labor lawAdivision of labor law center

An Illinois trucking company was ordered to pay more than $1.1 million in a sexual harassment case, including use of “adult entertainment” in the workplace. According to the judge, the allegations of abuse from those in the company’s highest positions were true.

Custom Companies of Northlake, Illinois, was found to have committed sexual harassment under Title VII of the Civil Rights Act of 1964. In a 50-page decision, Judge Harry D. Leinenweber was sharply critical of the founder and CEO of the company, Perry Mandera. Leinenweber found that the CEO and other top managers practiced sexual harassment of female employees. These included evidence of repeated touching, sexually explicit comments and jokes, sexual advances, and a sexually charged atmosphere.” All of the harassment came, the judge said, “from employees in a position of power.”

Judge Leinenweber issued an injunction to change many of the company’s business practices, including company outings to topless bars and other forms of company-sanctioned “adult entertainment.”

Female sales reps were required to entertain Custom Companies customers and potential clients at a number of strip clubs on Kingsbury Street in Chicago, including “Crazy Horse Too” “Thee Doll House” and “VIP’s: A Gentlemen’s Club.” The EEOC found that three female sales reps were subjected to unwelcome groping, sexual propositions, pornography and lewd sexual language in the course of their job duties. Evidence included photos of strippers wearing very little posed at various holes at company golf outings for clients.

The EEOC found that Custom Companies CEO Perry Mandera owned and operated two of the strip clubs in question. When one female employee complained to the EEOC, she suffered retaliation led by CEO Perry Mandera, including a suit filed against her.

The judge wrote that, “Circumstances indicate that Defendants might engage in sexual harassment in the future. The sexual harassment was carried out by several individuals still employed by Defendants . . . The president and owner of the company, [Perry] Mandera, was even involved in the retaliation.”

In November 2006, a jury awarded $2.36 million to three former Custom Companies employees. The amount was reduced due to dollar-amount limitations imposed by the Civil Rights Act of 1964.

Under a four-year injunction, the company is forbidden to sponsor events at “a place of adult entertainment or which includes adult entertainers.” Custom Companies is also required to distribute a notice to its customers advising them of the verdict and the judgment. In addition, the company is required to post a notice informing all employees of the outcome of the EEOC investigation, and of their right to contact the EEOC with complaints, without fear of retaliation.”

EEOC Regional Attorney John Hendrickson said, “Judge Leinenweber’s final judgment will surely be a milestone in Title VII law, especially on sexual harassment. It addresses and resolves in a thoughtful and scholarly way a host of important issues… Make no mistake about it, this is a big decision–it’s really important.”

“But beyond all that,” Hendrickson added, “we think it is especially significant that the court was willing to follow the evidence heard by the jury right into the executive suite and to the desk of the chief executive in assessing the need for injunctive relief and designing that relief to fit the way this company has done business. That is critically important, and it is what is going to make a practical difference to women who work at Custom Companies now and who will work there in the future.”

Justice in the case worked slowly. The original EEOC lawsuit was filed in May, 2002 in the U.S. District Court in the Northern District of Illinois, located in Chicago. Chicago attorneys Marty Denis and Michael D. Robbins represented two of the women who intervened in the case.

An Illinois firm recently settled an EEOC suit alleging discrimination against African Americans, Hispanics, Asians and women. Woodward Governor paid $5 million to two class action suits alleging discrimination at its plants in Rockford, Illinois and Rockton, Illinois. The company is based in Fort Collins, Colorado.

According to promotional material issued by the company, Woodward Governor is “the world’s largest independent designer, manufacturer, and service provider of energy control solutions for aircraft engines, industrial engines and turbines, power generation, and process automation equipment.” Woodward has approximately 1,100 employees at the Rockford and Rockton plants.

The Illinois plants are just two of 25 facilities worldwide including Australia, Brazil, China, Indian, Japan, Korea, and Poland. The company also has 10 plants in the U.S.

On May 8, 2003, a number of employees filed a class action suit against the Woodward Governor Company charging that the firm discriminated in pay, promotions and training against African-American, Hispanic and Asian employees. This violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, religion, color, sex, religion or national origin.

On October 4, 2006, the EEOC filed a similar claim on behalf of a number of employees, alleging that the company’s discriminatory practices included limiting opportunities for women. These actions violate Title VII, as well as the Equal Pay Act, which requires that women be paid the same amount as men for work that is substantially the same.

The two suits were consolidated by the court.

In filing the consent decree, Judge Philip Reinhard of the U.S. District Court for Northern Illinois established a $2.4 million settlement for the minority employees. The award covers all minority employees who worked at the company’s Rockford or Rockton plants since May 1999. The judge established a separate $2.6 million fund to be shared by female employees who worked at Woodward Governor’s Illinois plants since June 2002.

