of Vance’s complaints. Ball State tried to separate Vance and Davis, and counseled and issued warnings to the offending employees, but the alleged workplace harassment continued.

Vance filed suit in federal court claiming that she was subjected to a racially hostile work environment in violation of Title VII. She alleged that Davis was her supervisor, and Ball State was liable for Davis’ creation of a racially hostile work environment as a result. The district court granted Ball State’s motion for summary judgment, finding that Davis was not Vance’s supervisor because she could not “hire, fire, demote, promote, transfer, or discipline” Vance. Additionally, the district court held that Ball State could not be liable for negligence because it responded reasonably to incidents it knew about.  The Seventh Circuit Court of Appeals affirmed the district court’s decision for the same reasons.

The United States Supreme Court affirmed the lower courts’ decisions. The Court held that an employer may only be vicariously liable for an employee’s unlawful harassment when the employer has empowered the employee to take tangible employment actions against the victim, i.e. to effect a “significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.” The Court rejected both the EEOC’s and Vance’s broad definition of “supervisor.”  In doing so, the Court noted that its prior decisions in Burlington Industries, Inc. v. Ellereth, 524 U.S. 742 (1998) and Faragher v. Boca Raton, 524 U.S. 775 (1998), drew a sharp line between coworkers and supervisors and implied that the authority to take tangible employment actions was the defining characteristic of a supervisor. The Court compared the uncontested supervisory nature of the harassers in Ellereth and Faragher with Davis, who was not empowered to take any tangible employment actions against Vance and was therefore not a supervisor.  Consequently, Ball State was not liable because Davis was not a supervisor.

This decision bodes well for employers.  While employers must still take steps to eradicate any form of harassment, an employer will only be liable for co-worker harassment if it was negligent in controlling working conditions. To avoid such negligence, all employers should have an up-to-date harassment policy, train employees on the use of the policy, and promptly investigate and remediate all claims of harassment. Employers should also take steps to clarify and delineate the roles and power of employees, especially those who schedule shifts and assign work.

*Emily A. Smith practices in all areas of employment litigation. Emily has extensive experience helping employers navigate through supervisor liability under Title VII and related employment issues. For more information about this ever changing area, please contact Zashin & Rich at 216.696.4441.

EMPLOYMENT LAW QUARTERLY | Fall 2005, Volume VII, Issue iii

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• Ohio courts consider compensability in cases of automobile injury and limb loss
• Brain • Food • Breakfast • Law Series: Details on Seminars Nov. 10 and Dec. 8, 2005
• PRISON LOVE : California Puts Sexual Favoritism in the Slammer
• Last Chance Agreements ADA-Okay
• USERRA UPDATE : Finalization of New Regs Just Around the Corner

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Ohio Courts Consider Compensability in Cases of Automobile Injury and Limb Loss

By Steve P. Dlott

Two recent cases in Ohio courts considered two different aspects of workers' compensation law: when an injury is received "in the course of employment," and when the loss of limb can result in permanent total disability compensation.

In Cartwright v. Conrad, an employee traveling as a passenger in her co-worker's vehicle suffered injuries in a car accident. The injured employee had asked her co-worker, a store manager, for a ride to and from a one-day training seminar. After the seminar, the co-worker stopped to obtain payroll packets for her store and another store before driving the employee home. At this stop, the employee actually went inside and obtained the payroll packets. The employee and her co-worker then dropped off the first payroll packet. However, while driving to the second store to drop off the second payroll packet, the co-worker got into an accident.

The employee filed a workers' compensation claim for injuries she suffered as a passenger in the car accident. The Bureau of Workers' Compensation denied her claim, and the employee appealed. The Industrial Commission affirmed the Bureau's decision, and the employee appealed the Industrial Commission's decision to court. The court found in favor of the employer.

The employee appealed, arguing that factual questions existed concerning whether her injury occurred "in the course of" or "arising out of" her employment. By statute, only an employee with an injury "received in the course of, and arising out of, the injured employee's employment" may receive workers' compensation benefits for that injury. The language "in the course of" limits compensation to injuries an employee receives while performing duties that his or her employer requires, while "arising out of" requires a causal connection between the injury and the employment.

The appeals court held that the employee's injury was not received either "in the course" or "arising out of" her employment. First, the court reviewed the accident in light of the "coming-and-going rule":

As a general rule, an employee with a fixed place of employment, who is injured while traveling to or from his place of employment, is not entitled to participate in the Workers' Compensation Fund because the requisite causal connection between the injury and the employment does not exist.