The decree contains a number of other requirements. Woodward Governor must hire an industrial organizational psychologist to perform an analysis of production jobs that were an issue in the suit. The psychologist must develop written job descriptions, performance appraisals and a comprehensive review process for the positions. Once that is complete, Woodward Governor is required to review the job assignments of current production employees and adjust them if necessary.

The decree also authorizes the appointment of Nancy B. Kreiter to oversee Woodward’s implementation and compliance with the decree. Kreiter, of Chicago, has provided similar decrees with other EEOC lawsuits on sex discrimination against Mitsubishi Motors and the Dial Corporation. Kreiter will provide annual reports assessing Woodward’s compliance with the decree.

Woodward must implement a procedure for investigating complaints of discrimination under the agreement. In addition, the company must train all employees regarding the discrimination laws and the complaint procedure. It will report the results twice annually to Kreiter, the EEOC and the attorney representing the plaintiffs. These reviews must include information on promotion decisions, compensation and job training for employees.

These severe restrictions have led some pundits to the conclusion that Woodward Governor’s actions were especially severe.

 “The EEOC is very satisfied with both the monetary and non-monetary relief provided for in the consent decree,” said EEOC Attorney John Hendrickson. “The $5 million settlement fund provides for significant monetary relief, and the appointment of Nancy Kreiter to oversee implementation of the decree ensures that the decree will bring about comprehensive changes at Woodward resulting in equal opportunity and treatment for all of Woodward’s employees.”

The Director of the EEOC Chicago District Office, John Rowe, who managed the agency’s pre-suit administrative investigation of Woodward Governor, said, “Our sense now is that Woodward Governor is determined to make the aspirations memorialized in the consent decree part of daily life at the company. With that, with the work of Ms. Kreiter, and with the good will of everyone involved, the future looks bright for everyone at Woodward Governor.” Rowe led the agency’s pre-suit investigation of the company.

EEOC Attorney Ann Henry, added, “The job analyses provided for by the consent decree should position Woodward to make future job assignment and compensation decisions based on job-related, non-discriminatory criteria and should go a long way in assuring a discrimination-free work environment at the company.” Henry tried the case along with Attorney. Gregory Gochanour.

Athletic-shoe manufacturer Nike recently announced that it will pay $7.6 million to settle a discrimination suit brought by African-American employees at the Niketown store on Michigan Avenue in Chicago.

The accusations are especially ironic, considering that one of Nike’s primary markets for shoes and clothing is young African-Americans, especially young men between the ages of 13 and 25. Nike has relied on prominent black athletes, such as Michael Jordon and Kobe Bryant, to market its products.

This is just the latest example of a major retailer biting the hand that feeds them. Earlier this year, Motherhood Maternity, a retail giant employing 5,000 people, paid $375,000 to settle an EEOC pregnancy discrimination lawsuit.

The Chicago Niketown is located on “the Magnificent Mile,” Chicago’s landmark downtown destination shopping district.

According to the lawsuit, Nike segregated African-Americans into lower paying jobs as stockroom attendants and cashiers at the posh store. Nike failed to post job openings for higher-paying sales positions, denying those opportunities to black employees. Many African-American employees were hired as part-time workers, while others were given full-time positions. This resulted in the African-American workers not receiving benefits including health insurance and paid vacations.

In even more serious allegations, the suit claims that African-American employees were subject to searches when leaving the store, while Caucasian employees were not searched. The store also gave discounts to other employees, while denying them to African-American workers.

The store management also allegedly applied company policies differently, resulting in many black employees being disciplined for problems in attendance and sick leave, while other employees were not punished for similar behavior.

As a part of the settlement, Nike also will submit to independent monitoring of the store.  A compliance officer will be installed in the Nike corporate headquarters in Beaverton, Oregon, under a settlement reached with the EEOC, or Equal Employment Opportunity Commission. In a statement, the retail powerhouse said that it reached the settlement to avoid “lengthy and protracted litigation.”

The suit made headlines last year, when a Chicago judge granted class-action status to the more than 400 current and former African-American employees. The suit, originally filed in 2003, charges that Nike systematically discriminated against black workers in hiring, promotions, benefits and discipline. The suit charges that these actions created a hostile working environment.

Like nearly every major corporation, Nike has policies that address discrimination in the workplace. But, corporate officers admit that the enforcement of these policies is left entirely to the discretion of the individual store manager.  According to the plaintiffs, that resulted in African-American employees being singled out by management.

In a similar suit earlier this year, the EEOC alleged that the parent company of Motherhood Maternity, Mothers Work, Inc. refused to hire female applicants who were pregnant. The suit also alleges that when LaShonda Burns, complained, she was unfairly disciplined. Burns was an assistant manager who was fired because supervisors believed that she was pregnant, and because she objected to the company’s policy of discriminating against pregnant women.

Motherhood Maternity operates more than 1,000 retail stores including Mimi Maternity, A Pea in the Pod and Maternitymall.com. The suit alleges that the company committed systematic discrimination by implementing a policy not to hire pregnant women.

Under the Pregnancy Discrimination Act, employers cannot legally refuse to hire an employee, or fire her, simply because she is pregnant.

Motherhood Maternity was founded in 1982 and employs over 5,000 people. It is the leading designer and retailer of maternity clothes in the U.S. with more than 1,000 stores nationwide and a large internet retail operation.

Under the three-year consent decree agreement, Motherhood will pay Burns $135,000 in damages, $50,000 in back pay and $130,000 to her attorney. In addition, three women who were denied employment because they were pregnant will each receive $20,000.

The company also agreed to train all of its current and future Florida employees on the new anti-discrimination policy and federal law. Motherhood will also report all pregnancy discrimination complaints to the EEOC twice per year.

“It is shocking that a corporation whose market is pregnant women would refuse to employ them and then retaliate against a woman who complained about the practice,” said Nora Curtin, supervisory trial attorney of the Miami District Office. “We are pleased that this settlement will steer this important company to better treatment of pregnant employees.”

A recent study shows that using the printer in your office may harm the air quality as much as lighting up a cigarette. That’s a special concern, as many states move to make smoking in the workplace illegal.

Researchers at the International Laboratory for Air Quality & Health released a study showing that laser printers emit high levels of hazardous particles every day. The Laboratory, located in Brisbane, Australia, is affiliated with Queensland University. The article appeared in Environmental Science and Technology, an industry journal. 

Author Lidia Morawska, Phd. says the article shows that using a laser printer produces as many harmful ultra-fine particles as a lit cigarette, smoldering in an ashtray. Dr. Morawska is Director of the International Laboratory for Air Quality & Health. According to Dr. Morawska,” Particles have been shown beyond any doubt to be a health hazard.”

In fact, the air inside one non-smoking office building was found to contain five times as many particles as the air near a freeway outside.  Like many scientific discoveries, this one was the result of an accident.  Morawska and her co-authors, Congrong He and Len Taplin, were asked to investigate the air quality in a 6 story non-smoking office building in Brisbane. The researchers were initially puzzled that during the work day the indoor air quality was so low, while it improved at night. 

Eventually, the team identified the laser printers in use during the day as the culprits. The building contained 62 laser printers. After testing, Dr. Morawska and her associates identified 8 of those as low to medium emitters, and 17 as high emitters. They included printers manufactured by Canon, Hewlett-Packard, Ricoh and Toshiba. 

Even printers of the same make and model had huge variation in the impact of printing on air quality. For example, one HP LaserJet 5 emitted no particles, while another was a high emitter. Other high emitters included the HP LaserJet 1320 and HP LaserJet 4250. Among the printers with no emissions were four Ricoh Aficio models and eight HP LaserJet 4050 printers. The researchers actually found that laser printers with fresh toner released more pollution than those with an older toner cartridge. This flies in the face of OSHA advice, that recently maintained machines are safer. 

Laser printers are not the only health hazard that office workers face. Other sources of pollution in the workplace include natural agents such as carbon monoxide, microorganisms like mold, and radon. Synthetic chemicals including formaldehyde, cleaning fluids, asbestos and, yes, cigarette smoke, can also produce poor indoor air quality in workplaces. Experts have long recognized that copy machines can release potentially toxic chemicals into the air as well. Copy machines also produce excessive noise and intense light. 

There are a number of measures that can reduce the harmful effects of copy machines. If possible, copy machines should be in a separate room with an exhaust system that pulls the particles out of the air and vents them outside. The machines should be isolated from workers, to protect workers’ hearing. Employees should be trained to keep the lid closed on the copy machine as much as possible. All waste, including used toner cartridges, should be disposed of properly. Having an adequate office ventilation system is crucial in maintaining air quality in the workplace. The system should provide plenty of fresh air while maintaining a comfortable temperature and humidity. 

Many people believe that offices are safe places to work, but every year thousands of injuries are reported by office workers. With about 33% of the U.S. workforce employed in offices, even fairly low accident rates will affect a large number of people. While some office safety hazards are the result of slippery floors or a file cabinet left open, others are associated with modern technology. For example, spending many hours at a computer display can cause neck and back pain and eyestrain. A number of studies have also shown that long hours at the computer can make a person irritable and tense. 