The court held that the employee had a fixed place of employment, even though her employer required her to attend the one-day seminar at a different location. Based on the coming-and-going rule, therefore, the employee could not receive benefits for injuries received in the car accident while traveling home from work. The employee argued that an exception applied in her case because she was performing a special errand for her employer at the time of the accident. The court disagreed, explaining that the exception does not exist unless the special errand was a major factor in the travel that produced the injury, not just incidental to the travel. The court held that the co-worker's errand was merely incidental to the employee's journey home. Therefore, the employee's injury did not occur "in the course of" her employment.

The court also reviewed the facts and circumstances surrounding the accident in light of three factors that the Ohio Supreme Court established for finding a causal connection between an employee's employment and injury: proximity of the place of employment to the accident scene; the employer's degree of control over the accident scene; and the benefit to the employer of the employee's presence at the accident scene.

The court found no causal connection between the employee's injury and her employment. First, the accident scene was remote from the employee's place of employment, as well as the hotel where the seminar took place. Second, the employer had no direct control over the accident scene. Finally, and most significantly for the court, the employee's presence at the accident scene provided no real benefit to the employer. The court found that the employee did nothing significant during the trip from the hotel to her home that aided her co-worker's mission on the employer's behalf. Therefore, the court held that the employee's injury was not one "arising out of" her employment.

It was clear from the facts in this case that the three-factor analysis did not point to a causal connection between the employee's injury and her employment. Nevertheless, employers should understand that any off-site employee work activity increases the risk of workers' compensation exposure.

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The Ohio Supreme Court recently concluded that the loss of a leg is a loss of two limbs – a leg and a foot – for purposes of Ohio's permanent total disability ("PTD") statute. Under Ohio law, an individual may receive an award of PTD for "the loss or loss of use of both hands or both arms, or both feet or both legs, or both eyes, or of any two thereof."

In International Paper v. Trucinski, an employee suffered serious injuries to his leg during a chemical explosion at work. As a result of the injury, the employee underwent an above-the-knee amputation. The employee eventually applied for and received PTD. The employer unsuccessfully challenged the PTD award to an appeals court, and then to the Ohio Supreme Court.

The Ohio Supreme Court, in affirming the appeals court, also affirmed its own previous decision in a similar case. The Court previously held that a hand and an arm are distinct body parts for purposes of the PTD statute. Therefore, an employee's loss of an entire single extremity can equate to the loss of two body parts and an award of PTD under the statute. Based on its reading of the PTD statute and its previous case law, the Supreme Court held that the employee's loss of his leg equated to the loss of two body parts – a leg and a foot – for purposes of a PTD award.

The Supreme Court's decision is somewhat surprising. While the loss of a foot does not necessarily involve the loss of a leg, the converse is always true. One need not have a medical degree to recognize that the loss of a foot cannot survive the loss of a leg. Allowing employees, who unfortunately suffered the loss of a leg, to collect benefits for both the leg and the foot suggests a double recovery. However, the Supreme Court's sympathy for such tragic injuries appears to trump elementary anatomy in lost limb compensation awards.

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Brain • Food • Breakfast • Law Series

Breakfast might the most important meal of the day. Most people skip it.

Keeping pace with workplace law is important too, yet many human resource professionals, attorneys, managers and business leaders skip that, too.

Zashin & Rich Co., L.P.A. presents you with a valuable opportunity to get the nutrition you need for breakfast and your brain. The Ohio Supreme Court has also approved these seminars for attorney CLE credit. Join Zashin & Rich attorneys for breakfast refreshments as they discuss topics from and take your questions about the ever-evolving world of workplace law:

Zashin & Rich Co., L.P.A.  presents
Overtime Over Your Head? Fair Labor Standards Act Update
This seminar will take place on November 10, 2005. Attorney Michele Jakubs will discuss a variety of useful FLSA topics, including:

• how to determine whether an employee is exempt from overtime compensation (administrative, executive, professional, and others)
• how to protect exempt status: dos and don'ts
• how to understand what comprises working time, and what to do with waiting time, on-call time, break periods, training and the like
• how to avoid overtime mishaps with hours, bonuses, and determining an employee's "regular rate"
• what to do if your company makes a mistake

In addition, Attorney Christina Janice will discuss FLSA litigation and provide you with a useful understanding of:

• collective actions, class actions, multidistrict litigation, and choice of remedy
• which employers are subject to collective actions
• current trends and recent decisions in class action FLSA litigation
• defensive strategies for employers subject to collective actions

Details for the FLSA seminar:
Date: November 10, 2005
Time: 8:30 a.m.- 10:00 a.m.
How to register: call (216) 696-4441 and speak with Gwen Johnston

Because all seminars are strictly limited to 20 attendees, you must register for this seminar no later than November 8, 2005.

You may also register for our next breakfast seminar,
How Does Your Garden Grow? Cultivating a Union-Free Workplace
In this seminar, attorney Robert Hartman will discuss union organizing and union avoidance following recent developments involving the AFL-CIO. The information in this seminar will include:

• current state of union organizing
• exploring why employees unionize
• proactive steps management can take to prevent union organizing
• methods to win a union election campaign

Details for union organizing seminar:
Date: December 8, 2005
Time: 8:30 a.m.- 10:00 a.m.
How to register: call (216) 696-4441 and speak with Gwen Johnston

All brain · food · breakfast seminars:

• take place at our offices. Call (216) 696-4441 for directions or more information.
• begin with registration at 8:30 a.m. and conclude at 10:00 a.m.
• are strictly limited to 20 attendees. You may register in advance by calling (216) 696-4441 (please ask for Gwen Johnston).
• These courses have been approved by the Ohio Supreme Court Commission on Continuing Legal Education for 1.50 total CLE credit hours for each seminar (0.00 of ethics, 0.00 hour(s) of professionalism and 0.00 of substance abuse instruction).
• cost $30.00 per session per attendee
• include breakfast refreshments.
• are led by Zashin & Rich attorneys who practice only workplace law all day, every day.
• include time for your questions.

Join us for the brain · food · breakfast · law series. It's just good for you.

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PRISON LOVE: California Puts Sexual Favoritism in the Slammer

By Lois A. Gruhin

The California Supreme Court recently expanded the grounds for employee harassment actions against employers. In Miller v. Department of Corrections, the court unanimously held that widespread sexual favoritism in the workplace may create an actionable hostile work environment under the state's anti-harassment law, the Fair Employment and Housing Act ("FEHA").

In Miller, two female former employees of a California prison ("the plaintiffs"), claimed that a supervisor accorded unwarranted favorable treatment to three female co-workers ("the paramours") with whom the supervisor had sexual affairs. The plaintiffs claimed that the supervisor's conduct constituted sexual discrimination and harassment in violation of FEHA. For example, one plaintiff served on an interview panel that evaluated applications for a promotion. Although the panel did not select one of the supervisor's paramours, who had applied for the promotion, the paramour nonetheless received the promotion, allegedly upon the supervisor's orders. When one of the plaintiffs competed for a promotion with a second paramour, the paramour again received the promotion, despite the plaintiff's higher rank, superior education, and greater experience.

The plaintiffs alleged a host of other conduct and unfair treatment they attributed to the supervisor's sexual relationships. The plaintiffs also alleged that their complaints were either ignored or dismissed. Both plaintiffs eventually resigned from their positions.

The lower courts awarded the employer summary judgment, finding, as have many other courts, that a supervisor's favoritism toward a workplace-lover does not constitute sexual harassment toward non-favored employees. The California Supreme Court reversed, however, finding that an employee may establish an actionable claim of sexual harassment under FEHA by demonstrating that widespread sexual favoritism was severe or pervasive enough to alter his or her working conditions and to create a hostile work environment.

The court relied heavily on a 1990 Equal Employment Opportunity Commission ("EEOC") policy statement concerning employer liability for sexual favoritism under the Civil Rights Act of 1964 ("Title VII"). In its policy statement, the EEOC observed that:

although isolated instances of sexual favoritism in the workplace do not violate Title VII, widespread sexual favoritism may create a hostile work environment in violation of Title VII by sending the demeaning message that managers view female employees as 'sexual playthings' or that 'the way for women to get ahead in the workplace is by engaging in sexual conduct.'

The court concluded that this was just such a situation. The evidence suggested to the court that the supervisor "viewed female employees as 'sexual playthings' and that his ensuing conduct conveyed this demeaning message in a manner that had an effect on the workforce as a whole." Moreover, the court found that the supervisor's sexual favoritism blocked plaintiffs' advancement and caused them to suffer harassment at the hands of one of the supervisor's paramours, who the supervisor failed to control. The court therefore concluded that the evidence created at least a triable issue of fact.

So what does this case mean for employers? How much can employers possibly do to control workplace romances? Generally speaking, all employers, not just those doing business in California, should determine how they want to manage workplace relationships. Some companies go so far as to prohibit workplace relationships altogether, while other employers prohibit romantic relationships between supervisors and subordinates. Still others require employees engaged in romantic relationships to report the relationship to management. Some companies require that upon such a report, one employee transfer to another location or even leave the company's employ. Some companies require the employees to sign a "love contract" acknowledging the consensual nature of their relationship.