Carpel Tunnel Syndrome is associated with repetitive motion, including the motions used in operating a computer. Desks, computers and chairs should be properly designed to reduce the risk of musculoskeletal injuries including Carpel Tunnel. It’s particularly important to locate the computer mouse properly, to prevent injury. Each year, office workers suffer more than 76,000 fractures, dislocations, sprains, strains and bruises. The leading causes of injury in the office include falling, over-exertion, being struck by falling objects, and being caught between two objects. Workers also report injuries due to foreign objects in the eye, spilled hot liquid, burns and electric shocks.  

Walid Elkhatib of Chicago is a Muslim who says that eating or handling pork is against his religion. The 57-year-old was born in Jerusalem and moved to Chicago in 1971. He owns two Dunkin’ Donuts franchises in the Windy City. Today, Elkhatib is engaged in an intense legal battle with the parent company. The issue is whether Elkhatib has the legal right to refuse to serve foods that he considers “unclean” for religious reasons. 

Elkhatib worked as a bus driver in Chicago until he saved enough money to buy his first Dunkin’ Donuts franchise in 1979. Since then he purchased two additional stores, in suburban Berkeley and Westchester, and sold the original location. His total investment is just under $600,000. 

Critics say that Elkhatib should have chosen to operate a business that doesn’t serve pork.  He responds that he did. When Elkhatib opened his Dunkin’ Donuts franchise 30 years ago, the company sold no products containing pork. Elkhatib says he intentionally chose the Dunkin’ Donuts franchise because it didn’t involve serving pork or alcohol, two products that he is forbidden to handle under Muslim dietary laws.  

Elkhatib’s store specialized in coffee, milk, juice and donuts for several years. Dunkin’ Donuts gradually introduced heartier fare beginning in 1984 as a way to boost profits and compete with fast food franchises. Over the years, the sandwiches offered increased, especially as carb-conscious dieters consumed fewer of the chain’s tasty pastries.  

Problems started when Dunkin’ Donuts began to include breakfast sandwiches containing sausage, bacon and ham. At first the items were optional for franchisees. Elkhatib added breakfast sandwiches with egg and cheese to the menu, but declined to serve pork products. Initially, he says, the company supported his decision. Dunkin’ Donuts even supplied signs informing customers that no meat products were available at this location.  

Beginning in 2002, however, Dunkin’ Donuts required all franchisees—including Elkhatib—to serve breakfast sandwiches including pork.  

Ironically, Elkhatib would have a stronger case if he worked for someone else, instead of owning his own small business. A number of Islamic workers have successfully filed suits for religious discrimination under Title VII of the Civil Rights Act of 1964. In 1999, federal courts found that the Newark Police Department had to make an exception to its policy forbidding facial hair for officers. Two Muslim officers maintained that having a beard was part of their religious expression, and won the case. A number of suits have required employers to allow Muslim women to wear the hijab, loose-fitting clothing and scarves that cover the body, leaving only the hands and face visible.  

As the nation’s workforce becomes more diverse, many companies have simply adjusted. It is not unusual for employers to accommodate Islamic dress and grooming requirements, and the need to pray at five specific times per day.  

Elkhatib’s legal problems intensified when he wanted to relocate his Westchester store to a busier area. Initially, he says, the corporate real estate division supported his plan. When they learned that he refused to sell breakfast sandwiches containing pork at the new location, it became a problem. Shortly afterwards, Elkhatib was informed that his two current franchise contracts, for the existing stores, would not be renewed. 

Elkhatib points out that both of his stores are highly rated for cleanliness, customer service, marketing and product quality. Dunkin’ Donuts counters that company policy requires that owners offer the complete line approved products.  

Elkhatib’s attorney determined that he didn’t have a case against the company for religious discrimination, because he is not an employee. Instead, the attorney argues that the company is engaged in racial discrimination against Elkhatib because he is an Arab.  There is legal precedent for the case. In the past, African-American franchisees have sued other retail chains when they were denied the opportunity to expand in all-white neighborhoods. The law puts the onus on the franchisor to explain why they are favoring one franchisee over another.  

In court papers, the company argues that it would be inappropriate for a Hindu owner of a burger franchise to refuse to sell meat. The same applies to their business, the company’s lawyers contend. Elkhatib has an obligation to sell the approved products – all of the approved products.  

One judge found that Elkhatib’s case involved religious discrimination, which unfortunately isn’t addressed in corporate law.  

However, a panel of 3 judges found on appeal that Dunkin’ Donuts allows franchisees in at least 3 other Chicago stores to operate without serving breakfast sandwiches that contain pork. One of those franchisees even had his franchise contract renewed after Elkhatib’s was denied.  

The ruling may come to late to save Elkhatib’s businesses. The franchise on his Berkeley store has expired, and the agreement on the Westchester store will expire in a few months. Still, the small business owner is not sorry that he fought an unfair company policy.  

“What is life without dignity and your beliefs?” Elkhatib asks.