There may be wisdom in each of these choices. Employers should consider the best method for their size, legal jurisdiction, and corporate culture. All employers must, however, ensure that employees work in a hostility-free work environment even when co-workers have consensual sexual relationships. Regardless of how your company manages workplace romances, all employers should be familiar with one very important word: discretion. For more information about sexual favoritism in the workplace, please contact Zashin & Rich Co., L.P.A.

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Last Chance Agreements ADA-Okay

By Stephen S. Zashin*

Drugs and alcohol adversely affect the lives of so many people on a personal level that sometimes employers overlook the profound impact of substance abuse on the workplace. Employers must manage employee substance abuse while remaining cognizant of federal and state disability laws. Under the Americans with Disabilities Act ("ADA"), drug rehabilitation is considered a disability, although current, illegal use of drugs is not protected. An employer cannot, therefore, discriminate against an individual who no longer engages in drug use and who participates in or who has successfully completed a drug treatment program.

Many employers have utilized "last chance agreements" to work with recovering employees returning to work after treatment. "Last chance" or return-to-work agreements generally require an employee to abide by an employer's rules concerning drug or alcohol use, treatment, and testing in exchange for continued employment.

Although many federal courts have determined that such agreements are valid under the ADA, Ohio courts have not really considered the question. Recently the Cuyahoga County Court of Common Pleas decided that it agrees "with those federal courts that have found that last chance agreements or return to work agreements...do not violate the ADA."

In Partlow v. Blue Coral-Slick 50, the employee informed the employer's human resources department that he had a drinking problem. Pursuant to the employer's drug policy, the employer made its employee assistance program ("EAP") available to the employee. The employee saw a counselor through the EAP and divulged during a counseling session that he also had a cocaine addiction and depression. The employee began outpatient counseling and continued working with no incident – until three weeks later, when he relapsed. The employee then entered a treatment facility, and the employer placed him on medical leave.

When the employee received permission to return to work, the employer presented him with a "return to work agreement." The employer conditioned the employee's continued employment on successful participation and completion of a treatment plan and any aftercare counseling and treatment; periodic unannounced drug and alcohol testing; and no drug or alcohol use. The agreement also stated that any failure to abide by all of its terms would be cause for termination and ineligibility for rehire. The employee signed the agreement and returned to work without incident-until about two weeks later when he was arrested for cocaine possession.

After the employee returned to work, the employer contacted his drug treatment therapist, who confirmed that the employee had relapsed into drug use. The employer determined that the employee had violated the terms of his return to work agreement and terminated his employment. The employee sued under the ADA and Ohio state law, arguing that the return to work agreement unlawfully changed the terms and conditions of his employment solely because he sought treatment for his addiction.

The court reviewed federal case law interpreting the ADA and agreed that last chance agreements do not violate state or federal disability laws. The court reviewed a Pennsylvania federal case, for example, that held that an alcoholic's violation of a last chance agreement did not constitute a discharge based solely on disability, but rather a discharge based upon a breach of the agreement. The Pennsylvania court said that to attribute the firing to alcoholism was "defective reasoning that skips the key step of reality, i.e., the prior accommodation to alcoholism."

The employer in Partlow helped itself immensely by going by the book: abiding by its own drug policy and referring the employee to its EAP; using a clear and comprehensive last chance agreement that kept it in the loop concerning the employee's treatment; and confirming information regarding the employee's relapse with his drug counselor. Unfortunately, the employer still ended up in court. However, there is now clear guidance from an Ohio court that last chance agreements in this context are okay.

Keep in mind, however, that last chance agreements should be drafted clearly and carefully to avoid violation of other state or federal laws. For more information about last chance agreements or other ADA-compliance issues, please contact Stephen Zashin at (216)696-4441 or ssz@zrlaw.com.

*Stephen S. Zashin is an OSBA Certified Specialist in Labor and Employment Law and has extensive experience in defending ADA based litigation. For more information about the Americans with Disabilities Act or state disability laws, please contact Stephen at (216) 696-4441 or ssz@zrlaw.com.

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USERRA UPDATE: Finalization of New Regs Just Around the Corner

By Helena J. Oroz*

You probably know that the Uniformed Services Employment and Reemployment Rights Act of 1994, or USERRA, is a federal law that affects employment, reemployment and retention in employment, when employees serve or have served in the uniformed services. But did you know that new regulations implementing USERRA will go into effect soon?

The regulations clarify employer and employee responsibilities under USERRA in a question-and-answer format that covers USERRA's various provisions. The new regulations are expected to become finalized and effective by the close of 2005. As always, Zashin & Rich will keep you posted concerning these regulations.

*Helena Oroz practices in all areas of employment law and compliance issues.